Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry … · 2016. 7....

MIDDLE EAST AND NORTH AFRICA ENERGY AND EXTRACTIVES GLOBAL PRACTICETHE WORLD BANK GROUP

M E N A E N E R G Y S E R I E S | R E P O R T N O . 9 4 8 3 4 - M N A

Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

MIDDLE EAST AND NORTH AFRICA (MENA) | ENERGY AND EXTRACTIVES GLOBAL PRACTICE | THE WORLD BANK GROUPP

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M E N A E N E R G Y S E R I E S | R E P O R T N O . 9 4 8 3 4 - M N A

MIDDLE EAST AND NORTH AFRICAENERGY AND EXTRACTIVES GLOBAL PRACTICETHE WORLD BANK GROUP

Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

Copyright © March 2015 International Bank for Reconstruction and Development/The World Bank1818 H Street NW, Washington DC 20433Telephone: 202-473-1000; Internet: www.worldbank.orgSome rights reserved

This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.

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Written for the Energy Unit of the World Bank Middle East and North Africa Region, Energy and Extractives Global Practice, The World Bank Group.

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Contents | v

Contents

Acronyms and Abbreviations xxiv

Acknowledgments xxvii

Model Notation xxviii

Chapter 1 | Executive Summary 1

1.1 Introduction 1

1.2 MENA Countries Face Strong Competition from Leading Solar Markets 1

1.2.1 Concentrated Solar Power (CSP) Industries 1

1.2.2 Photovoltaic (PV) Industries 2

1.3 Egypt and Morocco Show the Highest Attractiveness Index for CSP and PV Component Industries 4

Chapter 2 | Introduction to the Value Chain of Solar Technologies 9

2.1 Concentrated Solar Power (CSP) Technology 9

2.1.1 Parabolic Trough Systems 9

2.1.2 Linear Fresnel Systems 13

2.1.3 Power Tower Systems 15

2.1.4 Dish/Engine Systems 17

2.2 Photovoltaic (PV) Technology 24

2.2.1 Crystalline (c-Si) Technologies 26

2.2.2 Thin Film (TF) Technologies 28

2.2.3 Shared Technologies 31

2.3 Other Related Activities 36

2.3.1 Research, Development and Innovation 36

2.3.2 Project Development 36

2.3.3 Engineering 37

2.3.4 Engineering, Procurement and Construction (EPC) 38

2.3.5 Operation and Maintenance (O&M) 38

vi | Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

2.3.6 Financing 38

2.3.7 Technology Provision 38

2.3.8 Consulting 38

Chapter 3 | Methodology 39

3.1 Introduction 39

3.2 Benchmark Countries Selection 41

3.3 Primary Data Selection and Classification 41

3.4 Model: Data Normalization and Aggregation 43

3.4.1 Ranking of Indexes According to Weighting Factors 44

3.5 Hypothesis Validation 47

3.5.1 Robustness and Consistency Analysis 47

3.6 Solar Industries Value Chain Analysis 49

3.6.1 CSP Industry 50

3.6.2 PV Industries 52

3.7 Identification of Potentially Competitive (Target) Industries and Competitiveness Gaps 53

3.8 Building of Demand Scenarios 54

3.8.1 Increase in Installed Capacity Forecast 55

3.8.2 Component Demand Scenario 57

3.9 Recommendations and Impact Assessment 58

Chapter 4 | Attractiveness Assessment 59

4.1 Benchmark Analysis Summary Results 59

4.2 Algeria 65

4.2.1 Algeria’s Key Strengths and Weaknesses 65

4.2.2 Potentially Competitive Industries 67

4.3 Egypt 72

4.3.1 Egypt’s Key Strengths and Weaknesses 72


4.4 Jordan 77

4.4.1 Jordan’s Key Strengths and Weaknesses 77


4.5 Morocco 82

4.5.1 Morocco’s Key Strengths and Weaknesses 82


Contents | vii

4.6 Tunisia 88

4.6.1 Tunisia’s Key Strengths and Weaknesses 88


Chapter 5 | Strategic Recommendations and Proposed Actions 93

5.1 Introduction 93

5.2 Algeria 93

5.2.1 Gaps Analysis 93

5.2.2 Recommendations 95

5.3 Egypt 100



5.4 Jordan 108



5.5 Morocco 114



5.6 Tunisia 123



5.7 Recommendations for MENA Regional Cooperation 130

Chapter 6 | National Climate Innovation Center 134

Annexes 145

Annex 1 | Solar Technologies Value Chain Analysis 145

Concentrated Solar Power (CSP) Technology 145

Parabolic Trough Systems 145

Linear Fresnel System 149

Power Tower System 151

Dish/Engine System 153

Analysis of the Value Chain for CSP 155

Photovoltaic (PV) Technology 173

Annex 2 | Solar Energy Development Scenarios 196

Global Solar Industry Scenarios 196

MENA Solar Industry Scenarios 197

viii | Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

MENA Market Potential 199

CSP and PV MENA market potential by 2020 200

Scenarios Sensitivity Analysis 205

Annex 3 | Benchmark Competitiveness Analysis Primary Data Definition 208

Overarching Categories: Production Factors 208

Overarching Categories: Demand Factors 209

Overarching Categories: Risk and Stability Factors 209

Overarching Categories: Business Support 210

Annex 4 | Benchmarking Model and Index Weights 211

Primary Data Normalization 211

Parameter Aggregation 211

Weights Distribution 212

Overarching Categories’ Weights 212

Competitiveness Parameters’ Weighting Factors 215

Primary Data’s Weight Factors 219

Comparison of MENA and Benchmark Countries as Statistical Populations 222

Model Robustness Using Different Aggregations 224

Parameter Aggregation Consistency 228

Annex 5 | Case Studies 229

Case Study: Mirror Industry in Egypt 229

Impacts of Mirror Industry Deployment 231

Case Study: Support Structure Industry in Egypt 231

Impacts of Support Structure Industry Deployment 233

Case Study: Support Structure Industry in Morocco 234

Impacts of Support Structure Industry Deployment 236

Case Study: Thin Film Modules Industry in Morocco 236

Certification and Testing Procedures 239

Case Study: Receiver Industry in Tunisia 239

Annex 6 | Benchmarking Analysis Results 241

Primary Data 241

Weights 248

References 259

Boxes

Box 4.1 | Certification and Testing Institute in Jordan 80

Box 4.2 | Success Story: CSP Industry Development in Spain 86

Box 5.1 | Success Story in PV Module Industry Development: China’s Development of the Crystalline Module Industry 117

Box 5.2 | Success Story: Reduction of Financial Risk in Morocco 121

Boxes | ix

x | Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

Figures

Figure 1.1 | Investment Requirements vs. Technology Complexity for CSP Technology Industries 2

Figure 1.2 | CSP Industry Development Opportunities in MENA Countries 3

Figure 1.3 | Investment Requirements vs. Technology Complexity for PV Technology Industries 3

Figure 1.4 | PV Industry Development Opportunities in MENA Countries 4

Figure 1.5 | Competitiveness Parameters in Algeria Compared to Benchmark and MENA Averages 5

Figure 1.6 | Competitiveness Parameters in Egypt Compared to Benchmark and MENA Averages 6

Figure 1.7 | Competitiveness Parameters in Jordan Compared to Benchmark and MENA Averages 6

Figure 1.8 | Competitiveness Parameters in Morocco Compared to Benchmark and MENA Averages 7

Figure 1.9 | Competitiveness Parameters in Tunisia Compared to Benchmark and MENA Averages 8

Figure 2.1 | Parabolic Trough Collectors Installed at Plataforma Solar de Almería (Spain) 10

Figure 2.2 | Schematics of a Parabolic Trough Collector 11

Figure 2.3 | General Schematics of a Parabolic Trough CSP Plant with Thermal Energy Storage 12

Figure 2.4 | Schematics of a Linear Fresnel Collector 13

Figure 2.5 | Functional Scheme of a Power Tower System, Using Molten Salt as HTF, with TES 15

Figure 2.6 | Main Components of a Heliostat 16

Figure 2.7 | Main Components of a Dish/Engine System 18

Figure 2.8 | Schematic Showing the Operation of a Heat-Pipe Solar Receiver 19


Figure 2.10 | CSP Industry Development Opportunities (Normalized Attractiveness Index) in MENA Countries 21

Figure 2.11 | Developing Phases: From Design to Commercial Exploitation 22

Figure 2.12 | Market Share of the Different CSP Technological Approaches, Both Operating (Left) and under Construction (Right), 2012 24

Figure 2.13 | PV Solar Energy Value Chain 25

Figure 2.14 | Polysilicon Manufacturing Value Chain 26

Figure 2.15 | Ingot/Wafer Manufacturing Value Chain 27

Figure 2.16 | c-Si Cell Structure 28

Figure 2.17 | Types of Solar Glass 30


Figure 2.19 | PV Industry Development Opportunities (Normalized Attractiveness Index) in MENA Countries 33

Figure 2.20 | Global PV Module Pricing Learning Curve for c-Si and CdTe Modules, 1979–2015 35

Figure 2.21 | Market Share of the Different PV Technological Approaches, 2011 36

Figure 2.22 | Value Chain Related to Solar Energy Deployment 37

Figure 3.1 | Global Methodology 40

Figure 3.2 | Rankings of Attractiveness Indexes per Country, Aggregated for CSP Technology, with Different Normalization and Aggregation Techniques 48

Figure 3.3 | Rankings of Attractiveness Indexes per Country, Aggregated for PV Technology, with Different Normalization and Aggregation Techniques 49



Figure 3.6 | Sample Graph: Country and MENA Average Normalized Attractiveness Index Score 53

Figure 3.7 | Sample Spider Graph Used to Identify Gaps 54

Figure 3.8 | Global and European CSP and PV Yearly Installed Capacity in Different Scenarios, Average 2008–20 55

Figure 3.9 | MENA CSP and PV Installed Capacity in 2020 for 3 Scenarios 56

Figures | xi

xii | Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

Figure 3.10 | MENA CSP and PV Yearly Installed Capacity in Different Scenarios, Average 2008–20 56

Figure 4.1 | Normalized Attractiveness Index for Each Country, Aggregated for CSP Industries and Probability Density Function* for MENA and Benchmark Countries 66

Figure 4.2 | Normalized Attractiveness Index for Each Country, Aggregated for PV Industries and Probability Density Function* for MENA and Benchmark Countries 66

Figure 4.3 | Competitiveness Parameters in Algeria Compared to Benchmark and MENA Averages 67

Figure 4.4 | Normalized Attractiveness Indexes for CSP Target Industries in Algeria Compared to MENA Average* 68

Figure 4.5 | Normalized Attractiveness Indexes for PV Target Industries in Algeria Compared to MENA Average* 70

Figure 4.6 | Competitiveness Parameters in Egypt Compared to Benchmark and MENA Averages 70

Figure 4.7 | Normalized Attractiveness Indexes for CSP Target Industries in Egypt Compared to MENA Average 72

Figure 4.8 | Normalized Attractiveness Indexes for PV Target Industries in Egypt Compared to MENA Average 73

Figure 4.9 | Competitiveness Parameters in Jordan Compared to Benchmark and MENA Averages 75

Figure 4.10 | Normalized Attractiveness Indexes for CSP Target Industries in Jordan Compared to MENA Average 76

Figure 4.11 | Normalized Attractiveness Indexes for PV Target Industries in Jordan Compared to MENA Average 78

Figure 4.12 | Competitiveness Parameters in Morocco Compared to Benchmark and MENA Averages 79

Figure 4.13 | Normalized Attractiveness Indexes for CSP Target Industries in Morocco Compared to MENA Average 81

Figure 4.14 | Normalized Attractiveness Indexes for PV Target Industries in Morocco Compared to MENA Average 81


Figure 4.16 | Normalized Attractiveness Indexes for CSP Target Industries in Tunisia Compared to MENA Average* 83

Figure 4.17 | Normalized Attractiveness Indexes for PV Target Industries in Tunisia Compared to MENA Average* 85

Figure 4.18 | Normalized Attractiveness Indexes for PV Target Industries in Morocco Compared to MENA Average 85


Figure 4.20 | Normalized Attractiveness Indexes for CSP and PV Technologies in Tunisia Compared to MENA Average* 89

Figure 4.21 | Normalized Attractiveness Indexes for CSP Target Industries in Tunisia Compared to MENA Average* 91

Figure 4.22 | Normalized Attractiveness Indexes for PV Target Industries in Tunisia Compared to MENA Average* 91

Figure 5.1 | Key Axes in a Country’s Development Plan for Solar Component Industries 94

Figure 5.2 | Strengths and Weaknesses of Algeria vs. US in the Solar Glass Industry 94

Figure 5.3 | Strengths and Weaknesses of Egypt vs. United States and China in the Mirror Industry 101

Figure 5.4 | Strengths and Weaknesses of Morocco vs. China in the Structures & Tracker Industry 114

Figure 5.5 | Investment Zones, Main Seaports and International Airports in Morocco 122

Figure 5.6 | Strengths and Weaknesses of Tunisia vs. United States in the Receiver Industry 124

Figure 5.7 | Representation of the Combined MENA Advantages in the Competitiveness Analysis Compared to the Benchmark and MENA Country Averages 131

Figure 5.8 | Key Axes in a Regional Development Plan for Solar Component Industries 132

Figure A1.1 | Parabolic Trough Collectors Installed at Plataforma Solar de Almería (Spain) 146

Figure A1.2 | Schematics of a Parabolic Trough Collector 147

Figure A1.3 | General Schematics of a Parabolic Trough CSP Plant with Thermal Energy Storage 148

Figure A1.4 | Schematics of a Linear Fresnel Collector 149

Figure A1.5 | Functional Scheme of a Power Tower System using Molten Salt as HTF with TES 151

Figure A1.6 | Main Components of a Heliostat 152

Figures | xiii

xiv | Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

Figure A1.7 | Main Components of a Dish/Engine System 154

Figure A1.8 | Schematic that Shows the Operation of a Heat-pipe Solar Receiver 155

Figure A1.9 | Investment Requirements vs. Technology Complexity for CSP Technology Industries 156

Figure A1.10 | CSP Industry Development Opportunities (Normalized Attractiveness Index) in MENA Countries* 157

Figure A1.11 | Developing Phases: From Design to Commercial Exploitation 158

Figure A1.12 | Market Share of the Different CSP Technological Approaches Both Operating (Left) and Under Construction (Right) as of 2012 160

Figure A1.13 | PV Solar Energy Value Chain 174

Figure A1.14 | Polysilicon Manufacturing Value Chain 175

Figure A1.15 | Ingot/Wafer Manufacturing Value Chain 176

Figure A1.16 | c-Si Cell Structure 177

Figure A1.17 | Types of Solar Glass 179

Figure A1.18 | Investment Requirements vs. Technology Complexity for PV Technology Industries 182

Figure A1.19 | PV Industry Development Opportunities (Normalized Attractiveness Index) in MENA Countries 183

Figure A1.20 | Global PV Module Pricing Learning Curve for c-Si and CdTe Modules, 1979–2015 185

Figure A1.21 | Market Share of the Different PV Technological Approaches, 2011 186

Figure A2.1 | Projected Global CSP Installed Capacity, 2008–35 196

Figure A2.2 | Projected Global PV Installed Capacity, 2008–35 197

Figure A2.3 | MENA CSP (Left) and PV (Right) Installed Capacity to 2020 (MW) 197

Figure A2.4 | Global CSP Development: Current Capacity and Capacity under Construction (MW) 198

Figure A2.5 | Global PV Development: Current Capacity and Projected Future Capacity by 2014 (MW) 198

Figure A2.6 | Market Share Evolution for Target Industries Hypotheses, 2011–21 (%) 200

Figure A2.7 | Algeria CSP Market Potential to 2020 Taking into Account Market Share Hypotheses 200

Figure A2.8 | Algeria PV Market Potential to 2020 Taking into Account Market Share Hypotheses 201

Figure A2.9 | Egypt CSP Market Potential to 2020 Taking into Account Market Share Hypotheses 201

Figure A2.10 | Egypt PV Market Potential to 2020 Taking into Account Market Share Hypotheses 202

Figure A2.11 | Jordan CSP Market Potential to 2020 Taking into Account Market Share Hypotheses 202

Figure A2.12 | Jordan PV Market Potential to 2020 Taking into Account Market Share Hypotheses 203

Figure A2.13 | Morocco CSP Market Potential to 2020 Taking into Account Market Share Hypotheses 203

Figure A2.14 | Morocco PV Market Potential to 2020 Taking into Account Market Share Hypotheses 204

Figure A2.15 | Tunisia CSP Market Potential to 2020 Taking into Account Market Share Hypotheses 204

Figure A2.16 | Tunisia PV Market Potential to 2020 Taking into Account Market Share Hypotheses 205

Figure A2.17 | Scenarios in Algeria for CSP Potential Market 205

Figure A2.18 | Scenarios in Algeria for PV Potential Market 205

Figure A2.19 | Scenarios in Egypt for CSP Potential Market 206

Figure A2.20 | Scenarios in Egypt for PV Potential Market 206

Figure A2.21 | Scenarios in Jordan for CSP Potential Market 206

Figure A2.22 | Scenarios in Jordan for PV Potential Market 206

Figure A2.23 | Scenarios in Morocco for CSP Potential Market 207

Figure A2.24 | Scenarios in Morocco for PV Potential Market 207

Figure A2.25 | Scenarios in Tunisia for CSP Potential Market 207

Figure A2.26 | Scenarios in Tunisia for PV Potential Market 207

Figure A4.1 | Investment Requirements vs. Technology Complexity for CSP Technology: Group Definition 212

Figure A4.2 | Investment Requirements vs. Technology Complexity for PV Technology: Group Definition 213

Figures | xv

xvi | Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

Figure A4.3 | Investment Requirements vs. Technology Complexity for CSP Technology 216

Figure A4.4 | Investment Requirements vs. Technology Complexity for PV Technology 217

Figure A4.5 | Production Competitiveness Parameters for CSP Industries 218

Figure A4.6 | Production Competitiveness Parameters for PV Industries 218

Figure A4.7 | Global Attractiveness Index by Country for CSP: MENA and Benchmark 223

Figure A4.8 | Global Attractiveness Index by Country for PV: MENA and Benchmark 223

Figure A4.9 | Rankings of Attractiveness Indexes per Country, Aggregated for CSP Technology, with Different Normalization and Aggregation Techniques 226

Figure A4.10 | Rankings of Attractiveness Indexes per Country, Aggregated for PV Technology, with Different Normalization and Aggregation Techniques 227


Figure A5.2 | Comparison of Total Demand for Mirror Industry vs. Range of Production for a Mirror Factory in Egypt, 2014–20 (m2) 230

Figure A5.3 | Cumulative Cash Flow for a Mirror Industry in Egypt, (US$ mil) 231


Figure A5.5 | Comparison of Total Demand for Support Structure Industry vs. Range of Production for a Support Structure Factory in Egypt, 2014–20 (tons) 233

Figure A5.6 | Cumulative Cash Flow for a Support Structure Industry in Egypt, 2013–20 (US$ mil) 234


Figure A5.8 | Comparison of Total Demand for Support Structure Industry vs. Range of Production for a Support Structure Factory in Morocco, 2014–20 (tons) 235

Figure A5.9 | Cumulative Cash Flow for a Support Structure Industry in Morocco, 2013–20 (US$ mil) 236


Figure A5.11 | Comparison of Total Demand for TF Modules Industry vs. Range of Production for a TF Modules Factory in Morocco, 2014–20 (MW) 238

Figure A5.12 | Cumulative Cash Flow for a TF Modules Industry in Morocco, 2013–20 (US$ mil) 238


Figure A5.14 | Comparison of Total Demand for Receiver Industry vs. Range of Production for a Receiver Factory in Tunisia, 2014–20 (000 units) 240

Figures | xvii

xviii | Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

Tables

Table 2.1 | CSP Solar Fields 9

Table 2.2 | Main Entry Barriers for the Difficult-to-reach CSP Industries 22

Table 2.3 | Characteristics of Concentrated Solar Power Systems 23

Table 2.4 | Conversion Efficiencies of Different PV Commercial Modules (%) 25

Table 2.5 | Main Entry Barriers for the Difficult-to-reach PV Industries 34

Table 3.1 | Primary Data Related to Production Factors 41

Table 3.2 | Primary Data Related to Demand Factors 42

Table 3.3 | Primary Data Related to Risk and Stability Factors 42

Table 3.4 | Primary Data Related to Business Support Factors 43

Table 3.5 | Global Ranking of Competitiveness Parameters According to Weight 44

Table 3.6 | Ranking of Competitiveness Parameters by Solar Industry (CSP Industries) 45

Table 3.7 | Ranking of Competitiveness Parameters by Solar Industry (PV Industries) 46

Table 3.8 | Rankings of Attractiveness Indexes per Country, Aggregated for CSP Technology, When Using Different Normalization and Aggregation Techniques 47

Table 3.9 | Rankings of Attractiveness Indexes Per Country, Aggregated for PV Technology, when Using Different Normalization and Aggregation Techniques 48

Table 3.10 | CSP Solar Industries by Technology 50

Table 3.11 | PV Solar Industries by Technology 51

Table 3.12 | Market Share in Target Industries Hypotheses for Each MENA Country 57

Table 4.1 | Normalized Attractiveness Index for CSP Component Industries (I) 60

Table 4.2 | Normalized Attractiveness Index for CSP Component Industries (II) 60

Table 4.3 | Normalized Attractiveness Index for Thin Film and Shared PV Component Industries 61

Table 4.4 | Normalized Attractiveness Index for Cristalline PV Component Industries 61

Table 4.5 | Normalized Competitiveness Parameters Included in the Overarching Categories Production Factors and Demand Factors, Aggregated for the CSP Solar Industries 62

Table 4.6 | Normalized Competitiveness Parameters Included in the Overarching Categories Production Factors and Demand Factors, Aggregated for All the PV Solar Industries 63

Table 4.7 | Normalized Competitiveness Parameters Included in the Overarching Categories Risk and Stability Factors and Business Support Factors, Aggregated for All the CSP Solar Industries 64

Table 4.8 | Normalized Competitiveness Parameters Included in the Overarching Categories Risk and Stability Factors and Business Support Factors, Aggregated for All the PV Solar Industries 65

Table 4.9 | Algeria’s Key Strengths and Competitive Gap Weaknesses Analysis 69

Table 4.10 | Impacts and Main Competitors – Algeria 71

Table 4.11 | Egypt’s Key Strengths and Competitive Gap Weaknesses Analysis 74

Table 4.12 | Impacts and Main Competitors: Egypt 77

Table 4.13 | Jordan’s Key Strengths and Competitive Gap Weaknesses Analysis 80

Table 4.14 | Impacts and Main Competitors: Jordan 81

Table 4.15 | Morocco’s Key Strengths and Competitive Gap Weaknesses Analysis 84

Table 4.16 | Impacts and Main Competitors: Morocco 87

Table 4.17 | Tunisia’s Key Strengths and Competitive Gap Weaknesses Analysis 90

Tables | xix

xx | Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

Table 4.18 | Impacts and Main Competitors: Tunisia 92

Table 5.1 | Associated Impact on Competitiveness Parameters Due to Recommended Strategic Actions 96

Table 5.2 | Gaps Addressed by Strategic Recommendations Relating to the Axes of the Industrial Development Plan in Algeria: Production Factors and Demand Factors 97

Table 5.3 | Gaps Addressed by Strategic Recommendations Relating to the Axes of the Industrial Development Plan in Algeria, Risk and Stability Factors and Business Support Factors 98

Table 5.4 | General Recommendations to Improve the Flexibility of the Labor Market 101

Table 5.5 | Associated Impacts in Competitiveness Parameters Due to Recommended Strategic Actions 103

Table 5.6 | Gaps Addressed by Strategic Recommendations Relating to the Axes of the Industrial Development Plan in Egypt, Production Factors and Demand Factors 104

Table 5.7 | Gaps Addressed by Strategic Recommendations Relating to the Axes of the Industrial Development Plan in Egypt, Risk and Stability Factors and Business Support Factors 105


Table 5.9 | Gaps Addressed by Strategic Recommendations Relating to the Axes of the Industrial Development Plan in Jordan: Production Factors and Demand Factors 111

Table 5.10 | Gaps Addressed by Strategic Recommendations Relating to the Axes of the Industrial Development Plan in Jordan: Risk and Stability Factors and Business Support Factors 112



Table 5.13 | Gaps Addressed by Strategic Recommendations Relating to the Axes of the Industrial Development Plan in Morocco: Production Factors and Demand Factors 118

Table 5.14 | Gaps Addressed by Strategic Recommendations Relating to the Axes of the Industrial Development Plan in Morocco: Risk and Stability Factors and Business Support Factors 119

Table 5.15 | Course on Hot-dip Galvanizing and Corrosion Protection 122

Tables | xxi



Table 5.18 | Gaps Addressed by Strategic Recommendations Relating to the Axes of the Industrial Development Plan in Tunisia: Production Factors and Demand Factors 126

Table 5.19 | Gaps Addressed by Strategic Recommendations Relating to the Axes of the Industrial Development Plan in Tunisia: Risk and Stability Factors and Business Support Factors 127

Table 5.20 | Potential Autonomy of Individual MENA Countries to Develop Various Industries based on Domestic Demand 131

Table 6.1 | Course on Hot-Dip Galvanizing and Corrosion Protection 137

Table 6.2 | Master’s in Carbon Offsetting Clean Development Mechanism and Carbon Markets 138

Table 6.3 | Course on Sputtering Laser Techniques and Encapsulation 139

Table 6.4 | Financing Specific Actions to be Conducted by CIC 141

Table 6.5 | Access to Information Actions to be Conducted by CIC 142

Table 6.6 | Training: Specific Actions to be Conducted by CIC 143

Table 6.7 | Networking Facilitation Actions to be Conducted by CIC 144

Table A1.1 | CSP Solar Fields 145

Table A1.2 | Main Entry Barriers for the Difficult-to-Reach CSP Industries 157

Table A1.3 | Characteristics of Concentrated Solar Power Systems 159

Table A1.4 | Conversion Efficiencies of Different PV Commercial Modules 173

Table A1.5 | Main Entry Barriers for the Difficult-to-Reach PV Industries 184

Table A2.1 | Projected Global Solar Installed Capacity (GW), 2008–35 196

Table A2.2 | Market Share Hypotheses for Each MENA Country to 2020 (%) 199

Table A4.1 | Weight Factors for Overarching Categories in Industries within Group I: CSP Industries 214

Table A4.2 | Weight Factors for Overarching Categories in Industries within Group II: CSP Industries 214

Table A4.3 | Weight Factors for Overarching Categories in Industries within Group III: CSP Industries 214

xxii | Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

Table A4.4 | Weight Factors for Overarching Categories in Industries within Group IV: CSP Industries 214

Table A4.5 | Weight Factors for Overarching Categories in Industries within Group I: PV Industries 214

Table A4.6 | Weight Factors for Overarching Categories in Industries within Groups II and III: PV Industries 215

Table A4.7 | Weight Factors for Overarching Categories in Industries within Group IV: PV Industries 215

Table A4.8 | Percentage Used to Set up a Weight Factor to Relevant Manufacturing Ability and Material Availability According Technological Complexity: CSP Industries 216

Table A4.9 | Percentage Used to set up a Weight Factor to Relevant Manufacturing Ability and Material Availability According Technological Complexity: PV Industries 217

Table A4.10 | Competitiveness Parameters Associated with Risk and Stability Factors 219

Table A4.11 | Competitiveness Parameters Associated with Business Support Factors 219

Table A4.12 | Weight Factors Applied to Primary Data within the Labor Market Competitiveness Parameter 220

Table A4.13 | Weight Factors Applied to Primary Data within the Material Availability Competitiveness Parameter; Example: Receiver Industry 220

Table A4.14 | Weight Factors Applied to Primary Data within the Relevant Manufacturing Ability Competitiveness Parameter 220

Table A4.15 | Weight Factors Applied to Primary Data within the Fiscal Policy Competitiveness Parameter 220

Table A4.16 | Weight Factors Applied to Primary Data within the Component Demand Competitiveness Parameter 221

Table A4.17 | Weight Factors Applied to Primary Data within the Risk Associated with Doing Business Competitiveness Parameter 221

Table A4.18 | Weight Factors Applied to Primary Data within the Risk Associated with Demand Competitiveness Parameter 221

Table A4.19 | Weight Factors Applied to Primary Data within the Industry Structure Competitiveness Parameter 222

Table A4.20 | Weight Factors Applied to Primary Data within the Innovation Capacity Competitiveness Parameter 222

Table A4.21 | Weight Factors Applied to Primary Data within the Logistical Infrastructure Competitiveness Parameter 222

Table A4.22 | Calculation Methods Used for Parameter Aggregation and Normalization 224

Table A4.23 | Rankings for CSP Technology Using Different Normalization and Aggregation Techniques 226

Table A4.24 | Rankings for PV Technology Using Different Normalization and Aggregation Techniques 223

Table A4.25 | Cronbach’s Alpha (α) for Competitiveness Parameters 228

Table A6.1 | Primary Data Related to Production Factors: MENA Countries 241

Table A6.2 | Primary Data Related to Production Factors: Benchmark Countries 242

Table A6.3 | Primary Data Related to Demand Factors: MENA Countries 243

Table A6.4 | Primary Data Related to Demand Factors: Benchmark Countries 243

Table A6.5 | Primary Data Related to Stability and Risk Factors: MENA Countries 244

Table A6.6 | Primary Data Related to Stability and Risk Factors: Benchmark Countries 245

Table A6.7 | Primary Data Related to Business Support Factors: MENA Countries 246

Table A6.8 | Primary Data Related to Business Support Factors: Benchmark Countries 248

Table A6.9 | Weight Factor for an Industry within an Attractiveness

Index ( is) – Weighting Overarching Categories: CSP Industries 248

Table A6.10 | Weight Factor for an Industry within an Attractiveness Index ( i

s) – Weighting Overarching Categories: PV Industries 248

Table A6.11 | Weight Factor within an Overarching Category ( i js, ) –

Weighting Competitiveness Parameters: CSP Industries 249

Table A6.12 | Weight Factor within an Overarching Category ( i js, ) –

Weighting Competitiveness Parameters: PV Industries 250

Table A6.13 | Weight Factor within a Competitiveness Parameter ( j ks, ) –

Weighting Normalized Primary Data: CSP Industries 251

Table A6.14 | Weight Factor within a Competitiveness Parameter ( j ks, ) –

Weighting Normalized Primary Data: PV Industries 256

Tables | xxiii

xxiv | Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

Acronyms and Abbreviations

ADEREE National Agency for the Development of Renewable Energy and Energy Efficiency (Morocco)

AGADIR Arab Mediterranean Free Trade Agreement

ANME Agence Nationale pour la Maîtrise de l’Énergie (Tunisia)

ANOVA Analysis of variance

API American Petroleum Institute

BIPV Building Integrated Photovoltaic

BoPET Biaxially oriented poly-ethylene terephthalate

CDM Clean development mechanism

CdS Cadmium sulfide

CCGT Combined cycle gas turbine

CIC Climate Innovation Center

CIGS Copper-indium-gallium selenide

CIS Copper-indium sulfide

CoSPER Committee for Rural Electrification Program (Morocco)

CPV Concentrated photovoltaic

CSP Concentrated solar power

DNI Direct normal irradiation

EIB European Investment Bank

EPC Engineering, Procurement and Construction contract; occ., Contractor of EPC

EPIA European Photovoltaic Industry Association

ESMAP Energy Sector Management Assistance Program

EU European Union

EVA Ethylene-vinyl acetate

E&Y Ernst & Young

FDI Foreign direct investment

FIT Feed-in tariff

GAFTA Greater Arab Free Trade Area

GCR Global Competitiveness Report

GDP Gross domestic product

GHG Greenhouse gas

GHI Global Horizontal Irradiation

GNP Gross national product

GW Gigawatt

GWe Gigawatt-electric

GWh Gigawatt-hour

HTF Heat transfer fluid

ICT Information and communication technology

IEA International Energy Agency

IFC-WB International Finance Corporation (World Bank Group)

IPF Investment Promotion Fund

IPP Independent power producer

ISCC Integrated solar combined cycle

ISO International Organization for Standardization

ITO Tin-doped indium oxide

kW Kilowatt

kWe Kilowatt-electric

KWh Kilowatt-hour

LCD Liquid crystal display

LCOE Levelized cost of energy

MAD Moroccan Dirham

MASEN Moroccan Agency for Solar Energy

MEMR Ministry of Energy and Mineral Resources (Jordan)

MENA Middle East and North Africa

MG-Si Metallurgical grade silicon

MW Megawatt

MWe Megawatt-electric

MWh Megawatt-hour

NAMA Nationally appropriate mitigation action

NREA New and Renewable Energy Authority (Egypt)

NTF-PSI Norwegian Trust Fund for Private Sector and Infrastructure

NTM Nontariff measures

OEM Original equipment manufacturer

O&M Operation and maintenance

ONEE Office National De l’Électricité et de l’Eau Potable (Morocco)

PB Power block

PECVD Plasma-enhanced chemical vapor deposition

PER Plan de Energías Renovables (Spain)

PERG Global Rural Electrification Program

PGESCO Power Generation Engineering and Services Co. (Egypt and Bechtel)

PV Photovoltaic

PVF Poly-vinyl fluoride

RD Royal Decree

RE Renewable energy

RCREEE Regional Centre for Renewable Energy and Energy Efficiency

ROW Rest of the world

R&D Research and development

SF Solar field

SME Small and medium enterprises

SITC Standard International Trade Classification

Si’Tarc Small Industries Testing and Research Centre (India)

SCR Silicon controlled rectifier

STA Solar Technology Advisors

Acronyms and Abbreviations | xxv

xxvi | Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

STC Standard test conditions

SWOT Strengths, weakness/limitations, opportunities and threats

TCO Transparent conductive oxide

TCS Trichlorosilane (HSiCl3)

TES Thermal energy storage

TF Thin film

US United States of America

US$ United States dollar

WEO World Energy Outlook

Acknowledgments

This study was prepared by a World Bank team led by Roger Coma Cunill and composed of Chandrasekar Govindarajalu, Silvia Pariente-David, Fanny Missfeldt-Ringius, Manaf Touati, Fowzia Hassan, and Mohab Hallouda, all of the Middle East and North Africa Region, Energy and Extractives Global Practice.

The assessment was drafted by a consortium of consultants composed of Solar Technology Advisors (STA)––Jorge Servert and Eduardo Cerrajero––and Accenture––Jose Ramón Alonso and Paz Nachón.

The team would like to thank the peer reviewers––Mario Ragwitz and Inga Boie (Fraunhofer ISI), and Silvia Martinez-Romero (ESMAP) and Nathalia Kulichenko (GEEDR)––for their valuable comments.

The team is grateful for the funding for this study by the Norwegian Trust Fund for Private Sector and Infrastructure (NTF-PSI) and the Energy Sector Management Assistance Program (ESMAP) representing the commitment of the World Bank and these organizations to support the MENA countries in the development of opportunities around solar energy.

Stakeholder workshops were conducted in Egypt and Morocco to garner feedback from client countries, industry participants, and donors. Interim results were presented and discussed at the MENAREC (Middle East North Africa Renewable Energy Conference) (May 2012) and Solar Paces (October 2012) regional conferences. Final results were presented in Morocco in Skhirat (January 2013) and Marrakech (October 2013).

Alicia Hetzner edited the report and Marjorie K. Araya (ESMAP) managed the final production.

Acknowledgments | xxvii

xxviii | Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

Model Notation

Pkc Primary datum (of the country “c”)

pkc Normalized datum

j ks, Weight of data within a Competitiveness parameter (for the industry “s”)

CPjs c, Competitiveness parameter

cpjs c, Normalized Competitiveness parameter

i js, Weight of Competitiveness parameters within an Overarching category

OC js c, Overarching category

ocjs c, Normalized Overarching category

is Weight of an Overarching category within the Attractiveness index

AIs c, Attractiveness index (of the country “c” for the industry “s”)

ais c, Normalized Attractiveness index

R Mean correlation

Superscripts:

c Country

b Benchmark country

m MENA country

s Solar industry

pv Solar industry related to PV

csp Solar industry related to CSP

Subscripts:

i Overarching category

j Competitiveness parameter

k Datum

Chapter 1 | Executive Summary | 1

11111CHAPTER ONE:

Executive Summary

1.1 Introduction

The objective of this study is to assess the competitiveness of five selected Middle East and North Africa (MENA) countries—Algeria, Egypt, Jordan, Morocco and Tunisia—to attract private sector investments in the Concentrated Solar Power (CSP) and Photovoltaic (PV) industries.1 The study develops an Attractiveness index for these countries and compares them to a group of Benchmark countries comprising Chile, China, Germany, India, Japan, South Africa, Spain, and the United States. The study also identifies the existing gaps between the MENA and Benchmark countries; and proposes recommendations to improve the competitiveness of MENA countries and, hence, to develop a local solar industry. To achieve these goals, a macro- and microeconomic analysis is carried out through a competitiveness benchmark

analysis, together with an analysis of the solar industry value chain and the projected component demand.

The Attractiveness index for each solar industry is composed of all relevant variables that an investor would take into account in his/her decision to set up a manufacturing plant.2

The four main factors for such a decision are3: (i) Production: productivity, and costs of production factors; (ii) Demand: expected internal and external demand for solar components; (iii) Risk and stability: Real and perceived risks; and (iv) Business support: Specific support and enabling environment. PV and CSP are complementary, rather than directly competitive. For this reason, developers should carefully assess their needs and environment when choosing which solar technology to use.

1.2 MENA Countries Face Strong Competition from Leading Solar Markets

1.2.1 CONCENTRATED SOLAR POWER (CSP) INDUSTRIES

The value chain analysis reveals three groups of industries with differing technological complexity4 and investment requirements (Figure 1.1). They comprise a group of industries that can be independently developed (independent industries); a group of

industries that are best developed based on existing conventional industries (conventional industries); and a group of industries that, due to their complexity and required investment, are not likely to be developed (difficult-to-reach industries).

Overall, MENA countries have some potential to attract investments in manufacturing facilities of

1 This study complements the World Bank study [69] published in March 2011.2 The Attractiveness index is a synthetic indicator built by aggregating 49 parameters, as described in the Methodology section. 3 Resulting from discussions with leading solar companies.4 The analysis of technological complexity is based on consulting and interviews with solar experts according to their internal manufacturing processes.

2 | Competitiveness Assessment of MENA Countries to Develop a Local Solar Industry

conventional (heat exchanger, pumps, storage tanks, and condensers) and independent (structure and tracker and solar salt) industries due to their higher Attractiveness index (Figure 1.2).

1.2.2 PHOTOVOLTAIC (PV) INDUSTRIES

The value chain analysis of Crystalline and Thin Film technologies5 reveals three groups of industries with differing technological complexity and investment requirements (Figure 1.3): a group of industries related to the Thin Film components (TF industries); a group of industries shared by

Crystalline and Thin Film technologies (sharedindustries), such as support structure and inverters; and a group of industries difficult to reach in most parts of the world, including Benchmark countries, due to their technological complexity and investment requirements. Most Crystalline industries, except for the module assembly, fall into this last category.6

Overall, MENA countries are more suited to develop shared industries such as inverters and support structures. In the medium term, if current world-wide overcapacity were to diminish, investments in Thin Film PV, solar glass, and modules industries could be considered (Figure 1.4).

Figure 1.1 | Investment Requirements vs. Technology Complexity for CSP Technology Industries

Difficult to reach Conventional Independent

Technology Complexity

Inve

stm

ent R

equi

rem

ents

Steam Turbine

HTF Thermal Oil

Electrical Generator

HTF Pumps

HighLow

Low

High

Pumps

Receiver

Storage Tanks

Heat exchanger

Structure & Tracker

Solar Salt

Complexity and Investment Requirements for the CSP Solar Industry

Condenser

Mirror

Source: STA/Accenture.

5 Crystalline PV has 80%–90% of market share, with Thin Film largely making up for the remaining. Concentrated Photovoltaic (CPV) has not been included directly in the study due to its lower penetration rate, but CPV technology requirements are included in the CSP and PV technology, because some of the components (trackers, optics, cells), are common to the other two solar technologies. Thus, CPV technology also could be of interest to MENA countries in the future. 6 Crystalline industries represent a market with experienced actors in an over-production capacity situation that has exerted downward pricing pressure on the value chain.Thus, the barriers of entry to this market are very high and currently not suitable to MENA countries.


Figure 1.3 | Investment Requirements vs. Technology Complexity for PV Technology Industries

Difficult to reach TF Shared

PV - Crystalline PV - Thin Film PV - Shared


Inve

stm

ent R

equi

rem

ents

HighLow

Low

HighPolysilicon

Ingots/Wafers

Cells

Solar Glass

Complexity and Investment Requirements for the PV Solar Industry

TF Materials

c-Si Modules

TF Modules

Inverters

Support Structure


Figure 1.2 | CSP Industry Development Opportunities in MENA Countries

1.0 Average MENA

Algeria

Egypt

Jordan

Morocco

Tunisia

Average Benchmark

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

Structu

re & Tra

cker

Storage Tanks

Steam Turbine

HTF PumpsHTF Th

ermal O

il

Heat Exchanger

Electrical G

enerator

Condenser

Solar Salt

Receiver

Pumps

Mirror


Note: The range covered by Benchmark countries is shaded.


1.3 Egypt and Morocco Show the Highest Attractiveness Index for CSP and PV Component Industries

The selected MENA countries lag behind the Benchmark countries, but present opportunities for improving their attractiveness to investors. For a given country, attractiveness varies among different component industries according to the country’s suitability to fulfill the specific needs of that industry (such as low energy price for energy-intensive industries, availability and price of critical materials) and investors’ preferences. The strengths and weaknesses of each MENA country for the development a local solar industry follow.

Algeria’s key strengths are the costs of energy for industrial consumers,7 its industry structure, and its solar energy targets. The four main aspects to improve would be its availability of required components and materials, risks associated with doing business, innovation capacity, and logistical infrastructure. Algeria could, however, explore opportunities in industries with higher energy requirements such as solar glass, TF materials and TF modules.

