Special Report Contents

• Delaying projects is not an option
• Middle East faces 2020 power capacity challenge
• Strong IPP pipeline for 2016
• Russia leading the way in region’s nuclear power race
• Databank: Power projects pipeline

Diversification has become the mantra of Middle East and North Africa (Mena) energy strategists, with ambitious plans to roll out renewables alongside the traditional fossil-fuel feedstock mix that will in future set to account for a smaller proportion of the overall mix.

Morocco – import dependent for 95 per cent of its energy needs – has established itself as a pioneer since it launched its National Renewable Energy and Energy Efficiency Plan in 2008, which aimed to develop alternative energy to meet 15 per cent of the country’s domestic energy needs. Those plans have gained traction with a raft of wind and solar projects underway. 

Even the more hydrocarbon-richcountries have developed a taste for renewables, though progress has been mixed in realising these plans.

Dubai is pushing ahead with a further 1,000MW of solar, adding to the 200MW already under development.

Egypt is promoting bids around wind and solar projects and Saudi Arabia is looking to diversifying feedstock in power generation beyond fossil fuels.

Morocco has first mover advantage, as it prepares to commission a 150MW wind farm at Taza in 2017, under the first phase of the Integrated Programme for Wind Energy.

The kingdom’s utility, Office National de l’Electricite et de l’Eau Potable (ONEE) has this year invited developers to submit commercial bids for the contract to develop five wind farms with a total capacity of 850MW.

Diversified feedstock

Solar is equally important to Rabat’s feedstock diversification drive.

The government aims to install 2GW of solar and 2GW of wind generation by 2020. Amina Benkhadra, director general of the Office National des Hydrocarbures et des Mines, told the Morocco Energy Exchange in Edinburgh on 12 October this was to meet annual increases in primary energy demand of 7 per cent.

It expects 42 per cent (equivalent to about 6W) of its total energy mix to come from solar, wind and hydroelectric sources by 2020, equally divided between 2GW each. 

Renewables has quickly embedded itself into the fabric of the country’s industrial landscape, with cement companies now generating increase volumes of energy from renewable sources.

Solar projects are getting headway in Morocco, in both concentrated solar power (CSP) and photovoltaic (PV).

The Morocco Solar Plan (MSP) aims to contribute around 14 per cent of the energy mix in the country’s electricity supply by 2020, through construction of five solar complexes that will require an estimated $9bn investment.

In January 2015, Moroccan Solar Agency (Masen) awarded contracts for the Noor 2 and three CSP projects, with combined capacity of 350MW. At Ouarzazate, work is underway on plans to supply over 500MW from Africa’s single largest solar complex. 

As Said Mouline, CEO of Aderee, the Moroccan Agency for the Development of Renewable Energy and Energy Efficiency tells MEED, renewable energy offers particular added value to Morocco as it can extend beyond the confines of the domestic economy.

“With renewables you have projects that go beyond the local market. We hope to export electricity, and become an energy hub for Africa and southern Europe,” he says.

There is talk – albeit in the early stages – of feeding wind and solar-generated electricity to the European electricity grid via an existing interconnection to Spain.  

CSP projects have dominated the kingdom’s energy mix, thanks to its ability to provide baseload capacity, with the storage enabling electricity to feed into the grid at off-peak times.

There is also a significant cost advantage, say advocates.

“The Moroccans have driven down the cost of renewables, especially in the CSP sector,” says Kevin Sara, CEO of Nur Energie which is developing CSP and PV power plants and has bid in Masen solar tenders.

The Moroccan CSP programme was designed to push down prices as fast as possible.  

“They have a very aggressive public tender process, with very strict procedures, and it’s working. The prices have gone down beyond anyone’s expectations,” says Sara. 

The first MSP project, Ouarzazate 1 saw the winning Saudi-Spanish consortium, led by Acwa Power, offer a $0.184 tariff that was 25 per cent lower than initial cost projections.

That enabled a reduction in the revenue subsidy from the forecast $60m to $20m.

Acwa Power took just four months to reach financial close on the second and third phases of the Ouarzazate Project, confirming the $2bn projects as highly bankable developments.

Morocco has another ace up its sleeve in that CSP’s feasibility is one that other sunny countries may struggle to replicate, with the direct solar radiation allowing the deployment of a variety of technologies to concentrate the electricity.

“If you moved southern Spain a couple of hundred kilometres south to Morocco, studies have shown you would get a 30 per cent increase in output for the same capital expenditure. What that does to the economics of a project is a no-brainer,” says Sara.

Despite the success of CSP, PV is also on the agenda in Morocco. In the next phase, Noor PV 1, will consist of three projects with an overall capacity of 170MW,  located at Ouarzazate, Laayoune and Boujdour.

Across the continent, Egypt is aiming at a renewable energy target of 20 per cent of the total energy mix by 2022, ahead of a long-term plan for renewables to comprise 30-40 per cent of the mix by 2035 and to 65 per cent by 2050.

Cairo’s initial focus is to bring online 4,300MW of solar and wind capacity, split into 2,000MW of wind, 2,000MW of solar and 300MW of solar rooftop projects.

The country’s feed-in tariffmodel qualification round has to date attracted more than 135 developers.

Saudi Arabia’s MTMM Consortium has signed a memorandum of understanding (MoU) with the Egyptian government to invest in up to 4,000MW of renewables projects, split evenly between solar and wind.

Saudi renewables

Saudi Arabia itself is targeting solar.

In September 2015, Saudi Electricity Company (SEC) launched a tender for a 3,780MW integrated solar combined cycle (ISCC) at Taiba.

This has encouraged renewables developers about the kingdom’s seriousness of intent, albeit on a much smaller scale than some of its neighbours.

The kingdom has considered dropping solar from its first two planned ISCC schemes, Duba and Waad al-Shamal due to rising costs, although it now looks like SEC will move ahead with the renewables element on these schemes. And it pulled back from the more ambitious KA-Care programme target of having 54GW of renewable energy by 2032.

But the tendering underway on Taiba suggests momentum is returning.

Saudi progress would provide greater impetus to other Gulf states with renewable ambitions.

Dubai has already made headway with its PV projects, with the launch of the 800MW third phase of the Mohammed bin Rashid al-Maktoum (MBR) solar park, the world’s largest single-phase solar plant.

The progress in awarding the contract for phase three, with 95 expressions of interest submitted by the 29 September deadline, confirms the robust appetite for the emirate’s solar plans.

Dubai’s momentum has superseded neighbouring Abu Dhabi’s, which commissioned the 100MW Shams 1 CSP plant in 2013, but has experienced delays in the tendering of another 100MW solar project, Noor 1.

Outside the Gulf, Jordan – like Morocco, another energy import dependent kingdom – is seeing measured progress with its 12 solar PV projects in the first round of its renewable energy feed-in tariff scheme having now secured financing.

Such moves are helping to steadily build the case for infusing non-fossil fuel energies into the mix is across Mena, though progress is uneven with budget constraints and unfamiliarity with relatively untested technologies affecting project timings.

Pioneers like Morocco have demonstrated the economic case for feedstock diversification.

“This energy transition will take time,” says Aderee’s Mouline. “We’re starting with our own requirements but that will enable us to develop wider plans and eventually have countries in the north buying our green electricity.”