Figure 1.4 | PV Industry Development Opportunities in MENA Countries

Average MENA

Algeria

Egypt

Attra

ctiv

enes

s in

dex

Jordan

Morocco

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

Tunisia

Cells

Modules c-Si

Ingots Wafers

Polysilicon

Solar glass

TF Materials

TF Modules

Inverter

Support Stru

cture

Average Benchmark



7 A low-cost electricity presents a competitive advantage to private investors in energy-intensive industries. However, from the point of view of the country, subsidies to energy consumption introduce tensions in the system because they veil the true price signal to electricity consumers and may lead to adverse economic and environmental impacts[94]. For a country that generates its electricity largely from natural gas, a true price of electricity would need to take into account the LCOE (levelized cost of energy) of a CCGT (Combined Cycle Gas Turbine) plant, estimated at 5$c/kWh, and add to it transportation costs, business margin, and others to arrive at the final number[93].


Egypt’s key strengths are its low cost of labor and of energy for industrial consumers;8 its availability of materials for solar industries, particularly glass, steel, and stainless steel; and a high manufacturing ability. The key aspect to improve would be its fiscal and financial costs, which undermine the country’s competitiveness. Egypt should focus on developing the CSP Structure & Tracker industries and the Support structure industry for PV. In the medium term, Egypt could consider opportunities to innovate

in some of the conventional CSP industries (heat exchanger, storage tanks) and to develop the solar glass and Mirror industries, with a strategy to take advantage of regional synergies. Investments in new reflective materials also could be explored in Egypt.9

Jordan’s key strengths for solar industry development are its fiscal and financial costs, low risk associated with doing business, and its higher education rates. On the other hand, a weak industrial structure10 and

Figure 1.5 | Competitiveness Parameters in Algeria Compared to Benchmark and MENA Averages

Innovation capacity

Industry structure

Financial risk

Risk associated to demand

Risk associated to doing business

Component demand

Fiscal and financial costs

Cost of energy (industrial)

Relevant manufacturing ability

Material availability

Labor market

Logistical infrastructure

Algeria

1.00

0.80

0.60

0.40

0.20

-

Production

Demand

Risk and stability

Business support

Benchmark Country Average

MENA Country Average


8 A low cost of electricity presents a competitive advantage for private investors in energy-intensive industries. However, from the point of view of the country, subsidies to energy consumption introduce tensions in the system because they veil the true pricesignal to electricity consumers and may lead to adverse economic and environmental impacts[94]. Although energy cost for industrial consumers is still low in Egypt, the cost has risen substantially over the past year and is expected to keep increasing because national subsidies to fossil fuels have been reduced.9 All-aluminum and multilayer aluminum reflectors[6], as well as reflective films ([7], [8]) are entering the market. However, despite having advantages compared with conventional glass Mirrors (light weight, no thermal shock, lower expected price), they also have disadvantages (durability concerns) and scant or no track record.10 Industrial structure refers to (a) the presence of large international industrial companies, (b) the % of industrial GDP, and (c) local clustering of suppliers needed for the solar industry being considered.


Figure 1.7 | Competitiveness Parameters in Jordan Compared to Benchmark and MENA Averages

Innovation capacity

Industry structure

Financial risk



Component demand





Labor market


Jordan

1.00

0.80

0.60

0.40

0.20

-

Production

Demand

Risk and stability

Business support




Figure 1.6 | Competitiveness Parameters in Egypt Compared to Benchmark and MENA Averages

Egypt

Labor market


Relevant manufacturingability


Financial risk Fiscal and financial costs

Component demand

Risk associated to doingbusiness


Production

Demand

Risk and stability

Business support



Industry structure


Innovation capacity

1.00

0.80

0.60

0.40

-

0.20



high cost of industrial energy, combined with lower expected local demand are drawbacks to new industrial developments. However, investments for some niche applications, as well as the creation of a regional Certification and Testing Institute, could be explored.

Morocco’s key strengths are its planned solar demand for 2020; the government’s commitment and support;11 and the overall industrial structure in the country, which includes the presence of large international companies alongside specific local clustering. The main aspects to improve are the cost of industrial energy, materials availability, innovation capacity, and logistical infrastructure. Morocco could focus on developing the CSP Structure & Tracker

industries and the Support structure industry for PV; and in the medium term, consider opportunities to innovate in the conventional CSP industries (condenser, pumps).

Tunisia’s keys strengths are its level of education, business sophistication, and a better-than-average logistical infrastructure. However, a weak industrial structure and high cost of energy for industrial customers, combined with low material availability and relevant manufacturing ability, could pose drawbacks to new industrial developments. In the short term, the CSP Receiver industry and the materials industry for PV TF may be of particular interest for development in Tunisia.

Figure 1.8 | Competitiveness Parameters in Morocco Compared to Benchmark and MENA Averages

Innovation capacity

Industry structure

Financial risk



Component demand





Labor market


Morocco

1.00

0.80

0.60

0.40

0.20

-

Production

Demand

Risk and stability

Business support




11 The Moroccan Agency for Solar Energy (MASEN) is a Joint Stock company with a Board of Trustees and a Supervisory Board. MASEN aims at implementing a program to use solar energy to develop integrated electricity production projects with a minimum total capacity of 2000 MW in the areas of Morocco that are capable of doing so[91].


The creation of a Climate Innovation Center (CIC) could assist investors, professionals and policy-makers in MENA countries to develop

local solar industries. The CIC could help to fill MENA’s gaps in financing, access to information, consulting and training, and networking.

Figure 1.9 | Competitiveness Parameters in Tunisia Compared to Benchmark and MENA Averages

Innovation capacity

Industry structure

Financial risk



Component demand





Labor market


Tunisia

1.00

0.80

0.60

0.40

0.20

-

Production

Demand

Risk and stability

Business support




Chapter 2 | Introduction to the Value Chain of Solar Technologies | 9

22222222222CHAPTER TWO

Introduction to the Value Chain of Solar Technologies

2.1 Concentrated Solar Power (CSP) Technology

Although, strictly speaking, “concentrated solar power” also could apply to low- and high-concentration photovoltaic systems, the term is more commonly used to describe technologies that use the thermal energy from solar radiation to generate electricity. These systems can be subdivided in three main subsystems:

• Solar field (SF), in which Mirrors (or, in some new developments, lenses) are used to concentrate (focus) sunlight energy and convert it into high temperature thermal energy (internal energy). This heat is transferred using a heat transfer fluid (HTF), which can be synthetic oil (the most widely used), molten salt, steam, air, or other fluids. Although they require highly precise, two-axis tracking systems, the point focus systems enable higher concentration ratios and, therefore, higher temperatures and efficiencies. On the other hand, linear focus systems are less demanding but also less efficient. Either way, as with any concentrating solar technology, only the beam (direct) component of the solar irradiation is used, because the diffuse portion does not follow the same optical path so will not reach the focus.

• Power block (PB), in which the heat contained in the HTF is used to generate electricity. The most common approach is to produce high pressure steam, which then is channeled through a conventional steam turbine and generator in a Rankine cycle. The Dish/Engine systems, however, use a Stirling engine.

• Thermal energy storage (TES) system, in which excess energy from the SF is stored for further use in the PB. The state of the art in this field is to use molten salts stored in two tanks (one “cold” and one “hot”), and a reversible heat exchanger. Additional approaches are steam storage, direct use of molten salt as HTF, and experimental prototypes.

To sum up, actual CSP plants utilize four alternative technological approaches: Parabolic Trough Systems, Linear Fresnel Systems, Power Tower Systems, and Dish/Engine Systems.

2.1.1 PARABOLIC TROUGH SYSTEMS

The Parabolic Trough today is considered a commercially mature technology, with thousands of megawatts already installed in commercial power

Table 2.1 | CSP Solar Fields

Point Focus Linear Focus

Single focus Power Tower systems*

Multiple focus Dish/Engine systems Parabolic Trough systemsLinear Fresnel systems

Source: Authors. Note: *Multitower solar fields are at a demonstration stage (a 5-MWe plant started operation in 2009).


plants, mainly in the US and Spain. In 2012 Parabolic Trough comprised approximately 95 percent of total CSP installed capacity (Figure 2.1).

Parabolic Trough (as well as Linear Fresnel) is a 2D concentrating system in which the incoming direct solar radiation is concentrated on a focal line by one-axis-tracking, parabola-shaped Mirrors. They are able to concentrate the solar radiation flux by 30–80 times, heating the HTF to 393ºC. (A different approach using molten salts as HTF can heat to 530ºC but is not yet commercially proven.) The typical unit size of these plants ranges from 30 MWe–80 MWe (megawatt-electric). Thus, they are well suited for central generation with a Rankine steam turbine/generator cycle for dispatchable markets.

A Parabolic Trough solar field comprises a variable number of identical “solar loops” connected in parallel. Each loop can raise the temperature of a

certain amount of HTF from the “cold” to the “high” operation temperature (typically from 300ºC to 400ºC). The loops contain from 4 to 8 independently moving subunits called “collectors.” The main components of a Parabolic Trough collector are:

• HTF Thermal Oil: A synthetic oil is used as heat transfer fluid in all commercial Parabolic Trough CSP plants actually in operation. The most commonly used oil is a eutectic mixture of biphenyl and diphenyl oxide. Additional fluids (such as silicone-based) are under development and testing.

• Mirror: It reflects the direct solar radiation incident on it and concentrates it onto the Receiver placed in the focal line of the Parabolic Trough collector. The Mirrors are made with a thin silver or aluminum reflective film deposited on a low-iron, highly transparent glass support to give them the necessary stiffness and parabolic shape.

Figure 2.1 | Parabolic Trough Collectors Installed at Plataforma Solar de Almería (Spain)

Source: Photo courtesy of PSA-CIEMAT.


• Receiver or absorber tube: It consists of two concentric tubes. The inner tube is made of stainless steel with a high-absorptivity, low-emissivity coating, and channels the flow of the HTF. The outer tube is made of low-iron, highly transparent glass with an antireflective coating. A vacuum is created in the annular space. This configuration reduces heat losses, thus increasing overall collector performance.

• Structure & Tracker: The solar tracking system changes the position of the collector following the apparent position of the sun during the day, thus enabling concentrating the solar radiation onto the Receiver. The S&T system consists of a hydraulic drive unit that rotates the collector around its axis, and a local control that governs the drive unit. The structure, in turn, must keep the shape and relative position of the elements, transmitting the driving force from the tracker and avoiding deformations caused by their own weight or other external forces such as the wind.

The power block of a Parabolic Trough CSP plant resembles a conventional Rankine-cycle power plant. The main difference is that, instead of combustion or a nuclear process, the heat used to generate superheated steam is collected in the solar field and transferred using a HTF. The main components of the power block are:

• Condenser: Although it also is a heat exchanger, the condenser’s design is more complex. The condenser affects the overall performance of the plant more than the other heat exchangers in the plant because it modifies the discharge pressure of the turbine. For this reason, the turbine manufacturer could try to limit the possible suppliers of condensers to give a performance guarantee, or even include the condenser in its own scope of supply.

• Electrical generator: Within the generator, the rotary movement from the turbine is transmitted to a series of coils inside a magnetic field, thus producing electricity due to electromagnetic induction. The design and manufacturing of a generator requires special materials and a highly specialized workforce, available to only a limited number of companies around the world. To manufacture generators, carbon steel, stainless steel, and special alloys are required, as well as copper and aluminum in smaller amounts.

• Heat exchanger: Two different sets of heat exchangers are required in the PB. First, HTF-water heat exchangers (usually referred to as SGS, or steam generation system) are required to generate the high-pressure and -temperature steam that will drive the turbine. Second, water-water heat exchangers recover the heat from turbine bleeds to preheat the condensate or feed water, thus increasing the Rankine cycle efficiency. If a TES system is included, a reversible, molten salt-HTF heat exchanger also is necessary. To manufacture exchangers, carbon steel and stainless steel are required, as well as copper and aluminum in smaller amounts.

• HTF Pumps: The materials commonly used in joints for the range of temperatures and pressures

Figure 2.2 | Schematics of a Parabolic Trough collector

0302

01

01 02 03

Sun rays

Solar Field Piping Ref lector Absorber tube

Source: STA.


required for this application are not compatible with the chemical composition of the HTF oil. Thus, specific designs and materials, derived mostly from the petrochemical industry, are necessary.

• Pumps: Several sets of pumps are required within a Parabolic Trough CSP plant: feed water pumps; cooling water pumps; condensate pumps; and other minor pumps for dosing, sewage, raw water, and water treatment purposes. If a TES system is included, molten salt pumps also are necessary. Carbon steel and stainless steel, as well as copper, aluminum, and other materials in smaller amounts, are required to manufacture pumps.

• Steam turbine: The expansion of the steam inside the turbine will cause the motion of the rotor

blades, and this movement will be transmitted to the Electrical generator to produce electricity. The design and manufacturing of a turbine requires special materials and a highly specialized workforce, available to only a limited number of companies around the world. Carbon steel, stainless steel, and special alloys are required for to manufacture steam turbines.

• Storage tanks: A large number of tanks and pressure vessels are required in a Parabolic Trough CSP plant. They include raw and treated water storage tanks; deaerator; steam drum; and condensate tank for the Rankine cycle; HTF storage; expansion; and ullage vessels and other minor tanks for sewage and water treatment intermediate steps. If a TES system is included, molten salt “hot” and “cold” storage tanks also

Figure 2.3 | General Schematics of a Parabolic Trough CSP Plant with Thermal Energy Storage

Generator

Steam turbine

Hot salt storage

Condenser

Cooling tower

Substation

Salt storage heat exchanger

Cold salt storage

Steam generator

Solar field

02

03

04

05

06

07

08

09

10

01

0809 07

04

05 06

10

0203

01

Source: STA.


are necessary. Carbon steel and stainless steel are required to manufacture tanks.

The state of the art in the field of thermal energy storage (TES) is to use molten salts. The most common mixture used for this purpose is referred to as “Solar salt,” and is composed by sodium nitrate (NaNO3) and potassium nitrate (KNO3). As described above, this salt is stored in two tanks (one “cold” and one “hot”), and a reversible heat exchanger is used to move energy from the solar field and to the power block.

Other elements also are necessary, such as piping, insulation, and either flexible piping or rotating joints to connect adjacent collectors, as well as electric switchgear, water treatment equipment, etc. However, these elements are either unspecific of CSP technology or, in the case of flexible piping or rotating joints, pose a minor fraction of the investment costs and are a highly specialized component, and thus have been omitted from this report.

2.1.2 LINEAR FRESNEL SYSTEMS

Linear Fresnel Systems are conceptually simple, using inexpensive, compact optics (flat Mirrors) that can produce saturated steam at 150ºC–360ºC with less than 1 ha/MW land use. Linear Fresnel systems account for 2 percent of total CSP installed capacity. This percentage is expected to increase in the near future as the system’s share in the pipeline increases (Figure 2.1).

The Fresnel system uses flat or slightly curved Mirrors to direct sunlight to a fixed absorber tube positioned above the Mirrors, sometimes with a secondary reflector to improve efficiency. With flat Mirrors that are close to the ground, Linear Fresnel collectors are less expensive to produce and less vulnerable to wind damage. On the other hand, efficiency is lower due to a lower concentration ratio, and the intra-day energy outflow variation is higher than in Parabolic Trough.

Figure 2.4 | Schematics of a Linear Fresnel Collector

Absorber tubePrimary fresnel ref lectorSecond stage ref lector 02 0301

Sun rays

02

03 01

Source: STA.


A Linear Fresnel solar field comprises a variable number of identical “solar loops” connected in parallel. Each loop can raise the enthalpy of a certain amount of HTF. Most[1] commercial applications use water as HTF in a Direct Steam Generation (DSG) configuration; and, instead of raising the temperature, these applications increase the vapor fraction of the fluid. The main components of a Linear Fresnel loop are:

• Mirror: Mirror reflects the direct solar radiation incident on it and concentrates it onto the Receiver placed in the focal line of the Linear Fresnel loop. The Mirrors are made with a thin silver or aluminum reflective film deposited on a low-iron, highly transparent glass support to give them the necessary stiffness. They are similar to the Mirrors for Parabolic Trough, differing in size and shape. Alternatively, aluminum foils are being tested by some leading companies (3M).

• Receiver or absorber tube: Receiver is made of stainless steel with a high-absorptivity and low-emissivity coating, it channels the flow of the HTF. The tube is placed inside a secondary reflector with a flat cover made of low-iron, highly transparent glass with an antireflective coating. This configuration reduces heat losses and increases the half-acceptance angle,12 thus increasing overall performance.

• Structure & Tracker: Solar tracking system changes the position of the mirrors following the apparent position of the sun during the day, thus enabling concentrating the solar radiation onto the Receiver. S&T consists of several drives that rotate the mirrors, and a local control that governs the drive unit. The structure, in turn, must keep the shape and relative position of the elements, transmitting the driving force from the tracker, and avoiding deformations caused by their own weight or other external forces such as the wind.

The power block of a Linear Fresnel CSP plant resembles a conventional Rankine-cycle power

plant. The main difference is that, instead of a combustion or nuclear process, the heat used to generate superheated steam is collected in the solar field and transferred using a heat transfer fluid. The main components of the PB are:

• Condenser: It is analogous to the equipment described for Parabolic Trough plants.

• Electrical generator: It is analogous to the equipment described for Parabolic Trough plants.

• Heat exchanger: Most commercial Linear Fresnel applications use water as HTF in a Direct Steam Generation (DSG) configuration. Thus, the need for heat exchangers is largely reduced compared to in a Parabolic Trough plant. The Solar Field will act as SGS (Steam Generation System), generating the high-pressure and temperature steam that will drive the turbine. Water-water heat exchangers are still necessary to recover the heat from turbine bleeds to preheat the condensate or feed water, thus increasing the Rankine cycle efficiency. Carbon steel and stainless steel, as well as copper and aluminum in smaller amounts, are required for their manufacture.

• Pumps: Several sets of pumps are required within a Linear Fresnel CSP plant: feed water pumps, cooling water pumps, condensate pumps, and other minor pumps for dosing, sewage, raw water and water treatment purposes. Carbon steel and stainless steel are required for their manufacture, as well as copper, aluminum, and other materials in smaller amounts.

• Steam turbine: It is analogous to the equipment described for Parabolic Trough plants.

• Storage tanks: A large number of tanks and pressure vessels are required in a Linear Fresnel CSP plant. They include raw and treated water storage tanks, the deaerator, the steam drum, the condensate tank for the Rankine cycle; and other minor tanks for sewage and water treatment intermediate steps. Depending on the DSG configuration, additional steam drums could

12 The half-acceptance angle is the angle of the maximum cone of light that will reflect onto the focus; it is used to characterize non-ideal optic systems.


be required for the solar field. Carbon steel and stainless steel are required for their manufacture.

The state of the art in the field of thermal energy storage (TES) is to use molten salts. However, the use of water (phase change) in Linear Fresnel plants makes it difficult using actual molten salts. Short-term energy storage using steam is the usual approach in these plants, if any[1].

Other elements also are necessary, such as piping, insulation, electric switchgear, and water treatment equipment. However, these elements are either not specifically for CSP technology or pose a minor fraction of the investment costs, so have been omitted from this report.

2.1.3 POWER TOWER SYSTEMS

The Power Tower systems, also known as Central Receiver systems, have more complex optics than the systems above because they are based on a 3-D concentration concept. A single solar Receiver is mounted on a tower, and sunlight is concentrated by means of a large paraboloid that is discretized

in a field of heliostats. Multitower systems also are under development. Power Tower systems currently represent 3 percent of total CSP installed capacity (Figure 2.1). This share is expected to increase in the near future because its share in the pipeline is higher than 3 percent.

Concentration factors for this technology range are between 200 and 1,000. Plant unit sizes could range between 10 MW and 200 MW so are suitable for dispatchable markets. Integration in advanced thermodynamic cycles also is feasible.

Although less mature than the Parabolic Trough technology, after a proof-of-concept stage, the Power Tower is taking its first steps into the market with three commercial plants that are in operation in southern Spain: PS1O0 and PS20 (11 and 20 MWe, using saturated steam as heat transfer fluid) and Gemasolar (17 MWe, using molten salts as HTF). Sierra SunTower, a 5-MWe plant in Lancaster, California (US) started operation in 2009 using a multitower solar field.

Figure 2.5 | Functional Scheme of a Power Tower System, Using Molten Salt as HTF, with TES

Generator

Steam turbine

Hot salt storage

Condenser

Cooling tower

Substation

Receiver

Cold salt storage

Steam generator

Solar field

02

02

03

03

04

04

05

05

06

06

07

07

08

08

09

09

10

10

01

01

Source: STA.


To this day, more than 10 different experimental Power Tower plants have been tested worldwide, generally small demonstration systems between 0.5 MWe and 10 MWe. Most of these plants operated in the 1980s.

A wide variety of heat transfer fluids including saturated steam, superheated steam, molten salts, atmospheric air, or pressurized air can be used. Temperatures vary between 200ºC and 1,000ºC.

Falling particle Receiver and beam-down Receiver are other promising technologies but further from the market.

A Power Tower solar field comprises a variable number of identical heliostats, which reflects the sunlight towards the Receiver. The heat transfer fluid temperature will reach 250ºC to 700ºC, depending on whether the HTF used is air, steam, molten salt, or others. The main components of a Power Tower solar field are:

• Mirror (or “facet”): Reflects the direct solar radiation incident on it and concentrates it onto the Receiver. The Mirrors are made with a thin silver or aluminum reflective film deposited on a low-iron, highly transparent glass support to give them the necessary stiffness. They are almost identical to the Mirrors for Parabolic Trough, differing only in size and shape. Although small heliostats can be made of flat glass, a slight curvature is necessary for larger sizes.13

• Receiver:14 Collects the radiation reflected by the heliostats and transfers it to the HTF as heat. The Receiver is the real core of a Power Tower system and the most technically complex component, because the former must absorb the incident radiation under very demanding concentrated solar flux conditions and with minimum heat loss. Receivers can be classified either by their

configuration, such as flat or cavity systems; or by their technology, such as tube, volumetric, panel/film, and/or direct absorption systems. Super alloys or ceramics are the usual material for Receivers.

• Structure & Tracker: Solar tracking system changes the position of the Mirrors on the heliostats, following the apparent position of the sun during the day and enabling concentrating the solar radiation onto the Receiver. Each heliostat performs two-axis tracking with a drive that rotates the Mirrors and has a local control that governs the drive unit. The structure, in turn, must keep the shape and relative position of the elements, transmitting the driving force from the tracker, and avoiding deformations caused by the elements’ own weight or other external forces such as the wind.

The power block of a Power Tower CSP plant resembles that of a Rankine-cycle power plant. The main difference is that, instead of a combustion or nuclear process, the heat used to generate superheated steam is collected in the solar field and

Figure 2.6 | Main Components of a Heliostat

Azimuth

Facets

Structure

Torque tube

Drive mechanism

Pedestal tube

Local control

Elevation

Source: Photo courtesy of PSA-CIEMAT

13 Due to non-ideal optics because the sun is not a point focus.14 The Receiver has been included in the solar field to keep an analogous structure for all CSP technologies, although, in Power Tower systems, the Receiver is physically within the power block.


transferred using a HTF. The main components of the power block are:



• Heat exchanger: Two different sets of heat exchangers are required in the power block. First, HTF-water heat exchangers (usually referred to as SGS, or Steam Generation System) are required to generate the high-pressure and temperature steam that will drive the turbine. This set will not be necessary if steam is used as HTF. Second, water-water heat exchangers are used to recover the heat from turbine bleeds to preheat the condensate or feed water, thus increasing the Rankine cycle efficiency. If a molten salt TES system is included, a reversible molten salt-HTF heat exchanger also is necessary, unless the same molten salt is used as HTF. Carbon steel and stainless steel are required for their manufacture, as well as copper and aluminum in smaller amounts.

• Pumps: They are analogous to the equipment described for Parabolic Trough plants.


• Storage tanks: They are analogous to the equipment described for Parabolic Trough plants.

The state of the art in the field of thermal energy storage (TES) is to use molten salts. The most common mixture used for this purpose, “Solar salt,” is composed of sodium nitrate (NaNO3) and potassium nitrate (KNO3). As described above, this salt is stored in two tanks (one “cold” and one “hot”), and a reversible heat exchanger is used to move energy from the solar field and to the power block. This heat exchanger is not necessary if the molten salt is used directly as the HTF.

Additional necessary elements are piping, insulation, electric switchgear, and water treatment equipment. However, these elements are either not specifically

for CSP technology, or comprise a minor fraction of the investment costs so have been omitted from this report.

2.1.4 DISH/ENGINE SYSTEMS

These systems are small modular units with autonomous generation of electricity, that is, each Dish/Engine set has its own solar field and power block, except for the power regulation switchgear.

Dish/Engine systems are parabolic 3-dimensional concentrators (thus requiring two-axes tracking) with high concentration ratios (600–4000), and a Stirling engine or Brayton mini-turbine located at the focal point that uses hydrogen, helium, or air as working fluid. Current Dish/Engine systems range from 3 kWe (that is, Infinia) to 25 kWe (that is, Tessera Solar). Their market niche is both in distributed/on-grid and remote/off-grid power applications.

Since the design of Dish/Engine systems is modular, they can compete with PV to serve the same applications. Typically, standalone PV systems are used for rural electrification or electricity supply in remote water pumping stations. Power capacity of this kind of application normally ranges from a few tenths of a kW to several hundred kW.

Besides the higher investment costs for Dish/Engine compared to photovoltaic systems, additional concerns need further technical development. One example is engine reliability.

Two decades ago, Dish/Engine Stirling systems with concentration factors of more than 3,000 suns and operating temperatures of 750ºC had already demonstrated their high conversion efficiency, at annual efficiencies of 23 percent and 29 percent peak[2]. However, Dish/Engine systems have not yet surpassed the pilot project plant operation phase.

A Dish/Engine solar field comprises a variable number, from one to dozens, of reflective elements,


or “facets,” in the shape of a paraboloid, or “dish.” Each dish can raise the temperature of a certain amount of working fluid from the “cold” to the “high” operation temperature (up to 850ºC). The main components of a Dish/Engine solar collector are:

• Mirror: Reflects the direct solar radiation incident on it and concentrate it onto the Receiver placed in the focal point of the dish. The Mirrors can be made with a thin silver or aluminum reflective film deposited on a low-iron, highly transparent glass support to give them the necessary stiffness and parabolic shape. These Mirrors are similar to those for Parabolic Trough, although differing in size and shape. Although small facets can be made of flat glass, a slight curvature is necessary15 for larger sizes. A different approach can use a reflective layer coating a flexible film, which is given the parabolic shape through vacuum.

• Receiver: Dish/Engine Receivers can be smaller versions of those used in Power Tower systems. However, simpler versions adapt the heater tubes of a Stirling engine, although it is hard to integrate multiple cylinder engines[3]. Liquid-sodium, heat-pipe solar Receivers solve this issue by

vaporizing liquid sodium on the absorber surface, condensing it onto the engine’s heater tubes. This process enables reaching more uniform temperatures, although complexity and cost are higher as well.

• Structure & Tracker: Solar tracking system changes the position of the collector following the apparent position of the sun during the day, thus enabling concentrating the solar radiation onto the Receiver. Each collector performs two-axes tracking with a drive that rotates both the dish and the Receiver and has a local control that governs the drive unit. The structure, in turn, must keep the shape and relative position of the elements, transmitting the driving force from the tracker, and avoiding deformations caused by the elements’ weight or other external forces such as the wind. The high precision required, together with the weight of the set Receiver plus the engine and the necessity to avoid the “arm” that holds the Receiver blocking too much light, make this a demanding task.

The power block of a Dish/Engine CSP collector is a compact set comprising the Receiver described above plus either a Stirling engine, or a Brayton

Figure 2.7 | Main Components of a Dish/Engine System

Stirling engine

Receiver

Mirror

Structure

Local control


15 Due to non-ideal optics because the sun is not a point focus.


turbine and a compressor. The main components of the power block are:

• Electrical generator: Induction generators are used on Stirling engines tied to an electric utility grid. These generators are off-the-shelf items that can provide single or three-phase power with high efficiency. For turbines, a different approach might be advisable. The high-speed output of the turbine can be converted to high-frequency alternate current in a high-speed alternator, converted to direct current by a rectifier, and then converted to either 50 Hz or 60 Hz power by an inverter.

• Heat exchanger: No heat exchanger is necessary per se because the heat transfer takes place at the engine heater tubes.

• Turbine or engine: The design and manufacturing of a turbine and compressor for a Brayton cycle requires special materials and alloys and a highly specialized workforce––available to a limited number of companies around the

world. On the positive side, the small size of the equipment required increases the range of possible manufacturers. Stirling engines are less demanding. The main expected issue (the high precision required in the piston fabrication) is probably solvable if a country has motor vehicle industries. Carbon steel, stainless steel, and special alloys are required to manufacture turbines and engines.

Dish/Engine systems have not been conceived with thermal energy storage as a guiding principle, although experimental approaches using thermochemical energy storage have been made [4].

Other elements also are necessary, such as wiring, insulation, and electric switchgear. However, these elements are either nonspecific to CSP technology or comprise a minor fraction of the investment costs so are omitted from this report.

Figure 2.8 | Schematic Showing the Operation of a Heat-pipe Solar Receiver

05

05

04

04

03

03

02

02

01

01

09

09

08

08

07

07

06

06

Sodium pool

Condensing sodium

Engine heater tubes

Heat engine

Generator

Sodium vapor

CONCENTRATED IRRADIATION

Sodium liquid in wick

Absorber surfaceEngine working fluid

Source: Adapted from [3].


Analysis of the value chain for CSPA close examination of the value chain reveals three clusters of industries with differing technological complexity16 and investment requirements (Figure 2.9). The three clusters are: a group of industries that can be independently developed (independent industries), a group of industries that are best developed with the backing of existing conventional industries (conventional industries), and a group of industries that, due to their complexity and required investment, are not likely to be developed based on the demand for solar applications alone (difficult-to-reach industries).

Due to their technological complexity and large investment requirements, the group of industries at top right in Figure 2.9 and outlined in green are

considered difficult to reach in most parts of the world, even in Benchmark countries, which have successfully developed their solar industries. This group includes the Steam turbine, Electrical generator, HTF Thermal Oil, and HTF Pumps.

The conventional group of industries (Condenser, Heat exchanger, Pumps and Storage Tanks), outlined in orange in Figure 2.9, relies on existing industries. These industries are easier to develop in countries that already have conventional pressure vessel and tank and pump industries.

The independent group of industries, highlighted in blue in Figure 2.9, includes the Structure & Tracker, solar salt blending, Mirror, and Receiver industries.




Inve

stm

ent R

equi

rem

ents

Steam Turbine

HTF Thermal Oil


HTF Pumps

HighLow

Low

High

Pumps

Receiver

Storage Tanks

Heat exchanger

Structure & Tracker

Solar Salt


Condenser

Mirror


16 The analysis of technological complexity is based on consulting and interviewing solar experts based on their internal manufacturing processes.


These industries can be developed independently as part of solar industry development so long as the right conditions for the latter exist.

Overall, particularly in the short and medium terms, MENA countries are better suited to develop the conventional and independent groups of industries. These groups, therefore, are considered target industries. Figure 2.10 shows the overall industry score using the normalized Attractiveness index by CSP solar industry and by country.

The four difficult-to-reach industries (Steam turbine, Electrical generator, HTF Thermal Oil and HTF Pumps, marked in green) are the least interesting CSP industries for selected MENA countries to focus on in their current context. The recommendation is for the MENA Region to focus on the independent

CSP industries (in blue); and, according to their relative industrial base, on the conventional CSP industries (in yellow).17 These two, therefore, are considered target industries.

Some of the barriers to enter the difficult-to-reachgroup of industries include:

Status

Since 2006, CSP has had a renaissance, mainly in the United States and Spain. Today, programs are starting in China, India, Australia, South Africa, Morocco, Algeria, Egypt, and other countries. According to the IEA (International Energy Agency):

“CSP is a proven technology. The first commercial plants began operating in California in the period of 1984 to 1991, spurred by

Figure 2.10 | CSP Industry Development Opportunities (Normalized Attractiveness Index) in MENA Countries

0.1

0.2

Attr

activ

enes

s in

dex

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0 AverageMENA

Algeria

Egypt

Jordan

Morocco

Tunisia

Averagebenchmark

CondenserElectric

al generator

Heat exchanger

HTF PumpsHTF Th

ermal O

il

Mirror

Pumps

ReceiverSolar s

altSteam tu

rbineStorage ta

nksStru

cture & Tracker



17 The rest of the CSP industry analysis and recommendations in the report refers to these two groups of industries.


federal and state tax incentives and mandatory long-term power purchase contracts. A drop in fossil fuel prices then led the federal and state governments to dismantle the policy framework that had supported the advancement of CSP. In 2006, the market resurged in Spain and the United States, again in response to government measures such as feed-in tariffs (Spain) and policies obliging utilities to obtain some share of power from renewable and from large solar in particular.

As of early 2010, the global stock of CSP plants neared 1 GW capacity. Projects now in development or under construction in more than a dozen countries (including China, India, Morocco, Spain and the United States) are expected to total 15 GW.

Parabolic Troughs account for the largest share of the current CSP market, but competing technologies are emerging. Some plants now incorporate thermal storage.”––[5] p. 9

Concerning the path from theoretical design to commercial exploitation, the classical phases followed by CSP have been:

If applied to the four CSP technologies, the status of each is:

• Parabolic Trough: Stage 7 - Revision of technology for optimization

• Power Tower: Stage 6 - Construction of commercial plant

• Linear Fresnel and Dish/Engine: Stage 5 - Construction of pilot project.

Figure 2.11 | Developing Phases: From Design to Commercial Exploitation

1. Develop theoreticaldesign

2. Laboratory tests3. Construction

of a scale prototype and field test

4. Construction of a commercial prototype

and field test

7. Revision of technologyfor optimization

6. Construction of a commercial plant

5. Constructionof a pilot project


Table 2.2 | Main Entry Barriers for the Difficult-to-reach CSP Industries

HTF Thermal Oil HTF Pumps Steam Turbine Electrical Generator

Entry Barriers

Most sales are undertaken by a small number of companies:

BASF (Germany)Dow Chemical (US)Linde (Germany)Solutia (US)

GE Power (US)KSB (Germany)

Alstom (France) GE Power (US) MAN Turbo (Germany)Mitsubishi (Japan)Siemens (Germany)

GE Power (US) MAN Turbo (Germany)Siemens (Germany)

High capital requirements

High technology and innovation requirements

Skilled workers, technicians, engineers, and scientists requirements

Source: Authors.


Typical solar-to-electricity annual conversion efficiencies and other relevant factors for the four technologies, as compiled by a group of experts, are listed in Table 2.3[5].

The values for Parabolic Trough, by far the most mature technology, have been demonstrated commercially. Those for Linear Fresnel, Dish/Engine, and Power Tower systems are, in general, projections based on component and large-scale pilot plant test data, and the assumption of mature development of current technology. Major improvements can be achieved in the not-so-mature technologies.

Trends

• Parabolic Trough technology is leading the commercial deployment around the world, but the model based on thermal oil must be improved. Actual efforts include developing larger collectors (current standard span: 5.76 m); optimizing the design of the heat storage systems; and raising the working temperature to 500ºC by developing new absorber tubes and using new fluids such as water/steam, molten salts, or inert gases. All-aluminum and multilayer aluminum reflectors[6] as well as reflective films ([7],[8]) are entering the

market. However, despite having advantages compared with conventional glass Mirrors (light weight, no thermal shock, lower expected price), they also have disadvantages (lower reflectivity, durability concerns), and a scant or no track record.

• New Power Tower projects seem to prefer larger scale on the order of 100 MWe that use superheated steam or molten salts as thermal fluids.

• Activity in Dish/Engine systems focuses on small dishes with low-maintenance Stirling motors.

• Linear Fresnel systems are at an earlier stage of development. The focus seems to be their optimization for steam augmentation in fossil power plants or their use for air conditioning or water desalination.

Table 2.3 | Characteristics of Concentrated Solar Power Systems

Technology

Annual Solar-to-Electricity Efficiency(%)

Land Occupancy* ha/MWe

Water Cooling (m3/MWh**)

Storage Possible

Possible Backup/Hybrid Mode

Solar Fuels

Outlook for Improvements

Parabolic Trough

15 Large2.7

3,000 or dry

Yes, but not yet for DSG***

Yes No Limited

Linear Fresnel

8–10 Medium1

3,000 or dry

Yes, but not yet for DSG

Yes No Significant

Power Tower

20–35◊ Medium1.6

2,000 or dry

Depends on plant configuration

Yes Yes Very significant

Dish/Engine

25–30 Small None Depends on plant configuration

Yes, but in limited cases

Yes Through mass production

Source: Authors.Note: *Based on operating power plants data.

**Megawatt-hour.

***DSG: Direct steam generation.

◊Concepts need to be proven in commercial power plants that are in operation. Previous figures came from simulations.


2.2 Photovoltaic (PV) Technology

This technology converts solar energy directly into electricity using the photovoltaic effect. When solar radiation reaches a semiconductor, the electrons present in the valence band absorb energy and, being excited, jump to the conduction band and become free. These highly excited, nonthermal electrons diffuse, and some reach a junction at which they are accelerated into a different material by a built-in potential (Galvani potential). This acceleration generates an electromotive force that converts some of the light energy into electric energy. Unlike CSP, solar PV can use all radiation (direct and diffuse) that reaches the system.

The basic building block of a PV system is the PV cell. It is a semiconductor layer that converts solar energy into direct-current (DC) electricity. PV cells are interconnected to form a PV Module, typically up to 50W–200W. The PV Modules combine with

a set of additional application-dependent system components (such as inverters, batteries, electrical components and mounting systems) to form a PV system. PV systems are highly modular, that is, modules can be linked to provide power ranging from a few watts to tens of megawatts (MW).

R&D and industrialization have led to a portfolio of available PV technology options at different levels of maturity. Commercial PV Modules may be divided into two broad categories: wafer-based Crystalline silicon (c-Si) and Thin Films.

An overview of the main PV technologies follows:

• Crystalline silicon (c-Si) Modules○ Single-Crystalline silicon (sc-Si)○ MultiCrystalline silicon (mc-Si)

Figure 2.12 | Market Share of the Different CSP Technological Approaches, both Operating (left) and under Construction (right), 2012

Powertower

3%

Parabolictrough

95%

Parabolic trough Power tower Fresnel Source: NREL Database

Parabolictrough

69%

Powertower26%

Fresnel2%

Fresnel5%

Source: STA/Accenture based on [9].


• Thin Film (TF) Modules:○ Amorphous (a-Si) and Micromorph (µc-Si)

silicon○ Cadmium-Telluride (CdTe)○ Copper/Indium Sulfide (CIS) and Copper/

Indium/Gallium di-Selenide (CIGS).

Conversion efficiency is defined as the ratio between the produced electrical power and the amount of incident solar energy per second. Conversion efficiency is one of the main performance indicators of PV cells and modules. Table 2.4 provides the current efficiencies of different PV commercial modules.18

The large variety of PV applications enables a range of different technologies to be present in the market that demonstrate a direct correlation between cost and efficiency. The lower cost (per watt) to manufacture some of the module technologies, namely, Thin Films, is partially offset by the higher area-related system costs (support structure, required land, wiring) due to their lower conversion efficiency.

Chips for electronic devices share many of the resources and manufacturing processes with PV elements, especially if silicon-based. However, the purity level required for solar cells is “five nines” (99.999 percent), whereas electronic-grade silicon must be “nine nines.”

Figure 2.13 | PV Solar Energy Value Chain

Quartzite gravel or quartz (SiO2)

Metallurgical Grade Si

High purity Polysilicon

Multicrystalline silicon ingot

Multicrystalline silicon wafers

Monocrystalline silicon ingot

Monocrystalline silicon wafers Multicrystallion silicon ribbons

Solar cell

PV module

Installed PV system

Silane (CH4)

Amorphous silicon deposition

Support structure

Electronic components

CdTe/CIGS

Soda Lime glass

TCO

TF technologies c-Si technologies Common technologies

Source: STA.

Table 2.4 | Conversion Efficiencies of Different PV Commercial Modules (%)

Crystalline Silicon (c-Si)

Thin Film (TF)

sc-Si mc-Si a-Si/µc-Si CdTe CIS/CIGS

14–20 13–15 6–9 9–11 10–12

Source: [10].

18 Table 2.4 illustrates the range of optimum values. The influence of angle, temperature and diffuse/direct irradiation share must be compared when selecting a technology. A one-year simulation of the system is recommended.


2.2.1 CRYSTALLINE (c-Si) TECHNOLOGIES

The following components belong to the value chain of Crystalline silicon PV and could be considered for local manufacturing in MENA countries.

• Polysilicon: In the first step to make solar cells, the raw materials—silicon dioxide of either quartzite19 gravel (the purest silica) or crushed quartz—are first placed into an electric arc furnace, in which a carbon arc is applied to release the oxygen. The products are carbon dioxide and molten silicon. This simple process yields commercial brown Metallurgical Grade silicon (MG-Si) of 97 percent purity or better, useful in many industries but not the solar cell industry.

MG-Si is purified by converting it to a silicon compound that can be more easily purified by distillation than in its original state, and then converting that silicon compound back into pure silicon. Trichlorosilane (TCS, HSiCl3) is the silicon compound most commonly used as the intermediate, although silicon tetrachloride (SiCl4) and silane (SiH4) also are used. When these gases

are blown over silicon at high temperature, they decompose to high-purity silicon. This ultra-pure TCS is subsequently vaporized (distilling the TCS achieves an even higher level of purity) and flowed into a deposition reactor in which it is retransformed into elemental silicon.

Different processes exist with different advantages and drawbacks. These processes include the Siemens process[11], REC process, vapor-to-liquid Tokuyama deposition, or chemical refinement processes starting with MG-Si which blow different gases through the silicon melt to remove the impurities.

After any of these processes, polysilicon has typical contamination levels in the ppb (parts per billion) range, and can be cast into square ingots and undergo the wafering process to produce mc-Si cells. For sc-Si cells manufacturing, the atomic structure of the silicon must be dealt with first.

• Ingots/Wafers: Solar-grade purified polysilicon can be cast into square ingots and undergo the wafering process to produce mc-Si cells directly. For sc-Si cells manufacturing, the atomic structure of the silicon must be dealt with first. In the more widely used[12] Czochralski method,

Figure 2.14 | Polysilicon Manufacturing Value Chain

Coke Reduction in Arc furnace

˜1,800º_ C

MetallurgicalGrade silicon

(MG-Si)

Hydrochloric acid(HCl)

High purityTrichlorisilane

(TCS)Quartzite gravelor quartz (SiO2)

Coke (C)

Dissolve in HCl + distillation

Siemens process

Electronic gradepoly-silicon

(9 nines)

Poly-silicon(6–7 nines)

Upgraded MG-Si(>5 nines)

HCl Hydrogen (H2)

Modifiedprocess

REC/Tokuyama

Chemical refinement

Various gases

Source: STA.

19 Quartzite, not to be confused with the mineral quartz, is a metamorphic rock formed from quartz-rich sandstone that has undergone metamorphism.


single crystals of very pure silicon are grown. However, they contain impurities[13], which limit usage.20

The wafering process starts from the ingot, either single-crystal or poly-silicon. Wafers are sliced one at a time using a circular saw whose inner diameter cuts into the rod, or many at once with a multiwire saw. A diamond sawproduces cuts that are as wide as the wafer—0.5 millimeter thick. Approximately one-half of the silicon is lost from the ingot to the finished circular wafer.21 Polysilicon ingots can be cast directly in a rectangular shape, reducing silicon waste.

An alternative method for mc-Si is ribbon drawing. In a continuous process, a wafer-thin ribbon or sheet of multiCrystalline silicon is drawn from a polysilicon melt, avoiding most of the silicon loss caused by sawing. The wafers are

then polished to remove saw marks. State-of-the-art manufacturing processes try to optimize light absorption by surface micromachining of the polished wafer.

Doping (adding impurities to) the wafers is required for cell manufacturing. However, certain doping techniques must be undergone during ingot manufacturing. For Crystalline silicon, some dopants can be added in the crucible during the Czochralski process. Doping polyCrystalline silicon does have an effect on the resistivity, mobility, and free-carrier concentration. However, these properties strongly depend on the polycrystalline grain size, which is a physical parameter that the material scientist can manipulate.

• c-Si Cells: Single-crystal wafer cells tend to be expensive. Moreover, because they are cut from cylindrical ingots, they do not completely cover

Figure 2.15 | Ingot/Wafer Manufacturing Value Chain


Ribbondrawing

Crunching

Melting

Casting

Wafering

Czochralski

Monocrystallinesilicon ingot

Monocrystallinesilicon wafers

Multicrystallinesilicon ingot

Cutting

Multicrystallinesilicon wafers

Multicrystalline silicon ribbons

Source: STA.

20 For some electronic applications, single-crystal wafers are required. Even if “nine nines” purity silicon (99.9999999%) is used, during the Czochralski crystal growth the crucible slowly dissolves oxygen into the melt that is incorporated into the final crystal in typical concentrations of around 25ppma. To have even lower concentrations of impurity atoms (e.g. oxygen), Float Zone Crystal Growth is used.21 Silicon waste from the sawing process can be recycled into polysilicon, but the majority of the energy is not recovered.


a square solar cell module without a substantial waste of refined silicon. On the other hand, multiCrystalline silicon, or polyCrystalline silicon (mc-Si or poly-Si) is made from cast square ingots. Mc-Si or poly-Si is large blocks of molten silicon carefully cooled and solidified. These cells are less expensive to produce than single-crystal silicon cells but also less efficient.

Single-crystal wafers are usually lightly p-type doped. To make a solar cell from the wafer, a surface diffusion of n-type dopants (boron and/or phosphorus) is performed on the front side of the wafer. This diffusion forms a p–n junction a few hundred nanometers below the surface. The traditional way22 of doping (adding impurities to) silicon wafers with boron and phosphorus is to introduce a small amount of boron in the crucible during the Czochralski process.

One of the key processes in silicon surface micromachining is the selective etching of a sacrificial layer to release silicon microstructures. Improving the surface texturing is one of the important factors required to increase the solar cell short-circuit current, hence the solar cell conversion efficiency, due to the enhanced absorption properties of the silicon surface[14].

Because pure silicon is shiny, it can reflect up to 35 percent of sunlight. To reduce the amount of sunlight lost, an antireflective coating is put on the silicon wafer. The most common coatings used to be titanium dioxide and silicon oxide. Silicon nitride is gradually replacing them as the antireflective coating because of its excellent surface passivation qualities. Actual commercial solar cell manufacturers use silicon nitride because it prevents carrier recombination at the surface of the solar cell. Some solar cells have textured front surfaces that, like antireflective coatings, increase the light coupled into the cell. Such surfaces can usually only be formed on single-crystal silicon,

although in recent years methods of forming them on mc-Si have been developed.

The wafer then has a full area metal contactmade on the back surface. The rear contact is formed by screen-printing a metal paste, typically aluminum. A grid-like metal contact made up of fine “fingers” and larger “bus bars” is screen-printed onto the front surface also using a silver paste. After the metal contacts are made, the solar cells are given connections such as flat wires or metal ribbons and encapsulated, that is, sealed into silicone rubber or ethylene vinyl acetate (EVA).

• c-Si Modules: The encapsulated solar cells are interconnected and placed into an aluminum frame that has a BoPET (biaxially oriented poly-ethylene terephthalate) or PVF (poly-vinyl fluoride) back sheet and a glass or plastic cover. Front and rear connections are channeled through the junction box.

2.2.2 THIN FILM (TF) TECHNOLOGIES

The following components belong to the value chain of Thin Film PV and could be considered for local manufacturing in MENA countries.

Figure 2.16 | c-Si Cell Structure(1) Surface contact

(2) Antireflective coating

(3) n type silicon

(4) p type silicon

(5) p+ type silicon

(6) Back contact

Source: STA.

22 A more recent way of doping silicon with phosphorus is to use a small particle accelerator to shoot phosphorus ions into the ingot (ion implantation). By controlling the speed of the ions, it is possible to control their penetrating depth. This new process, however, generally has not been accepted by commercial manufacturers of solar cells because it is more expensive and complex, although it has advantages for the manufacture of electronic devices such as metal–oxide–semiconductor (MOS) transistors.


• TF Modules: Three main types of Thin-Film Modules can be described: thin-film silicon23

(TF-Si), cadmium telluride (CdTe), and copper-indium-(gallium) amphid films (CIS/CIGS). Unlike with Crystalline Modules, the manufacturing process of Thin-Film Modules is a single process that cannot be split up. Two different manufacturing approaches can be considered:○ “Superstrate” approach: For CdTe and

TF-Si Modules, the manufacturing process starts by depositing a transparent conductive oxide (TCO) such as zinc or tin oxide on the front glass superstrate. The thin (approximately 1/100th times “thinner” than in crystalline cells) photoactive films24 are deposited next, either by sputtering,25 PECVD26 or chemical deposition. Between each deposited layer, a laser or mechanical patterning is performed to create the conductive paths for electron evacuation. A final conductive layer, or “back contact,” connects the electric circuit; usually a carbon paste doped with copper or lead and a final layer of silver paint are used.

○ “Substrate” approach: For CIS/CIGS Modules, the manufacturing process starts by sputtering a molybdenum (Mo) layer on the rear soda lime glass substrate.

To apply the thin CIGS film, industrial manufacturers use either a single-step co-evaporation or a two-step method: deposition of the copper-indium-gallium precursor and ulterior selenization. As with CdTe Modules, a CdS layer is applied to act as the n-type semiconductor.

A TCO layer (in fact, two layers: a regular tin or zinc oxide and an ITO or Al doped oxide) closes the circuit, and the module is

finally encapsulated with EVA or molybdenum sputtered over glass.

CIS/CIGS and, in some recent developments, TF-Si can be manufactured on a transparent conductive organic film instead of on glass by means of low-temperature deposition techniques, resulting in flexible modules especially useful for building-integrated applications (BIPV).

• Solar glass: Solar glass can be defined depending on the final use (Figure 2.17).

General requirements can be defined for any of these applications, such as:○ Tight tolerances in overall dimensions, warp,

and others○ Surface quality, smoothness, and planarity to

avoid coating problems○ Edge shape and quality required for assembly○ Durability and small loss of properties with

aging○ Reliability and repeatability.

• TF Materials: The main materials required for TF Modules are:○ Transparent conductive oxides (TCO):

The TCO layer is usually divided in two layers: a highly conductive thick TCO layer, and a diffusion barrier. The main layer can consist of tin and/or zinc oxides, with dopants such as cadmium or aluminum. Indium tin oxide (ITO, or tin-doped indium oxide) is a solid solution of indium (III) oxide and tin (IV) oxide, typically 90 percent In2O3 and 10 percent SnO2 by weight. ITO is one of the most widely used transparent conducting oxides because of its two chief properties––electrical conductivity and optical transparency––as well as the ease with which it can be deposited as a Thin Film.

23 Three different technologies lie within this term: amorphous silicon (a-Si), micromorphous silicon (mc-Si) and tandem Thin Films (a-Si + mc-Si). The third is the most advanced development.24 These films usually are cadmium sulfide/cadmium telluride (CdTe Modules); cadmium sulfide/various sulfides and/or selenides (in CIGS) of copper, indium and gallium (CIS/CIGS Modules); and amorphous/microcrystalline silicon (tandem TF-Si).25 Sputter deposition is a method of depositing thin films. It erodes material from a “target” source onto a “substrate” by bombarding the target with energetic particles. Sputtered atoms ejected into the gas phase are not in their thermodynamic equilibrium state and tend to deposit on all surfaces in the vacuum chamber. Thus, a substrate (such as a wafer) placed in the chamber will be coated with a thin film. Sputtering usually uses an argon plasma.[89]26 Plasma-enhanced chemical vapor deposition (PECVD) is a process used to deposit thin films from a gaseous state (vapor) to a solid state on a substrate. The process involves chemical reactions, which occur after creation of a plasma of the reacting gases.


However, its cost has increased over the last years due to low availability of Indium and alternative uses in electronic devices such as liquid crystal displays (LCDs).

○ Molybdenum: The main commercial source of molybdenum is molybdenite (MoS2)[15]. Molybdenum is mined as a principal ore, and also is recovered as a byproduct of copper and tungsten mining.

○ Cadmium sulfide (CdS): Cadmium sulfide occurs in nature as rare minerals, but is more prevalent as an impurity substituent in similarly structured zinc ores, the major economic sources of cadmium. As a compound that is easy to isolate and purify, CdS is the principal source of cadmium for all commercial applications[16].

○ Cadmium telluride (CdTe): Cadmium telluride does not occur in nature but is obtained from its base elements, cadmium and tellurium. Cadmium occurs as a minor component in most zinc ores and therefore is a byproduct of zinc production. The principal source of tellurium is from anode sludge produced during the electrolytic refining of blister copper. Te also is a component of dusts

from blast furnace refining of lead. Only a small amount of Te, estimated to be approximately 800 metric tons per year, is available. However, it has had few uses in history so it has not yet been the focus of geologic exploration.

○ Cadmium chloride (CdCl2): As noted above, cadmium chloride does not occur in nature. Anhydrous cadmium chloride can be prepared by the action of anhydrous chlorine or hydrogen chloride gas on heated cadmium metal. Hydrated CdCl2 also can be obtained from the metal, or from cadmium oxide or cadmium carbonate.

○ Copper sulfide (CuS): Copper sulfides describe a family of chemical compounds and minerals with the formula CuxSy, both minerals and synthetic. Prominent copper sulfide minerals include Cu2S (chalcocite) and CuS (covellite). In the mining industry, the minerals bornite or chalcopyrite, which consist of mixed copper-iron sulfides, often are referred to as “copper sulfides.”

○ Selenium precursors: Selenium is found impurely in metal sulfide ores, in which it partially replaces the sulfur. Commercially, selenium is produced as a byproduct in

Figure 2.17 | Types of Solar Glass

Thin Film PV

Substrate Technology(CIS/CIGS)

Low-iron front glass

Anti-reflective coating

Sodium contentMo coating


Front electrode (TCO – ITO)

Standard back glass

Standard back soda-lime glass

Low-iron front glass Standard back glass

SuperstrateTechnology (TF-Si, CdTe)

Source: STA.


the refining of these ores, most often during copper production. A usual approach in TF Modules manufacturing is to produce the copper selenide directly on the module, in a process referred to as “selenization.”

○ Indium precursors: Zinc ores are the primary source of indium[17], in which it is found in compound form. The indium is leached from slag and dust of zinc production. Further purification is done by electrolysis.

○ Gallium precursors: Elemental gallium does not occur in nature, but as the gallium (III) compounds in trace amounts in bauxite and zinc ores. Gallium is, then, a byproduct of the production of aluminum and zinc. The sphaleritefor zinc production is the minor source. Most gallium is extracted from the crude aluminum hydroxide solution of the Bayer process.

2.2.3 SHARED TECHNOLOGIES

The following components belong to the value chain of both crystalline silicon and Thin Film PV, and could be considered for local manufacturing in MENA countries.

• Support structure: The structure must keep the shape and relative position of the modules, avoiding deformations caused by their weight or other external forces such as the wind, and transmitting the driving force from the tracker, if included. In building-integrated applications, the structure also must distribute the loads toward the structural elements of the building.

Although the solar tracking system is not indispensable, as it is in concentrating applications, it increases the overall production and usually is profitable for most locations. Rack- or crown-and-pinion electric drives are the most

commonly used to move the collector following the apparent position of the sun during the day, rotating the collector around its axis or axes, with a local control to govern the drive unit.

Welded, hot-dip galvanized carbon steelframes are the usual choice, although aluminum structures can be used in building-integrated applications for which weight limits might apply.

• Inverter: An electrical power converter changes direct current (DC) to alternating current (AC). The converted AC can be at any required voltage and frequency with the use of appropriate transformers, switching, and control circuits. Solid-state inverters have no moving parts and are used in a wide range of applications from small switching power supplies in computers to large electric utility high-voltage direct current applications that transport bulk power.

Grid-tied inverters used to supply AC power from DC sources such as solar panels are sine wave inverters, designed to inject electricity into the electric power distribution system. Such inverters must synchronize with the frequency of the grid. They usually contain one or more “maximum power point tracking” features to extract the maximum amount of power and include safety features such as anti-islanding protection.27 The manufacturing of the inverter is similar to any electronic device based on semiconductor technologies. The main issues to solve are the manufacturing of silicon controlled rectifiers (SCR), or thyristors,28 and the design of a circuitry able to minimize the harmonic distortion.

Analysis of the value chain for PV

For PV industries, Crystalline and Thin Film value chains have been selected as a reference by which to analyze the potential to develop a solar industry in MENA countries.29 Clustering PV-related

27 In the event of a power failure on the grid, it is generally required that any inverters attached to the grid turn off in a short time. Shutdown prevents the inverters from continuing to feed power into small sections of the grid, known as “islands.” Powered islands present a risk to workers, who may expect the area to be unpowered. Additionally, without a grid signal to synchronize with, the power output of the inverters may drift from the tolerances required by customer equipment connected within the island, resulting in damage to the equipment.28 Thyristor manufacturing processes are similar to those of multilayer thin-film solar cells. However, higher purity materials and restrictive quality controls must be applied.29 Crystalline PV has 80%–90% of market share, with Thin Film largely making up the remainder. Due to its lower penetration rate, Concentrated Photovoltaic (CPV) has not been included directly in the study. However, CPV technology requirements are included in the CSP and PV technology because some of the components (trackers, optics, cells) are common to the other two solar technologies. Thus, CPV technology also could be of interest to MENA countries in the future.


industries (Figure 2.18) revealed three clusters with differing technological complexity and investment requirements.

The group of industries at the top right in Figure 2.18 (circled in green), are industries that, due to their technological complexity and large investment requirements, are considered difficult to reach in most parts of the world, including in Benchmark countries that have successfully developed the solar industry. Most Crystalline industries, except for the module assembly, fall into this category. Another significant aspect that emerged in the analysis is the particular situation surrounding Crystalline industries. They are a market with experienced actors in an over-production capacity situation that has exerted a downward pricing pressure on the value chain. Using the first step in the production chain as an example,

all of the 2011 global Polysilicon demand could have been met by the top producers[18]. This context of over-production makes it more difficult for new entrants to gain a foothold. Thus, no new entrants worldwide are expected, from either MENA or Benchmark countries, until a change in the supply or demand paradigm drives a more attractive business case. Barriers against any new production facility entering the market both for Crystalline or Thin Film technologies currently are too high.

The group of industries related to Thin Film components (TF) are in the middle quadrant (circled in blue). The Crystalline Module assembly industry has a similar range of technological complexity and required investment. The shared component industries, Support Structure and Inverters, have





Inve

stm

ent R

equi

rem

ents

HighLow

Low

HighPolysilicon

Ingots/Wafers

Cells

Solar Glass


TF Materials

c-Si Modules

TF Modules

Inverters

Support Structure



lower technological complexity and investment requirements.

For these reasons, and taking into account the current overcapacity, the selected MENA countries are better suited for the development of the Shared industries (marked in yellow), which, therefore, are considered target industries. In the medium term, if world overcapacity were to diminish, there would be an opportunity for Thin Film and Crystalline PV industries to develop.

Figure 2.19 describes the industry development opportunities for MENA countries (in terms of normalized Attractiveness index) for each PV technology, taking the MENA average as the reference.

For these reasons, at this time, MENA countries are better suited for the development of the Shared industries which, therefore, are considered target industries. The recommendation is for the MENA

countries to focus on the development of Inverters and Support Structures. In the medium term, if world overcapacity were to diminish, there would be an opportunity for Thin Film PV, Solar Glass, and Modules-related industries to develop.

Beyond the numerical analysis, certain entry barriers to the crystalline industry make it difficult for it to get a share in the polysilicon, ingots/wafers, and cells industries. The main obstacles in these markets are shown in Table 2.5.

Status

Solar PV power is a commercially available and reliable technology with a significant potential for long-term growth in nearly all world regions.

PV and CSP are complementary rather than directly competitive. For this reason, developers should carefully assess their needs and environment when choosing which solar technology to use.

Figure 2.19 | PV industry Development Opportunities (Normalized Attractiveness Index) in MENA Countries

Average MENA

Algeria

Egypt

Attra

ctiv

enes

s in

dex

Jordan

Morocco

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

Tunisia

Cells

Modules c-Si

Ingots Wafers

Polysilicon

Solar glass

TF Materials

TF Modules

Inverter

Support

Structure

Average Benchmark




PV technology is very versatile, so it generally can be substituted with competitive advantages compared to conventional supply for electrical supply systems of every kind. Examples are:

• Rural areas isolated from the distribution grids, with great advantages with respect to electrification of various applications

• Street furniture, safety systems, and other, not extensively distributed systems

• Urban areas interconnected with relatively dense distribution grids

• Integration in buildings to decrease solar impacts and improve insulation, and for self-consumption backed up with conventional grids

• Utility-scale electricity production in power plants usually interconnected with power outputs in the MW range.

The development of solar PV intends to satisfy different types of demands for electricity thanks to the characteristics of accessibility and equivalent costs of this resource compared to other possibilities. The basic characteristics of solar PV are:

• The resource is dispersed, limiting energy surface intensity.

• The seasonal, daily and hourly character of the power supply curve conditions the coupling of demand and supply.

• Off-grid systems need energy storage systems to effectively couple demand and supply.

• Emergency systems are needed in many applications in which 24/24h supply security is required.

• Its important value as a sustainable and renewable resource significantly decreases its environmental impacts compared to other technologies.

• Generally, fewer permit requirements and other administrative processes are required than for other sources of energy, and the installation time for PV applications is shorter.

• Installation is limited to a few devices, rendering O&M relatively simple.

• If the operation conditions are severe, life of the equipment will be reduced.

PV is a commercially mature technology and is expanding very rapidly due to effective supporting policies and recent dramatic cost reductions. Additionally to commercial PV Modules, a range of technologies is emerging, including concentrating photovoltaic (CPV) and organic solar cells, as well as novel concepts with significant potential for performance increase and cost reduction. According to IEA[10], Crystalline silicon (c-Si) Modules represent 85 percent-90 percent of the global annual market today. Thin Film accounts for 10 percent-5 percent of global PV Module sales. Emerging technologies encompass advanced Thin Films and organic cells. The latter are about to enter the market via niche applications. Concentrator technologies (CPV) use an optical concentrator system that focuses solar radiation onto a small high-efficiency cell. CPV

Table 2.5 | Main Entry Barriers for the Difficult-to-reach PV Industries

Polysilicon Ingots/Wafers Cells

Entry barriers


The market remains dominated by the well-established*polysilicon producers.

The wafer industry is dominated by 5 companies*sharing over 90% of the global market.

Most competitors are vertically integrated so have better control over costs.

Most customers have long-term contracts with existing suppliers, impeding new entrants.

Companies on the back end of the value chain are well positioned to move into this segment.

Many skilled workers, technicians, engineers, and scientists in this field are required.

Source: Authors.Note: *As noted in the corresponding technical worksheet.


technology is being tested in pilot applications. Novel PV concepts aim at achieving ultra-high efficiency solar cells via advanced materials and new conversion concepts and processes. They are the subject of basic research.

Figure 2.20 gives an overview of the cost and performance of different PV technologies, although recent changes in the Crystalline PV market have caused a downward pricing trend.

Trends

The global PV market has experienced vibrant growth for more than a decade with an average annual growth rate of 40 percent. The cumulative installed PV power capacity has grown from 0.1 GW in 1992 to 14 GW in 2008. In 2008 annual worldwide installed new capacity increased to almost 6 GW.

Four countries have a cumulative installed PV capacity of 1 GW or above: Germany (5.3 GW), Spain (3.4 GW), Japan (2.1 GW), and the US (1.2 GW).

These countries account for almost 80 percent of the total global capacity. Other countries (including Australia, China, France, Greece, India, Italy, South Korea, and Portugal) are gaining momentum due to new policy and economic support schemes. Accelerated deployment and market growth in turn will bring about additional cost reductions from economies of scale, significantly improving the relative competitiveness of PV by 2020 and spurring additional market growth.

Crystalline silicon (c-Si) cells and modules capacities are located primarily in Asia. Almost 50 percent of this capacity is located in China. The rest is produced in Taiwan (over 15 percent), the EU (over 10 percent), Japan (slightly less than 10 percent), and the US (less than 5.0 percent). While a large part of c-Si Modules are assembled in China, most of the Thin Film manufacturing plants are located in other parts of the world. The leaders are the US, the EU, Japan, and Malaysia[20].

Figure 2.20 | Global PV Module Pricing Learning Curve for C-Si and CdTe Modules, 1979–2015

Cumulative Production Volume (MW)

Glob

al M

odul

e Av

eran

ge S

ellin

g Pr

ice

(201

0 US

D/W

p)

0,10

1 10 100 1,000 10,000

1979

19921998

2002

2004

2014$1.05

2010$1.52 2015

$1.08

2011$1.3-1.5

22% price reduction for eachdoubling of cumulative volume

2006 c-Si price increasedue to polysilicon shortage

c-Si CdTe

100,000 1,00,000

1,00

10,00

100,00



1979

19921998

2002

2004

2010$1.52

2014$1.05

2011$1.3–1.5

2015$1.08

Source: IRENA[19].


2.3 Other Related Activities

Even though the present analysis focuses on the solar component industry, a group of economic activities are necessary for the development of solar energy in a country and are a source of value and wealth (Figure 2.22).

In the short term, there are other options for involving local countries in these activities, such as local content requirements in solar tenders. However, in the medium term, to become competitive in these activities, local Egyptian organizations will have to perform at a level similar to those of the leading foreign organizations that could be hired to perform the same role.

2.3.1 RESEARCH, DEVELOPMENT, AND INNOVATION

Research and Development (R&D) is a common element in the Benchmark countries.China, Germany, Japan, Spain, and the US have developed large R&D programs and maintained a long-term commitment. R&D has been a useful tool not only to develop technology and new products but also to grown the skills and capabilities of local engineering and construction companies.

R&D in solar is connected mainly to leading universities and to dedicated public R&D centers. Within the 5 MENA countries, only Cairo University (Egypt) ranks among the world’s 500 top universities in R&D (Shanghai index)[22]. To close the gap, strong commitments from governments and collaboration with leading R&D centers are essential.

2.3.2 PROJECT DEVELOPMENT

The activity of project development is bound to be carried out locally. The activity comprises multiple aspects related to resource and grid analysis, local legislation and constraints, environmental and social issues, and specific documents and projects that must be prepared and presented to the authorities for approval.

Experience shows that, in the first projects, international companies with good technical backgrounds are the leaders, complemented with local expertise. Later, local companies take the lead.

Project development experience in the five analyzed MENA countries, related primarily to wind energy, could be a reference point for future development of this activity.

Figure 2.21 | Market Share of the Different PV Technological Approaches, 2011

sc-Si40%

mc-Si45%

Other1%

Cd-Te8%

CIS-CIGS3%

TF-Si3%

Thin film14%

Other mc-Si sc-Si Cd-Te TF-Si CIS-CIGS



2.3.3 ENGINEERING

Engineering is a key component in solar power plants. Although it is more demanding in CSP than in PV, engineering is a critical element for both because these kinds of installations almost always have unique features. Solar power plants are capital intensive and composed of repetitive elements.These plants have some critical elements for which a track record and experience in large projects are a must.30

MENA countries have experience in power plant construction and in the petrochemical industry, and both could be applied to solar power plants. For instance, the PGESCO (Power Generation Engineering and Services Company) joint venture between the Egyptian government and Bechtel has

great experience in power plant design, construction, and management.

Following the experience gathered in the first power plants, PV engineering capabilities could be developed locally as well as through partnerships in projects abroad, reaching a fully competitive level.

CSP local engineering capabilities are more difficult to acquire without external support due to their greater complexity and risk when compared to PV power plants and because of the bankability requirements.31

In the first projects, local supply could handle at least the conventional parts of the power plant (civil works, electrical lines, substations) and local project legalization and associated administrative tasks.

30 Both PV and CSP plants’ solar fields consist of multiple repetitions of individual, complex, and nearly autonomous units (set of module strings + inverter for PV; SCA loops for CSP). The double implication of this characteristic is that (a) experience in analogous plants is valuable because the basic element will be very similar and require little adaptation, but (b) any mistake made in the definition and/or adaptation of the base unit will scale up.31 Small-scale projects can be financed through conventional mechanisms because the promoter can provide its own assets as collateral. However, for utility-scale projects, more complex and leveraged financing structures are used (Project Finance). The financing entity usually requires several conditions. These could include great previous experience by the engineering firm; financial guarantees from the EPC contractor and/or the main suppliers; and previous studies assessing the solar resource, legal, and insurance details. The compliance of a project with all of these requisites from the financing entity is referred to as “bankability.”

Figure 2.22 | Value Chain Related to Solar Energy DeploymentFromIdea

R&D

ProjectDevelopment

Engineering

ComponentManufacturing

Procurement

Fina

ncin

g

Cons

ultin

g

Tech

olog

y Pr

ovis

ion

ToExecution



To achieve a higher share of local supply, local enterprises could follow several paths. Local capacity building, joint ventures and partnerships, or technical assistance contracting with technology suppliers are the most advisable.

The larger MENA countries could leverage their larger expected market and past experience to build engineering capacities. However, size alone might not be enough and should not be blindly relied upon. Jordan and Tunisia also could take advantage of niche experience to focus on particular elements of the engineering value chain.

2.3.4 ENGINEERING, PROCUREMENT, AND CONSTRUCTION (EPC)

Most utility-scale renewable energy projects being developed globally are financed using “Project Finance.” In this financing structure, the project itself is the collateral of the loan. The financial institution usually requests to contract a company with a good track record and enough financial strength to assume the technology, construction, and performance risks through a turnkey EPC contract. In this contract, performance and delivery dates are fixed, and penalties and guarantees are defined.

It would be difficult for local companies to fulfill these requirements in the short term. Nevertheless, involvement in the first projects as subcontractors would build experience and references.

Moreover, even if the first EPC contracts were granted to foreign companies, local employment would be generated either by direct hiring or through subcontracting local companies.

2.3.5 OPERATION AND MAINTENANCE (O&M)

Operation and maintenance (O&M) is a relevant part of the value chain because it creates a long-term source of revenues. Usually, the EPC company or one of its subsidiaries will take over these activities during

the first years to ensure fulfillment of its guarantees, often required by the financing entity as part of the financing contract.

Thus, during the first years, this task would be carried out by the EPC company, which probably would subcontract part of it to local individuals or companies. Later, a local industry could be developed based on the experience gained by these local subcontractors.

O&M local industry development will be driven mainly by installed capacity because this expertise cannot be gained in the component manufacturing processes but only from operating power plants.

2.3.6 FINANCING

Utility-size solar projects have large financial needs that lead to sophisticated analysis and risk assessment of the entire project and of the sponsor. Local banks’ capacity building is a must if they are to play a role in future project financing.

2.3.7 TECHNOLOGY PROVISION

Technology provision is related to R&D and past track record. The owner of the know-how for a specific technology will provide licenses, technical support, customized applications, and expert services to promoters, component manufacturers, and/or engineering companies.

2.3.8 CONSULTING

Partnerships between international highly specialized companies with a good experience in solar strategy, technology, financing, communication, social, and environmental aspects could join hands with local consultant firms to serve the local market by advising both authorities and companies.

Chapter 3 | Methodology | 39

3333333333333CHAPTER THREE:

Methodology

3.1 Introduction

The methodology is oriented to identify the potential to develop different solar components manufacturing industries in the five considered MENA countries, and to outline recommendations for increasing the attractiveness to invest in these countries.

To achieve these goals, a macro- and microeconomic analysis have been carried out through a competitiveness benchmark analysis, and two complementary analyses: the solar industry value chains and the projected component demand scenarios. The main steps followed in the methodology are shown in Figure 3.1.

1. Competitiveness benchmark analysis, comprising:a) Selection of the sample of Benchmark

countriesb) Identification of relevant primary data

correlated to the attractiveness of a country to be the recipient of investment in solar components industries

c) Aggregation of primary data to build Attractiveness indexes model

d) Hypothesis validation to verify the relevance of the selected Benchmark countries, the relevance and consistency of the primary data, and the stability and robustness of the model

2. Analysis of the solar industry value chains3. Projection of component demand scenarios by

country, both internal and external

4. Identification of the industry for which each MENA country is more competitive, and of the gaps between MENA and Benchmark countries

5. Micro analysis of demand scenarios for selected components to verify viability for the development of these industries in MENA countries.

6. Recommendations for enhancing competitiveness and increasing attractiveness to foreign investors of each MENA country, focused on the most suitable industries, and quantification of associated impacts.

The whole process is set out from the decision logic of a private investor. Data has been gathered around four main axes of decision:

1. Production factors2. Demand factors3. Risk and stability factors4. Business support factors.

Strategic recommendations and associated impacts emerge from this process.

“Nations compete in offering the most productive environment for business.”

—Michael Porter[23]


Figure 3.1 | Global Methodology

Benchmark countries identification

Projected component demand scenarios

Model

Solar industryanalysis

Relevant available parameter

identification

Industry identification andgaps

Country-solar industryanalysis

Hypothesisvalidation

1 2 3

?????? ??

??,????

4 5

6

Recommendations and impactassessment



3.2 Benchmark Countries Selection

Benchmark countries from all major regions of the world were selected for comparison against the selected MENA countries (Algeria, Egypt, Jordan, Morocco, and Tunisia). The multicriteria analysis considered current level of activity and experience

in the solar industry, future potential and interest in renewable energies, and geographic location. Based on these criteria, a final list of Benchmark countries was drafted: Chile, China, Germany, India, Japan, South Africa, Spain, and the United States of America.

3.3 Primary Data Selection and Classification

The selection of the raw data and ready-made indexes used as primary data was an interactive process. Based on the team members’ expert judgment, the project team identified categories and subcategories that would impact the attractiveness of a country to the investor in a manufacturing facility of solar components. In parallel, a survey was made of available data that could be used in the analysis. Thus, the final choice was driven by the relevance of information and its

availability for the countries under study. The weighting and aggregation of the primary data in the context of the model was based on their relevance; no individual datum defined a country’s attractiveness.

The primary data were aggregated into 12 “Competitiveness parameters” and further into 4 “Overarching categories” (Table 3.1, Table 3.2, Table 3.3, and Table 3.4).32

32 Definition of the primary data can be found in Annex 3.

Table 3.1 | Primary Data Related to Production Factors

Overarching Category OCi

s c,s c,s cCompetitiveness Parameter CPjCPjCPs c,s c,s c Primary Data PkPkPc

Main Data Sources

1. Production factors

1.1. Labor market 1.1.1. Labor costs [24]

1.1.2. Labor market efficiency [25]

1.2. Material availability

1.2.1. Glass manufacturing in the country [26]

1.2.2. Stainless steel manufacturing in the country [27][28]

1.2.3. Steel manufacturing in the country [29]

1.2.4. Oil manufacturing ability in the country [30][31]

1.2.5. Copper manufacturing in the country [32][33]

1.2.6. Silicon manufacturing in the country [34]

1.2.7. NaNO3/KNO

3 availability [35]

1.3. Relevant manufacturing ability

1.3.1. Existence of synergic industries Own elaboration

1.3.2. Literacy rates [36]

1.3.3. Higher education and training [25]

1.4. Cost of energy 1.4.1. Cost of energy (industrial) [37][38][39][40]

1.5. Fiscal and financial cost

1.5.1. Paying taxes rank [41]

1.5.2. Lending interest rate [42]


Table 3.3 | Primary Data Related to Risk and Stability Factors


s c,s c,s cCompetitiveness Parameter CPjCPjCPs c,s c,s c Primary Datum Pk

cMain Data Sources

3. Risk and stability factors

3.1. Risk associated with doing business

3.1.1. Corruption index [51]

3.1.2. Ease of Doing Business ranking 2012 [41]

3.1.3. Ease of Doing Business 20072012 ranking change factor

[41]

3.1.4. Inflation rate [52]

3.1.5. OECD country risk [53]

3.2. Risk associated with demand

3.2.1. Existence of clear stable regulatory framework for RE (Renewable Energy)

[54][55][56][57]

3.2.2. Existence of incentives for PV

3.2.3. Existence of incentives for CSP

3.2.4. Existence of RE associations

3.2.5. Total solar PV capacity

3.2.6. Total CSP capacity

3.2.7. Agency for the development of RE

3.2.8. Competition in the electricity sector

3.3. Financial risk 3.3.1. Access to credit [58]

Table 3.2 | Primary Data Related to Demand Factors


s c,s c,s c

Competitiveness Parameter CPjCPjCPs c,s c,s c Primary Datum PkPkPc

Main Data Sources

2. Demand factors

2.1. CSP and PV component demand

2.1.1. CSP Growth Scenario to 2020 [43]

2.1.2. PV Growth Scenario to 2020 [43]

2.1.3. Global Horizontal Irradiation (GHI), yearly maximum

[44]

2.1.4. Direct Normal Irradiation (DNI), yearly maximum

[44]

2.1.5. Electricity demand growth, change 2010 over 2009

[45]

2.1.6. Energy imports, net, as a % of energy use [10][46][47][48][49][50]

2.1.7. Cost of energy (residential) [38][30]

2.1.8. CSP Global potential market for components to 2020

[43]

2.1.9. PV Global potential market for components to 2020

[43]


3.4 Model: Data Normalization and Aggregation

The model aggregates the primary data (Annex 3 and Annex 4) into different Competitiveness parameters that are further aggregated into Overarching categories, and finally into an Attractiveness index per industry and country. The weighting for each aggregation is related to the impact of the datum on the component’s value chain and on the decision to invest.

Each primary datum has been normalized through:

pkc k

ck

k k

=P (kP (k

cP (c −P (− PkPk

(Pk k(Pk k

)) )k k) )k k(P) )(Pk k(Pk k) )k k(Pk k

P (miP (P (nP (P (miP (nP (miP (max mk kx mk k(Px m(Pk k(Pk kx mk k(Pk k) )x m) )k k) )k kx mk k) )k k−) )−x m−) )−max mma ) )in) )k k) )k kink k) )k k

Each country’s normalized datum ranges from 0 to 1, where 1 would be associated with the highest value and 0 with the lowest. Normalized data have been redefined to have a positive correlation with the Attractiveness indexes where necessary.

The aggregation model follows33:

1. The aggregation impact of each normalized datum within its Competitiveness parameter is modeled through a weighting factor j k

sj k,j k

which fulfills the normalization condition.34 For a given country and solar industry, the score for a Competitiveness parameter is equal to

CPjCPjCPs c

kj ks

kcp,s c,s c

j k,j k= ×j k= ×j ks= ×s= ×∑= ×∑= ×a= ×a= ×

For easier comparing, the Competitiveness parameters are normalized in tables

cpjs c j

s c,s c,s c

,s c,s c

maxmaxma= ( )j( )j

s( )s

CPjCPj

( )CP( )j( )jCPj( )j

2. The aggregation impact of each Competitiveness parameter within its Overarching category is

Table 3.4 | Primary Data Related to Business Support Factors


s c,s c,s c

Competitiveness Parameter CPjCPjCPs c,s c,s c Primary Datum PkPkPc

Main Data Sources

4. Business support factors

4.1. Industrial structure

4.1.1. Presence of large international industrial companies

[59]

4.1.2. % industrial GDP (gross domestic product) [52]

4.1.3. Local clustering Own elaboration

4.2. Innovation capacity

4.2.1. Patent filings per million population 2010 [60][58]

4.2.2. Global Competitiveness Report 2011-12 innovation score

[61]

4.2.3. Global Competitiveness Report 2011-12 technological readiness

[61]

4.2.4. Business sophistication [25]

4.3. Logistical infrastructure

4.3.1. Quality of port infrastructure 2010 [62][25]

4.3.2. Global Competitiveness Report 2011-12 infrastructure

[61]

4.3.3. Logistics performance index [63]

33 Methods and a sensitivity analysis are presented in Annex 4.34 ∑ = ∑ = ∑ =k j k

sj i j

si i

sα β γ, ,1 1 1, , .


modeled through a weighting factor i ji j,i js which

fulfills the normalization condition. For a given country and solar industry, the score for an Overarching category is equal to

OC CPis c

ji js

js c,

,,= ×∑

For easier comparing, the Overarching categories are normalized in tables

ocis c i

s c

is

,,

max= ( )

OC

OC

3. The aggregation impact of each Overarching category within the Attractiveness index is modeled through a weighting factor i

s which fulfills the normalization condition. For a given country and solar industry, the Attractiveness index is equal to

AI OCs c

iis

is c, ,= ×∑

For easier comparing, the Attractiveness indexes are normalized in tables

ais cs c

s

,,

max= ( )

AI

AI

4. Partial scores that aggregate Competitiveness parameters, Overarching categories, and Attractiveness indexes for groups of industries and/or countries provide valuable information.

For each industry primary data, Competitiveness parameters and Overarching categories weight35

( j ksj k,j k, i ji j,i j

s and i

s) represents their relative importance

for an investor.

3.4.1 RANKING OF INDEXES ACCORDING TO WEIGHTING FACTORS

For each industry, the weighting factors ( i ji j,i js

and is)

represent the relative importance of each Overarching category and Competitiveness parameter to an investor. The weighting factors have been aggregated through multiplication with the aim of identifying the most significant Competitiveness parameters for each solar industry.

The aggregated weighting factors were ranked in order, from highest to lowest, setting a ranking by solar industry. An average of Competitiveness parameters’ rankings by solar industry was calculated by which position number 1 is the most weighted index and 12 the least weighted index within each solar industry. Annex 4 shows the relative position for all Competitiveness parameters by solar industry.

Table 3.5 | Global Ranking of Competitiveness Parameters According to Weight

Global Ranking Competitiveness Parameter

1 Financing risk

2 Relevant manufacturing ability

3 Component demand

4 Material availability

5 Risk associated with doing business

6 Risk associated with demand

7 Labor market

8 Cost of energy (industrial)

9 Fiscal and financial costs

10 Innovation capacity

11 Logistical infrastructure

12 Industry structure

35 Weights are presented in Annex 4.


Tab

le 3

.6 |

Ran

kin

g o

f C

om

pe

titi

ve

ne

ss P

ara

me

ters

by S

ola

r In

du

stry

(C

SP

In

du

stri

es)

Co

mp

eti

tive

ne

ss

Para

me

ters

Co

nd

en

ser

Ele

ctr

ical

Ge

ne

rato

rH

eat

Exch

an

ge

rH

TF

P

um

ps

HT

FT

he

rmal

Oil

Mir

ror

Pu

mp

sR

ece

ive

rS

ola

r S

alt

Ste

am

T

urb

ine

Sto

rag

e

Tan

ks

Str

uctu

re

& T

racke

r

Fin

an

cin

g r

isk

11

31

11

11

31

43

Rele

van

t m

an

ufa

ctu

rin

g

ab

ility

22

22

22

22

22

15

Co

mp

on

en

t d

em

an

d6

33

33

66

53

34

3

Mate

rial

availa

bili

ty2

71

77

22

81

92

1

Ris

k a

sso

cia

ted

w

ith

do

ing

b

usi

ness

44

54

44

43

54

76

Ris

k a

sso

cia

ted

w

ith

dem

an

d4

45

44

44

35

47

6

Lab

or

mark

et

78

78

88

76

76

32

Co

st o

f en

erg

y

(in

du

stri

al)

78

78

89

810

78

69

Fis

cal an

d

fin

an

cia

l co

sts

78

78

89

99

710

98

Inn

ovati

on

cap

acit

y10

610

66

710

711

711

10

Lo

gis

tical

infr

ast

ructu

re11

1111

1111

1111

1110

1110

11

Ind

ust

ry

stru

ctu

re11

1111

1111

1111

1111

1111

11


Tab

le 3

.7 |

Ran

kin

g o

f C

om

pe

titi

ve

ne

ss P

ara

me

ters

by S

ola

r In

du

stry

(P

V I

nd

ust

rie

s)

Co

mp

eti

tive

ne

ss P

ara

me

ters

Ce

lls

Ing

ots

/W

afe

rsM

od

ule

s c-S

iP

oly

silico

nS

ola

r G

lass

TF

M

ate

rials

TF

Mo

du

les

Inve

rte

rS

up

po

rtS

tru

ctu

re

Fin

an

cin

g r

isk

11

31

11

33

3

Rele

van

t m

an

ufa

ctu

rin

g a

bili

ty2

21

66

21

55

Co

mp

on

en

t d

em

an

d3

33

22

63

33

Mate

rial availa

bili

ty9

101

126

21

11

Ris

k a

sso

cia

ted

wit

h d

oin

g b

usi

ness

34

64

44

77

6

Ris

k a

sso

cia

ted

wit

h d

em

an

d3

46

44

47

76

Lab

or

mark

et

66

58

87

52

2

Co

st o

f en

erg

y (

ind

ust

rial)

68

93

37

66

9

Fis

cal an

d f

inan

cia

l co

sts

109

89

129

99

8

Inn

ovati

on

cap

acit

y8

710

79

1010

1010

Lo

gis

tical in

frast

ructu

re11

1111

1010

1111

1111

Ind

ust

ry s

tru

ctu

re11

1111

1010

1111

1111


3.5 Hypothesis Validation

The first hypothesis validation confirmed that MENA countries and Benchmark countries are statistically different in terms of Competitiveness parameters, Overarching categories and Attractiveness indexes.

The second hypothesis validation checked whether different normalization and aggregation techniques had any relevant effect on ranking.

In addition, for non-value-chain-related indexes, consistency was checked using Cronbach’s Alpha [64].

3.5.1 ROBUSTNESS AND CONSISTENCY ANALYSIS

Competiveness parameters were calculated using different normalization and aggregation techniques to check for relative ranking variations. The following

normalization and aggregation techniques were used. Their results are shown in Table 3.8 and Table 3.9:

• Rescaling factor analysis, linear aggregation (base case)

• Rescaling equal weights, linear aggregation• Rescaling factor analysis, geometric aggregation• Rescaling equal weights, geometric aggregation• Z-scores equal weights, linear aggregation.

Of the two normalization techniques used, z-score transformation converts data to a common scale with a mean of 0 and a standard deviation of 1, which means that variables with extreme values have more of an effect. The rescaling method is used to normalize indicators by linear transformation and is often considered useful because it can widen the range of indicators lying within small intervals.

Table 3.8 | Rankings of Attractiveness Indexes per Country, Aggregated for CSP Technology, When Using Different Normalization and Aggregation Techniques

CSP

Base Case

Rescaling, Equal

Weights, Linear

Aggregation

Rescaling, Factor Analysis,

Geometric Aggregation

Rescaling, Equal Weights,


Z-scores, Equal Weights, Linear

Aggregation

Score Rank Score Rank Score Rank Score Rank Score Rank

United States

1.00 1 1.00 1 1.00 1 0.98 2 1.00 1

China 0.91 2 0.98 3 0.94 2 1.00 1 0.90 3

Japan 0.88 3 0.91 4 0.75 3 0.91 4 0.69 4

Germany 0.86 4 0.99 2 0.57 7 0.87 5 0.95 2

South Africa 0.78 5 0.61 7 0.59 6 0.76 7 –0.15 7

Spain 0.77 6 0.89 5 0.61 5 0.92 3 0.60 5

India 0.72 7 0.55 8 0.66 4 0.78 6 –0.35 8

Chile 0.65 8 0.70 6 0.31 9 0.72 8 0.10 6

Egypt 0.52 9 0.42 11 0.35 8 0.60 11 –0.47 10

Morocco 0.43 10 0.51 9 0.29 10 0.67 9 –0.43 9

Tunisia 0.39 11 0.47 10 0.21 11 0.62 10 –0.49 11

Algeria 0.22 12 0.29 13 0.05 12 0.41 13 –1.00 13

Jordan 0.22 13 0.34 12 0.04 13 0.49 12 –0.85 12


Figure 3.2 | Rankings of Attractiveness Indexes per Country, Aggregated for CSP Technology, with Different Normalization and Aggregation Techniques

Glob

al C

SP A

ttrac

tiven

ess

inde

x ra

nkin

g

1

United States

China

Japan

Germany

South Afri

ca

Spain

India ChileEgypt

MoroccoTu

nisiaAlgeriaJo

rdan

2

Z-scores, equal weights,linear aggregation

Rescaling, equal weights,geometric aggregation

Rescaling, factor analysis,geometric aggregation

Rescaling, equal weights,linear aggregation

Base case

3

4

5

6

7

8

9

10

11

12

13

-


Note: Zone defined by the average plus/minus one standard deviation is shown.

Table 3.9 | Rankings of Attractiveness Indexes Per Country, Aggregated for PV Technology, when Using Different Normalization and Aggregation Techniques

PV

Base Case

Rescaling, Equal Weights, Linear

Aggregation



Rescaling, Equal Weights, Geometric

Aggregation


Aggregation


United States 1.00 1 1.00 1 0.87 2 0.98 2 1.00 1

China 0.98 2 0.98 3 1.00 1 1.00 1 0.90 3

Japan 0.97 3 0.91 4 0.87 3 0.91 4 0.69 4

Germany 0.96 4 0.99 2 0.75 5 0.88 5 0.95 2

India 0.79 5 0.55 8 0.80 4 0.78 6 –0.35 8

South Africa 0.76 6 0.61 7 0.75 6 0.77 7 –0.15 7

Spain 0.73 7 0.89 5 0.74 7 0.92 3 0.60 5

Chile 0.61 8 0.70 6 0.55 9 0.72 8 0.10 6

Egypt 0.58 9 0.42 11 0.59 8 0.60 11 –0.63 11

Morocco 0.43 10 0.51 9 0.54 10 0.68 9 –0.43 9

Tunisia 0.42 11 0.50 10 0.50 11 0.62 10 –0.49 10

Algeria 0.26 12 0.29 13 0.32 12 0.41 13 –1.00 13

Jordan 0.25 13 0.34 12 0.28 13 0.49 12 –0.85 12


Aggregation follows both the linear and geometric techniques, although the base case scenario is described using the linear aggregation.

Even though small differences exist among the results, the overall trend does not depend on the technique used. In other words, the results are robust because they are not driven by the weighting scheme.

3.6 Solar Industries Value Chain Analysis

Two main paths to convert solar energy into electricity are considered36: the thermal process and the photovoltaic process.

In the thermal process, Concentrated Solar Power (CSP) technologies use Mirrors to concentrate the sunlight and convert it into high temperature heat. This heat is used in either a conventional Rankine cycle or a Stirling engine to move an electrical generator. CSP plants can be divided in three main

subsystems: Solar Field, which collects solar energy and converts it to heat; Power Block, which converts heat energy to electricity; and sometimes, between them, a Thermal Energy Storage (TES) system. Four alternative technological approaches––Parabolic Trough, Power Tower, Linear Fresnel and Parabolic Dish Systems––can be described. The component industries in Table 15 have been chosen for this study because they make up a major share of the overall investment cost of CSP projects.

Figure 3.3 | Rankings of Attractiveness Indexes per Country, Aggregated for PV Technology, with Different Normalization and Aggregation Techniques

Glob

al P

V At

tract

iven

ess

inde

x ra

nkin

g

United S

tate

s

China

Japa

nGer

man

y

India

Sout

h Afric

a

Spain

Chile

Egyp

t Mor

occo

Tunisi

a

Alger

ia Jo

rdan

-

1

2

3

4

5

6

7

8

9

10

11





Base case

12

13

Source: TA/Accenture.


36 The complete value chain is presented in Annex 1.


The basic building block of a photovoltaic (PV) system is the PV cell, which is a semiconductor device that converts solar energy into direct-current (DC) electricity due to the photovoltaic effect. PV cells are interconnected to form a PV Module, typically in the range of 50–200 Watts (W). The PV Modules, when combined with a set of additional application-dependent components (such as support structure, inverters, and batteries37), form a PV system.

R&D and industrialization have led to a portfolio of available PV technology options at different levels of maturity. Commercial PV Modules may be divided into two broad categories: wafer-based Crystalline silicon (c-Si) and Thin Films (TF). Table 3.11 describes the component industries selected for PV systems.

For each solar industry,38 the value chain, demand forecast, production facility size, required investment,

and technological complexity have been analyzed. This information has been used to guide the construction of Attractiveness indexes, and for the microeconomic analysis of the selected industries.39

3.6.1 CSP INDUSTRY

A close examination of the value chain reveals three clusters of industries with differing technological complexities and investment requirements (Figure 3.4).40 The three clusters are a group of industries that can be independently developed (independent industries); a group of industries which are best developed on the backing of existing conventional industries (conventional industries); and a group of industries which, due to their complexity and required investment, are not likely to be developed based on the demand of solar applications alone (difficult-to-reach industries).

Table 3.10 | CSP Solar Industries by Technology

Process Subsystem Technology Solar industry

CSP Solar Field Parabolic Trough HTF Thermal OilMirrorReceiverStructure & Tracker

Power Tower

Linear Fresnel

Dish/Engine MirrorReceiverStructure & Tracker

Power Block Parabolic TroughPower TowerLinear Fresnel

CondenserElectrical generatorHeat exchangerHTF PumpsPumpsSteam turbineStorage tanks

Dish/Engine Stirling Engine*

Thermal Storage Parabolic Trough Solar salt

Power Tower

Linear Fresnel

Note: *This solar technology has not been considered in this document because Dish/Engine systems are not yet commercially available. Therefore, the demand expected for these elements is not large enough to justify the development of a component supply line.

37 Batteries have not been considered in this document because they are part of the value chain only in small-scale PV systems for standalone applications. For this reason, the demand expected for these elements is not enough to justify the development of a component supply line.38 Although the CSP Structure & Tracker and PV Support Structure industries have been considered separately in most of this document, a facility producing CSP structures can be easily adapted to produce PV structures, and vice versa.39 For details, see Annex 1 and Annex 2.40 The analysis of technological complexity is based on consulting and interviews with solar experts according to their internal manufacturing processes.


Table 3.11 | PV Solar Industries by Technology

Process Subsystem Technology Solar industry

PV Module Crystalline CellsIngots/WafersModules c-SiPolysilicon

Thin Film Solar GlassTF MaterialsTF Modules

Inverter Inverters

Support Structure Fixed structure Support Structure

Single axis Support StructureTracker*Double axis

Note: *The tracking precision for non-concentrating solar technologies as such PV is comparatively low, so it has been assumed that the Tracker industry will be included in the Support Structure industry.




Inve

stm

ent R

equi

rem

ents

Steam Turbine

HTF Thermal Oil


HTF Pumps

HighLow

Low

High

Pumps

Receiver

Storage Tanks

Heat exchanger

Structure & Tracker

Solar Salt


Condenser

Mirror



Due to their technological complexity and large investment requirements, one group of industries (Figure 3.4, top right, circled in green), is considered difficult to reach in most parts of the world, including in Benchmark countries that have developed the solar industry successfully. These industries include Steam turbine, Electrical generator, HTF Thermal Oil, and HTF Pumps.

The conventional group of industries (Condenser, Heat Exchanger, Pumps, and Storage Tanks) (circled in orange in Figure 3.4) refers to those industries that rely on existing industries and that, therefore, are easier to develop in countries that already have conventional pressure vessel and tank and pump industries.

The independent group of industries (highlighted in blue in Figure 3.4) includes Structure & Tracker, Solar salt blending, Mirror, and Receiver. These industries can be developed independently as part of solar industry development so long as the conditions for solar industry development exist.

3.6.2 PV INDUSTRIES

Crystalline and Thin Film have been selected as the two main solar PV technologies to develop a solar industry in MENA countries.41 Clustering PV-related industries revealed three clusters with differing technological complexity and investment requirements (Figure 3.5).


Difficult to reach TF



Inve

stm

ent R

equi

rem

ents

HighLow

Low

HighPolysilicon

Ingots/Wafers

Cells

Solar Glass


TF Materials

Modules c-Si

TF Modules

Inverters

Support Structure


41 Crystalline PV has 80%-90% of market share, with Thin Film largely making up the remainder. Due to its lower penetration rate, Concentrated Photovoltaic (CPV) has not been included directly in the study. However, CPV technology requirements are included in the CSP and PV technology because some of the components (trackers, optics, cells) are common to the other two solar technologies. Thus, CPV technology also could be of interest to MENA countries in the future.


The group of industries at the top right in Figure 3.5 (circled in green), are industries that, due to their technological complexity and large investment requirements, are considered difficult to reach in most parts of the world, including in Benchmark countries that have successfully developed the solar industry. Most Crystalline industries, except for the Module assembly, fall into this category. Another significant aspect that emerged in the analysis is

the greater maturity of this Crystalline industries, including their over production capacity, which makes it more difficult for new entrants to gain a foothold. Using the first step in the production chain as an example, global Polysilicon demand in 2011 could have been met by the top producers[18]. No new entrants worldwide are expected until a change in the supply or demand paradigm drives a more attractive business case.

3.7 Identification of Potentially Competitive (Target) Industries and Competitiveness Gaps

The primary data are used for each industry to measure each MENA country against the Benchmark countries. In this way, the industries in which MENA countries are or can become competitive (target) are identified, and the gaps to be addressed for each MENA country are detected. The normalized Attractiveness index score has been graphed (Figure 3.6) for each MENA country for comparison with the average score of MENA countries (blue line).

Spider graphs were built with the normalized Competitiveness parameter scores of each MENA country, compared to the MENA and Benchmark countries’ average. These graphs are used to identify gaps between MENA and Benchmark countries. Overarching categories are highlighted in colors.

Figure 3.6 | Sample Graph: Country and MENA Average Normalized Attractiveness Index Score

Attra

ctiv

enes

s In

dex

Scor

e

Race...0.40

0.45

0.50

0.55

0.60

0.65

Mirror

Struc...

Heat...

Solar...Stor...

PumpsCon...

ILLUSTRATIVE

Source: STA/Accenture


3.8 Building of Demand Scenarios

In thinking about solar industry development, demand is perhaps the less adaptable factor. If there is no current or projected demand (internal or external) in a country, it is unlikely that the solar component industry will develop, even if other conditions exist.42

However, once demand surpasses a certain minimum threshold related to the minimum technical-economically viable capacity of a factory, additional demand may prove not so significant for the development of the industry.

To set up one of the industries within the solar supply chain, a minimum demand should exist so that a threshold technical and economical production capacity can be reached. This demand can come from the country in which the industry is established (internal demand) or from exports (external demand). Three steps have been followed to build potential market volume estimation:

• Solar power installed capacity forecast to 2020.• Market share evolution forecast to 2020.

42 A special example of this is China which, due to its very specific strengths, developed the solar industry market mainly for export, before developing the internal market.

Figure 3.7 | Sample Spider Graph Used to Identify Gaps

ILLUSTRATIVE

-


Labor market




Component demand



Country



Production

Demand

Risk and stability

Business support

Financial risk

0.20

0.40

0.60

0.80

1.00

Industry structure

Innovation capacity



Note: Overarching categories are highlighted in colors


• Combining the previous forecasts, the expected market volume and, therefore, the demand to be supplied by the manufacturing sector of each MENA country are forecasted.

From these solar installed capacity projections, a component demand scenario has been built for the selected industries in each specific MENA country. In the long run, the yearly installed capacity is a key element to determine whether a manufacturing industry will have stable demand.

3.8.1 INCREASE IN INSTALLED CAPACITY FORECAST

The driving force for internal demand is the growth of installed capacity of solar power plants in each MENA country. Therefore, a forecast to 2020 has been made to deduce the solar component demand in each of the five MENA countries.

Additionally, demand for solar components not only is domestic but also can come from other countries, and regions. Therefore, demand from four separate regions––neighboring MENA countries, the MENA Region as a whole, the European Union, and the rest of the world (ROW)––has been forecasted. The methodology to define the component demand is based on the forecasted installed capacity in each of these regions43 per:

• Projections to 2020 for Europe and the rest of the world[65].

• Objectives and plans to 2020 for each MENA country[57], [66], [67].

Global and European forecasted installed capacity includes three scenarios: conservative, moderate (used as a base case), and optimistic (Figure 3.8). Modifications were made to the projections in[65] to include Algeria and Morocco’s solar plan targets

Figure 3.8 | Global and European CSP and PV Yearly Installed Capacity in Different Scenarios, Average 2008–20

7.9

2.8

1.3

0.3

0

2

4

6

8

10

Global European

Year

ly In

stal

led

Capa

city

, GW

/yea

r

PV Conservative scenario PV Base case PV Optimistic scenario

CSP Conservative scenario CSP Base case CSP Optimistic scenario

Source: [65].

43 A linear hypothesis was used to determine annual growth.


Figure 3.9 | MENA CSP and PV Installed Capacity in 2020 for 3 ScenariosIn

stal

led

Capa

city

, MW

0

1000

Algeria

1,525

1,100

200450 400

50300

1600

150

800

PV Conservative scenario

CSP Conservative scenario

PV Base case PV Optimistic scenario

CSP Optimistic scenarioCSP Base case

Egypt Jordan Morocco Tunisia

2000

3000

4000


Figure 3.10 | MENA CSP and PV Yearly Installed Capacity in Different Scenarios, Average 2008–20

Year

ly In

stal

led

Capa

city

, MW

/yea

r

0

100

100

188

25 19

56

6

38

198

50

135

Algeria


CSP Optimistic scenarioCSP Base caseCSP Conservative scenario

Egypt Jordan Morocco Tunisia

200

300

400

500

Source: [65].


which were disclosed after the publication of the World Energy Outlook[43]. A linear hypothesis was used to determine annual growth. In the long run, the yearly installed capacity is the key number to determine whether a manufacturing industry will have stable demand.

For MENA countries, [57], [66] and [67] define a similar “moderate” scenario, and conservative and optimistic scenarios were built (Figure 3.9) following the same proportions as forecasted in [65]. Both for PV and CSP, the moderate scenario was taken as the baseline for the present analysis.

A linear hypothesis was explored to determine annual growth.

3.8.2 COMPONENT DEMAND SCENARIO

Based on these solar power installed capacity forecasts, a component demand scenario was

built for the components considered feasible to be developed in each MENA country.

The basic scenario hypothesis is that a fraction of domestic, MENA Regional, European and rest of the world (ROW) demand could be met from each MENA country under study if appropriate actions are taken.

After discussion with industry leaders, and taking into account the necessity of a track record to supply components in the energy business, the following hypotheses on demand growth were made:

1. There are three main types of solar component industries, in terms of feasibility for each MENA country to be competitive in the market:a) Target industries: Those for which a MENA

country is likely to be competitive in the short or medium term if appropriate actions are taken (as described in epigraphs 2.1 and 2.2).

b) Neutral industries: Those for which a MENA country might reach a certain market share in the medium or long term, but only through partnerships with technology proprietors or an extensive and expensive research and development process.

c) Difficult-to-reach industries: Those with strong entry barriers, such as an oligopolistic market situation, high capital requirements, and/or patent-protected knowledge requirements. No market share was considered for these industries.

2. The hypothesis of increase in market share is the same for both CSP and PV technologies.

3. A domestic market share increase hypothesis for each MENA country was made, to reach 80 percent in 2018 for target industries.

4. Market share to be supplied by each MENA country to its neighboring countries (the nearest two from those in this study) was estimated to reach a 5.0 percent of the demand for target industries in 2020.

5. MENA Regional (nonneighboring countries) market share to be supplied by each MENA

Table 3.12 | Market Share in Target Industries Hypotheses for Each MENA Country

CSP/PV Actual Market Share, Estimated(%)

CSP/PV Forecasted Market Sharein 2020(%)

Target

Domestic 25.0 80.0Neighboring countries

0.0 5.0

Other MENA countries

0.0 2.5

Europe 0.0 1.0ROW 0.0 0.5

Note: *It has been estimated for target industries that the forecasted market share will be reached in 2018, then stay flat. As described in sections 2.1 and 2.2, the target industries are:

• The independent and conventional groups of CSP industries: Condenser, Heat exchanger, Mirror, Pumps, Receiver, Storage tanks, and Structure & Tracker

• The shared PV industries: Inverter and Support Structure.


country was estimated to be 2.5 percent of the demand for target industries in 2020.

6. A market share for Europe equal to 1.0 percent, and for ROW equal to 0.5 percent in 2020 has been assumed.

7. Actual market share was estimated to be 25 percent for domestic demand. No participation in foreign markets has been assumed, as of today.

8. A linear increase from actual to forecasted market share has been assumed.

Demand projections do not include the additional demand that could arise from the development of niche applications for PV and be developed at the same time as the main PV market.

3.9 Recommendations and Impact Assessment

Finally, strategic recommendations are presented to encourage the development of solar component industries and minimize the gaps with Benchmark countries. The associated impacts of these recommendations were evaluated taking into account investment, cash flow, and number of jobs created; and using specific market information about each industry44

• Investment necessary for the deployment of a factory

• Maximum and minimum production capacity of a factory per year

• Component production cost• Component market price• Number of employees per factory.

44 As shown in Annex 5 Case Studies.

Chapter 4 | Attractiveness Assessment | 59

444444444444CHAPTER FOUR:

Attractiveness Assessment

4.1 Benchmark Analysis Summary Results

Benchmark countries were selected for comparison against the five selected MENA countries (Algeria, Egypt, Jordan, Morocco, and Tunisia) through a multicriteria analysis. It evaluated their current levels of activity and experience in the solar industry; future potential and motivation to develop renewable energies; and geographic location covering all major regions of the world.

Based on the three criteria, a group of countries was proposed by the team and a preliminary analysis carried out. After joint consideration between the project team and the World Bank, a final list was drafted comprising eight countries: Chile, China, Germany, India, Japan, South Africa, Spain, and the US.

According to the analyses performed,45 Egypt and Morocco are the MENA countries that show the highest Attractiveness index for both CSP and PV component industries, followed by Tunisia. Table 4.1, Table 4.2, Table 4.3, and Table 4.4 show the normalized Attractiveness index ais c, for each country and solar industry.

Table 4.1 and Table 4.2 show the attractiveness of each country for the development of the different CSP components normalized against the best Benchmark country for that component (whose value then is equal to 1). For any given country, attractiveness varies for the different component industries according to the country’s suitability to fulfill the specific needs of

that industry (low energy price for energy-intensive industries, availability and price of critical materials) and investors’ preferences.

Even though, statistically, Benchmark countries perform significantly better than MENA countries, the analysis shows that the attractiveness of some MENA countries comes closer to the average value of Benchmark countries for certain industries, highlighting industries of particular interest for those countries to develop.

Table 4.3 and Table 4.4 show the attractiveness of each country for the development of the different PV components, normalized against the best Benchmark country for that component (whose value is, then, equal to 1). For a given country, attractiveness varies for the different component industries according to the country’s suitability to fulfill the specific needs of that industry (such as low energy price for energy-intensive industries, availability and price of critical materials) and investors’ preferences.

Even though, statistically, the Benchmark countries perform significantly better than the 5 MENA countries, the analysis shows that, for certain components, some MENA countries are close to the average value of the 8 Benchmark countries.

The following tables highlight the specific strengths and weaknesses of each country, comparing its

45 The methodology is described in chapter 3, Methodology.


Table 4.1 | Normalized Attractiveness Index for CSP Component Industries (I)

CondenserElectrical Generator

Heat Exchanger HTF Pumps

HTF Thermal Oil Mirror

Algeria 0.2 0.1 0.3 0.2 0.1 0.2

Egypt 0.5 0.5 0.5 0.5 0.5 0.5

Jordan 0.2 0.1 0.2 0.2 0.1 0.2

Morocco 0.4 0.4 0.3 0.4 0.4 0.5

Tunisia 0.4 0.4 0.3 0.4 0.4 0.4

Chile 0.6 ⊕ 0.7 0.5 0.6 0.6 0.6

China 0.9 ⊕ 0.7 1.0 ⊕ 0.8 ⊕ 0.7 0.9

Germany 0.9 0.9 ⊕ 0.8 0.9 0.9 0.9

India ⊕ 0.7 ⊕ 0.7 ⊕ 0.7 ⊕ 0.7 ⊕ 0.7 ⊕ 0.7

Japan 0.9 0.9 0.9 0.9 0.9 ⊕ 0.8

South Africa ⊕ 0.7 0.9 0.6 ⊕ 0.8 0.9 ⊕ 0.7

Spain ⊕ 0.8 ⊕ 0.8 ⊕ 0.7 ⊕ 0.8 ⊕ 0.8 ⊕ 0.8

United States 1.0 1.0 1.0 1.0 1.0 1.0

Average ALL 0.6 0.6 0.6 0.6 0.6 0.6

Average BENCHMARK ⊕ 0.8 ⊕ 0.8 ⊕ 0.8 ⊕ 0.8 ⊕ 0.8 ⊕ 0.8

Average MENA 0.3 0.3 0.3 0.3 0.3 0.3

Table 4.2 | Normalized Attractiveness Index for CSP Component Industries (II)

Pumps Receiver Solar SaltSteam

TurbineStorage Tanks

Structure & Tracker

Algeria 0.2 0.2 0.2 0.1 0.3 0.3

Egypt 0.5 0.5 0.4 0.5 0.5 ⊕ 0.7

Jordan 0.2 0.2 0.2 0.1 0.3 0.3

Morocco 0.4 0.4 0.3 0.4 0.4 0.5

Tunisia 0.4 0.4 0.3 0.4 0.4 0.4

Chile 0.6 0.6 0.9 ⊕ 0.7 0.5 0.5

China 0.9 ⊕ 0.8 1.0 ⊕ 0.7 1.0 1.0

Germany ⊕ 0.8 0.9 0.5 0.9 ⊕ 0.8 ⊕ 0.8

India ⊕ 0.7 ⊕ 0.7 0.4 ⊕ 0.7 ⊕ 0.7 0.9

Japan 0.9 0.9 0.4 0.9 0.9 0.9

South Africa ⊕ 0.7 ⊕ 0.7 0.4 0.9 ⊕ 0.7 ⊕ 0.8

Spain ⊕ 0.8 ⊕ 0.8 0.5 ⊕ 0.8 ⊕ 0.7 ⊕ 0.7

United States 1.0 1.0 0.5 1.0 1.0 0.9

Average ALL 0.6 0.6 0.5 0.6 0.6 ⊕ 0.7

Average BENCHMARK ⊕ 0.8 ⊕ 0.8 0.6 ⊕ 0.8 ⊕ 0.8 ⊕ 0.8

Average MENA 0.4 0.3 0.3 0.3 0.4 0.4


Table 4.3 | Normalized Attractiveness Index for Thin Film and Shared PV Component Industries

Solar Glass TF Materials TF Modules InverterSupport

Structure

Algeria 0.2 0.2 0.3 0.3 0.3

Egypt 0.5 0.5 0.5 0.6 ⊕ 0.7

Jordan 0.1 0.2 0.2 0.3 0.3

Morocco 0.4 0.4 0.4 0.4 0.4

Tunisia 0.4 0.4 0.3 0.4 0.4

Chile 0.7 0.6 0.5 0.5 0.5

China ⊕ 0.7 0.9 1.0 1.0 1.0

Germany 0.9 1.0 0.9 ⊕ 0.7 0.9

India ⊕ 0.7 0.6 ⊕ 0.7 ⊕ 0.8 0.9

Japan 0.9 0.9 0.9 0.9 0.9

South Africa 0.9 ⊕ 0.7 0.6 0.6 ⊕ 0.7

Spain ⊕ 0.7 ⊕ 0.7 ⊕ 0.7 0.6 ⊕ 0.7

United States 1.0 0.9 1.0 0.9 0.9

Average ALL 0.6 0.6 0.6 0.6 ⊕ 0.7

Average BENCHMARK ⊕ 0.8 ⊕ 0.8 ⊕ 0.8 ⊕ 0.8 ⊕ 0.8

Average MENA 0.3 0.3 0.3 0.4 0.4

Table 4.4 | Normalized Attractiveness Index for Cristalline PV Component Industries

Cells Ingots Wafers Modules c-Si Polysilicon

Algeria 0.2 0.1 0.2 0.2

Egypt 0.5 0.5 0.5 0.5

Jordan 0.2 0.1 0.2 0.1

Morocco 0.4 0.4 0.3 0.4

Tunisia 0.4 0.4 0.3 0.4

Chile 0.6 ⊕ 0.7 0.5 ⊕ 0.7

China ⊕ 0.8 ⊕ 0.7 1.0 ⊕ 0.7

Grmany 1.0 1.0 0.9 0.9

India ⊕ 0.7 ⊕ 0.7 ⊕ 0.7 ⊕ 0.7

Japan 0.9 0.9 0.9 0.9

South Africa ⊕ 0.7 0.9 0.6 0.9

Spain ⊕ 0.8 ⊕ 0.8 ⊕ 0.7 ⊕ 0.7

United States 1.0 1.0 1.0 1.0

Average ALL 0.6 0.6 0.6 0.6

Average BENCHMARK ⊕ 0.8 ⊕ 0.8 ⊕ 0.8 ⊕ 0.8

Average MENA 0.3 0.3 0.3 0.3


Competitiveness parameters and Overarching categories, aggregated for all CSP (Table 4.5, Table 4.6) and PV (Table 4.7, Table 4.8) component industries. As can be seen, even though Benchmark countries perform significantly better than MENA countries, different countries achieve their competitiveness on the basis of different strengths. It also is remarkable that there are some factors for which no statistically significant difference between Benchmark and MENA countries can be established, as reflected by the indicator Prob H1. The labor

market is the closest parameter, especially for PV industries, although similarities can also be found in cost of energy (industrial), fiscal and financial costs, and component demand parameters.

The Labor market Competitiveness parameter includes both labor costs (which are more positive in MENA countries) and productivity (better in most Benchmark countries), somehow balancing the effect between Benchmark and MENA. Thus, the average results are similar for both groups of countries.

Table 4.5 | Normalized Competitiveness Parameters Included in the Overarching Categories Production Factors and Demand Factors, Aggregated for the CSP Solar Industries

Production Factors Demand Factors

CSPLabor Market

Material Availability

Relevant Manufact.

Ability

Cost of Energy

(Industrial)

Fiscal and

Financial Costs Production

CSP Component

Demand Demand

Algeria 0,3 0,0 0,3 1,0 0,2 0,3 0,5 0,5

Egypt 0,8 0,2 0,4 0,4 0,1 0,4 ⊕ 0,6 ⊕ 0,6

Jordan ⊕ 0,6 0,0 0,2 0,1 0,8 0,2 0,5 0,5

Morocco 0,5 0,0 0,2 0,1 ⊕ 0,7 0,2 0,8 0,8

Tunisi 0,5 0,0 0,2 0,2 0,9 0,3 0,5 0,5

Chile 0,5 0,3 0,3 0,0 0,9 0,4 ⊕ 0,6 ⊕ 0,6

China 0,9 1,0 0,9 0,2 0,5 1,0 1,0 1,0

Germany 0,3 0,3 1,0 0,0 1,0 ⊕ 0,7 0,3 0,3

India 1,0 0,3 ⊕ 0,7 0,2 0,3 ⊕ 0,7 ⊕ 0,6 ⊕ 0,6

Japan 0,5 0,5 1,0 0,0 0,8 0,8 0,3 0,3

South Africa ⊕ 0,6 0,2 ⊕ 0,6 0,2 ⊕ 0,6 0,5 0,9 0,9

Spain 0,2 0,2 ⊕ 0,7 0,0 1,0 0,5 0,8 0,8

United States ⊕ 0,7 0,5 1,0 0,4 0,9 0,8 0,8 0,8

Average ALL ⊕ 0,6 0,3 ⊕ 0,6 0,2 ⊕ 0,7 0,5 ⊕ 0,6 ⊕ 0,6

Average BENCHMARK

⊕ 0,6 0,4 0,8 0,1 0,8 ⊕ 0,7 ⊕ 0,7 ⊕ 0,7

Average MENA

0,5 0,1 0,3 0,4 0,5 0,3 ⊕ 0,6 ⊕ 0,6

Prob H1 42% 98% 100% 86% 77% 100% 38% 38%

Note: Prob H1 is the probability that Benchmark countries are different than selected MENA countries, analysis of variance (ANOVA). The countries are split in two groups (MENA and Benchmark), for which average and variance values are calculated. The ratio of the variances in both groups follows an F-distribution, yielding the probability of both groups being statistically different populations. A high value of the indicator Prob H1 means a high probability of Benchmark and MENA countries being different in the corresponding Competitiveness parameter.


Due to its high energy subsidies, Algeria introduces a distortion in the analysis of the energy cost for industrial purposes.46

On fiscal and financial costs, Benchmark countries have a better average than MENA countries. Nevertheless, some MENA countries such as Jordan, Morocco and Tunisia are near, or even outperform, the Benchmark average value.

Demand forecast for CSP components in both Benchmark and MENA countries is similar. Although

Benchmark countries are better positioned technologically, for steady development of CSP plants, poor solar resource and lack of incentives in some Benchmark countries and the high potential of MENA countries balance the score. For PV, on the other hand, incentives exist in Benchmark countries, and weather conditions are more propitious.

Benchmark countries show better performance in the Overarching category of Ri sk and Stability Factors as a whole, especially in the Financing Risk parameter. Thus, improving this parameter

Table 4.6 | Normalized Competitiveness Parameters Included in the Overarching Categories Production Factors and Demand Factors, Aggregated for All the PV Solar Industries

PV

Production Factors Demand Factors

Labor Market

Material Availability

Relevant Manufact.

Ability

Cost of Energy

(Industrial)

Fiscal and

Financial Costs Production

PV Component

Demand Demand

Algeria 0,3 0,1 0,3 1,0 0,2 0,3 0,3 0,3

Egypt 0,8 0,3 0,4 0,4 0,1 0,5 0,4 0,4

Jordan ⊕ 0,6 0,0 0,2 0,1 0,8 0,3 0,4 0,4

Morocco 0,5 0,1 0,2 0,1 ⊕ 0,7 0,3 ⊕ 0,6 ⊕ 0,6

Tunisi 0,5 0,1 0,2 0,2 0,9 0,3 0,4 0,4

Chile 0,5 0,2 0,3 0,0 0,9 0,3 ⊕ 0,6 ⊕ 0,6

China 0,8 1,0 0,9 0,2 0,5 1,0 0,8 0,8

Germany 0,2 0,5 1,0 0,0 1,0 ⊕ 0,6 1,0 1,0

India 1,0 ⊕ 0,6 ⊕ 0,7 0,2 0,3 ⊕ 0,7 0,5 0,5

Japan 0,4 0,8 1,0 0,0 0,8 0,8 ⊕ 0,6 ⊕ 0,6

South Africa ⊕ 0,6 0,4 ⊕ 0,6 0,2 ⊕ 0,6 0,5 0,5 0,5

Spain 0,2 0,4 ⊕ 0,7 0,0 1,0 0,5 ⊕ 0,6 ⊕ 0,6

United States 0,5 ⊕ 0,7 1,0 0,4 0,9 0,8 ⊕ 0,6 ⊕ 0,6

Average ALL 0,5 0,4 ⊕ 0,6 0,2 ⊕ 0,7 0,5 ⊕ 0,6 ⊕ 0,6

Average BENCHMARK

0,5 ⊕ 0,6 0,8 0,1 0,8 ⊕ 0,6 ⊕ 0,6 ⊕ 0,6

Average MENA

0,5 0,1 0,3 0,4 0,5 0,3 0,4 0,4

Prob H1 4% 100% 100% 86% 77% 99% 97% 97%

Note: Prob H1 is the probability that Benchmark countries are different than selected MENA countries, analysis of variance (ANOVA).

46 Most MENA countries have subsidized energy. Egypt has the lowest price of electricity for domestic use, but Algerian subsidies for industrial consumers are higher [39] [40].


should be a priority, and it is a point for which collaboration among MENA countries would yield mutual benefits.

The Competitiveness parameter regarding Industry structure shows a better result for the Benchmark countries. Nevertheless, some MENA countries such as Algeria and Morocco reach or outperform the Benchmark country average value. Logistical infrastructure is the weakest point within the Business Support Factors and is a field in which coordinated efforts would be synergetic for all MENA countries due to their physical proximity.

Figure 4.1 and Figure 4.2 show the normalized Attractiveness index for each country, aggregated for CSP and PV technologies, respectively. The figures show each MENA and Benchmark country’s Attractiveness index (x-axis) and normal distributions for MENA and Benchmark countries.

Table 4.7 | Normalized Competitiveness Parameters Included in the Overarching Categories Risk and Stability Factors and Business Support Factors, Aggregated for All the CSP Solar Industries

CSP

Risk and Stability Factors Bussines Support Factors

Risk

Associated

to Doing

Business

Risk

Associated

to Demand

Financing

Risk

Risk and

Stability

Industry

Structure

Innovation

Capacity

Logistical

Infrastructure

Bussines

Support

Algeria 0,2 0,1 0,0 0,1 ⊕ 0,7 0,0 0,0 0,1

Egypt 0,3 0,3 0,5 0,5 0,3 0,2 0,2 0,2

Jordan 0,4 0,0 0,0 0,1 0,1 0,3 0,3 0,3

Morocco 0,5 0,5 0,3 0,4 0,8 0,2 0,2 0,3

Tunisi ⊕ 0,6 0,3 0,3 0,4 0,3 0,3 0,4 0,4

Chile ⊕ 0,7 ⊕ 0,7 ⊕ 0,7 0,8 0,3 0,3 0,5 0,4

China 0,5 0,8 ⊕ 0,6 ⊕ 0,6 1,0 0,3 0,5 0,5

Germany 1,0 0,8 0,8 1,0 1,0 0,8 1,0 1,0

India 0,2 ⊕ 0,7 ⊕ 0,7 ⊕ 0,7 0,1 0,3 0,2 0,2

Japan 1,0 ⊕ 0,6 0,8 0,9 0,9 1,0 0,8 1,0

South Africa 0,5 0,4 1,0 0,9 0,2 0,3 0,4 0,4

Spain 0,8 1,0 ⊕ 0,7 0,8 0,8 0,4 0,8 ⊕ 0,7

United States 1,0 ⊕ 0,6 1,0 1,0 1,0 0,8 0,8 0,9

Average ALL ⊕ 0,6 0,5 ⊕ 0,6 ⊕ 0,6 ⊕ 0,6 0,4 0,5 0,5

Average BENCHMARK

⊕ 0,7 ⊕ 0,7 0,8 0,8 ⊕ 0,7 0,5 ⊕ 0,6 ⊕ 0,6

Average MENA

0,4 0,2 0,2 0,3 0,4 0,2 0,2 0,3

Prob H1 95% 100% 100% 100% 71% 97% 99% 98%



4.2 Algeria

4.2.1 ALGERIA’S KEY STRENGTHS AND WEAKNESSES

Algeria’s key strength is the cost of energy for industrial consumers,47 its industry structure, marked by the presence of multiple international companies, and the fact that Algeria has recently announced

very ambitious targets for solar energy development in the country.

On the other hand, the main aspects to improve would be the Overarching category of Production factors, specifically Material availability of required components and materials, Risk and stability Factors,

47 A low-cost electricity presents a competitive advantage to private investors in energy-intensive industries. However, from the point of view of the country, subsidies to energy consumption introduce tensions in the system because they veil the true price signal to electricity consumers and may lead to adverse economic and environmental impacts [94]. For a country that generates its electricity largely from natural gas, a true price of electricity would need to take into account the LCOE (levelized cost of energy) of a CCGT (Combined Cycle Gas Turbine) plant, estimated at 5$c/kWh, and add to it transportation costs, business margin, and others to arrive at the final number [93].

Table 4.8 | Normalized Competitiveness Parameters Included in the Overarching Categories Risk and Stability Factors and Business Support Factors, Aggregated for All the PV Solar Industries

Risk and Stability Factors Bussines Support Factors

PV

Risk Associated to Doing Business

Risk Associated to Demand

Financing Risk

Risk and Stability

Industry Structure

Innovation Capacity

Logistical Infrastructure

Bussines Support

Algeria 0,2 0,1 0,0 0,1 ⊕ 0,7 0,0 0,0 0,2

Egypt 0,3 0,4 0,5 0,5 0,3 0,2 0,2 0,2

Jordan 0,4 0,0 0,0 0,1 0,1 0,3 0,3 0,3

Morocco 0,5 0,5 0,3 0,4 0,8 0,2 0,2 0,4

Tunisi ⊕ 0,6 0,3 0,3 0,4 0,3 0,3 0,4 0,4

Chile ⊕ 0,7 ⊕ 0,7 ⊕ 0,7 0,8 0,3 0,3 0,5 0,4

China 0,5 0,8 ⊕ 0,6 ⊕ 0,7 1,0 0,3 0,5 ⊕ 0,6

Germany 1,0 1,0 0,8 1,0 1,0 0,8 1,0 1,0

India 0,2 ⊕ 0,7 ⊕ 0,7 ⊕ 0,7 0,1 0,3 0,2 0,2

Japan 1,0 0,8 0,8 1,0 0,9 1,0 0,8 0,9

South Africa 0,5 0,4 1,0 0,9 0,2 0,3 0,4 0,4

Spain 0,8 0,9 ⊕ 0,7 0,8 0,8 0,4 0,8 ⊕ 0,7

United States 1,0 0,5 1,0 1,0 1,0 0,8 0,8 0,9

Average ALL ⊕ 0,6 ⊕ 0,6 ⊕ 0,6 ⊕ 0,6 ⊕ 0,6 0,4 0,5 0,5

Average BENCHMARK

⊕ 0,7 ⊕ 0,7 0,8 0,9 ⊕ 0,7 0,5 ⊕ 0,6 ⊕ 0,6

Average MENA

0,4 0,2 0,2 0,3 0,4 0,2 0,2 0,3

Prob H1 95% 100% 100% 100% 71% 97% 99% 98%



Figure 4.1 | Normalized Attractiveness Index for Each Country, Aggregated for CSP Industries and Probability Density Function* for MENA and Benchmark Countries

Algeria

Egypt

Jordan

Morocco

Tunisia

Chile

China

Germany

India

Japan

South Africa

Spain

United States

0

0.1

0.2

0.3

0.4

0.5

0.20 0.4 0.6 0.8 1 1.2

Prob

abilit

y Dist

ribut

ion,

CSP

MENA Countries Benchmark Countries

Source: STA/Accenture.Note: *The underlying hypothesis is that both Benchmark and MENA countries follow a normal distribution whose average and

standard deviations are those corresponding to the Benchmark and MENA countries, respectively. Figure 4.1 illustrates the plausibility of the cluster hypothesis (H1). See Table 4.5 to Table 4.8 (ANOVA analysis).

Figure 4.2 | Normalized Attractiveness Index for Each Country, Aggregated for PV Industries and Probability Density Function* for MENA and Benchmark Countries

Algeria

Egypt

Jordan

Morocco

Tunisia

Chile

China

GermanyJapan

IndiaSouth Africa

Spain

United States

0

0.1

0.2

0.3

0.4

0.5

0.20 0.4 0.6 0.8 1 1.2

Prob

abilit

y Dist

ribut

ion,

PV

MENA Countries Benchmark CountriesSource: STA/Accenture.Note: *The underlying hypothesis is that both Benchmark and MENA countries follow a normal distribution whose average and

standard deviations are those corresponding to the Benchmark and MENA countries, respectively. Figure 4.1 illustrates the plausibility of the cluster hypothesis (H1). See Table 4.5 to Table 4.8 (ANOVA).


specifically Risk associated with doing business, and Business Support Factors, specifically Innovation capacity and Logistical infrastructure.48

4.2.2 POTENTIALLY COMPETITIVE INDUSTRIES

Algeria is different from its neighboring countries in some respects. As one of the world’s largest natural gas exporters, in the short term, Algeria may not experience the same drive to diversify its energy sector through solar energy in order to increase its energy independence. However, the country could have other motivations to develop its solar industry, such as the opportunity to free more gas for export, or the will to diversify industrial structure by developing a new industry in the face of a possible reduction

in oil and gas supply. Significantly, Algeria is moving in this direction, having announced a substantial 20-year plan for solar development. This plan calls for 5 percent renewable energy installed capacity by 2017, and 20 percent by 2030, of which 70 percent would be CSP, 20 percent PV, and the remaining 10 percent wind power.

Hosting one of the world’s first Integrated Solar Combined Cycle (ISCC) plants,49 Algeria also has gained a valuable insight into the development, construction, and operation of this type of plant––experience that could be put to use as the sector develops in the Region. As a natural gas producer, Algeria will have opportunities to combine this resource with CSP technology in future projects as well.

48 For details on the Benchmark analysis, refer to Benchmark analysis summary results, section 4.1.49 ISCC Hassi R’mel is a 150-MWe combined cycle hybridized with a 25-MWe equivalent CSP solar field. It was the first ISCC plant in the world to start construction although Morocco’s ISCC Ain Beni Mathar was the first operating plant of this type in the world[9].

Figure 4.3 | Competitiveness Parameters in Algeria Compared to Benchmark and MENA Averages

-


Labor market




Component demand



Algeria



Production

Demand

Risk and stability

Business support

Financial risk

0.20

0.40

0.60

0.80

1.00

Industry structure

Innovation capacity




Despite Algeria’s experience and political will to develop solar energy, the competitiveness analysis performed highlights some areas for the country to improve to increase its competitiveness and encourage investment by foreign and local firms. Specifically, Algeria could take actions to overcome gaps in financial country risk and human capital constraints,50 and to consider how increasing the

level of higher education could translate into higher innovation capacity for the country.

Figure 4.4 and Figure 4.5 show the normalized Attractiveness index of Algeria for the CSP and PV selected industries, compared to the MENA countries’ average.

Figure 4.4 | Normalized Attractiveness Indexes for CSP and PV Technologies in Algeria Compared to MENA Average*

Alge

ria

CSP

Indu

strie

s

1.00.90.80.70.60.50.40.30.2

0.1

Condenser

Algeria Average MENA Average BenchmarkElectric

al generator

Heat exchanger

HTF pumps

HTF Thermal oil

Mirror

Pumps

Recevier

Solar salt

Steam turbie

Storage tanks

Structure & Tra

cker -

PV In

dust

ries

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

Cells

Algeria Average MENA Average Benchmark

Ingots

Wafe

rs

Modules c-Si

Polysilicon

Solar glass

TF M

ateria

ls

TF M

odules

Inve

rter

Support Stru

cture

-

Source: STA/Accenture.Note: The range covered by Benchmark countries is shaded.

50 For details on Benchmark analysis, see Benchmark analysis summary results 4.1.


Table 4.9 | Algeria’s Key Strengths and Competitive Gap Weaknesses Analysis

Key Strengths Competitive Gap Weaknesses

Production factors

Material availability: Algeria already has a significant glass industry and an emerging steel industry.

Relevant manufacturing ability: Based on current industrial capability, Algeria has synergic industries such as Float glass and crude steel.

Cost of energy: From an investor’s point of view, Algeria’s electricity price represents a competitive advantage for the establishment of energy-intensive industries.

Labor market: Monthly wages are not competitive compared to other MENA countries.

Material availability: Despite having glass and steel, it lacks other composite and raw materials needed to develop solar industries, including stainless steel, copper, and silicon.

Demand factors CSP and PV component demand: Ambitious domestic goals have been set for solar installed capacity in PV (800 MW) and CSP (1,525 MW) to 2020.

Risk and stability factors

Risk associated with doing business: Algeria, as well as its neighboring countries, is still going through a political transition that may lead to a reduction in risk once it is complete.

Risk associated with demand: Giving visibility to the pipeline of energy projects would be an important step toward reducing the risk associated with demand, particularly in the case of a country which does have domestic fossil fuel resources. As this is the Algerian case, the development of solar energy is very much a political decision rather than one of security of supply.

Financing risk: Algeria needs to take steps to overcome financing country risk, especially improving access to credit.

Business support factors

Industry structure: Gas resources in the country are an advantage for industries such as solar glass.

Innovation capacity: For industries whose innovation requirements are not high, such as Support Structure, Structure & Tracker, Storage tank, and Solar glass, potential local lack of innovation capability can be overcome through collaboration with technological partners in the short term.

Logistical infrastructure: Improving infrastructure would make it easier for investors to develop new industries in the country.


Figure 4.5 | Normalized Attractiveness Indexes for CSP Target Industries in Algeria Compared to MENA Average*

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

Condenser

Heat exchenger

Mirror


Pumps

Recevier

Solar salt

storage tanks

Stricture & Tra

ker -


Figure 4.6 | Normalized Attractiveness Indexes for PV Target Industries in Algeria Compared to MENA Average

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1


Solar glass

TF Materials

TF Modules

Inverter

Support stru

cture

-



Having competitive energy costs,51 and with the backing of political will, Algeria could find it of particular interest to consider the industries that have higher energy requirements:

• Solar glass (35 percent of production costs)• TF Materials (15 percent of production costs)• TF Modules (10 percent of production costs).

Additionally, Algeria should consider the possible synergies for solar energy development that could arise with companies already in the country. However, based on the analysis above, to become a competitive country for solar industry development in the medium and long terms, Algeria needs to concentrate on improving its access to financing.

4.2.2.1 Potential Impact

Choosing the right approach to enter new markets requires knowing the potential to be competitive. Table 4.9, based on Algeria’s key strengths, depicts the investment, production, and jobs required for a typical factory for the potentially competitive

industries. Top companies in the corresponding markets also are shown.

Solar glass is one of the minor products of Float glass production lines, accounting for only 0.7 percent of the total average production worldwide. A Float glass line requires significant investment; its main consumers are the automotive, construction, and furniture industries[68].52

TF Materials are produced by chemical industries. Setting up a chemical facility only to produce TF materials, which are a small part of the industry portfolio, is not advisable. However, existing chemical industries might be encouraged to diversify their production toward TF Materials. If any of the MENA countries were to develop a TF Modules production facility within the frame of Regional cooperation and demand, feasibility of this alternative would increase.

There are few barriers to create a TF Modules industry although, when scale becomes important, access to capital could become a limiting factor. The main issue is the current overcapacity in this sector.

Table 4.10 | Impacts and Main Competitors – Algeria

IndustryInvestment (US$ mil)

Typical Yearly Production

Jobs per Factory Top Companies (Country)

Solar glass 80–150 400 t/day Various* • AGC Solar (Belgium)• Guardian (US)• Pilkington (UK)• Saint Gobain Solar (Germany)

TF Materials 20 60 MW Various* • 5N Plus Inc. (Canada)• Advanced Technology and Materials (US)• Hitachi Metals (Japan)

TF Modules 12 8 MW 30–40 • Best Solar (China)• First Solar (US)• Sharp (Japan)

Note: * Depends on the number of types of glass to be produced and the capacity of the entire Float glass line.** Depends on the number of chemical products or components to be manufactured and the capacity of the entire chemical factory.

51 A low-cost electricity presents a competitive advantage to private investors in energy-intensive industries. However, from the point of view of the country, subsidies to energy consumption introduce tensions in the system because they veil the true price signal to electricity consumers and may lead to adverse economic and environmental impacts[94]. For a country that generates its electricity largely from natural gas, a true price of electricity would need to take into account the LCOE (levelized cost of energy) of a CCGT (Combined Cycle Gas Turbine) plant, estimated at 5$c/kWh, and add to it transportation costs, business margin, and others to arrive at the final number[93].52 As of 2007, the Float glass market reached 44 million tons, worth 21 billion ¤ before additional processing (laminating, tempering, coating), and up to 60 billion ¤ after processing [68].


4.3 Egypt

4.3.1 EGYPT’S KEY STRENGTHS AND WEAKNESSES

From the point of view of solar industrial development, Egypt’s key strengths are in the Overarching category of Production factors: low cost of labor market and low cost of energy for industrial consumers53; availability of material for solar industries, particularly glass, steel, and stainless steel; and a high manufacturing ability. Its planned CSP deployment to

202054 renders a remarkable Component demand. Its lower financial risk, measured as higher access to credit, in comparison with other MENA countries should also be noted.

The following analysis was based on Egypt’s background and historical data. The underlying assumption for this choice is that Egypt will regain its political, social, and economic stability (necessary conditions for any investment).

53 A low cost of electricity presents a competitive advantage for private investors in energy-intensive industries. However, from the point of view of the country, subsidies to energy consumption introduce tensions in the system because they veil the true price signal to electricity consumers and may lead to adverse economic and environmental impacts[94]. Although energy cost for industrial consumers is still low in Egypt, the cost has risen substantially over the past year and is expected to keep increasing because national subsidies to fossil fuels have been reduced.54 The intermediate objective of the Egyptian solar plan, as communicated by the Ministry of Electricity and Energy, is 1100 MW for CSP and 200 MW for PV.

Figure 4.7 | Competitiveness Parameters in Egypt Compared to Benchmark and MENA Averages

Labor market


Relevant manufact.ability

Cost of energy(industrial)

Risk associated withdemand

Financial risk

Egypt

Benchmark country Average

MENA country Average

Industry structure

Innovation capacity


Risk associated withdoing business


Component demand

Production

-

0.20

0.40

0.60

0.80

1.00

Demand

Risk and Stability

Business Support



The key aspect to improve are the Fiscal and financial costs. Due to its high interest rates and low ranking, and as indicated in the World Bank’s Paying Taxes ranking, Egypt has a competitive gap when compared to not only the Benchmark countries but also the MENA countries.


In the short term, both the Structure & Tracker industry for CSP (Figure 4.5, highlighted in red) and Support

Structure for PV (Figure 4.8, highlighted in yellow) emerge as the clearest industries for development in Egypt due to their higher overall competitiveness in comparison to the other MENA countries. These two solar industries share a common basis in steel manufacturing and handling, so developing one of these industries will in part develop the other. However, while Egypt has a greater competitive advantage with these two solar industries, these industries also are likely to develop in other MENA countries.

Figure 4.8 | Normalized Attractiveness Indexes for CSP and PV Technologies in Egypt Compared to MENA Average

Egyp

t

CSP

Indu

strie

s

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

Egypt Average MENA Average Benchmark

CondenserElectri

cal g

eneratorHeat e

xchangerHTF

PumpsHTF

Therm

al oil

Mirror

Pumps

Receiver

Solar salt

Steam turbine

Storsge tanks

Structu

re &Traker

-

PV In

dust

ries

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

Cells


Ingots Wafers

Modules c-Si

Polysilicon

Solar glass

TF Materials

TF Modules

Inverter

Support Stru

cture-



Table 4.11 | Egypt’s Key Strengths and Competitive Gap Weaknesses Analysis


Production factors

Labor market: Low wages are attractive, especially for industries whose labor costs represent a high percentage of production costs. As an example, the labor cost in the Structure & Tracker industry represents 35% of the total production costs.

Material availability: Some key materials are produced in the country, such as steel and Float glass.

Cost of energy: For some industries, such as Polysilicon and Ingots/Wafers, energy costs are significant, representing almost one-third of the production costs. Nevertheless, no encouragement for energy-intensive industries is forecasted. On the contrary, energy costs are to be increased toward international prices.

Relevant manufacturing ability: Based on current industrial capability, further capacity building for glass and pressure vessels could increase Egypt’s competitive edge through training or alliances with technology providers[69].

Fiscal and financial cost: Egypt has previous experiences with implementing fiscal incentives for other industries.* These experiences could be replicated to drive the development of solar component industries.

Demand factors

CSP and PV component demand: Recently announced ambitious domestic goals for solar installed capacity in CSP could prove an important driver for the development of associated industries.

CSP and PV component demand: Although CSP targets are ambitious, domestic targets goals for PV solar installed capacity are not. However, the expected electricity demand growth, current shortage, and the abundant solar resource support the rationale for solar promotion policies.


Risk associated with demand: While the earlier projected solar capacity for CSP (100 megawatt, or MW) and PV (20 MW) in Egypt by 2020 is not enough to develop any solar industry, the recently announced new intermediate targets within the 2030 plan are promising.

Risk associated with doing business: Egypt is still going through a political transition. Once it is complete, reduction in risk may occur.

Risk associated with demand: Egypt’s electricity sector is essentially a monopoly. Thus, it is particularly important to give visibility to the pipeline to reduce the risk associated with demand for utility scale projects. In addition, efforts to promote the visibility of private (power purchase agreement, or PPA) and self-consumption projects pipelines are relevant (a solar cluster or governmental body could take on this role).

Financial risk: Particularly in the case of medium-to-large investment projects, such as the development of the Mirror industry (investment needed is on the order of US$40 million).

(Continued)


The development of metal fabrication industries, particularly Heat exchanger and Storage tanks (highlighted in red), also may also be of particular interest in the short and medium terms due to the existing capacity in the country.

The Mirror industry presents a highly valuable opportunity for Egypt. The Solar glass and Mirror industries require a high investment, but considering Egypt’s high Attractiveness index in access to financing and taking into account that Float



Industry structure: There are large international industrial companies in Egypt, of which some (Saint Gobain) are associated with CSP components.

Industry structure: No local clustering in the country, although at least one attempt in the glass manufacturing sector is in progress.

Innovation capacity: For industries whose innovation requirements are not high, such as Support Structure, Structure & Tracker, and Storage tank industries, potential local lack of innovation capability can be overcome through collaboration with technological partners in the short-term.

Nevertheless, Egypt hosts good Universities and research centers that, with appropriate incentives, could lead the way.

Logistical infrastructure: The identification of suitable sites, to cluster manufacturing capability for the different solar component industries, could reduce this gap.

Source: STA/AccentureNote: *As an example, poultry breeding companies have been exempted from corporate tax for 10 consecutive years, beginning the year

after the company commences production.

Figure 4.9 | Normalized Attractiveness Indexes for CSP Target Industries in Egypt Compared to MENA Average

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

Egypt Avreage MENA Average Benchmark

0.1

Condenser

Heat exchanger

Mirror

Pumps

Receiver

Solar salt

Storage tanks

Struture & Tra

cker-


Table 4.11 | Continued


glass is already manufactured in the country, the development of these industries could be prioritized. Besides, hosting an ISCC plant55 has given Egypt valuable insights into the development, construction, and operation of this type of plant. This experience may be put to valuable use as the sector develops in the Region.

Finally, new reflective materials56 are emerging in the market that Egypt could explore as both a threat and an opportunity.

Figure 4.9 and Figure 4.10 show the normalized Attractiveness index of Egypt for the CSP and PV selected industries, compared to the MENA countries’ average.

Based on the analysis above, Egypt should focus on developing the Structure & Tracker industry for CSP and the Support Structure industry for PV,57

and to consider opportunities to improve some of the

conventional CSP industries (Heat exchanger, Storage tanks) in the short and medium terms. Solar glass and Mirror development are additional opportunities to be implemented in the medium term, with a strategy to take advantage of Regional synergies.


Choosing the right approach to enter new markets requires knowing the potential impact associated with these industries. Table 4.12 depicts the investment, production, and jobs required in a typical factory for the selected industries to be developed in Egypt. Top companies in the corresponding markets also are shown.

Egypt has some entry barriers to the Mirror industry, such as developing a complex manufacturing line and highly skilled workforce requirements to run the line. In addition, the industry is capital intensive, so not many new companies are able to enter this market. However, there is already Float glass manufacturing

Figure 4.10 | Normalized Attractiveness Indexes for PV Target Industries in Egypt Compared to MENA Average

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1


Solar glass

TF Materia

ls

TF Module

Inverter

Support Stru

cture

-


55 Kuraymat ISCC is a 120-MWe combined cycle hybridized with a 20 MWe equivalent solar field. It started operation in June 2011 [9].56 All-aluminum and multilayer aluminum reflectors[6], as well as reflective films ([7], [8]) are entering the market. However, despite having advantages compared with conventional glass Mirrors (light weight, no thermal shock, lower expected price), they have disadvantages as well (durability concerns) and a scant or no track record.57 Detailed in Case Studies.


in the country, and its presence gives a head start to this development.

The main barrier to the creation of a Structure & Tracker or Support Structure industry could be the availability

of cheap steel. The lack of related industries in the country (conventional metal fabrication industries, especially heat recovery systems and pressure vessels) is one of the main entry barriers for the Heat exchanger and Storage tanks industries.

4.4 Jordan

4.4.1 JORDAN’S KEY STRENGTHS AND WEAKNESSES

Jordan’s key strengths for solar industry development are fiscal and financial costs,58 low risk associated with doing business, and Innovation capacity as indicated by the levels of higher education in the country.

On the other hand, a weak Industry structure and high cost of energy for industrial purposes, combined

with high risks associated with demand, could pose drawbacks to new industrial developments.


Jordan’s high dependency on fossil fuels makes the development of renewable energies of particular interest to the government. The country already has a renewable energy target, expected to result in 600 MW of solar energy in 2020. In practice, this target is being implemented at the institutional level.59

Table 4.12 | Impacts and Main Competitors: Egypt




Mirrors 39 2,000,000 m2 125–250 • 3M (US)• Alanod Solar (Germany)• Flabeg Gmbh (Germany)• Glasstech Inc. (US)• Glaston (Finland)• Guardian Ind. (US)• Pilkington (Japan)• Rioglass Solar (Spain)• Saint-Gobain (France)

Structure 10 70 MW 40–65 • Sener (Spain)• Siemens (Germany)• Mecasolar (Spain)

Heat exchanger Various Adaptable Various • Aitesa (Spain)• GEA (Germany)• Alfa Laval (Sweden)

Storage tanks • Taco Inc, (US)• Flagsol (Germany)• Sleegers Engineered (Sweden)

Note: * Structure can be developed for CSP (Structure & Tracker) and PV (Support Structure) technologies.** Depends on the number of products to be manufactured and the capacity of the factory.

58 As defined by the Paying Taxes indicator of the World Bank’s Ease of Doing Business Report [41].59 Jordan’s Ministry of Energy and Mineral Resources (MEMR) launched the first round of unsolicited proposals in May 2011. Thirty-four applications qualified: 12 wind projects, 15 solar photovoltaic projects, 2 concentrating solar photovoltaic projects, and 5 solar thermal projects. Two wind projects and 12 solar photovoltaic projects were approved [95]. The aggregate capacity of the 2 wind projects is approximately 200 megawatts; the aggregate capacity of the 12 solar photovoltaic projects is the same. In May 2013, MEMR received proposals for each of the approved projects. Formal project awards are pending, and MEMR is hosting clarification meetings with a number of bidders.


There are options to ensure a high local supply share, which may vary depending on the project.60 In the long term, however, due to the size of the country, domestic demand for CSP and PV components alone is not likely to be enough to foster the development of a solar industry in Jordan rather than in another MENA country.

Solar industry development in Jordan does not have clear drivers. Nevertheless, compared with other MENA countries, Jordan’s innovation capacity,61

high education rates, and labor market efficiency62

indicate promising potential. If the political will exists, some local promising private projects and niche applications could be supported. Moreover, within the frame of Regional cooperation, some activities related to solar energy industry development could be set up in Jordan (for example, a Certification and Testing Institute, as discussed in Box 4.1).

Figure 4.11 and Figure 4.12 show the normalized Attractiveness index of Jordan for the CSP and PV selected industries compared to the MENA countries’ average.

Figure 4.11 | Competitiveness Parameters in Jordan Compared to Benchmark and MENA Averages

-


Labor market




Component demand



Jordan



Production

Demand

Risk and stability

Business support

Financial risk

0.20

0.40

0.60

0.80

1.00

Industry structure

Innovation capacity



60 For example, the US-based company supplying solar steam boilers to the planned 100MW CSP project in Ma’an, is expected to install an advanced manufacturing facility in Jordan to supply the JOAN1 project with its solar steam boilers.61 Measured in terms of patent filings per million population and Innovation, Business sophistication, and Technological readiness scores in the Global Competitiveness Report (Benchmarking Analysis Results).62 Literacy rates above 90% (Source: UNDP Report 2011 [36]); labor market efficiency rate of 3.97 compared to US rate of 5.57 (Source: WEF[90]).



Due to the country’s comparatively high innovation capacity, Jordan could lead the development of a certification and testing institute, which could be an asset to the entire MENA Region.63 Even though a certification and testing institute is not a component

industry, it also requires a business model and a market analysis. Table 4.14 depicts the investment, production, and jobs required in a typical factory for the selected industries to be developed in Jordan. Top companies in the corresponding markets also are shown.

Figure 4.12 | Normalized Attractiveness Indexes for CSP and PV Technologies in Jordan Compared to MENA Average

Jord

an

CSP

Indu

strie

s

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

Jordan Average MENA Average Benchmark

CondenserElectric

al generatorHeat e

xchanger

HTF PumpsHTF Th

ermal O

il

Pumps

Mirror

Receiver

Solar salt

Steam turbine

Storage tanks

Structure & Tra

cker

-

PV In

dust

ries

1.0

0.9

0.8

0.7

0.60.5

0.4

0.3

0.2

0.1

Cells

Jordan Average BenchmarkAverage MENA

Polysilicon

Solar glass

TF Materia

ls

TF Modules

Inverter

Support Stru

cture

Modules c-Si

Ingots Wafers

-


63 This is not to say that other MENA countries could not develop a certification and testing institute themselves. However, as discussed in the individual country details, these countries also could have other priorities in terms of solar component industry development. Thus, the certification and testing institute could be an opportunity for Jordan to capitalize on and to promote Regional collaboration.


Table 4.13 | Jordan’s Key Strengths and Competitive Gap Weaknesses Analysis


Production factors

Labor market: Both the labor market efficiency and wages are strengths from an investor’s point of view.

Fiscal and financing cost: The cost of taxes borne by a company and the administrative burden of tax compliance for firms are at a level similar to the best- positioned Benchmark countries.1

Material availability: Access to raw materials and components is essential for the development of solar industries.

Relevant manufacturing ability: Jordan’s score for this Competitiveness parameter is slightly lower than the MENA average because Jordan currently has no important presence of synergic industries.

Cost of energy: The cost of energy for industrial consumers is relatively expensive when compared to the other analyzed MENA and Benchmark countries.

Demand factors

CSP and PV component demand: Jordan has a low CSP and PV Component demand parameter.


Risk associated with doing business: Several of Jordan’s neighboring countries are still going through a political transition, which puts Jordan in the middle of an unstable environment.

Risk associated with demand: Jordan has an oligopoly of power generation2 through concession areas.

Financial risk: Access to financing needs to be improved even for small and medium investments.


Innovation capacity: Innovation is one of Jordan’s strengths. The country ranks 3rd among the Arab League in the Global Innovation Index 2011 [70].

Industry structure: Although there is strong presence of large international industrial companies, no local cluster in related sectors has been identified.

Note: 1 As per data extracted from the International Finance Corporation-World Bank (IFC-WB) Paying Taxes Rank.2 Renewable energy plants typically are small or medium-sized, especially when PV technology is used. These sizes enable small and medium enterprises (SMEs) to participate as independent power producers (IPPs), greatly increasing the development of the sector. An oligopoly of power generators could thwart this development, unless some kind of obligation to buy energy from IPPs is imposed on the companies belonging to the oligopoly. The effect of an oligopoly blocking the entrance of IPPs has never been seenbecause it is not possible to detect something that is not happening, and the oligopolic companies do not openly oppose the IPPs.

Box 4.1 | Certification and Testing Institute in Jordan

The services that could be covered by the Certification and Testing Institute are:

• Qualification, certification, and co-OEM (Original Equipment Manufacturer) certification• Measurement of performance under standard test conditions (STC) and specific ambient

conditions• Individual testing and random sample measurements of Solar Modules• Testing for special conditions, for example, for ammonium or transport loads• Prototype testing for development projects• Benchmarking of Photovoltaic Modules• Yield measurements, specifically energy yield• Long-term testing of open-air weathering in different climate zones• Assessment of light-aging in Thin-Film Modules• Application of analytical methods, including thermograph and electroluminescence.



Figure 4.13 | Normalized Attractiveness Indexes for CSP Target Industries in Jordan Compared to MENA Average

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

Condenser

Heat exchanger

Mirror


Pumps

Receiver

Solar salt

Storage tanks

Structure &

Tracker

-


Figure 4.14 | Normalized Attractiveness Indexes for PV Target Industries in Jordan Compared to MENA Average

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1


Solar glass

TF M

aterials

TF M

odules

Inverte

r

Support Stru

cture

-


Table 4.14 | Impacts and Main Competitors: Jordan



Jobs per Factory

Top Companies (Country)

Certification and testing institute

1–15 Not applicable 5–30 • NREL (US)• DLR (Germany)• CIEMAT (Spain)


4.5 Morocco

4.5.1 MOROCCO’S KEY STRENGTHS AND WEAKNESSES

Morocco’s key strengths for solar industry development are its planned demand (CSP and PV) for 2020, the government’s commitment and support,64 and the structure of companies in the country. The third includes the presence of large international companies alongside specific local clustering. This clustering is particularly important for small and medium enterprises (SMEs), which otherwise might not be able to share and benefit from new ideas and projects.

The main aspects for Morocco to improve are the Cost of energy for industrial purposes and the availability of Materials, as well as Innovation capacity and Logistical infrastructure. Based on the analysis performed,65 for the short term, Morocco could focus on developing the Structure & Tracker industry for CSP and the Support Structure industry for PV. In the medium term, Morocco could consider opportunities to improve some of the conventional CSP industries (Condenser, Pumps). TF Modules development is another opportunity to be implemented if current world overcapacity were to decrease. These opportunities will increase if Morocco follows a

Figure 4.15 | Competitiveness Parameters in Morocco Compared to Benchmark and MENA Averages

-


Labor market




Component demand



Morocco



Production

Demand

Risk and stability

Business support

Financial risk

0.20

0.40

0.60

0.80

1.00

Industry structure

Innovation capacity



64 The Moroccan Agency for Solar Energy (MASEN) is a Joint Stock company with a Board of Trustees and a Supervisory Board. MASEN aims at implementing a program to develop integrated electricity production projects from solar energy with a minimum total capacity of 2000 MW in the areas of Morocco that are capable of hosting the plants to do so[91].65 Morocco has a similar Attractiveness index for the Mirror industry. However, the lack of local Float glass production has been considered a handicap that makes this industry less advisable because common practice is to avoid road transportation of glass products farther than 600 km [88].


Figure 4.16 | Normalized Attractiveness Indexes for CSP and PV Technologies in Morocco Compared to MENA Average

Mor

occo

CSP

Indu

strie

s

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

Morocco Average MENA Average Benchmark

Condenser

Electrical g

enerator

Heat exchanger

HTF Pumps

HTF Therm

al Oil

Mirror

Pumps

Receiver

Solar salt

Steam turbine

Storage tanks

Structure & Tra

cker-

PV In

dust

ries

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1


Cells

Ingots Wafers

Modules c-Si

Solar glass

Polysilicon

TF Materials

TF Modules

Inverter

Support Stru

cture

-

1.0


strategy to take advantage of Regional synergies, that is, collaboration with Algeria on TF Material manufacturing and demand aggregation.


In the short term, both the Structure & Tracker industry for CSP (Figure 4.13, highlighted in red) and Support Structure for PV (Figure 4.14, highlighted in yellow)

emerge as the clearest industries for development in Morocco. The reason is their higher Attractiveness index in comparison to the other industries in the country. Although Morocco has a competitive advantage, these industries typically offer high local content. In addition, they are among the first industries to be developed once projects arise. Thus, there could be competition from countries, such as Egypt, that are pursuing the local project pipeline.


Table 4.15 | Morocco’s Key Strengths and Competitive Gap Weaknesses Analysis


Production factors

Fiscal and financial cost: According to the data extracted from the World Bank [58], the lending interest rate in Morocco’s financial market is the lowest among selected MENA countries.

Labor market: Morocco stands below selected MENA and Benchmark average values for this parameter because its Labor market efficiency is low.* The weight of this factor is high for technologically complex components.

Material availability: Each industry must implement a specific plan to obtain the raw materials and composites needed because materials such as flat glass, stainless steel, and silicon are not available locally.

Relevant manufacturing ability: Morocco still has lower literacy rates than neighboring countries. This parameter should be improved to ensure future capability in industrial sectors such as the solar sector.

Cost of energy: Morocco’s energy supply depends largely on imports (fossil fuels and electricity). On one hand, this is a compelling reason to develop solar energy, which can also drive industry development. However, having to import fuels and electricity initially thwarts industrial growth if the energy available for purchase is cheaper than what can be produced through solar energy.

Demand factors

CSP and PV component demand: Morocco has an ambitious target for solar energy development (2,000 MW for 2020) that could attract foreign and local investors.


Risk associated with doing business: In the last 4 years, Morocco’s annual real GDP growth has risen from 3.7% to 6.0%. This increase could boost growth and job creation[71].

Risk associated with demand: There are no clear incentives for solar projects. To date, the national target has not been clearly divided between CSP and PV.

Financing risk: Some solar industries require a significant amount of investment to start up. Strengthening the legal rights of borrowers and lenders would narrow Morocco’s existing gap with Benchmark countries and make the country a more attractive investment destination.


Industry structure: Strong presence of large international industrial companies.

Innovation capacity: For industries whose innovation requirements are not high,** potential local lack of innovation capability can be overcome through collaboration-partnerships with technology providers. For other industries for which technological barriers are higher,*direct ownership of one of the technology leaders would be more reasonable.

Logistical infrastructure: The identification of suitable sites in which to cluster manufacturing capability for the various solar component industries could reduce the existing gap in the Logistical infrastructure Competitiveness parameter.

Source: STA/Accenture.Note: * Labor market efficiency is measured by the 7th pillar of the Global Competitiveness Index. The index reflects the efficiency and

flexibility of the labor market, which are critical for ensuring that workers are allocated to their most efficient use in the economy. Labor market efficiency is composed of flexibility and efficient use of talent [25].** Those for which the weight of the Competitiveness parameter, “Innovation capacity,” is not outstanding. These include, for CSP, Structure & Tracker, Heat exchanger, and Storage tanks. For PV, they include TF and c-Si Modules, Support structure, Solar glass, and Inverter


For CSP, the development of conventional industries such as Condenser and Pumps (highlighted in red) may be of particular interest in the country in the medium term.

Morocco’s score for the TF (Thin Film) Modules manufacturing industry is slightly higher than the MENA average, and international experience shows that domestic demand is highly relevant for

Figure 4.17 | Normalized Attractiveness Indexes for CSP Target Industries in Morocco Compared to MENA Average

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1


Condenser

Heat exc

hanger

Mirror

Pumps

Receiver

Solar salt

Storage tanks

Structu

re & Tr

acker

-


Figure 4.18 | Normalized Attractiveness Indexes for PV Target Industries in Morocco Compared to MENA Average

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

Morocco Average Mena Average Benchmark

Solar glass

TF M

aterials

TF M

odules

Inverter

Support Stru

cture

-

1.0



Box 4.2 | Success Story: CSP Industry Development in Spain

Box Figure 1 | CSP Installed Capacity in Spain, 2007–11

1,200

800

11 61232

2007 2008 2009 2010 2011

1049

532

MW

400

0

Source: [72].

Spain’s decision to invest in solar energy, specifically solar power, comes largely from its geographic location and high dependency on fossil fuel imports. Because Spain’s local energy supply is lower than the EU (European Union) average, it imports close to 80% of its fuel. At the same time, Spain must meet the EU 20/20/20 commitments, which include a 20% reduction in GHG (greenhouse gases) emissions, 20% renewable energy, and a 20% reduction in primary energy consumption. To meet these targets, Spain set a national objective of almost 35 GW (gigawatts) of wind power and 11.5 GW of solar power, to be achieved by 2020.

Spain’s feed-in tariff (FIT) legislation provided the necessary incentive to encourage the growth and development of the CSP Industry. When Royal Decree (RD) 841 was introduced in 2002, Spain became the first country in the world to introduce a FIT for solar thermal power. This legislation was further developed by RD 436 in 2004 and RD 661 in 2007, which increased the FIT rate again; and also the CSP target of 500 MW by 2010.*

Besides the favorable regulatory framework, other factors have combined to explain the Spain’s leadership in CSP:

• Continuous support for research and technological development since the late 1970s• Receptiveness of Spanish companies, which could rely on highly trained human resources and

commit to investments financed mostly by “Project Finance” in commercial terms.

The total contribution of the sector to GDP in 2010 was ¤ 1650 million, of which 89.3% corresponded to construction activities, manufacturing of equipment and components, and exports, while the rest corresponded to plant operations. If the necessary support suffices to achieve the penetration rate settled in the draft Renewable Energies Plan (PER) 2011–2020, the contribution to GDP could more than double to ¤ 3,517 million in 2020.

The total number of people employed by the sector in 2010 was 23,844. In addition, the production of solar thermal energy in Spain avoided importing roughly 140,000 tons of oil.

Furthermore, the success of the sector in Spain is not limited to the construction of plants for renewable electricity generation. CSP has an important component of technological leadership and innovation that has developed in parallel. The sector’s effort in R&D represents 2.67% of its contribution to GDP. This figure is twice the average for Spain and is higher than the overall rates in countries that include Germany and the US.

The sustained R&D effort combined with FIT and proper industry environment has boosted CSP industry and technology in Spain. FIT, which was a key element to make possible the construction of solar power plants in the country, has a cost that was not passed through completely to end users but was turned into public debt. Contention about the public debt has led to the removal of FIT in Spain for new power plants. FIT was useful to gain momentum, but, if the industry is to continue, cost reduction is necessary.

Source: STA/Accenture.Note: *RD 1614/2010, published on December 7, 2010, and additional regulations since have made the environment for investors

and developers take a turn for the worse.


the development of a solar industry.66 Based on Morocco’s solar target, the development of Thin Film Modules may be of interest to the country.67

In the medium term, once the module industry has been established, the Materials industry for TF Modules also may be developed. Nevertheless, in the short term, the current PV overcapacity does not encourage any investment in any country.

Figure 4.17 and Figure 4.18 show the normalized Attractiveness index of Morocco for the CSP and PV selected industries compared to the MENA countries’ average.

In addition, regarding PV, and based on the analysis performed, Morocco has several opportunities in the short and medium terms. The recommendation is to focus on developing the Structure & Tracker industry for CSP and the Support Structure industry for PV, and to consider opportunities to improve some of the conventional CSP industries (Condenser, Pumps). TF Modules development is another opportunity to be implemented in the medium term, using a strategy that will leverage Regional synergies.


Choosing the right approach to enter a new market requires knowing the potential impact associated with these industries. Table 4.16 depicts the investment, production, and jobs required in a typical factory for the selected industries to be developed in Morocco. Top companies in their corresponding markets also are shown.

There are few barriers to establishing a TF Modules industry although, when scale becomes important, access to capital could become a limiting factor.

The lack of related industries in the country (conventional industry involving pumping and fluid handling) is one of the main entry barriers to the Pumps industry.

The TF Modules industry requires significant capital investment and energy supply to carry out the manufacturing processes. To compete with the rest of players, Morocco needs to exploit economies of scale.

66 See Success story: CSP industry development in Spain (Box 4.2).67 For details regarding the reason that TF is proposed as an alternative rather than Crystalline, see section 2.2,Photovoltaic (PV) Technology. TF is more modular and needs less initial investment than Crystalline technologies.

Table 4.16 | Impacts and Main Competitors: Morocco




Structure* 10 70 MW 40–65 • Sener (Spain)• Siemens (Germany)• Mecasolar (Spain)

Pumps Various Adaptable Various** • Alstom (France)• ABB (US)• GE Power (US)• Kraftanlagen Munchen

(Germany)• MAN Turbo (Germany)• KSB (Germany)

TF Modules 12 8 MW 30–40 • Best Solar (China)• First Solar (US)• Sharp (Japan)

Source: STA/Accenture.Note: * Structure can be developed for CSP (Structure & Tracker) and PV (Support Structure) technologies.

** Depends on the capacity of the factory.


4.6 Tunisia

4.6.1 TUNISIA’S KEY STRENGTHS AND WEAKNESSES

Tunisia has a significant advantage due to its geographic location in the MENA Region. Geography, together with the country’s other strengths, makes Tunisia a possible Regional hub for the development of certain solar industry components. The country’s keys strengths are level of education, business sophistication, and a better-than-average logistical infrastructure and logistics performance index compared to the selected MENA countries’ average.

A weak Industry structure and high Cost of energy for industrial purposes, combined with low Material

Availability and Relevant manufacturing ability, could impede new industrial developments. In the short term, because Tunisia ranks above the MENA average, both the Receiver industry for CSP and the Materials industry for PV TF may be of particular interest for development in the country. However, Tunisia is still far from the Benchmark countries’ attractiveness, so special incentives and a strong political will are required to achieve its development.


In the medium term, both the Receiver industry68 for CSP (highlighted in red) and the Materials industry

Figure 4.19 | Competitiveness Parameters in Tunisia Compared to Benchmark and MENA Averages

Tunisia



Production

Demand

Risk and stability

Business support

-


Labor market




Component demand



Financial risk

0.20

0.40

0.60

0.80

1.00

Industry structure

Innovation capacity



68 Provided there is enough market in the Region, the Receiver industry could be set up based on direct investment by one of the companies already manufacturing Receivers. However, even though Tunisia has some advantage, the industry could be set up in any of the other selected MENA countries as well.


for PV TF (highlighted in yellow) may be of particular interest for development in Tunisia because it ranks above the selected MENA Attractiveness index average.

Tunisia’s chemical industry is dominated by fertilizers, its second largest export earnings source. Tunisia has the potential to sign agreements with suppliers of silane gas and TCO (Transparent

Conductive Oxide) and to adapt its chemical industry for the development of TF Materials in the medium term.

Figure 4.21 and Figure 4.22 show the normalized Attractiveness index of Tunisia for the CSP and PV selected industries, compared to the selected MENA countries’ average.

Figure 4.20 | Normalized Attractiveness Indexes for CSP and PV Technologies in Tunisia Compared to MENA Average*

Tuni

sia

CSP

Indu

strie

s

1.0

0.9

0.8

0.7

0.5

0.6

0.4

0.3

0.2

0.1

Tunisia Average MENA Average Benchmark

Condenser

Electrical g

enerator

Heat exchanger

HTF Pumps

HTF Therm

al Oil

Mirror

Pumps

Receiver

Solar salt

Steam turbine

Storage tanks

Structure & Tra

cker-

PV In

dust

ries

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1


Cells

Ingots Wafers

Modules c-Si

Polysilicon

Solar glass

TF M

aterials

TF M

odules

Inverte

rSupport

Structu

re

-

Source: STA/Accenture.Note: *The range covered by Benchmark countries is shaded.


Table 4.17 | Tunisia’s Key Strengths and Competitive Gap Weaknesses Analysis


Production factors

Labor market: Both wages and labor market efficiency fall in the middle between those of MENA and Benchmark countries.

Fiscal and financing cost: According to the data extracted from IFC-WB (International Finance Corporation-World Bank), the cost of taxes borne by a company and its administrative burden of tax compliance are at similar level as in the United States. Lending interest rate is between those of the United States and China ([58]).*

Material availability: Except for steel, Tunisia does not have local access to the raw materials and components essential for the development of solar industries.

Relevant manufacturing ability: With the exception of the cement industry, Tunisia lacks the presence of synergic industries.

Cost of energy: Energy cost is higher than the selected MENA average but remains competitive in comparison with the Benchmark countries.

Demand factors CSP and PV component demand: Tunisia is strategically located to distribute solar components to Europe and other MENA countries, so the external component demand is positive.

CSP and PV component demand: Tunisia’s potential CSP and PV domestic component demand is not as high as that of other MENA countries.


Risk associated with doing business: Tunisia is well positioned in the Doing Business rankings at a level similar to Chile or Spain.

Risk associated with demand: Tunisia is still going through a political transition, which should be consolidated in the short and medium terms to guarantee political stability. There is a de facto monopoly of power generation.**

Financing risk: Tunisia’s access to financing rates shows that it has a possibility to finance industries that do not require capital over US$50 million. However, there may be a risk for medium-to-large investment projects.


Innovation capacity: Tunisia has levels of innovation similar to those of India,*** and could reach higher levels if appropriate efforts were made.

Logistical infrastructure: Tunisia is well positioned in infrastructure quality. However, improvements in infrastructure could strengthen its opportunity to become a solar component exporter.

Industry structure: Although there is strong presence of large international industrial companies, no local cluster has been identified in the area of solar energy.

Note: * See Paying taxes rank and Lending interest rate for these countries.** Société Tunisienne de l’Electricité et du Gaz (STEG) generates 70%–75% of Tunisia’s energy. Several cement industries produce power for their own needs and send the surplus to the grid. As of 2009, only 2 independent power producers (IPPs) were operating, generating less than 550 MW combined (approximately 12% of the available capacity). Renewable energy plants typically are small or medium sized, especially when PV technology is used. Their size enables SMEs to participate as IPPs, greatly increasing the development of the sector. A monopoly or oligopoly of power generators could thwart this development unless some kind of obligation to buy energy from IPPs was imposed on the companies belonging to the oligopoly.*** For details, see Benchmark analysis summary results, section 4.1.


Based on the analysis in Figure 4.21 and Figure 4.22, both selected industries could become successful if carried out within a MENA Regional scenario rather than being focused on Tunisia’s domestic

market alone. However, Tunisia is still far from the Benchmark countries’ attractiveness, so special incentives and a strong political will are required to achieve its development.

Figure 4.21 | Normalized Attractiveness Indexes for CSP Target Industries in Tunisia Compared to MENA Average*

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1


Condenser

Heat exc

hanger

Mirror

Pumps

Receiver

Solar salt

Storage tanks

Structu

re & Tr

acker

-

Source: STA/Accenture.Note: * The range covered by Benchmark countries is shaded.

Figure 4.22 | Normalized Attractiveness Indexes for PV Target Industries in Tunisia Compared to MENA Average*

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1


Solar glass

TF Materials

TF Modules

Inverter

Support Stru

cture

-

Source: STA/Accenture.Note: * The range covered by Benchmark countries is shaded.



Choosing the right approach to enter new markets requires knowing the potential impact associated with these industries. Table 4.18 depicts the investment, production, and jobs required in a typical factory for the selected industries to be developed in Tunisia. Top companies in the corresponding markets also are shown.

There are technical barriers for Receiver industry, namely, the specialized coating process needed that requires very high accuracy, and glass to metal welding. Track record also is necessary, thus

strong partnership with technology leaders or direct investment by them would be needed. Another drawback is that Tunisia has a limited capacity to produce steel (only 285 kt per year) [73].

TF Materials are produced by chemical industries.97

Setting up a chemical facility to produce only TF Materials, which are a small part of the industry portfolio, is not advisable. However, existing chemical industries could be encouraged to diversify their production toward TF Materials, mainly if Regional demand and cooperation picks up due to local TF manufacturing.h

Table 4.18 | Impacts and Main Competitors: Tunisia




Receiver US$10 mil 70 MW 40–65 • Schott (Germany)• Siemens (Germany)

TF Materials US$20 mil 60 MW Various* • 5N Plus Inc. (Canada)• Hitachi Metals (Japan)• Advanced Technology and Materials (US)

Note: * Most TF Materials are byproducts of mineral ore processing and recovery industries. Thus, the number of jobs depends on the number of chemical products or components to be manufactured and the capacity of the whole chemical factory so cannot be divided exactly.

Chapter 5 | Strategic Recommendations and Proposed Actions | 93

55555555555555.1 Introduction

This section presents country-level recommendations for the development of specific solar industries in the five selected MENA countries based on the result of the Benchmark analysis and the additional complementary analyses carried out on the individual solar industries. A series of strategic recommendations for bridging gaps and overcoming barriers is presented for each country.

The industries recommended for development in the selected MENA countries are the conventional and

independent groups of CSP industries (Figure 3.4), and the Thin Film and shared PV industries (Figure 3.5).

Figure 5.1 represents the main axes to be developed in an industrial development plan. They are similar for each country, and analogous to those followed for the Regional development plan recommended in chapter 5.7, Recommendations for MENA Regional cooperation.

5.2 Algeria

The high-level recommendations described above crystallize in a series of strategies that needs to be implemented to successfully develop Algeria’s different solar component industries. These strategies represent the main axes for the country’s industrial development plan (Figure 5.1).

The following gaps analysis and derived recommendations have been focused on the Solar glass industry because the pre-existing Float glass production provides a good starting point. However, the overall attractiveness of Algeria remains low compared to some of its neighbors, so special incentives and strong political will are required to achieve its development.

5.2.1 GAPS ANALYSIS

Gaps were found when linking the Competitiveness parameters to the five axes of the industrial plan in the current Algerian business environment. The most important gaps to be covered to bring the Algerian Attractiveness index for Solar glass industry closer to that of the United States (the best-scored Benchmark country) are depicted in Figure 5.2.

The main gaps to develop the Solar glass industry in Algeria follow.

Labor market: This Competitiveness parameter is linked to two factors: (1) labor cost - Algeria has the highest wages among MENA countries; and (2) market efficiency and flexibility - Algeria still has the opportunity to improve performance.

CHAPTER FIVE:

Strategic Recommendations and Proposed Actions


Material availability: This Competitiveness parameter is related to the resources that a country has and trades with. Float glass is the main material necessary to manufacture glass for Thin Film PV technology, although Float glass comprises less than 40 percent of the total costs. Algeria, with Egypt, is one of the main Float glass producers of the MENA countries under study, although still far from the Benchmark countries’ average.

Relevant manufacturing ability: Literacy rates, quantity and quality of education, and on-the-job training are issues that Algeria has the potential to improve. Specific training and education related to the selected solar industry would help to close capacity gaps. Signals to both the educational institutions and the future students or trainees to prepare and participate depend on the visibility of projects and pipeline and political will.

Figure 5.2 | Strengths and Weaknesses of Algeria vs. US in the Solar Glass Industry

-


Labor market




Component demand



Algeria -Solar glass

United States

Production

Demand

Risk and stability

Business support

Financial risk

0.200

0.400

0.600

0.800

1.000

Industry structure

Innovation capacity



Figure 5.1 | Key Axes in a Country’s Development Plan for Solar Component Industries

1. Sectoralstrategy and

policy

2. Businessenvironment

3. Access tofinance

4.Infrastructure

5. Capacitydevelopment

Country'sdevelopment

plan



Cost of energy (industrial): The lower cost of energy is Algeria’s key strength, especially for the Solar glass industry, in which energy comprises approximately 35 percent of the total costs. A low electricity cost is a competitive advantage for private investors in energy-intensive industries. However, from the country’s point of view, subsidies to energy consumption introduce tensions in the system because they veil the true price signal to electricity consumers and could lead to adverse economic and environmental impacts. The sustainability of these artificially low costs therefore can be perceived as an investor risk because it is likely to change in the near future to avoid said adverse impacts.

Fiscal and financial costs: The level of taxes borne by companies and lending interest rates influence a country’s attractiveness to investors. Corporate taxes and borrowing costs are high in Algeria. Their selective reduction could improve the country’s competitiveness and attract investments in solar technology components.

CSP and PV Component demand: Compared to other selected MENA countries, Algeria has planned ambitious solar targets. In addition, its solar resource is among the best in the world. This strength will aid the performance of future solar plants. The possibility of increasing the country’s CSP and PV targets in the medium and long terms is worth analyzing.

Risk associated with demand: Ambitious domestic goals for solar installed capacity in PV (800 MW) and CSP (1,525 MW) to 2020 might suffice for certain solar industries to develop. However, because Algeria also has domestic fossil fuel resources, giving visibility to the pipeline of solar energy projects would be an important step toward reducing the perceived risk. The development of solar energy is very much a political decision rather than one driven by the risk of security of supply issues.

Financial risk: The access to credit indicator measures the legal rights of borrowers and lenders with respect to secured transactions and the sharing of credit information. Strengthening these legal rights to guarantee and protect the investment could reduce financial risk for investors.

Industry structure: The presence of gas resources in the country can attract international industrial players. However, Algeria also would benefit from the development of clusters that would drive the development of the country’s industrial network, incentivizing new industries such as those in the solar sector.

Innovation capacity: To be competitive and sustainable in time, new Solar glass industry developments require the development of specific techniques and innovation capabilities.69 These developments would pose both a risk and an opportunity.

Logistical infrastructure: The identification of suitable sites and development of industrial estates in which to cluster manufacturing capability for the Solar glass industry could reduce this gap. As markets abroad will be targeted, logistics improvement is a must to increase competitiveness in exports, especially considering that transportation costs can burden the final price of Solar glass.

5.2.2 RECOMMENDATIONS

Some strategies need to be implemented to successfully develop solar industries in Algeria. Each action represented in Table 5.2 and Table 5.3 is linked to one or more Competitiveness parameters, and the impact on their improvement is shown with the symbols described in Table 5.1.

69 Among others, (a) surface texturing techniques to increase light absorption and (b) glass composition optimization to improve transparency, conductivity, and/or ease of deposition for ulterior layers can be cited.


1. Sectoral strategy and policy

Action A: Create the policy and regulatory environment to advance solar investment

Algeria has an ambitious target in place for installed solar capacity, both for CSP (1525 MW) and PV (800 MW). This target raises the likelihood of development for a local component industry in Algeria, providing an important market signal.

The immediate step is creating the policy mechanisms and incentives to ensure not only that the targets are achieved in the short and medium terms but also that a long-term steady development is possible, meaning an effective change in Algeria’s energy supply mix. These mechanisms and incentives can be created in different ways, such as a FIT system, green certificates, grants, subsidies, soft loans, tax exemptions, or other mechanisms to enable the high growth-rates required to reach Algeria’s target. However, the government will need to take into account that the different mechanisms and incentives have different advantages and disadvantages, and that the policies must be flexible enough to accommodate to the evolution of the solar market.

Special incentives and a strong political will shall be required to achieve the development of solar component industries because the overall attractiveness of Algeria remains low compared to some of its neighbors.

Action B: Make the project pipeline visible to investors and public

Giving visibility to the pipeline of projects in different stages of development encourages transparency

and contributes to giving investors and financing institutions the foresight and confidence required for an associated local industry to develop. It would be an important step toward reducing the perceived risk because Algeria has domestic fossil fuel resources with enough gas reserves to be self-sufficient. Thus, the development of solar energy very much represents a political decision rather than one driven by a risk in security of supply.

Monitoring installed capacity is a tool both to evaluate the effectiveness of the system and its impact on society and on national budgets, and to give visibility to potential investors.

Action C: Develop appropriate fiscal incentives to investors in the solar glass industry

Fiscal policies can incentivize a particular industry to attract private investment. Several approaches can be considered, such as accelerated depreciation, tax credits, or direct exemptions either total or partial, temporary or permanent (for example, Morocco’s National Pact for Industrial Emergence 2009–2015 includes an exemption from corporate tax for the first 5 years, followed by a tax rate capped at 8.75 percent for the following 20 years). A detailed analysis should be made considering not only a policy’s effectiveness, but also its efficiency (for example, if the social benefits obtained, both direct and indirect, are larger than its economic cost).

Action D: Remove barriers to advance the integration of markets and facilitate the import of materials and/or export of manufactured solar components

This action may include the development of agreements to import raw and other materials necessary for solar industries, as well as to export manufactured components to other countries in the Region and reduce export barriers. These goals may be achieved through bilateral or multilateral agreements, either specifically created or already existing (such as the Arab Mediterranean Free Trade Agreement (AGADIR), or GAFTA).

Table 5.1 | Associated Impact on Competitiveness Parameters Due to Recommended Strategic Actions

+ + High impact

+ Medium impact

− No impact

Tab

le 5

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s A

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sin

ess

Su

pp

ort

Facto

rs

Pro

du

cti

on

Facto

rsD

em

an

d

Facto

rs


GA

PS

Lab

or

Mark

et

Mate

rial

Availab

ilit

y

Re

levan

t M

an

ufa

ctu

rin

g

Ab

ilit

y

Co

st o

f E

ne

rgy

(in

du

stri

al)

Fis

cal an

d

Fin

an

cia

l C

ost

sC

om

po

ne

nt

De

man

d

CS

P

ACT

ION

PV

1_ S

ecto

ral st

rate

gy a

nd

po

licy

1A

cti

on

A: C

reate

th

e p

olic

y a

nd

reg

ula

tory

en

vir

on

men

t

to a

dvan

ce s

ola

r in

vest

men

t in

Alg

eri

a

1A

cti

on

B: M

ake t

he p

roje

ct

pip

elin

e v

isib

le

1A

cti

on

C: D

evelo

p a

pp

rop

riate

fis

cal in

cen

tives

to in

vest

ors

in

so

lar

co

mp

on

en

t in

du

stri

es

1A

cti

on

D: R

em

ove b

arr

iers

in

ord

er

to f

urt

her

the in

teg

rati

on

o

f m

ark

ets

an

d f

acili

tate

th

e im

po

rt m

ate

rials

an

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r exp

ort

m

an

ufa

ctu

red

so

lar

co

mp

on

en

ts

1A

cti

on

E: D

evelo

p a

syst

em

to

measu

re p

erf

orm

an

ce a

nd

ach

ievem

en

ts

1A

cti

on

F: C

arr

y o

ut

a b

riefi

ng

an

d c

om

mu

nic

ati

on

cam

paig

n

2_

Bu

sin

ess

en

vir

on

me

nt

2A

cti

on

G: S

imp

lify in

vest

men

t p

roced

ure

s

2A

cti

on

H: P

ut

in p

lace a

pla

n t

o d

evelo

p R

&D

cap

acit

y

2A

cti

on

I: D

evelo

pm

en

t o

f an

in

form

ati

on

data

base

of

local

man

ufa

ctu

rers

3_

Acce

ss t

o f

inan

ce

3A

cti

on

J: C

on

sid

er

co

ncess

ion

al fi

nan

ce o

pp

ort

un

itie

s

3A

cti

on

K: D

evelo

p a

n in

vest

men

t p

lan

4_

In

frast

ructu

re

4A

cti

on

L: C

on

sid

er

necess

ary

im

pro

vem

en

ts

to p

ub

lic in

frast

ructu

re

4A

cti

on

M: F

acili

tate

th

e p

urc

hase

of

ren

tal o

f la

nd

an

d/o

r b

uild

ing

s

5_

Cap

acit

y d

eve

lop

me

nt

5A

cti

on

N: D

evelo

p d

em

an

d-s

ide s

kill

s st

rate

gie

s to

bri

ng

in

skill

ed

w

ork

ers

to

th

e s

ecto

r

So

urc

e: S

TA

/Accen

ture

.


It is worth mentioning that a more integrated sector results in synergistic effects in the Region, with the result that Algeria, as other countries, also could benefit from industry developments elsewhere in the Region.

Action E: Develop a system to measure industry performance and achievements

Develop a monitoring and evaluation (M&E) system and tools to monitor year-to-date expenditure and achievements in the solar industries, using a series of indicators to assess progress. This system is useful to ensure transparency and visibility of achievements by the sector.

Action F: Carry out a communication campaign

The communication campaign publicizing the measures taken to drive the sector and their potential impact on investors needs to reach all stakeholders. Targeted workshops, both national and international, would have the multiple benefit of giving visibility to the sector, showing institutional commitment and promoting communication, clustering, and partnership among different companies.

2. Business environment

Action G: Simplify investment procedures

The recommendation, which follows a strategic recommendation from Egypt’s Sixth Five-Year Plan, is to further simplify investment procedures to facilitate creation of new business. Simplification could be achieved by creating a one-stop shop along the lines of what Morocco included in the National Pact for Industrial Emergence 2009–2015. In the pact, a single administrative interface to facilitate investment by new investors is proposed. As part of its functions, this interface may provide initial investor orientation, permitting, and licensing support, as well as other services aimed to simplify the investment procedures.

Action H: Put in place a plan to develop R&D capacity

With the objective of increasing innovation capacity in the Region, it is essential to put in place both R&D funding and partnerships to develop new processes that improve solar industries. These improvements will yield a competitive advantage in the medium and long terms.

Action I: Development of a database of local manufacturers

Develop and maintain a database of local manufacturers and possible counterparts, available to project developers to incentivize local supply share in projects. This database might be elaborated in collaboration with professional associations to ensure it stays up to date.

3. Access to finance

Action J: Consider concessional finance opportunities

Concessional finance by the AfDB, IFC, World Bank, or other donors can mitigate the risk of private sector investors’ coming into solar industries. Depending on the donors, different products and structures can be considered, including risk-sharing products, lower-interest-rate products, and lower returns for equity investments. These initial investments in the industry could pave the way for financing on fully commercial terms.70

Action K: Develop an investment plan

Cost and duration of finance are key determinants for the viability of manufacturing investments, particularly in the case of new sectors. The investment plan needs to involve all stakeholders to identify the best ways of extending credit for investments, taking into account that smaller companies or new entrants may require long grace periods to generate the liquidity

70 As an example, AfDB is employing a model of concessional financing to finance early stages and high-risk activities required to fast-track the development of geothermal sources in East Africa.


to pay back. Action K targets the generation of financing opportunities that encourage private sector investments.

4. Identify infrastructure requirements

Action L: Consider necessary improvements to public infrastructure

Identify infrastructure requirements, including port and road infrastructure, that could increase the opportunity to export the products to neighboring countries. Improving road infrastructure will also lower internal transportation costs, thus increasing competitiveness. The Solar glass industry is especially sensitive to this necessity, considering that transportation costs can be a significant burden in its final price.

Action M: Facilitate the purchase or rental of land and/or buildings

Develop a framework to facilitate the acquisition, either through purchase or rental, of land and/or buildings by potential investors. At the same time, take the necessary measures to facilitate land allocations for public lands.

5. Capacity development

Action N: Develop supply-side strategies to bring in skilled workers to the sector

In preparation for developing the solar component industry, supply-side skills strategies based on training and education should be put in place to ensure alignment with the economic objectives and future sector needs. Algeria’s Ministry of National Education and Ministry of Labour, Employment and Social Security should coordinate their plans to include the development of specialized training and education.

5.3 Egypt

The high-level recommendations described above crystallize in a series of strategies that must be implemented to successfully develop the different solar component industries in Egypt. These strategies represent the main axes for the country’s industrial development plan (Figure 5.1).

The following gaps analysis and derived recommendations focus on the Mirror industry, one of the key solar industries that Egypt could develop in the short and medium terms and in which it has a distinct competitive advantage due to an already developed Float glass industry.

5.3.1 GAPS ANALYSIS

Some gaps were found when linking the Competitiveness parameters to the five axes of the industrial plan in the current Egyptian business environment. The most important gaps to be covered to bring the Egyptian Attractiveness index for Mirror

industry closer to that of China and United States (the best-scored Benchmark countries) are depicted in Figure 5.3.

The main gaps to develop the Mirror industry in Egypt are presented below:

Labor market: This Competitiveness parameter is linked to two factors: (1) labor cost, in which Egypt is very competitive, and (2) market efficiency and flexibility, in which Egypt still has the opportunity to improve performance. General recommendations to address the issue of flexibility in the market for any type of industry are shown in Table 5.4.

Material availability: This Competitiveness parameter is related to the resources that a country has and trades with. Float glass and silver coating are the main materials necessary to manufacture Mirrors for CSP plants. Their cost represents approximately 70 percent of a Mirror manufacturing industry. Today,


there is Float glass production in Egypt, but it is producing glass with an iron content that would not be compliant with the CSP requirement. Regarding the silver coating, Egypt is not a large silver producer.

However, Morocco is among the top 20 silver-producing countries. A trade agreement could be considered as an option to reduce tax levies.

Figure 5.3 | Strengths and Weaknesses of Egypt vs. United States and China in the Mirror Industry

Egypt -Mirror

United States

China

Production

Demand

Risk and stability

Business support

-


Labor market




Component demand



Financial risk

0,200

0,400

0,600

0,800

1,000

Industry structure

Innovation capacity



Table 5.4 | General Recommendations to Improve the Flexibility of the Labor Market

Price (Wage) Flexibility

Numerical Flexibility

Temporal Flexibility

Functional Flexibility

Location Flexibility

Flexibility of wage determination

Expansion of flexible term employment contracts

Flexible working hours

Ability of labor force to use varied technology

Geographic flexibility

Pay packages reflecting skill differentials

Growth of working from home

Increased use of part-time staff to meet changes in demand

Transferable skills within the workplace

Wider use of performance-related pay as an incentive to boost productivity

Core of full-time employees on contracts

Flexibility to shift to new activities at low cost

Source: [74]


Relevant manufacturing ability: Literacy rates, quantity and quality of education, and on-the-job training are issues that Egypt has an opportunity to improve. Specific training and education related to the selected solar industry would help to close capacity gaps. Egypt has universities and institutions able to offer specialized training and the necessary background to set up collaboration with international institutions. Signals to both the educational institutions and the future students or trainees to prepare and participate arise from the visibility of projects and pipeline and from political will.

Cost of energy (industrial): Low energy cost is one of Egypt’s strengths.71 It provides a competitive advantage to private investors in energy-intensive industries. However, from the country’s point of view, subsidies to energy consumption introduce tensions in the system because they veil the true price signal to electricity consumers and may lead to adverse economic and environmental impacts. The sustainability of artificially low costs therefore can be perceived by an investor as a risk because the costs are likely to change in the near future to avoid the adverse impacts.

Fiscal and financial costs: A country’s level of taxes borne by companies and lending interest rates influence its attractiveness to investors. Company taxes and borrowing costs are high in Egypt, so their selective reduction could improve Egypt’s competitiveness and attract investments in solar technology components. Egypt has experience with fiscal incentives for other industries that could be replicated to drive the development of solar component industries.

CSP and PV Component demand: Egypt has developed attractive solar targets in comparison to other selected MENA countries. In addition, its solar resource is one of the most abundant in the world. This availability will help the performance of

future solar plants. It is worth analyzing the possibility of increasing CSP and PV targets in the medium term, especially considering the expected electricity demand growth and the abundant solar resource.

Risk associated with demand: The earlier projected solar capacity for CSP (100 MW) and PV (20 MW) in Egypt by 2020 has not sufficed to develop any solar industry yet. However, the recently announced new intermediate targets of the 2030 plan (1,100 MW for CSP and 200 MW for PV by 2020) could cause a positive change in this trend.

Financial risk: The access to credit indicator measures the legal rights of borrowers and lenders with respect to secured transactions and sharing credit information.72 Strengthening these legal rights in Egypt to guarantee and protect the investment can reduce financing risk for investors.

Industry structure: No related local cluster has been identified in Egypt. A cluster could be useful to export goods and import equipment and raw material needed for Mirror industry, especially silver for coating. On the other hand, Egypt already hosts large international industrial companies––some of them linked to CSP goods.

Innovation capacity: To be competitive and sustainable in time, new Mirror industry developments require the acquisition of specific techniques and innovation capabilities, which poses both a risk and an opportunity. For industries with lower innovation requirements, lack of innovation capabilities can be overcome partially through short-term collaborations with technological partners. Egypt hosts good universities and research centers that, with appropriate incentives, could lead the way for higher level capacity building.

Logistical infrastructure: The identification of suitable sites and development of industrial estates

71 Significantly, over the last quarter, Egypt’s energy cost subsidies have decreased––a trend expected to continue.72 The higher the legal rights of borrowers and lenders in transactions, and the deeper and more easily available the credit information, the lower the perceived risk of lending, and the easier the perceived access to credit in the country.


to cluster manufacturing capability for the Mirror industry could reduce this gap. Because markets abroad will be targeted, logistics improvement is a must to increase exports’ competitiveness.


The following strategic recommendations follow the five axes described above. Their objective is to reduce the existing gaps with the selected Benchmark countries to deploy the recommended solar component industries in Egypt.

Each action is linked to the Competitiveness parameter that would improve in the way described in Table 5.5.


Action A: Create the policy and regulatory environment to advance solar investment in Egypt

Egypt recently increased its solar capacity target for 2020 from 120 MW, of which 100 MW CSP and 20 MW PV, to 1,300 MW, of which 1,100 MW CSP and 200 MW PV.73 This significant increase over the earlier objective raises the likelihood of development for a local component industry in Egypt, thus providing an important market signal.

The immediate step is to create the policy mechanisms and incentives to ensure not only that (1) the targets are achieved in the short and medium terms but also (2) long-term, steady development

is possible, meaning an effective change in Egypt’s energy supply mix. This change can be accomplished in different ways, some of which Egypt is already employing such as competitive bidding. The change also could lead to a future FIT (feed-in tariff) system or other mechanism to enable the high growth-rates required to reach Egypt’s target. A coherent policy and regulatory environment is essential because it creates the certainty and stability that the sector requires to grow.

The Egyptian government has already put in place the Renewable Development Fund.74 One of its objectives is to support research for project siting. The latter could have an indirect impact on the solar component industry because it could highlight key areas in the country in which plants could develop. Careful consideration needs to be given to how the Fund could help support not only renewable energy but also the development of the solar component industry.


Giving visibility to the pipeline of projects in different stages of development encourages transparency. A visible pipeline also contributes to giving investors and financing institutions the foresight and confidence required for an associated local industry to develop. This visibility can be achieved through a public website and communicated in industry forums and events.

To provide visibility for investors, the country will need to monitor its installed electric power capacity and the progress of the pipeline and its impact on society and on future national budgets.

Table 5.5 | Associated Impacts in Competitiveness Parameters Due to Recommended Strategic Actions

+ + High impact

+ Medium impact

- No impact

73 Intermediate objective of the Egyptian solar plan, as communicated by the Ministry of Electricity and Energy. The plan involves the installation of 3500 MW of solar energy by 2027, of which 2800 MW CSP and 700 MW PV.74 The Renewable Development Fund has been established but is not yet operational.

Tab

le 5

.6 |

Gap

s A

dd

ress

ed

by S

trate

gic

Re

co

mm

en

dati

on

s R

ela

tin

g t

o t

he

Axe

s o

f th

e I

nd

ust

rial

De

ve

lop

me

nt

Pla

n i

n E

gyp

t,

Pro

du

cti

on

Facto

rs a

nd

De

man

d F

acto

rs

Pro

du

cti

on

Facto

rsD

em

an

d

Facto

rs


GA

PS

Lab

or

Mark

et

Mate

rial

Availab

ilit

y

Re

levan

t M

an

ufa

ctu

rin

g

Ab

ilit

y

Co

st o

f E

ne

rgy

(In

du

stri

al)

Fis

cal an

d

Fin

an

cia

l C

ost

sC

om

po

ne

nt

De

man

d

CS

P

ACT

ION

PV

1_ S

ecto

ral st

rate

gy a

nd

po

licy

1A

cti

on

A: C

reate

th

e p

olic

y a

nd

reg

ula

tory

en

vir

on

men

t

to a

dvan

ce s

ola

r in

vest

men

t in

Eg

yp

t

1A

cti

on

B: M

ake t

he p

roje

ct

pip

elin

e v

isib

le

1A

cti

on

C: D

evelo

p a

n o

vera

rch

ing

str

ate

gy f

or

the C

SP

-PV

1A

cti

on

D: D

evelo

p a

pp

rop

riate

fis

cal in

cen

tives

to in

vest

ors

1A

cti

on E

: Rem

ove b

arr

iers

in o

rder

to f

urt

her

the in

teg

rati

on o

f m

ark

ets

and

fa

cili

tate

the im

po

rt a

teri

als

and

/or

exp

ort

manufa

ctu

red

so

lar

co

mp

onents

1A

cti

on

F: D

evelo

p a

syst

em

to

measu

re p

erf

orm

an

ce a

nd

ach

ievem

en

ts

1A

cti

on

G: C

arr

y o

ut

a b

riefi

ng

an

d c

om

mu

nic

ati

on

cam

paig

n

2_ B

usi

ne

ss e

nvir

on

me

nt

2A

cti

on

H: S

imp

lify in

vest

men

t p

roced

ure

s

2A

cti

on

I: P

ut

in p

lace a

pla

n t

o d

evelo

p R

&D

cap

acit

y

2A

cti

on

J: D

evelo

pm

en

t o

f an

in

form

ati

on

data

base

of

local m

an

ufa

ctu

rers

2A

cti

on

K: D

evelo

pm

en

t o

f st

an

dard

s fo

r in

div

idu

al co

mp

on

en

ts

2A

cti

on

L: E

nco

ura

ge t

he d

evelo

pm

en

t o

f a s

ola

r clu

ster

3_ A

cce

ss t

o f

inan

ce

3A

cti

on

M: C

on

sid

er

co

ncess

ion

al fi

nan

ce o

pp

ort

un

itie

s

3A

cti

on

N: D

evelo

p a

n in

vest

men

t p

lan

3A

cti

on

O: D

evelo

p a

nd

im

ple

men

t a p

lan

to

bri

ng

in

in

du

stri

al in

vest

ors

an

d p

art

ners

, in

clu

din

g c

on

sid

era

tio

n o

f jo

int

ven

ture

s

4_ I

nfr

ast

ructu

re

4A

cti

on

P: Id

en

tify

th

e b

est

lo

cati

on

s fo

r th

e m

an

ufa

ctu

rin

g p

lan

ts

4A

cti

on

Q: C

on

sid

er

necess

ary

im

pro

vem

en

ts t

o p

ub

lic in

frast

ructu

re

4A

cti

on

R: F

acili

tate

th

e p

urc

hase

of

ren

tal o

f la

nd

an

d/o

r b

uild

ing

s

5_ C

ap

acit

y d

eve

lop

me

nt

5A

cti

on

S: D

evelo

p d

em

an

d-s

ide s

kill

s st

rate

gie

s to

bri

ng

in

skill

ed

w

ork

ers

So

urc

e: S

TA

/Accen

ture

.

Tab

le 5

.7 |

Gap

s A

dd

ress

ed

by S

trate

gic

Re

co

mm

en

dati

on

s R

ela

tin

g t

o t

he

Axe

s o

f th

e I

nd

ust

rial

De

ve

lop

me

nt

Pla

n i

n E

gyp

t,

Ris

k a

nd

Sta

bilit

y F

acto

rs a

nd

Bu

sin

ess

Su

pp

ort

Facto

rs

Ris

k a

nd

Sta

bilit

y F

acto

rsB

usi

ne

ss S

up

po

rt F

acto

rs


GA

PS

Ris

k

Ass

ocia

ted

to

do

ing

B

usi

ne

ss

Ris

k

Ass

ocia

ted

to

De

man

dF

inan

cia

l R

isk

Ind

ust

ry

Str

uctu

reIn

no

vati

on

C

ap

acit

yL

og

isti

cal

Infr

ast

ructu

r

CS

P

ACT

ION

PV

1_ S

ecto

ral st

rate

gy a

nd

po

licy

1A

cti

on

A: C

reate

th

e p

olic

y a

nd

reg

ula

tory

en

vir

on

men

t

to a

dvan

ce s

ola

r in

vest

men

t in

Eg

yp

t

1A

cti

on

B: M

ake t

he p

roje

ct

pip

elin

e v

isib

le

1A

cti

on

C: D

evelo

p a

n o

vera

rch

ing

str

ate

gy f

or

the C

SP

-PV

1A

cti

on

D: D

evelo

p a

pp

rop

riate

fis

cal in

cen

tives

to in

vest

ors

1A

cti

on E

: Rem

ove b

arr

iers

in o

rder

to f

urt

her

the in

teg

rati

on o

f m

ark

ets

and

fa

cili

tate

the im

po

rt a

teri

als

and

/or

exp

ort

manufa

ctu

red

so

lar

co

mp

onents

1A

cti

on

F: D

evelo

p a

syst

em

to

measu

re p

erf

orm

an

ce a

nd

ach

ievem

en

ts

1A

cti

on

G: C

arr

y o

ut

a b

riefi

ng

an

d c

om

mu

nic

ati

on

cam

paig

n

2_ B

usi

ne

ss e

nvir

on

me

nt

2A

cti

on

H: S

imp

lify in

vest

men

t p

roced

ure

s

2A

cti

on

I: P

ut

in p

lace a

pla

n t

o d

evelo

p R

&D

cap

acit

y

2A

cti

on

J: D

evelo

pm

en

t o

f an

in

form

ati

on

data

base

of

local m

an

ufa

ctu

rers

2A

cti

on

K: D

evelo

pm

en

t o

f st

an

dard

s fo

r in

div

idu

al co

mp

on

en

ts

2A

cti

on

L: E

nco

ura

ge t

he d

evelo

pm

en

t o

f a s

ola

r clu

ster

3_ A

cce

ss t

o f

inan

ce

3A

cti

on

M: C

on

sid

er

co

ncess

ion

al fi

nan

ce o

pp

ort

un

itie

s

3A

cti

on

N: D

evelo

p a

n in

vest

men

t p

lan

3A

cti

on

O: D

evelo

p a

nd

im

ple

men

t a p

lan

to

bri

ng

in

in

du

stri

al in

vest

ors

an

d p

art

ners

, in

clu

din

g c

on

sid

era

tio

n o

f jo

int

ven

ture

s

4_ I

nfr

ast

ructu

re

4A

cti

on

P: Id

en

tify

th

e b

est

lo

cati

on

s fo

r th

e m

an

ufa

ctu

rin

g p

lan

ts

4A

cti

on

Q: C

on

sid

er

necess

ary

im

pro

vem

en

ts t

o p

ub

lic in

frast

ructu

re

4A

cti

on

R: F

acili

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of

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an

d/o

r b

uild

ing

s

5_ C

ap

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y d

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nt

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on S

: Develo

p d

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an

d-s

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gie

s to

bri

ng

in s

kill

ed

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`

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TA

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.


Action C: Develop an overarching strategy for the CSP and PV industry

This overarching strategy for the CSP and PV sector would link the national solar capacity target, the solar industrial plan, and the industry development objectives. This strategy could be accomplished through an interministerial committee involving the Ministry of Planning, the Ministry of Electricity, NREA (New and Renewable Energy Authority), the Ministry of Industry, the Ministry of Finance, and think tanks. This committee would be responsible for coordinating and merging knowledge to facilitate private companies coming in while individual solar component industries were being developed. The private sector also could be involved though a solar cluster/association that could be created with initial public support but driven by industry.

Action D: Develop appropriate fiscal incentives to investors in the solar Mirror industry

Fiscal policies can incentivize a particular industry to attract private investment. Several approaches can be considered, such as accelerated depreciation, tax credits, or direct exemptions either total or partial, temporary or permanent. For example, Morocco’s National Pact for Industrial Emergence 2009-2015 includes an exemption from corporate tax for the first 5 years, followed by a tax rate capped at 8.75 percent for the following 20 years. A detailed analysis should be made considering not only a policy’s effectiveness but also its efficiency. An example would be whether the social benefits obtained, both direct and indirect, exceeded the policy’s economic cost.

Action E: Remove barriers to advance the integration of markets and facilitate the import of materials and/or export of manufactured solar components

Action E could include the development of agreements to import raw and other materials necessary to establish solar industries as well as to export manufactured components to other countries in the Region and reduce barriers for doing so. Facilitating trade could be achieved through bilateral

or multilateral agreements, either specifically created or already existing, such as the Arab Mediterranean Free Trade Agreement (AGADIR, or GAFTA).

For example, Egypt needs silver coating to develop the Mirror industry, and Morocco was one of the top 20 silver-producing countries in 2011 [75]. Morocco, in turns, needs to import Float glass, and Egypt is one of the main Float glass manufacturers in the MENA Region [73]. These intersecting needs and supplies may prove to be a win-win situation in which both countries profit from the integration of Regional markets.

A more integrated sector results in synergistic effects in the Region, with the result that Egypt, as well as other countries, also could benefit from industry developments elsewhere in MENA.

Action F: Develop a system to measure industry performance and achievements

A monitoring and evaluation (M&E) system and tools to track year-to-date expenditures and achievements in the solar industries could be developed through using a series of key indicators to assess progress. Such M&E would be useful to ensure transparency and visibility of achievements by the sector.

Action G: Carry out a communication campaign

The communication campaign to publicize the measures taken to drive the sector and their potential impacts on investors in the sector needs to reach all stakeholders. targeted workshops, both national and international, could have the multiple benefits of giving visibility to the sector; demonstrating institutional commitment; and promoting communication, clustering, and partnership among different companies.


Action H: Simplify investment procedures

As stated in Egypt’s Sixth Five-Year Plan, a goal is to further simplify investment procedures to facilitate


the creation of new business. Simplification could be achieved by creating a one-stop shop along the lines of what Morocco included in its National Pact for Industrial Emergence 2009–2015. The pact proposes a single administrative interface to facilitate investment by new investors. Among its functions, such an interface could provide initial investor orientation, permitting and licensing support, and other services to simplify the investment procedures.

Action I: Put in place a plan to develop R&D capacity

With the objective of increasing innovation capacity in the Region, it is essential to put in place both R&D funding and partnerships to develop new processes that would improve solar industries. For example, Mirrors for use in the Region would benefit from new laminating and coating processes to protect them from harsh outdoor conditions such as sand storms, and new processes and packaging for transporting the Mirrors These improvements will yield a competitive advantage in the medium and long terms.

Action J: Development of a database of local manufacturers

To incentivize local supply share in projects, it is important for the country to develop and maintain a database of local manufacturers and possible counterparts and make it available to project developers. This database might be elaborated in collaboration with professional associations and the RCREEE (Regional Centre for Renewable Energy and Energy Efficiency) to ensure that it stays up to date.

Action K: Development of standards for individual components

Facilitating and encouraging the development of standards for the local solar component industry will help prevent the entrance of low-quality products in the market. Standardization will reduce overall

manufacturing costs. The adaptation or adoption of international standards will facilitate exports by avoiding compatibility and/or quality issues.

Action L: Encourage the development of a solar cluster

Encouraging the development of a cluster for other solar component technologies, as Egypt is already attempting to do for glass manufacturing, would take advantage of synergies, such as logistical synergies for transport of the components to clients. This action can be started early, but it will gain relevance only once the industry has begun developing.


Action M: Consider concessional finance opportunities

Concessional finance, by the IFC, African Development Bank (AfDB), or other donors, could mitigate the risk for private sector investors to enter solar industries. Depending on the donor, different products and structures could be considered, including risk-sharing products, lower-interest-rate products, and lower returns for equity investments. These initial investments in the industry could pave the way for financing on fully commercial terms.75

Action N: Develop an investment plan

Cost and duration of financing are key determinants for the viability of manufacturing investments, particularly in the case of new sectors. The investment plan needs to involve all stakeholders to identify the best ways of extending credit for investments in Mirror manufacturing capacity, taking into account that smaller companies or new entrants may require long grace periods to generate the liquidity to pay back. This action targets generating finance opportunities and encouraging private sector investments.

75 For example, AfDB is employing a model of concessional financing to finance the early stages and high-risk activities required to fast-track the development of geothermal sources in East Africa.


Action O: Develop and implement a plan to bring in industrial investors and partners, including consideration of joint ventures

With a focus on raising funds and securing loans, the objective of the plan will be to secure the participation of key Regional players. The objective is to get key Regional industrial players involved and interested in participating.


Action P: Identify the best locations for the manufacturing plants

The recommendation is to prepare maps for investment purposes and to identify key locations for the installation of new manufacturing plants. Determining the best locations includes taking into account logistics and transportation of the products of the Mirror industry to local and Regional customers. These identifications could be made by the Ministry of Industry in Egypt’s industrial development zones.

Solar Mirror manufacturing plants may be part of, or built close to, existing Float glass industries. For the former to be developed from the ground up, the plan could take into account the objective of Egypt’s Sixth Five-Year Plan (2007–2012). The objective is to intensify investment in Upper Egypt and the desert governorates to achieve balanced spatial development[76].

In addition to identifying potentially interesting locations for the plants, it could be advisable to develop industrial estates that would facilitate the clustering of manufacturing capability for the different solar component industries. In addition, a framework needs to be designed to aid investors to assess the viability of other potential locations.

Action Q: Consider necessary improvements to public infrastructure

Identifying infrastructure requirements, including for ports and roads, would increase the opportunity to export the products to neighboring countries. Improving road infrastructure will also lower internal transportation costs, thus increasing competitiveness.

Action R: Facilitate the purchase or rental of land and/or buildings

It is recommended to develop a framework to facilitate the acquisition, either through purchase or rental, of land and/or buildings by potential investors. At the same time, the necessary measures to facilitate land allocations for public lands should be taken.

5. Capacity developmentAction S: Develop supply-side strategies to bring in skilled workers to the sector

In preparation for developing the solar component industry, supply-side skills strategies based on training and education should be put in place to ensure alignment with the economic objectives and future sector needs. These strategies would involve collaboration between Egypt’s Ministry of Education and Ministry of Labor. They also could include the development of specialized training and education in:

• Laminating and coating expertise• Mechanical expertise• Welding expertise• General maintenance expertise• General business functions including, but not

limited to, logistics, human resources, quality control, and purchasing.

5.4 Jordan

The high-level recommendations described above crystallize in a series of strategies that need to be implemented to successfully develop the different

solar component industries in Jordan. These strategies represent the main axes for the country’s industrial development plan (Figure 5.1).


The following gaps analyses and derived recommendations have been focused on the establishment of a certification and testing institute, as a prior step to focus innovation capabilities and to develop high value-added subcomponents or new technologies in both PV and CSP in the long term.

5.4.1 GAPS ANALYSIS

A certification and testing institute is not one of the solar industries within the scope of this report, thus, it is not possible to identify quantitative gaps or clearly link them to the Competitiveness parameters defined. Nevertheless, the five axes of the industrial plan can be used as references. The most important qualitative gaps to be covered to boost Jordanian attractiveness have been described.

The main gaps to develop a certification and testing institute in Jordan are presented below:

Labor market: Jordan is above the Benchmark countries’ average in this Competitiveness parameter thanks to two factors: labor cost, in which Jordan is competitive; and market efficiency, in which Jordan still has the opportunity to improve performance, although it outranks most other MENA countries.

Material availability: This Competitiveness parameter is not relevant to a certification and testing institute.

Relevant manufacturing ability: Jordan has good literacy rates, and quantity and quality of education; it lacks synergic industries for on-the-job training. Specific training and education related to the solar energy components industry would help to close capacity gaps.

Cost of energy (industrial): This Competitiveness parameter is not relevant to a certification and testing institute.

Fiscal and financial costs: Jordan’s certification and testing institute will most likely be a public company, so the cost of taxes borne by companies

in the country and lending interest rates should not influence its business model.

CSP and PV Component demand: This Competitiveness parameter is not directly related to the attractiveness of a certification and testing institute. However, it increases the likelihood of component industries developing in Jordan or in neighboring countries, and so the demand for the institute’s services.

Risk associated with demand: The success of a certification institute is based largely on the confidence and trustworthiness that it generates. A healthy solar sector in Jordan, with a stable regulatory environment and appropriate policy mechanisms and incentives for a long-term steady development, will create a perception of low country risk that will reflect positively on the institute’s reputation. At the same time, a steady, known pipeline creates opportunities for the certification and testing institute to gain experience and track record.

Financial risk: Jordan’s certification and testing institute will most likely be a public company so the access to credit indicator should not influence its business model.

Industry structure: No related local cluster has been identified in Jordan. A certification and testing institute could act as a seed for a solar-related cluster, which could be useful to export goods and import equipment and raw material, as well as to start a standardization process.

Innovation capacity: Jordan outranks the other MENA countries in this parameter. A certification and testing institute could act as a first step to focus innovation capabilities and to develop high value-added subcomponents or new technologies in both PV and CSP in the long term.

Logistical infrastructure: This Competitiveness parameter is not relevant to a certification and testing institute.



The following strategic recommendations correlate with the five axes described above. The objectives of the former are to reduce the existing gaps to deploy the certification and testing institute in Jordan; and, in the medium term, where possible, make Jordan a more attractive country for the development of solar component industries. Each action is linked to the Competitiveness parameter that would improve in the way described in Table 5.8.



The current projected solar capacity for CSP (450 MW) and PV (150 MW) in Jordan by 2020 is modest so it is not likely to suffice to develop any of the solar component industries studied.

The solar industry in Jordan could be built only based on exports. Regional collaboration could be a way to build the industry if enough political will exists to develop it (Action B).

Action B: Remove barriers to help advance the integration of markets and facilitate the import of materials and/or export of manufactured solar components

Action B could include the development of agreements to import raw and other materials necessary to develop solar industries, as well as to export manufactured components to other countries in the Region and reduce the barriers to do so. The importing and exporting could be achieved through bilateral or multilateral agreements, either specifically created or already existing ((such as the Arab Mediterranean Free Trade Agreement (AGADIR) or GAFTA)).

A more integrated sector results in synergistic effects in the Region, which would be of interest to Jordan

as a way of participating in developments elsewhere in the Region.

Action C: Carry out a communication campaign

The communication campaign publicizing the measures taken to drive the sector and their potential impact on investors needs to reach all stakeholders. Targeted workshops, both national and international, would have the multiple benefits of giving visibility to the sector; showing institutional commitment; and promoting communication, clustering, and partnership among different companies.


Action D: Put in place a plan to develop R&D capacity

With the objective of increasing innovation capacity in the Region, it is essential to put in place both R&D funding and partnerships to develop new processes that improve solar industries. These improvements would yield a competitive advantage in the medium and long terms, and could take advantage of synergies with the proposed certification and testing institute.

Action E: Development of a database of local manufacturers

Develop and maintain a database of local manufacturers and possible counterparts available to project developers to incentivize local supply share in projects. This database could be elaborated in collaboration with professional associations to ensure it stays up to date.


+ + High impact

+ Medium impact

− No impact


Tab

le 5

.9 |

Gap

s A

dd

ress

ed

by S

trate

gic

Re

co

mm

en

dati

on

s R

ela

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rial

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ve

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n in

Jo

rdan

: P

rod

ucti

on

Facto

rs a

nd

De

man

d F

acto

rs

Pro

du

cti

on

Facto

rsD

em

an

d

Facto

rs


GA

PS

Lab

or

Mark

et

Mate

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Availab

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y

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t M

an

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g

Ab

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ne

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(In

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Fin

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d

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A. C

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men

t to

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th

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TA

/Accen

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Tab

le 5

.10

| G

ap

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Bu

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Su

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k a

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up

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GA

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to

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Ris

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to

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Fin

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Ind

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Str

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Inn

ovati

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C

ap

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an

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ts

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pro

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s

5_ C

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lop

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cti

on

K: D

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TA

/Accen

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.


Action F: Development of standards for individual components

Facilitate and encourage the development of standards for the local solar component industry to avoid the entrance of low-quality products in the market. Standardization would reduce overall manufacturing costs. The adaptation or adoption of international standards also would facilitate exports, avoiding compatibility and/or quality issues.

The certification and testing institute would be the natural leader of the standardization process.


Action J: Consider concessional finance opportunities

Concessional finance by the IFC, WB, AfDB, or other donors could mitigate the risk of private sector investors coming into solar industries. Depending on the donors, different products and structures could be considered, including risk-sharing products, lower-interest-rate products, and lower returns on equity investments. These initial investments in the industry could pave the way for financing on fully commercial terms.76

Action K: Develop an investment plan

Cost and duration of finance are key determinants for the viability of manufacturing investments, particularly in the case of new sectors. The investment plan needs to involve all stakeholders to identify the best ways of extending credit for investments, taking into account that smaller companies or new entrants could require long grace periods to generate the liquidity to pay back. This action targets the generation of finance opportunities, which would encourage private sector investments.

4. Identify infrastructure requirementsAction I: Consider necessary improvements to public infrastructure

Identify infrastructure requirements, including port and road infrastructure, that could increase the opportunity to export the products to neighboring countries. Improving road infrastructure will also lower internal transportation costs, thus increasing competitiveness.

Action J: Facilitate the purchase of rental of land and/or buildings

Develop a framework to facilitate the acquisition, through either purchase or rental, of land and/or buildings by potential investors. At the same time, take the necessary measures to facilitate land allocations for public lands.


Action K: Develop supply-side strategies to bring in skilled workers to the sector

In preparation for developing the solar component industry, supply-side skills strategies, based on training and education, should be put in place to ensure alignment with the economic objectives and future sector needs. Jordan’s Ministry of Higher Education and Higher Research and the Ministry of Labor should coordinate their plans to include the development of specialized training and education.



5.5 Morocco

The high-level recommendations described above crystallize in a series of strategies that need to be implemented to successfully develop the different solar component industries in Morocco. These strategies represent the main axes for the country’s industrial development plan (Figure 5.1).

As described in section 4.5, Morocco has potential to develop the Structure & Tracker industry for CSP and the Support Structure industry for PV, and to consider opportunities to improve some of the conventional CSP industries (Condenser, Pumps) in the short and medium terms. TF Modules development is another opportunity to be implemented (if current world overcapacity decreases) in the medium term, with

a strategy that should take advantage of Regional synergies.

Structures and trackers will be used as a reference to analyze the gaps and derived recommendations.

5.5.1 GAPS ANALYSIS

Some gaps were found when linking the Competitiveness parameters to the five axes of the industrial plan in the Moroccan business environment. The most important gaps to be covered to bring the Moroccan Attractiveness index for Structure & Tracker industry closer to that of China (the best scored Benchmark country) are depicted in Figure 5.4.

Figure 5.4 | Strengths and Weaknesses of Morocco vs. China in the Structures & Tracker Industry

Morocco - Structure & tracker

China

Production

Demand

Risk and stability

Business support

-


Labor market




Component demand



Financial risk

0.200

0.400

0.600

0.800

1.000

Industry structure

Innovation capacity




The main gaps to develop the Structure & Tracker industry in Morocco are presented below:

Labor market: This Competitiveness parameter is linked to two factors: labor cost, in which Morocco is very competitive; and market efficiency and flexibility, in which Morocco still has the opportunity to improve performance. General recommendations to address the issue of flexibility in the market, for any type of industry, are shown in Table 5.11.

Material availability: This Competitiveness parameter is related to the resources that a country has and trades. Carbon steel beam and plate, and electrodes are needed to set up a Structure & Tracker industry. Trackers also need high precision gears and shafts for hydraulic actuators. Morocco is among the main steel producers among MENA countries [73], but its production is lower than the local demand. This gap should be overcome to avoid shortages.

Relevant manufacturing ability: Literacy rates, years and quality of education, and on-the-job training are issues that Morocco has an opportunity to improve. Specific training and education related to the selected solar industry would help to close capacity gaps. On the other hand, language skills enable national workers to adapt easily to changes. Signals, both to the education institutions and to the future students or trainees, to prepare and participate are related to visibility of projects and pipeline and political will.

Cost of energy (industrial): Despite being subsidized, the cost of electricity in Morocco is high when compared to the MENA average. This higher cost is largely due to the fact that, in Morocco as well as in other countries such as Egypt and Algeria, subsidies to energy consumption are introducing tensions in the system. Subsidies veil the true price signal to electricity consumers and could lead to adverse economic and environmental impacts. Morocco has the lowest subsidies among the studied MENA countries. On the other hand, policies aimed to encourage energy efficiency and self-supply (such as subsidies or tax exemptions for CHP linked to efficiency) for industries would help to reduce this gap.

Fiscal and financial costs: The level of taxes borne by companies in the country and lending interest rates influence the attractiveness of a country for investors. Low company taxes and borrowing costs are one of the strengths in Morocco, which already possesses interesting programs to reduce the fiscal burden to new investors.

CSP and PV Component demand: Comparatively, China is a huge market. The only possibility to reach a proportional demand is to increase the market, for example by boosting intraregional trades in the MENA Region—which has over 400 million people—or by reaching other growing CSP markets. A very positive attribute is Morocco’s global horizontal irradiation, which is one of the


Price (Wage) FlexibilityNumerical Flexibility





Flexible working hours Ability of labor force to use varied technology








Source: [74].


best in the world and will boost the performance of future PV plants.

Risk associated with demand: Morocco has no clear incentives for CSP and the competitiveness in the electricity sector. In it, the interconnection and supply of electricity must still be undertaken through the national electricity company, ONEE(Office National de l’Electricité et de l’Eau Potable). Another important point is that the share between CSP and PV for the 2,000 MW solar energy target by 2020 has not been fixed.77 However, a renewable regime for PV plants is in place, and plants smaller than 2 MW do not need approval from ADEREE (National Agency for the Development of Renewable Energy and Energy Efficiency). This exemption makes it easier for a promoter to deploy a plant up to this capacity. Thus, this exemption could provide an additional market for the Structure & Tracker industry, which is easily adaptable for PV structures.

Financial risk: Borrowers and lenders have legal rights with respect to secured transactions. The strength of the legal rights index, credit information, public credit registry coverage, and private credit bureau coverage must be improved to guarantee and protect the investment.78

Industry structure: No related local cluster has been identified in Morocco; but, due to the similarities, automotive industry cluster and past support mechanisms could be taken as an example.

Innovation capacity: Support structures and trackers are an application for which innovations in design, manufacturing, erection, operation, and maintenance are possible. Adaptation to the MENA and desert environments could be carried out. Improving engineering skills and possible joint ventures or technology transfer programs with

technology providers would speed up increasing innovation capacity.

Logistical infrastructure: The identification of suitable sites and development of industrial estates in which to cluster manufacturing capability could reduce this gap. Because markets abroad will be targeted, logistics improvement is a must to increase competitiveness in exports. However, in Morocco, infrastructure appears to be less significant than other issues, such as constraints associated with trade processes [77][78].


The following strategic recommendations follow the five axes described above. Their objective is to reduce the existing gaps with the selected Benchmark countries to develop the recommended solar component industries in Morocco.

Each action is linked to the Competitiveness parameter that would improve in the way described in Table 5.12.


Action A: Define clear targets for CSP and PV technologies

Morocco has an ambitious target for solar energy development (2,000 MW for 2020) that could attract foreign investors. However, the national target has

77 Although this flexible approach can be advantageous in energy cost (because it allows choosing the project that will offer the lowest price, regardless of the technology), it blocks the visibility of the pipeline, thus hampering the development of solar component industries.78 The stronger the legal rights of borrowers and lenders in transactions, and the deeper and more easily available credit information is, the lower the perceived risk of lending and the easier the access to credit in the country.


+ + High impact

+ Medium impact

− No impact


not been clearly divided between CSP and PV. The main recommended policy action is to define targets for individual technologies (CSP and PV) to give investors insight into the potential demand of the industry. The existence of agencies such as ADEREE (National Agency for the Development of Renewable Energy and Energy Efficiency) and MASEN (Moroccan Agency for Solar Energy) also helps in providing visibility and transparency to the sector.

Action B: Increase the PV and CSP target from 2020 onwards

Morocco’s ambitious solar target is a key advantage, but the CSP and PV component demand is not as

high as China’s. Increasing the target for PV and CSP deployed capacity from 2020 onward could reduce the gap with China. Although domestic demand is a key factor, another way to improve CSP and PV component demand is through exports to other countries, something that could be promoted with specific actions regarding trade barriers, as proposed below.

Action C: Remove barriers to help advance the integration of markets and facilitate the import of materials and/or export of manufactured solar components

Action C could include the development of agreements to import raw and other materials

Box 5.1 | Success Story in PV Module Industry Development: China’s Development of the Crystalline Module Industry

Today, China is the largest solar PV manufacturer in the world.

China’s PV sector is unique in that it has sprung up due to the demand of foreign markets, rather than from domestic demand, as is more common.

The Chinese government has identified new energies as a strategic emerging industrial sector, and has planned the investment of US$3 trillion in the next 10 years. The Chinese government also has decided to improve its solar PV tariff policy to standardize PV tariff management and promote the sustainable development of the PV sector.

China has developed a unified national PV tariff for on-grid developments. The unified national tariff for non-bidding solar PV projects is formulated based on average investment and operation costs, PV plant bidding prices and solar resources in the country.

The Chinese PV industry has learned much from Europe’s and the Unites States’ experience. Between 2003 and 2005, the US and European governments, industry associations and companies provided valuable suggestions to China as it developed its laws and programs to promote the development and use of renewable energy.

Fiscal incentives were another important factor that encouraged PV development in China. In 2009 a national PV subsidy program was introduced to promote the use of BIPV (Building Integrated Photovoltaic) applications and rooftop systems. In the same year, a second national PV subsidy program was implemented. The Golden Sun Demonstration Program was designed to subsidize 600 MW of PV demonstration projects in the following 2–3 years. In 2009 China’s central government also introduced a FIT-style subsidy for a 10 MW PV project.

Chinese PV companies have achieved their growth with both domestic and overseas encouragement. The Chinese PV sector is truly global in all aspects, sourcing inputs globally, using the most advanced technologies, and qualifying for financing on internationally recognized terms.

In 2009, China’s solar sector employs an estimated 55,000 people in PV[79]. China’s experience provides an example of policy-led growth in renewable energy that has created jobs, income and revenue streams for nascent industries.


Tab

le 5

.13

| G

ap

s A

dd

ress

ed

by S

trate

gic

Re

co

mm

en

dati

on

s R

ela

tin

g t

o t

he

Axe

s o

f th

e I

nd

ust

rial

De

ve

lop

me

nt

Pla

n i

n M

oro

cco

: P

rod

ucti

on

Facto

rs a

nd

De

man

d F

acto

rs

Pro

du

cti

on

Facto

rsD

em

an

d

Facto

rs


GA

PS

Lab

or

Mark

et

Mate

rial

Availab

ilit

y

Re

levan

t M

an

ufa

ctu

rin

g

Ab

ilit

y

Co

st o

f E

ne

rgy

(in

du

stri

al)

Fis

cal an

d

Fin

an

cia

l C

ost

sC

om

po

ne

nt

De

man

d

CS

P

ACT

ION

PV

1_ S

ecto

ral st

rate

gy a

nd

po

licy

1A

cti

on

A. D

efi

ne c

learl

y t

arg

ets

fo

r C

SP

an

d P

V t

ech

no

log

ies

1A

cti

on

B: In

cre

ase

th

e P

V a

nd

CS

P t

arg

et

to 2

020

on

ward

s

1A

cti

on

C: R

em

ove b

arr

iers

in

ord

er

to f

urt

her

the in

teg

rati

on

of

mark

ets

an

d f

acili

tate

im

po

rt m

ate

rials

an

d/o

r exp

ort

man

ufa

ctu

red

so

lar

co

mp

on

en

ts

1A

cti

on

D: D

evelo

p a

syst

em

to

measu

re p

erf

orm

an

ce a

nd

ach

ievem

en

ts

2_

Bu

sin

ess

en

vir

on

me

nt

2A

cti

on

E: Im

pro

ve lab

or

mark

et

flexib

ility

2A

cti

on

F: S

tim

ula

te t

rad

e w

ith

ME

NA

reg

ion

2A

cti

on

G: E

nco

ura

ge t

he d

evelo

pm

en

t o

f a s

ola

r clu

ster

3_

Acce

ss t

o f

inan

ce

3A

cti

on

H: A

naly

ze t

he f

iscal an

d f

inan

cia

l ad

van

tag

es

by z

on

es

3A

cti

on

I: D

evelo

p a

n in

vest

men

t p

lan

3A

cti

on

J: D

evelo

p a

nd

im

ple

men

t a p

lan

to

bri

ng

in

in

du

stri

al

invest

ors

an

d p

art

ners

, in

clu

din

g c

on

sid

era

tio

n o

f jo

int

ven

ture

s

4_

In

frast

ructu

re

4A

cti

on

K: Id

en

tify

th

e b

est

lo

cati

on

s fo

r th

e m

an

ufa

ctu

rin

g p

lan

ts

4A

cti

on

L: C

on

sid

er

necess

ary

im

pro

vem

en

ts t

o p

ub

lic in

frast

ructu

re

5_

Cap

acit

y d

eve

lop

me

nt

5A

cti

on

M: D

evelo

p d

em

an

d-s

ide s

kill

s st

rate

gie

s to

bri

ng

in

skill

ed

w

ork

ers

to

th

e s

ecto

r

So

urc

e: S

TA

/Accen

ture

.


Tab

le 5

.14

| G

ap

s A

dd

ress

ed

by S

trate

gic

Re

co

mm

en

dati

on

s R

ela

tin

g t

o t

he

Axe

s o

f th

e I

nd

ust

rial

De

ve

lop

me

nt

Pla

n in

Mo

rocco

: R

isk a

nd

Sta

bilit

y F

acto

rs a

nd

Bu

sin

ess

Su

pp

ort

Facto

rs

Ris

k a

nd

Sta

bilit

y F

acto

rsB

usi

ne

ss S

up

po

rt F

acto

rs


GA

PS

Ris

k

Ass

ocia

ted

to

d

oin

g B

usi

ne

ss

Ris

k

Ass

ocia

ted

to

De

man

d

Fin

an

cia

l R

isk

Ind

ust

ry

Str

uctu

re

Inn

ovati

on

C

ap

acit

yL

og

isti

cal

Infr

ast

ructu

re

CS

P

ACT

ION

PV

1_ S

ecto

ral st

rate

gy a

nd

po

licy

1A

cti

on

A. D

efi

ne c

learl

y t

arg

ets

fo

r C

SP

an

d

PV

tech

no

log

ies

1A

cti

on

B: In

cre

ase

th

e P

V a

nd

CS

P t

arg

et

to

20

20

on

ward

s

1A

cti

on

C: R

em

ove b

arr

iers

in

ord

er

to f

urt

her

the in

teg

rati

on

of

mark

ets

an

d f

acili

tate

im

po

rt m

ate

rials

an

d/o

r exp

ort

man

ufa

ctu

red

so

lar

co

mp

on

en

ts

1A

cti

on

D: D

evelo

p a

syst

em

to

measu

re

perf

orm

an

ce a

nd

ach

ievem

en

ts

2_ B

usi

ne

ss e

nvir

on

me

nt

2A

cti

on

E: Im

pro

ve lab

or

mark

et

flexib

ility

2A

cti

on

F: S

tim

ula

te t

rad

e w

ith

ME

NA

reg

ion

2A

cti

on

G: E

nco

ura

ge t

he d

evelo

pm

en

t o

f a

sola

r clu

ster

3_ A

cce

ss t

o f

inan

ce

3A

cti

on

H: A

naly

ze t

he f

iscal an

d f

inan

cia

l ad

van

tag

es

by z

on

es

3A

cti

on

I: D

evelo

p a

n in

vest

men

t p

lan

3A

cti

on

J: D

evelo

p a

nd

im

ple

men

t a p

lan

to

b

rin

g in

in

du

stri

al in

vest

ors

an

d p

art

ners

, in

clu

din

g c

on

sid

era

tio

n o

f jo

int

ven

ture

s

4_ I

nfr

ast

ructu

re

4A

cti

on

K: Id

en

tify

th

e b

est

lo

cati

on

s fo

r th

e

man

ufa

ctu

rin

g p

lan

ts

4A

cti

on

L: C

on

sid

er

necess

ary

im

pro

vem

en

ts

to p

ub

lic in

frast

ructu

re

5_ C

ap

acit

y d

eve

lop

me

nt

5A

cti

on M

: Develo

p d

em

and

-sid

e s

kill

s st

rate

gie

s to

bri

ng

in s

kill

ed

wo

rkers

to

the s

ecto

r

So

urc

e: S

TA

/Accen

ture

.


necessary to carry out solar industries, as well as to export manufactured components to other countries in the Region and reduce barriers for doing so. Facilitating trade could be achieved through bilateral or multilateral agreements, either specifically created or already existing ((such as the Arab Mediterranean Free Trade Agreement (AGADIR) or GAFTA)).

As in the example mentioned, Egypt needs silver coating to develop the Mirror industry, and Morocco was one of the top 20 silver-producing countries in 2011 [75]. Morocco, in turn, needs to import Float glass, and Egypt is one of the main Float glass manufacturers in MENA Region [73]. These complementary needs and capacities could be a win-win situation in which both countries profit from the integration of Regional markets.

Action D: Develop a system to measure industry performance and achievements

Develop a monitoring and evaluation system and tools to monitor year-to-date expenditure and achievements in the solar industries, using a series of key indicators to assess progress. This kind of monitoring system would be useful to ensure transparency and visibility of achievements by the sector.


Action E: Improve labor market flexibility

Labor market flexibility could be improved through specific actions, which need to be defined in coordination with specific agencies and ministries. Assuming a manufacturing factory is being considered, the following actions are highlighted:

• Put in place pay packages reflecting skill differentials

• Ensure a core of full-time employees • Develop transferable skills within the workplace.

These actions must be implemented in coordination with national institutes and authorities.

Action F: Encourage the development of a solar cluster

Encourage the development of a cluster for solar component technologies to take advantage of synergies, such as logistical synergies for transport of the components to clients. This action could be started early but will gain relevance only once the industry has begun developing.


Action G: Develop an investment plan

Cost and duration of finance are key determinants for the viability of manufacturing investments, particularly in the case of new sectors. The investment plan needs to involve all stakeholders to identify the best ways of extending credit for investments, taking into account that smaller companies or new entrants may require long grace periods to generate the liquidity to pay back. This action targets the generation of finance opportunities, thus encouraging private sector investments.

Action H: Develop and implement a plan to bring in industrial investors and partners, including consideration of joint ventures

With a focus on raising funds and securing loans, the objective of the plan will be to secure the participation of key Regional players. The objective is to get key Regional industrial players involved and interested in participating.


Action I: Identify the best locations for the manufacturing plants

By selecting a suitable, logistically well-connected industrial zone to deploy an industry, it is possible to overcome the logistical infrastructure challenges that may exist in other parts of the country. These locations, which may vary for different industries according to an industry’s specific requirements,


need to be made known to investors who potentially could develop particular industries.

In addition to identifying potentially attractive locations for the plants, the development of industrial estates in which to cluster manufacturing capability for the different solar component industries could be advisable. In addition, a framework needs to be designed to support investors in assessing the viability of other potential locations. Advancing in this direction, Morocco has defined a series of Investment Zones (Figure 5.5).

Within these zones, the investors are offered Real Estate services (purchase or rental of land and/or buildings), general (security, telecommunications, banking) and advanced specific services (industrial maintenance, logistical areas), training services, a one-stop shop for administrative services (recruitment support, municipality services, National Social Security Fund). Some of these investment zones

are generalist, while other are specialized in certain sectors (such as offshoring, food and processing of seafood products, automotive, or aerospace).

Morocco might consider developing specialized Investment Zones for solar industries. Doing so would enable focusing on the specific needs of solar component manufacturing industries, such as for specialized labor force, logistics, and networking with suppliers.

The development of specialized Investment Zones would also facilitate the appearing of a physical solar cluster, with all the benefits explained in Action F.

Action J: Consider necessary improvements to public infrastructure

Identify infrastructure requirements, including port and road infrastructure, that could increase the opportunity to export the products to neighboring

Box 5.2 | Success Story: Reduction of Financial Risk in Morocco

Morocco has established the Investment Promotion Fund (IPF). The fund manages operations relating to the State’s taking charge of the cost of some advantage granted to the projects that meet certain criteria. A project must fulfill at least one of the following criteria:

• Invests an amount equal to or greater than MAD 200 million• Creates a number of stable jobs equal to or above 250• Is executed in one of these provinces or prefectures: Al Hoceima, Berkane, Boujdour, Chefchaouen,

Es-Smara, Guelmim, Laayoune, Larache, Nador, Oued Ed-Dahab, Oujda-Angad, Tangier-Asilah, Fahs-Bni-Makada, Tan-Tan, Taounate, Taourirt, Tata, Taza and Tetouan

• Ensures transfer of technology• Contributes to environmental protection.

For these projects, according to the Moroccan Investment Development Agency, the Investment Promotion Fund can support the following costs:

• Land: pays 20% of the expenses of land acquisition• External infrastructure: pays up to 5% of the overall amount of the investment program• Training: pays up to 20% of the expense of vocational training provided as part of the investment

program.

These advantages are cumulative, provided that the State’s participation does not exceed 5% of the total investment program. However, if the investment project will take place in a suburban or rural area, the participation of the State is allowed to reach 10% of the total investment program.

The costs supported by the IPF reduce the investment required to deploy a factory, thus reducing the financial risk of the activity because risk is correlated with the amount financed.



countries. Improving road infrastructure will also lower internal transportation costs, thus increasing competitiveness. The Structure & Tracker industry is especially sensitive to this necessity, considering that transportation costs can be a significant burden in its final price.


Action K: Develop supply-side strategies to bring in skilled workers to the sector

In preparation for developing the solar component industry, supply-side skills strategies based on

Figure 5.5 | Investment Zones, Main Seaports and International Airports in Morocco

Legend

Investment Zones

Dakhla

Laayoun

Eassaouira

Safi

Rabet

TangerTetouan

Oujda

Berkane

Feskenitra

Meknes

Tadla

OuarzazateMarrakech

Settat

CasablancaEI Jadida

Main seaportsInternational Airports

Highways

OffshoringGeneralist P2I

AutomotiveAerospace

Food And Processing of Seafood Products

Source: [80]

Table 5.15 | Course on Hot-dip Galvanizing and Corrosion Protection

Course Course on Hot-dip Galvanizing and Corrosion Protection

Venue Climate Innovation Center Morocco

Training Galvanizing process, theory, and practice;the most common inspections

Duration 1,000 hours

Cost US$1,000

Prerequisites for admission Applicant possesses Secondary Education Certificate

Program Galvanizing process:• Surface preparation• Galvanizing• Time to first maintenance• Other corrosion protection systemsInternational galvanizing standardsTypes of inspectionRepairsTests



training and education should be put in place to ensure alignment with the economic objectives and future sector needs. Training sessions to prepare workers for the new industry are advisable because new jobs would involve primarily medium-level qualified staff. The following course is an example to make workers more familiar with the

daily operations of a TF Modules manufacturing line.

Although boosting economy-wide employment and growth is not enough to boost competitiveness in an innovation sector, such policies can make a critical difference to a smaller region or a city[78].

5.6 Tunisia

The high-level recommendations described above crystallize in a series of strategies that need to be implemented to successfully develop the different solar component industries in Tunisia. These strategies represent the main axes for the country’s industrial development plan (Figure 5.1).

The following gaps analyses and derived recommendations have been focused on the Receiver industry, because Tunisia’s Attractiveness index for this industry lies along the average of MENA countries. For this reason, Tunisia is used here as an example in which to deploy this industry.

5.6.1 GAPS ANALYSIS

Some gaps were found when linking the Competitiveness parameters to the five axes of the industrial plan in the current Tunisian business environment. The most important gaps to be covered to bring Tunisian Attractiveness index for Receiver industry closer to that of the United States (the best scored Benchmark country) are depicted in Figure 5.6.

The main gaps to develop the Receiver industry in Tunisia follow.

Labor market: Market efficiency is critical to ensure that workers are allocated to their most efficient use in the economy. This Competitiveness parameter is linked to two factors: labor cost, for which Tunisia is average among the selected MENA countries; and market efficiency and flexibility, for which Tunisia is

well positioned among the selected MENA countries. However, Tunisia still must improve performance. General recommendations to address the issue of flexibility in the market, for any type of industry, are shown in Table 5.16.

Material availability: This Competitiveness parameter is correlated with the resources that a country possesses and trades. Stainless steel tubes; borosilicate glass; coating; and other products such as collars, flanges, and bellows are needed to manufacture Receivers for CSP plants. Their costs represent approximately 65 percent of the Receiver manufacturing industry. There are composite companies in Tunisia whose customers are mainly the shipyard and railway industries. These companies can adapt their production to the necessities of the Receiver industry. Tunisia has a limited capacity to produce steel (only 285 kt per year) [73], which should be increased to avoid shortages.

Relevant manufacturing ability: Although Tunisia already has some qualified human capital, on-the-job training must be improved in the short term due to the significant requirements of this industry for qualified people. Signals, both to the education institutions and to the future students or trainees, to prepare and participate are related to the visibility of projects and pipeline and to political will.

Fiscal and financial costs: One of Tunisia’s strengths. It ranks best among the selected MENA countries and above the Benchmark countries’ average.



Price (Wage) Flexibility

Numerical Flexibility



Location Flexibility



Flexible working hours

Ability of labor force to use varied technology

Geographic flexibility








Source: [74].

Figure 5.6 | Strengths and Weaknesses of Tunisia vs. United States in the Receiver Industry

Tunisia - Receiver

United States

Production

Demand

Risk and stability

Business support

-


Labor market




Component demand



Financial risk

0.200

0.400

0.600

0.800

1.000

Industry structure

Innovation capacity




CSP and PV Component demand: On one hand, Tunisia’s projected solar capacity for CSP (300 MW) and PV (50 MW) in Tunisia by 2020 is modest compared to other selected MENA countries. On the other hand, Tunisia’s Direct Normal Irradiation is among the best in the world, and this strength will boost the performance of future CSP plants. It is worth analyzing the possibility of increasing CSP and PV targets in the medium term, especially considering the abundant solar resource.

Risk associated with demand: Giving visibility to the pipeline of energy projects would be an important step toward reducing the perceived risk because Tunisia currently has the lowest CSP and PV target in the MENA Region.

Financial risk: Although Tunisia ranks above the MENA average in this parameter, it is still far from the Benchmark countries’ average. The strength of its legal rights index, credit information, public credit registry coverage and private credit bureau coverage must be improved to guarantee and protect investments.

Industry structure: Large international industrial companies already are located in Tunisia. However, no local cluster for the Receiver industry has been identified there. Such a cluster could be useful to export goods and to import the equipment and materials needed for the Receiver industry, especially steel and borosilicate glass for coating purposes.

Innovation capacity: Tunisia is among the best of the selected MENA countries in this parameter. This high ranking is significant because Receiver is an emerging industry, in which the importance of innovation is higher than for more mature technologies. For industries with lower innovation requirements, lack of innovation capabilities can be partially overcome in the short term through collaboration with technological partners.

Logistical infrastructure: The identification of suitable sites and development of industrial estates

in which to cluster manufacturing capability for the Receiver industry could reduce this gap. Because foreign markets will be targeted, to increase competitiveness in exports, improving logistics is a must.


The following strategic recommendations follow the five axes described above. Their objective is to reduce the existing gaps with the selected Benchmark countries to deploy the recommended solar component industries in Tunisia. Each action is linked to the Competitiveness parameter that would improve in the way described in Table 5.17.



The current projected solar capacity for CSP (300 MW) and PV (50 MW) in Tunisia by 2020 is modest, so the country is not likely to develop any of the different solar component industries studied during this period.

One option available to the government is to provide an important market signal, increasing the solar targets up to levels that can sustain a local component industry.If the size of the domestic market alone does not allow for this, another option is to consider ways of encouraging Regional demand (Action C).

After setting the targets or objectives, the immediate step is to create the policy mechanisms and incentives to ensure not only that the targets are achieved in the short and medium terms but also that a long-term


+ + High impact

+ Medium impact

− No impact

Tab

le 5

.18

| G

ap

s A

dd

ress

ed

by S

trate

gic

Re

co

mm

en

dati

on

s R

ela

tin

g t

o t

he

Axe

s o

f th

e I

nd

ust

rial

De

ve

lop

me

nt

Pla

n i

n T

un

isia

: P

rod

ucti

on

Facto

rs a

nd

De

man

d F

acto

rs

Pro

du

cti

on

Facto

rsD

em

an

d

Facto

rs


GA

PS

Lab

or

Mark

et

Mate

rial

Availab

ilit

y

Re

levan

t M

an

ufa

ctu

rin

g

Ab

ilit

y

Co

st o

f E

ne

rgy

(In

du

stri

al)

Fis

cal an

d

Fin

an

cia

l C

ost

sC

om

po

ne

nt

De

man

d

CS

P

ACT

ION

PV

1_ S

ecto

ral st

rate

gy a

nd

po

licy

1A

cti

on

A: C

reate

th

e p

olic

y a

nd

reg

ula

tory

en

vir

on

men

t to

ad

van

ce

sola

r in

vest

men

t in

Tu

nis

ia

1A

cti

on

B: M

ake t

he p

roje

ct

pip

elin

e v

isib

le

1A

cti

on

C: R

em

ove b

arr

iers

in

ord

er

to f

urt

her

the in

teg

rati

on

o

f m

ark

ets

an

d f

acili

tate

th

e im

po

rt m

ate

rials

an

d/o

r exp

ort

m

an

ufa

ctu

red

so

lar

co

mp

on

en

ts

1A

cti

on

D: D

evelo

p a

syst

em

to

measu

re p

erf

orm

an

ce a

nd

ach

ievem

en

ts

2_

Bu

sin

ess

en

vir

on

me

nt

2A

cti

on

E: P

ut

in p

lace a

pla

n t

o d

evelo

p R

&D

cap

acit

y

2A

cti

on

F: D

evelo

pm

en

t o

f an

in

form

ati

on

data

base

of

local

man

ufa

ctu

rers

2A

cti

on

G: D

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up

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.


steady development is possible, meaning an effective change in Tunisia’s energy supply mix. Changing the mix can be done in different ways, such as a FIT system, green certificates, grants, subsidies, soft loans, tax exemptions or other mechanisms to enable the high growth-rates required to reach Tunisia’s target. However, it is necessary to take into account that the different mechanisms and incentives have different advantages and disadvantages and that the policies must be flexible enough to accommodate the evolution of the solar market.


Giving visibility to the pipeline of projects in different stages of development encourages transparency and contributes to give investors and financing institutions the foresight and confidence required for an associated local industry to develop.

Monitoring installed capacity is a tool both to evaluate the effectiveness of the system and its impact on society and on national budgets, and to give visibility to potential investors.

Action C: Remove barriers to help advance the integration of markets and facilitate the import of materials and/or export of manufactured solar components

Action C may include the development of agreements to import raw and other materials necessary to establish solar industries, as well as to export manufactured components to other countries in the Region and reduce barriers to doing so. Removing barriers may be achieved through bilateral or multilateral agreements, either specifically created or already existing ((such as the Arab Mediterranean Free Trade Agreement (AGADIR) or GAFTA)).

As an example, Tunisia needs stainless tubes; borosilicate glass; coating; and other products such as collars, flanges, and bellows to develop the Receiver industry. Some of these materials will need

to be imported. Tunisia can tap into its strengths by working with other MENA countries on a combined strategy to develop solar energy in the Region. The result could be a win-win situation in which all countries profit from the integration of Regional markets.

Action D: Develop a system to measure industry performance and achievements

Develop a monitoring and evaluation system and tools to monitor year-to-date expenditure and achievements in the solar industries, using a series of key indicators to assess progress. This M&E is useful to ensure transparency and visibility of achievements by the sector.

2. Business environmentAction E: Put in place a plan to develop R&D capacity

With the objective of increasing innovation capacity in the Region, it is essential to put in place both R&D funding and partnerships to develop new processes that improve solar industries. These improvements will yield a competitive advantage in the medium and long terms. Tunisia has a good base of educated engineers, technicians, and workers. To increase its competitive edge, the provision of additional training programs is encouraged. As an example, some opportunities for technology transfer based on Receiver industry are detailed:

• Coatings and vacuum process• Glass to metal welding• Glass to glass welding.

Action F: Development of a database of local manufacturers

Develop and maintain a database of local manufacturers and possible counterparts available to project developers to incentivize local supply share in projects. The database could be updated by collaborating with professional associations.


Action G: Development of standards for individual components

Facilitate and encourage the development of standards for the local solar component industry, to avoid the entrance of low-quality products in the market. Standardization would reduce overall manufacturing costs. The adaptation or adoption of international standards would also facilitate exports by avoiding compatibility and/or quality issues.

Action H: Encourage the development of a solar cluster

No local cluster has been identified in the country. The development of a cluster for solar component technologies would help to take advantage of synergies, such as logistical synergies for transport of the components to clients. This action can be started early but will gain relevance only once the industry has begun developing.


Action I: Consider concessional finance opportunities

Concessional finance by the IFC, AfDB, or other donors could mitigate the risk of private sector investors coming into solar industries. Depending on the donors, different products and structures could be considered, including risk-sharing products, lower-interest-rate products, and lower returns for equity investments. These initial investments in the industry could pave the way for financing on fully commercial terms.79

Action J: Develop an investment plan

Cost and duration of finance are key determinants for the viability of manufacturing investments, particularly in the case of new sectors. The investment plan needs to involve all stakeholders to identify the best

ways of extending credit for investments in Receiver manufacturing capacity, taking into account that smaller companies or new entrants may require long grace periods to generate the liquidity to pay back. This action targets generating finance opportunities, thus encouraging private sector investments.

Action K: Spread investment procedures among potential investors.

An investor’s guide to set up and build a business in Tunisia has been created. The Ministry of Industry and Technology has developed a website to clarify the procedures for setting up a company. The maintenance and improvement of this website is intended to attract investors and maintain a lasting relationship with them, important for a country such as Tunisia, which already is well positioned in the ease of doing business ranking.

4. Identify infrastructure requirementsAction L: Identify the best locations for the manufacturing plants

By selecting a suitable, logistically well connected industrial zone to deploy an industry, it is possible to overcome the logistical infrastructure challenges that may exist in other parts of the country. These locations, which may vary for different industries according to an industry’s specific requirements, need to be made known to investors who could develop particular industries.

A Receiver manufacturing plant could be installed close to a railway station, seaport, or airport to facilitate the import of borosilicate glass and stainless steel. This proximity is important due to the fragility and weight of the materials. Another option could be to install the plant near a stainless steel factory, or a borosilicate glass manufacturing facility if it were developed, because there is no glass production in the country today.



80 Based on interviews with leading companies, the footnote table shows the average manufacturing capacity by solar industry:

Solar Industry Receivers (MW/year) Mirror (MW/year) CSP & PV Structure (MW/year) TF Modules (MW/year)

Average manufacturing capacity by solar industry 150 300 70 100

In addition to identifying potentially attractive locations for the plants, the development of industrial estates in which to cluster manufacturing capability for the different solar component industries could be advisable. In addition, a framework needs to be designed to support investors in assessing the viability of other potential locations.

Action M: Consider necessary improvements to public infrastructure

Identify infrastructure requirements, including port and road infrastructure, which could increase the opportunity to export the products to neighboring countries. Improving road infrastructure will also lower internal transportation costs, thus increasing competitiveness.

Action N: Facilitate the purchase of rental of land and/or buildings

Develop a framework to facilitate the acquisition, either through purchase or rental, of land and/or buildings by potential investors. At the same time,

take the necessary measures to facilitate land allocations for public lands.


Action O: Develop supply-side skills strategies to bring in skilled workers to the sector

In preparation for developing the solar component industry, supply-side skills strategies based on training and education should be put in place to ensure alignment with the economic objectives and future sector needs. These strategies would involve collaboration between Tunisia’s Ministry of Higher Education and Scientific Research and its Ministry of Labor. Collaboration could include the development of specialized training and education in areas such as:

• Laminating and coating expertise• Mechanical expertise• Welding expertise• General maintenance expertise• General business functions, including but not

limited to: logistics, human resources, quality control and purchasing.

5.7 Recommendations for MENA Regional Cooperation

The existence of sufficient domestic demand is a key driver for the development of an industry because demand is perhaps the less adaptable factor. If there is no current or projected demand (internal or external) in a country, it is unlikely that the solar component industry would develop, even if other conditions exist. The component supply needed to cover a country’s annual solar target can be compared to typical annual manufacturing capacity of a given industry. The ratio between the typical output of a component factory80

and the domestic demand is a first high-level indicator of the attractiveness to an investor to set up a factory to supply the foreseen market.

Table 5.20 demonstrates that, although some countries have ratios above 100 percent so could develop certain industries on the basis of domestic demand alone, the remaining countries lack the critical mass to develop these industries.

A Regional approach will enable an industry not only to have access to a critical market but also to leverage each country’s strengths and offset its relative weaknesses.

Beyond component demand, Figure 5.7 shows that, on average, Benchmark countries are more


Table 5.20 | Potential Autonomy of Individual MENA Countries to Develop Various Industries based on Domestic Demand

Ratio of Yearly Forecasted Demand vs. Nominal Capacity of a Typical Production Factory, to 2020(%)

Country Receivers MirrorCSP & PV Structure

TF Modules

Algeria 125 110 415 100

Egypt 90 45 230 25

Jordan 40 20 110 20

Morocco 133 67 360 50

Tunisia 25 12 60 6

Regional 415 205 1175 200


Note: For Table 5.20, a preliminary, hypothetical linear distribution of the planned solar power capacity has been assumed to estimate an annual demand to be compared with the average manufacturing capacity by solar industry.

Figure 5.7 | Representation of the Combined MENA Advantages in the Competitiveness Analysis Compared to the Benchmark and MENA Country Averages

Combined Maximum MENA Advantage



Production

Demand

Risk and stability

Business support

-


Labor market (Egypt)

(Egypt)

(Egypt)

(Egypt)

(Algeria)

(Tunisia)

(Tunisia)

(Tunisia)

(Morocco)(Morocco)

(Morocco)

(Jordan) Relevant manufacturing ability



Component demand



Financial risk

0.20

0.40

0.60

0.80

1.00

Industry structure

Innovation capacity



competitive than MENA countries in energy cost. Nevertheless, the best-performing MENA country for each factor surpasses the Benchmark countries’ average in labor market, cost of industrial energy, fiscal and financial costs, component demand, and industry structure. In other words, each MENA country could build on its distinctive advantages and, as a group, on their complementary strengths.

Figure 5.7 represents a hypothetical MENA country whose 12 Competitiveness parameters would be equal to the best among the MENA countries. As can be seen by comparing the yellow and purple lines, working together on a combined strategy, the MENA Region could gain access to strengths that would take it well beyond the average of the countries. While Figure 5.8 is only a representation, it shows that MENA countries are complementary and that a


Figure 5.8 | Key Axes in a Regional Development Plan for Solar Component Industries

1. Sectoralstrategy and

policy

2. Businessenvironment

3. Access tofinance

4.Infrastructure

5. Capacitydevelopment

Country'sdevelopment

plan


plan to develop the solar industries together would benefit all MENA countries.

The recommendation is for the different selected MENA countries to work together toward the development of a common transnational policy to design and develop different solar elements in different countries, following their relative competitive advantages. This Regional plan would focus on five main axes (Figure 5.8):

a. Sectoral strategy and policyb. Business environmentc. Access to financed. Infrastructuree. Capacity development.

The plan could include the following measures and actions.

1. Sectoral strategy and policy Action A: Remove barriers to facilitate the import of materials and export of manufactured solar components regionally

To establish a framework of free commerce/free export in specific locations within the different countries for the materials, products, and components to be included within the Regional plan, to stimulate the manufacturing and trade of these components within the Region, and to increase competitiveness and productivity.

Action A may be achieved through bilateral agreements, a specific multilateral agreement, or within the Greater Arab Free Trade Area (GAFTA).


Action B: Put in place a plan to develop R&D capacity

Accelerate research, development, and innovation in the Region by setting up science and technology agreements to identify common research priorities and areas of common interest among R&D centers, universities, and industry.

Then, to avoid duplicate efforts, prioritize transnational cooperation on R&D projects related to solar energy and solar industry components.

Action C: Develop a Regional Climate Innovation Center

Promote the development of a Regional Climate Innovation Center, whose role will be to link all the National Climate Innovation Centers, thus offering services to fill the existing gaps in financing, access to information, training, and networking facilitation.

Action D: Carry out a communication campaign

Communicate this Regional strategy at a national, Regional, and international level, because the Regional strategy represents the first step toward a more competitive industry that could satisfy needs and requirements of the international market as well.

Action E: Stimulate trade within MENA Region

A deeper integration to stimulate trade with other countries is recommended. The World Bank has


analyzed the current agreements [81] in the MENA Region and found that none of them comes close to generating the sizable trade impact that the EU has had on its members. The following remarks are extracted from the Bank’s report:

“Although the agreements have facilitated trade, initial trade is very low as the countries are not natural trade partners, so the gains from expanded trade are small. In addition, an important concern is that there are too many overlapping and partial agreements and that this ‘spaghetti bowl’ will serve as a distraction of scarce trade negotiating resources. …In sum, [R]egional integration can help the MENA countries stimulate trade and investment, but the largest gains are likely to come from domestic reforms. Given the relatively small effects of existing [R]egional integration agreements in MENA, pursuing this route is unlikely to prove successful unless agreements are much deeper and domestic reforms are pursued.”(p.22)

As an example, Morocco needs raw materials and composites to implement solar industries, so a solar trade agreement following the lines of the AGADIR or GAFTA with MENA countries must be developed. Morocco might import Float glass from Egypt and Algeria [73], and the latter two might import TF Modules to fulfill their solar target.

3. Access to financeAction F: Improve financing environment

Develop a Regional capacity building program among financial institutions to improve local capacity to evaluate solar industry related projects, and share success stories among MENA countries and collaboration among the national development agencies on projects successfully financed.

Both approaches are aimed to reduce the risk perceived by financial institutions, thus easing the access to finance for new projects.

4. InfrastructureAction G: Consider necessary improvements to public infrastructure

Large infrastructure works such as highways and high capacity train lines could improve logistical infrastructures and connections among the different countries, thus improving transnational trade. Consider possible opportunities for coordination at the Regional level.


Action H: Develop supply-side strategies to bring skilled workers to the sector

Under the Regional Climate Innovation Center, support the development of Regional training courses and seminars to satisfy future needs of skilled workforce for the solar component industries. These courses, which would be attended by people from all MENA countries, will also represent an important networking opportunity for professionals in the sector.


666666666666CHAPTER SIX:

National Climate Innovation Center

The development of the solar industry represents an important opportunity for MENA countries to drive the development of all associated industry in the Middle East and North Africa Region. The creation of a National Climate Innovation Center (CIC) in the five selected MENA countries, together with a Regional Climate Innovation Center, could be one of the key elements to make this possible.

The key role of the Climate Innovation Center should be to support the development of renewable energy industries in MENA countries and—prioritized among them, the solar energy industry—by offering services to bridge the gap for renewable energies and encourage investment in related industries.

A National Climate Innovation Center can help fill the gaps in financing, access to information, consulting and/or training, and networking facilitation for the locally relevant climate and clean energy technologies. In the case of solar, these technologies include both CSP and PV; and both large-scale projects, for national or international supply, and small-scale projects, for supplying energy to remote areas in the less-developed agricultural regions of MENA countries.

With this objective in mind, the purpose should be not only to import foreign knowledge and technology. The purpose should also be to develop the conditions so that MENA countries can learn all that has been accomplished to date so it can advance to the forefront of solar energy development in aspects that are of particular interest to the MENA Region.

Specific functions and activities of the National Climate Innovation Center the different areas could include:

1. Financing

a) Climate technology subsidies: Subsidies (up to US$50K) granted by the National CIC to researchers, entrepreneurs, and new branches of existing companies will support the development of a local climate technologies market. These subsidies should be used in the validation of new concepts, in the testing or demonstration phase, and/or to assure a technology’s market viability. Support must be maintained for at least 5 years to guarantee the fulfillment of researchers’ work;

b) Investment fund facilitation: Provide access to investment funds for individual projects on the order of US$150K to US$1.5M each to companies starting activities that involve the development of innovation solar technologies. All investment assigned to these companies must be matched by an additional investment of the same value obtained by the promoter from a different source. For example, to obtain US$300K from the National CIC, a company should spend at least another US$300K from a different source on the same project.

c) If not already available in the country, support the creation of an Investment Promotion Agency. The role of such an Agency, in accordance with an existing one (Moroccan

Chapter 6 | National Climate Innovation Center | 135

Investment Development Agency), could include:

i. Image Building Activities: Creating the perception of a country as an attractive site for international investment. Activities commonly associated with image building include focused advertising, public relations events, and the generation of favorable news stories (“buzz”) by cultivating journalists.

ii. Investor Facilitation and Investor Servicing: Providing the range of services in a host country that can assist an investor in analyzing investment decisions, establishing a business, and maintaining it in good standing. Activities include information provision, “one-stop-shop” service aimed at expediting approval process, and general assistance.

iii. Investment Generation: Targeting specific sectors and companies to create investment leads. Activities may include identification of potential sectors and investors, direct mail, telephone campaigns, investor fora and seminars, and individual presentations to targeted investors.

iv. Policy Advocacy: Supporting initiatives to improve the investment climate and identifying the views of the private sector on relevant matters. Activities may include surveys of the private sector, participation in task forces, policy and legal proposals, and lobbying.Support the development of the institutional structure for the Clean Development Mechanism (CDM) and for future Nationally Appropriate Mitigation Action (NAMA) policies that may develop. Support given to these flexibility mechanisms implemented under Kyoto and to future NAMA agreements may have a positive impact on renewable, specifically solar, energy development by creating additional market opportunities

for project developers. These markets, in turn, will increase the component demand for renewable (specifically solar) industries.

d) Involvement of local banks in solar technology projects. Develop capacity building in local financing institutions, on lending to clean energy projects; develop support tools and incentives (risk guarantee programs).

e) Available Funds: Develop a database of available funds and grants, including both national and international opportunities, for different types of projects using innovative climate technologies.

2. Access to information

a) Implementation and management of a National CIC website. The website should include a presentation of the CIC: its goals, mission, and programs. The site may be used to disseminate solar reports and to publicize upcoming and past events in the solar field, as well as to inform and raise awareness of the value and advantages of climate technologies and the opportunities offered in the sector. Another function of the website would be to encourage interaction with companies interested in supporting the CIC and partnering with it at the national and international levels. Finally, the website could provide linkages to other CICs and to the solar value chain community, reinforcing Regional market integration.

b) Climate technologies database. Set up and maintain a database in one, comprehensive format about the different climate technologies, including, but not limited to, information on the technologies themselves, national and Regional policies and incentive measures, and other market information. The different National CICs could collaborate to provide a rich source of data


for investors, analysts, and policymakers, among others.

c) International suppliers’ database for these technologies and their components. Set up and maintain a database of local and international renewable energy companies, products, and services that can help potential investors and project developers identify suppliers for different components. Consider the inclusion of a web-based mechanism for registration of goods and services providers.

d) Quarterly publication of an e-Bulletinhighlighting market trends in the RE sector and for specific technologies. Publish an e-Bulletin with information and analysis about new trends for the different climate technologies, highlighting the market situation, and local and Regional market trends and opportunities. The bulletin will also provide statistics, data, and lessons learned from the CIC’s beneficiaries to share their knowledge and experiences in a wider scope.

e) Organization of an annual forum dedicated to innovation in climate technologies. Under the auspices of the CIC, national and international stakeholders may gather every year to share achievements, trends, and developments in the sector worldwide and, more specifically, in the MENA Region.

f) Organization of a number of roundtables (to be defined) every year. The objective of the RTs will be to bring together major stakeholders to discuss topics of interest for the RE sector and for specific technologies, such as, for example, global good practices in policy and regulation, climate change risks and opportunities, national and Regional solar resource potential, and energy security and innovation. The topics for discussion at each RT will be agreed beforehand with key stakeholders.

g) Annual award for innovation in climate technologies. Award developers and companies who have integrated climate-friendly technologies successfully in their projects.

3. Consulting/Training

a) Business and financial planning support. Provide basic advice and support to interested individuals and companies on the business and financial information required to set up and grow a company in the climate technologies sector. A whole set of services will be offered to eligible persons/companies. These services including:

i. Expert advice on and about the clean technology sector

ii. Customized assistance on the development of a business plan

iii. Financial planning services to ensure that their business plans are ready for investment and support in applying for available subsidies or grants

iv. Advice on how to make the transition from an informal business to a formal business (or from another industry to the solar industry)

v. Assistance in commercialization of climate technologies both domestic and international (export policy)

vi. Assistance to business to be able to use ICT (information and communication technology)

vii. Other business support solutions covering such topics as regulation employment matters and customer service issues.

b) Industry-specific training courses. Provide industry-specific training courses to satisfy future needs for skilled workforce, specifically in technical and specialized knowledge. The exact offering of training courses would have to be developed and updated frequently according to industry and sector needs. For the solar industry, training course topics could be:

i. Developing basic and applied knowledge on processes and technologies related to the use of solar radiation

ii. Sputtering and encapsulation processes used in TF Modules industry

iii. Instrumentation and control iv. Coating process and welding required by

the Receiver industryv. Galvanization structure and corrosion

protection industriesvi. Training course to raise awareness of

climate change issues

vii. Master in carbon offsetting, Clean Development Mechanism (CDM), and carbon markets.

Example 1: Course on hot-dip galvanizing and corrosion protection. Table 6.1 is an example of the course’s program features and requirements.

Table 6.1 | Course on Hot-Dip Galvanizing and Corrosion Protection

Course Course on Hot-dip Galvanizing and Corrosion Protection

Venue Climate Innovation Center (CIC), Morocco

Training Galvanizing process theory and practice. Most common inspections.

Duration 1000 hours

Cost US$1000

Prerequisites for admission

Possession of Secondary Education Certificate

Program Galvanizing process:• Surface preparation• Galvanizing• Time to first maintenance• Other corrosion protection systemsInternational galvanizing standardsTypes of inspectionRepairsTests




Example 2: Master’s Degreein Carbon Offsetting Clean Development Mechanism, and Carbon Markets. The following is an example of the Master’s program features and requirements:

Table 6.2 | Master’s in Carbon Offsetting Clean Development Mechanism and Carbon Markets

Master’s ProgramMaster’s Degree in Carbon Offsetting Clean Development Mechanism and Carbon Markets


Training Implementation of training programs related to carbon-offsetting projects and the carbon market

Duration 600 hours

Cost US$2000


Possession of a university Bachelor’s degree

Program Improving the CDM process in the country and including solar projects in the portfolio

The following actions have been identified as potential means to improvement of the CDM in the country:• Improvement of legislation on standards and norms in the mitigation areas.• Establishing incentives for the support of the energy saving projects and

renewable sources of energy, particularly for solar projects.• Financial encouragement of mitigation measures.• New assessment of technological needs and analysis of the mitigation

potential in the country.• Implementation of training programs related to CDM projects.Exploring opportunities in the “new mechanisms” framework, including:• Unilateral NAMAs, domestically funded and unilaterally implemented.• Supported NAMAs, implemented with support from developed countries

(financial, technological, capacity building).• Credited NAMAs that would generate credits for the reductions achieved

(This option is in a very preliminary stage of discussion and has not been formally agreed by all the parties.)


Note: * NAMA = nationally appropriate mitigation action.

Example 3: Course on sputtering laser techniques and encapsulation. The following is an example of the course’s program features and requirements:

Table 6.3 | Course on Sputtering Laser Techniques and Encapsulation

Course Course on Sputtering Laser Techniques and Encapsulation


Training Improving the sputtering laser techniques and encapsulation process

Duration 3 weeks

Cost Borne by TF Modules industry promoters


Possession of Secondary Education Certificate

Program Improving the sputtering and encapsulation process and laser techniques in the country

This course is intended to make the worker more familiar with daily operations, proper routine maintenance procedures, emergency repairs, and basic calibration of the instrumentation.

Course objectives:• Basic familiarity with sputtering and encapsulated processes• Basic understanding of calibration techniques• In-depth understanding of mechanical fluid flow systems• Ability to complete basic mechanical, electrical, and computer maintenance• Ability to conduct basic troubleshooting and repairs


c) Training Seminars: A number of formative seminars to be organized every year with different target groups in mind. These groups would include but would not be limited to:

i. University students interested in developing careers in climate technologies

ii. Entrepreneurs interested in starting or redirecting their companies to use climate technologies or to integrate climate technologies in their current manufacturing processes

iii. Unemployed people who are looking to recycle their skills in a different industry

iv. Investors and local bankersv. General public.

The seminars will cover a wide range of commercial and technical aspects including

but not limited to general management project development and marketing.

d) Develop a jobs listing board. Develop and maintain an active jobs listing board that lists abilities and competencies for employment in climate technologies. Participants would include among others people who have benefitted from the training courses offered as well as students looking for internships in the sector.

e) Annual scholarship awards. Under this framework, the CIC would award a number of scholarships to embed promising research students from top universities in climate technology industries and encourage applied research on related subjects. National CICs could collaborate to encourage student exchange among different countries in the Region as well.



4. Networking facilitation

The following activities can be envisioned with the objective of facilitating the framework for expanded interaction and coordination among different agents in the sector:

a) Mentoring program. Establish an extensive mentoring network for entrepreneurs, technical advisors, and locally based professional services companies (accounting, legal, and marketing). The objective of the mentoring program will be to ensure that each company sustained by the CIC’s grants will have access not only to the funds but also to a tutor and additional support during the entire financing cycle. The tutors will be rewarded by the CIC for their involvement on the program.

b) Partnerships between the CIC and Universities. The CIC will act as the focal point for synergies and university-industry partnerships in the climate technologies sector. Select from among local universities and institutions appropriate partnerships to organize solar-oriented courses and workshops on climate technologies and entrepreneurship.

c) Relationships between government and private sector. Set up a database of companies interested in renewable energy and promote the dialogue between the government and the private sector to develop relationships and reinforce the political/legislative/fiscal framework around innovation for green growth using climate technologies. This database is essential to make sure the government is on board and informed of the newest developments in the sector because the government’s support in the development of new technologies is key.

d) Diaspora/investors network. Facilitate the creation of a diaspora/investors network interested in the climate technologies sector. This network will provide secure counterpart funds for companies supported by the CIC and provide a list of possible tutors from the mentoring program for early-stage companies.

e) Support to professional institutions. Promote the development of climate technologies industries in several socioeconomic sectors. The CIC will provide financial support to strengthen the capacity of the existing professional institutions already in the climate technologies sector or to create new institutions.

f) Networking lunch. To facilitate partnership opportunities, organize a monthly networking lunch open to all companies and organizations interested in learning more about the sector.

g) International networking. To benefit national companies, build the relationship with Regional and international organizations and promote initiatives for the global development of the climate technologies. The National CIC, together with the Regional CIC and other international centers, also could encourage exchanges of good South-South practices to facilitate the access of national companies into foreign markets.

The spectrum of actions described above in financing, access to information, consulting, training, and networking facilitation are depicted in Table 6.4 and Table 6.7.

Tab

le 6

.4 |

Fin

an

cin

g S

pe

cif

ic A

cti

on

s to

be

Co

nd

ucte

d b

y C

IC

Sh

ort

-Te

rm (

< 1

ye

ar)

Mid

-Te

rm (

1–3

ye

ars

)L

on

g-T

erm

(>

3 y

ears

)

FIN

AN

CIN

GC

limate

Tech

no

log

y s

ub

sid

ies

to r

ese

arc

hers

to

su

pp

ort

th

e d

evelo

pm

en

t an

d a

dap

tati

on

to

lo

cal clim

ate

tech

no

log

ies

mark

et

Pro

vid

e b

asi

c a

dvic

e o

n s

ub

sid

ies

(In

vest

men

t F

un

d F

acili

tati

on

) to

th

e G

overn

men

t fo

r th

e e

xis

tin

g s

teel in

du

stri

es

to

ad

ap

t th

eir

pro

du

cti

on

to

so

lar

pro

ject

req

uir

em

en

ts (

galv

an

izin

g p

rocess

)

Pro

vid

e b

asi

c a

dvic

e o

n s

ub

sid

ies

(In

vest

men

t F

un

d F

acili

tati

on

) to

th

e

Go

vern

men

t to

exis

tin

g p

ress

ure

an

d v

ess

el ta

nks

ind

ust

ries

to a

dap

t th

eir

p

rod

ucti

on

to

pu

mp

s, h

eat

exch

an

ger,

an

d c

on

den

ser

req

uir

em

en

ts f

or

sola

r p

roje

cts

Rais

e f

un

ds

(In

vest

men

t F

un

d F

acili

tati

on

) to

tra

in w

ork

ers

fo

r n

ew

so

lar

ind

ust

ries

an

d p

rocess

es

Su

pp

ort

th

e c

reati

on

of

an

In

vest

men

t P

rom

oti

on

Ag

en

cy if

no

t alr

ead

y a

vaila

ble

in

th

e c

ou

ntr

y

Pro

vid

e b

asi

c a

dvic

e o

n f

iscal an

d f

inan

cia

l in

cen

tives

to a

ttra

ct

FD

I (f

ore

ign

dir

ect

Invest

men

t)

Carr

y o

ut

surv

eys

in t

he p

rivate

secto

r (s

uch

as

steel g

lass

pre

ssu

re v

ess

el an

d

tan

ks

an

d n

ew

so

lar

ind

ust

ries)

to

get

feed

back a

bo

ut

the p

rog

ress

mad

e t

han

ks

to

the s

ub

ven

tio

ns

of

the G

overn

men

t

Su

pp

ort

th

e In

stit

uti

on

al S

tru

ctu

re o

f th

e C

lean

Develo

pm

en

t M

ech

an

ism

(C

DM

)

Su

pp

ort

th

e In

stit

uti

on

al S

tru

ctu

re f

or

the C

lean

Develo

pm

en

t M

ech

an

ism

(C

DM

) an

d f

utu

re C

O2 o

ffse

ttin

g a

nd

nati

on

al ap

pro

pri

ate

mit

igati

on

acti

on

(N

AM

As)

NA

MA

mech

an

ism

s th

at

may d

evelo

p

Imp

lem

en

t N

AM

As

ag

reem

en

ts w

ith

o

ther

co

un

trie

sS

up

po

rt N

AM

As

ag

reem

en

ts w

ith

oth

er

co

un

trie

s

Facili

tate

th

e in

vo

lvem

en

t o

f lo

cal b

an

ks

in c

limate

tech

no

log

ies

pro

jects

Develo

p a

nd

main

tain

a d

ata

base

of

availa

ble

fu

nd

s

So

urc

e: S

TA

/Accen

ture

.



Tab

le 6

.5 |

Acce

ss t

o I

nfo

rmati

on

Acti

on

s to

be

Co

nd

ucte

d b

y C

IC

Sh

ort

-Te

rm (

< 1

ye

ar)

Mid

-Te

rm (

1–3

ye

ars

)L

on

g-T

erm

(>

3 y

ears

)

AC

CE

SS

TO

IN

FO

RM

AT

ION

Imp

lem

en

tati

on

an

d m

an

ag

em

en

t o

f a N

ati

on

al C

IC w

eb

site

to

dis

sem

inate

in

form

ati

on

an

d e

ven

ts a

nd

in

form

th

e

pu

blic

ab

ou

t clim

ate

tech

no

log

ies Inte

ract

wit

h c

om

pan

ies

an

d p

ote

nti

al p

art

ners

in

tere

sted

in

su

pp

ort

ing

th

e C

IC

Develo

p t

he c

limate

tech

no

log

ies

data

base

Develo

p t

he in

tern

ati

on

al su

pp

lier

data

base

Qu

art

erl

y p

ub

licati

on

of

an

e-B

ulle

tin

wit

h t

he c

limate

tech

no

log

ies

mark

et

tren

ds

in r

en

ew

ab

le e

nerg

ies

secto

r

Org

an

ize a

nn

ual fo

rum

ded

icate

d t

o t

he in

no

vati

on

in

clim

ate

tech

no

log

ies

to

share

ach

ievem

en

ts t

ren

ds

an

d d

evelo

pm

en

ts in

th

e s

ecto

r

Org

an

ize a

nu

mb

er

of

rou

nd

tab

les

every

year

to b

rin

g t

og

eth

er

majo

r so

lar

en

erg

y

stakeh

old

ers

to

pre

sen

t n

ati

on

al an

d R

eg

ion

al so

lar

reso

urc

e p

ote

nti

al

A

nn

ual aw

ard

fo

r in

no

vati

on

in

clim

ate

tech

no

log

ies

So

urc

e: S

TA

/Accen

ture

.

Tab

le 6

.6 |

Tra

inin

g: S

pe

cif

ic A

cti

on

s to

be

Co

nd

ucte

d b

y C

IC

Sh

ort

-Te

rm (

< 1

ye

ar)

Mid

-Te

rm (

1–3

ye

ars

)L

on

g-T

erm

(>

3 y

ears

)

CO

NS

UL

TIN

G/

TR

AIN

ING

Pro

vid

e b

asi

c a

dvic

e a

nd

su

pp

ort

to

in

tere

sted

in

div

idu

als

an

d c

om

pan

ies

on

th

e b

usi

ness

an

d f

inan

cia

l in

form

ati

on

req

uir

ed

to

set

up

an

d g

row

a c

om

pan

y in

th

e c

limate

tech

no

log

ies

secto

r

Ad

vic

e o

n h

ow

to

make t

he t

ran

siti

on

fro

m a

no

ther

ind

ust

ry t

o a

so

lar

ind

ust

ry

Ass

ista

nce o

n t

he d

evelo

pm

en

t o

f a b

usi

ness

pla

n f

or

the d

evelo

pm

en

t

of

a s

ola

r in

du

stry

Fin

an

cia

l p

lan

nin

g s

erv

ices

an

d s

up

po

rt in

ap

ply

ing

fo

r availa

ble

su

bsi

die

s o

r g

ran

ts

Tra

inin

g c

ou

rse t

o d

evelo

p b

asi

c a

nd

ap

plie

d k

no

wle

dg

e o

n p

rocess

es

an

d t

ech

no

log

ies

rela

ted

wit

h t

o u

se o

f so

lar

rad

iati

on

Tra

inin

g c

ou

rse t

o in

cre

ase

nati

on

al co

mp

eti

tive e

dg

e in

sp

utt

eri

ng

an

d

en

cap

sula

tio

n p

rocess

es

(req

uir

ed

by T

F M

od

ule

s in

du

stry

)

Tra

inin

g c

ou

rse in

in

stru

men

tati

on

an

d c

on

tro

l

Tra

inin

g c

ou

rse t

o in

cre

ase

nati

on

al co

mp

eti

tive e

dg

e in

co

ati

ng

pro

cess

an

d w

eld

ing

(re

qu

ired

by R

eceiv

ers

in

du

stry

)

Tra

inin

g c

ou

rse t

o in

cre

ase

nati

on

al co

mp

eti

tive e

dg

e in

galv

an

izati

on

st

ructu

re a

nd

co

rro

sio

n p

rote

cti

on

(re

qu

ired

by M

irro

rs a

nd

str

uctu

res

ind

ust

ries)

Mast

er

of

Cle

an

Develo

pm

en

t M

ech

an

ism

an

d C

arb

on

Tra

din

g

Tra

inin

g s

em

inars

fo

r en

trep

ren

eu

rs (

an

d s

takeh

old

ers

) in

tere

sted

in

sta

rtin

g o

r re

dir

ecti

ng

a c

om

pan

y u

sin

g

clim

ate

tech

no

log

ies

Jo

b lis

tin

g b

oard

fo

r em

plo

ym

en

t in

clim

ate

tech

no

log

ies

An

nu

al sc

ho

lars

hip

aw

ard

s.

So

urc

e: S

TA

/Accen

ture

.



Tab

le 6

.7 |

Ne

two

rkin

g F

acilit

ati

on

Acti

on

s to

be

Co

nd

ucte

d b

y C

IC

S

ho

rt-T

erm

(<

1 y

ear)

Mid

-Te

rm (

1–3

ye

ars

)L

on

g-T

erm

(>

3 y

ears

)

NE

TW

OR

KIN

G

FA

CIL

ITA

TIO

NM

en

tori

ng

pro

gra

m t

o g

ive s

up

po

rt d

uri

ng

th

e e

nti

re f

inan

cin

g c

ycle

Sele

ct

the lo

cal u

niv

ers

itie

s an

d in

stit

uti

on

s to

est

ab

lish

p

art

ners

hip

s

Org

an

ize c

ou

rses

an

d w

ork

sho

ps

ab

ou

t re

new

ab

le e

nerg

y

Cre

ate

a d

ata

base

of

co

mp

an

ies

inte

rest

ed

in

ren

ew

ab

le e

nerg

yP

rom

ote

an

nu

al m

eeti

ng

betw

een

CIC

/Go

vern

men

t an

d p

rivate

secto

r to

rein

forc

e

the p

olit

ical/

leg

isla

tive/f

iscal fr

am

ew

ork

Cre

ate

a d

iasp

ora

/in

vest

or

netw

ork

to

in

vest

in

so

lar

ind

ust

ries

Pro

vid

e a

lis

t o

f p

oss

ible

tu

tors

fro

m a

men

tori

ng

pro

gra

m f

or

earl

y s

tag

e

co

mp

an

ies

Make s

ug

gest

ion

s to

str

en

gth

en

th

e c

ap

acit

y o

f th

e e

xis

tin

g p

rofe

ssio

nal

inst

itu

tio

ns

Ad

vic

e a

nd

su

pp

ort

to

cre

ate

new

in

stit

uti

on

s to

pro

mo

te t

he d

evelo

pm

en

t o

f clim

ate

tech

no

log

ies

ind

ust

ries

in s

evera

l so

cio

eco

no

mic

secto

rs

Netw

ork

ing

lu

nch

aim

ed

at

facili

tati

ng

part

ners

hip

o

pp

ort

un

itie

s

Bu

ild t

he r

ela

tio

nsh

ip b

etw

een

R

eg

ion

al o

rgan

izati

on

s an

d

pro

mo

te in

itia

tives

to f

acili

tate

th

e e

ntr

y o

f n

ati

on

al co

mp

an

ies

into

fo

reig

n m

ark

ets

Bu

ild t

he r

ela

tio

nsh

ip b

etw

een

in

tern

ati

on

al o

rgan

izati

on

s an

d p

rom

ote

in

itia

tives

to

facili

tate

th

e e

ntr

y o

f n

ati

on

al co

mp

an

ies

into

fo

reig

n m

ark

ets

So

urc

e: S

TA

/Accen

ture

.

Annexes | 145

Annexes

Annex 1 | Solar Technologies Value Chain Analysis

CONCENTRATED SOLAR POWER (CSP) TECHNOLOGY

Strictly speaking, “Concentrated Solar Power” (CSP) also could apply to Low- and High-Concentration Photovoltaic Systems. However, CSP more commonly describes technologies that use the thermal energy from solar radiation to generate electricity. These systems can be divided in three main subsystems:

• A solar field (SF), in which Mirrors (or, in some new developments, lenses) are used to concentrate (focus) the sunlight energy and convert it to high-temperature thermal energy (internal energy). This heat is transferred using a heat transfer fluid (HTF), which can be synthetic oil (the most widely used) molten salt, steam air, or other fluids. The point focus systems enable higher concentration ratios and therefore higher temperatures and efficiencies, although they require highly precise two-axis tracking systems. Linear focus systems are less demanding but less efficient as well. Either

way, as for any concentrating solar technology, only the beam (direct) component of the solar irradiation is used because the diffuse portion does not follow the same optical path and will not reach the focus.

• A power block (PB), in which the heat contained in the HTF generates electricity. The most common approach is to produce high pressure steam that then is channeled through a conventional steam turbine and generator in a Rankine cycle. However, the Dish/Engine systems use a Stirling engine.

• A thermal energy storage (TES) system, in which the excess energy from the SF is stored for further use in the PB. The state of the art in this field is to use molten salts stored in two tanks (one “cold” and one “hot”) and a reversible heat exchanger. Additional approaches include steam storage, direct use of molten salt as HTF, and experimental prototypes.

To sum up, actual CSP plants utilize four alternative technological approaches: Parabolic Trough Systems Linear Fresnel Systems, Power Tower Systems, and Dish/Engine Systems.

PARABOLIC TROUGH SYSTEMS

The Parabolic Trough today is considered a commercially mature technology, with thousands of megawatts already installed in commercial power plants, mainly in the US and Spain. In 2012 Parabolic Trough comprised approximately 95 percent of total CSP installed capacity (Figure A1.12).

Table A1.1 | CSP Solar Fields

Point Focus Linear Focus

Single focus Power Tower systems*

Multiple focus

Dish/Engine systems

Parabolic Trough systemsLinear Fresnel systems

Note: * Multitower solar fields are at a demonstration stage (a 5 MWe plant started operation in 2009).


Parabolic Trough (as well as Linear Fresnel) is a 2D concentrating system in which the incoming direct solar radiation is concentrated on a focal line by one-axis-tracking, parabola-shaped Mirrors. They are able to concentrate the solar radiation flux by 30–80 times, heating the HTF up to 393ºC. (A different approach using molten salts as HTF can reach up to 530ºC but is not commercially proven yet.) The typical unit size of these plants ranges from 30 MWe–80 MWe (megawatt-electric). Thus, they are well suited for central generation with a Rankine steam turbine/generator cycle for dispatchable markets.

A Parabolic Trough solar field comprises a variable number of identical “solar loops” connected in parallel. Each loop can raise the temperature of a certain amount of HTF from the “cold” to the “high” operation temperature (typically from 300ºC to 400ºC). The loops contain from 4 to 8 independently moving subunits called “collectors.” The main components of a Parabolic Trough collector are:

• HTF Thermal Oil: A synthetic oil is used as heat transfer fluid in all commercial Parabolic

Trough CSP plants actually in operation. The most commonly used oil is a eutectic mixture of biphenyl and diphenyl oxide. Additional fluids (such as silicone-based) are under development and testing.

• Mirror: It reflects the direct solar radiation incident on it and concentrates it onto the Receiver placed in the focal line of the Parabolic Trough collector. The Mirrors are made with a thin silver or aluminum reflective film deposited on a low-iron, highly transparent glass support to give them the necessary stiffness and parabolic shape.

• Receiver or absorber tube: It consists of two concentric tubes. The inner tube is made of stainless steel with a high-absorptivity, low-emissivity coating, and channels the flow of the HTF. The outer tube is made of low-iron, highly transparent glass with an antireflective coating. A vacuum is created in the annular space. This configuration reduces heat losses, thus increasing overall collector performance.

• Structure & Tracker: The solar tracking system changes the position of the collector following the apparent position of the sun during the day,

Figure A1.1 | Parabolic Trough Collectors Installed at Plataforma Solar de Almería (Spain)

Source: Photo courtesy of PSA-CIEMAT

Annexes | 147

thus enabling concentrating the solar radiation onto the Receiver. The S&T system consists of a hydraulic drive unit that rotates the collector around its axis, and a local control that governs the drive unit. The structure, in turn, must keep the shape and relative position of the elements, transmitting the driving force from the tracker and avoiding deformations caused by their own weight or other external forces such as the wind.

The power block of a Parabolic Trough CSP plant resembles a conventional Rankine-cycle power plant. The main difference is that, instead of combustion or a nuclear process, the heat used to generate superheated steam is collected in the solar field and transferred using a HTF. The main components of the power block are:

• Condenser: Although it also is a heat exchanger, the condenser’s design is more complex. The condenser affects the overall performance of the plant more than the other heat exchangers in the plant because it modifies the discharge pressure of the turbine. For this reason, the

turbine manufacturer could try to limit the possible suppliers of condensers to give a performance guarantee, or even include the condenser in its own scope of supply.

• Electrical generator: Within the generator, the rotary movement from the turbine is transmitted to a series of coils inside a magnetic field, thus producing electricity due to electromagnetic induction. The design and manufacturing of a generator requires special materials and a highly specialized workforce, available to only a limited number of companies around the world. To manufacture generators, carbon steel, stainless steel, and special alloys are required, as well as copper and aluminum in smaller amounts.

• Heat exchanger: Two different sets of heat exchangers are required in the PB. First, HTF-water heat exchangers (usually referred to as SGS, or steam generation system) are required to generate the high-pressure and -temperature steam that will drive the turbine. Second, water-water heat exchangers recover the heat from turbine bleeds to preheat the condensate or feed water, thus increasing the Rankine cycle efficiency. If a TES system is included, a reversible, molten salt-HTF heat exchanger also is necessary. To manufacture exchangers, carbon steel and stainless steel are required, as well as copper and aluminum in smaller amounts.

• HTF Pumps: The materials commonly used in joints for the range of temperatures and pressures required for this application are not compatible with the chemical composition of the HTF oil. Thus, specific designs and materials, derived mostly from the petrochemical industry, are necessary.

• Pumps: Several sets of pumps are required within a Parabolic Trough CSP plant: feed water pumps; cooling water pumps; condensate pumps; and other minor pumps for dosing, sewage, raw water, and water treatment purposes. If a TES system is included, molten salt pumps also are necessary. Carbon steel and stainless steel, as well as copper, aluminum, and other materials in smaller amounts, are required to manufacture pumps.

Figure A1.2 | Schematics of a Parabolic Trough Collector

0302

01

01 02 03

Sun rays

Solar Field Piping Ref lector Absorber tube

Source: STA.


• Steam turbine: The expansion of the steam inside the turbine will cause the motion of the rotor blades, and this movement will be transmitted to the Electrical generator to produce electricity. The design and manufacturing of a turbine requires special materials and a highly specialized workforce, available to only a limited number of companies around the world. Carbon steel, stainless steel, and special alloys are required for to manufacture steam turbines.

• Storage tanks: A large number of tanks and pressure vessels are required in a Parabolic Trough CSP plant. They include raw and treated water storage tanks; deaerator; steam drum; and condensate tank for the Rankine cycle; HTF storage, expansion, andullage vessels, and other minor tanks for sewage and water treatment intermediate steps. If a TES system is included,

molten salt “hot” and “cold” storage tanks also are necessary. Carbon steel and stainless steel are required to manufacture tanks.

The state of the art in the field of thermal energy storage (TES) is to use molten salts. The most common mixture used for this purpose is referred to as “Solar salt” and is composed of sodium nitrate (NaNO3) and potassium nitrate (KNO3). As described above, this salt is stored in two tanks (one “cold” and one “hot”), and a reversible heat exchanger is used to move energy from the solar field and to the power block.

Other elements also are necessary such as piping insulation and either flexible piping or rotating joints to connect adjacent collectors as well as electric switchgear and water treatment equipment. However, these elements either are not specific to

Figure A1.3 | General Schematics of a Parabolic Trough CSP Plant with Thermal Energy Storage

Generator

Steam turbine

Hot salt storage

Condenser

Cooling tower

Substation

Salt storage heat exchanger

Cold salt storage

Steam generator

Solar field

02

03

04

05

06

07

08

09

10

01

0809 07

04

05 06

10

0203

01

Source: STA.

Annexes | 149

CSP technology; or, in the case of flexible piping or rotating joints,these elements comprise a minor fraction of the investment costs and are a highly specialized component and thus have been omitted from this report.

LINEAR FRESNEL SYSTEM

Linear Fresnel Systems are conceptually simple. They use inexpensive compact optics (flat Mirrors) that can produce saturated steam at 150ºC–360ºC with less than 1 ha/MW land use. As seen in Figure A1.12, Linear Fresnel systems comprise 2 percent of total CSP installed capacity, although this number is expected to increase in the near future because its share in the pipeline is higher.

Linear Fresnel Systems use flat or slightly curved Mirrors to direct sunlight to a fixed absorber tube positioned above the Mirrors, sometimes with a secondary reflector to improve efficiency. With flat

Mirrors that are close to the ground, Linear Fresnel collectors are less expensive to produce and less vulnerable to wind damage. On the other hand, efficiency is lower due to a lower concentration ratio, and the intra-day energy outflow variation is higher than in Parabolic Trough.

A Linear Fresnel solar field comprises a variable number of identical “solar loops” connected in parallel. Each loop can raise the enthalpy of a certain amount of HTF. Most[1] commercial applications use water as HTF in a Direct Steam Generation (DSG) configuration and, instead of rising temperature, they increase the vapor fraction of the fluid. The main components of a Linear Fresnel loop are:

• Mirror: Reflects the direct solar radiation incident on it and concentrates it onto the Receiver placed in the focal line of the Linear Fresnel loop. The Mirrors are made with a thin silver or aluminum reflective film deposited on a low-iron highly

Figure A1.4 | Schematics of a Linear Fresnel Collector

Absorber tubePrimary fresnel ref lectorSecond stage ref lector 02 0301

Sun rays

02

03 01

Source: STA.


transparent glass support to give them the necessary stiffness. They are similar to the Mirrors for Parabolic Trough differing in size and shape. Alternatively aluminum foils are being tested by some leading companies (3 M).

• Receiver or absorber tube: Made of stainless steel with a high-absorptivity and low-emissivity coating; it channels the flow of the HTF. The tube is placed inside a secondary reflector with a flat cover made of low-iron highly transparent glass with an antireflective coating. This configuration reduces heat losses and increases the half-acceptance angle81 thus increasing overall performance.

• Structure & Tracker: Solar tracking system changes the position of the Mirrors following the apparent position of the sun during the day thus enabling concentrating the solar radiation onto the Receiver. S&T consists of several drives that rotate the Mirrors and a local control that governs the drive unit. The structure, in turn, must keep the shape and relative position of the elements transmitting the driving force from the tracker and avoiding deformations caused by their own weight or other external forces such as the wind.

The power block of a Linear Fresnel CSP plant resembles a conventional Rankine-cycle power plant. The main difference is that, instead of a combustion or nuclear process, the heat used to generate superheated steam is collected in the solar field and transferred using a heat transfer fluid. The main components of the power block are:



• Heat exchanger: Because most commercial Linear Fresnel applications use water as HTF in a Direct Steam Generation (DSG) configuration the need for heat exchangers is largely reduced

when compared to a Parabolic Trough plant. The Solar Field will act as a Steam Generation System (SGS) generating the high-pressure and temperature steam that will drive the turbine. On the other hand water-water heat exchangers are still necessary to recover the heat from turbine bleeds to preheat the condensate or feed water, thus increasing the Rankine cycle efficiency. Carbon steel and stainless steel are required for their manufacture as well as copper and aluminum in smaller amounts.

• Pumps: Several sets of pumps are required within a Linear Fresnel CSP plant: feed water pumps; cooling water pumps; condensate pumps; and other minor pumps for dosing, sewage, raw water, and water treatment purposes. Carbon steel and stainless steel are required for their manufacture as well as copper, aluminum, and other materials in smaller amounts.


• Storage tanks: A large number of tanks and pressure vessels are required in a Linear Fresnel CSP plant. These vessels include raw and treated water storage tanks; the deaerator; the steam drum; and condensate tank for the Rankine cycle and other minor tanks for sewage and water treatment intermediate steps. Depending on the DSG configuration additional steam drums might be required for the solar field. Carbon steel and stainless steel are required for their manufacture.

The state of the art in the field of thermal energy storage (TES) is to use molten salts. However, the use of water (phase change) in Linear Fresnel plants makes difficult to use actual molten salts. Short-term energy storage using steam is the usual approach in these plants, if any[1].

Other elements also are necessary, such as piping, insulation, electric switchgear, and water treatment

81 The half-acceptance angle is the angle of the maximum cone of light that will reflect onto the focus; it is used to characterize non-ideal optic systems.

Annexes | 151

equipment. However these elements either are not specific to CSP technology or pose a minor fraction of the investment costs and thus have been omitted from this report.

POWER TOWER SYSTEM

The Power Tower systems, also known as Central Receiver systems, have more complex optics than the systems showed before as it is a 3-D concentration concept. A single solar Receiver is mounted on top of a tower and sunlight is concentrated by means of a large paraboloid that is discretized in a field of heliostats. Multitower systems also are under development. As seen in Figure A1.12, Power Tower systems currently represent 3 percent of total CSP installed capacity although this number is expected to increase in the near future as its share in the pipeline is higher than that.

Concentration factors for this technology range between 200 and 1000. Plant unit sizes could range between 10 MW and 200 MW and therefore

are suitable for dispatchable markets. Integration in advanced thermodynamic cycles also is feasible.

Although less mature than the Parabolic Trough technology, after a proof-of-concept stage, the Power Tower is taking its first steps into the market. Three commercial plants are in operation in southern Spain: PS10 and PS20 (11 MWe and 20 MWe, using saturated steam as heat transfer fluid) and Gemasolar (17 MWe, using molten salts as HTF). Sierra SunTower, a 5-MWe plant using a multitower solar field,started operation in 2009 in Lancaster, California (US).

To this day, more than 10 different experimental Power Tower plants have been tested worldwide, generally small demonstration systems between 0.5 MWe and 10 MWe, most of them operated in the 1980s.

A wide variety of heat transfer fluids including saturated steam, superheated steam, molten salts, atmospheric air, or pressurized air can be used. Temperatures vary between 200ºC and 1000ºC.

Figure A1.5 | Functional Scheme of a Power Tower System using Molten Salt as HTF with TES

Generator

Steam turbine

Hot salt storage

Condenser

Cooling tower

Substation

Receiver

Cold salt storage

Steam generator

Solar field

02

02

03

03

04

04

05

05

06

06

07

07

08

08

09

09

10

10

01

01

Source: STA.


Falling particle Receiver and beam-down Receiver are other promising technologies but farther from the market.

A Power Tower solar field comprises a variable number of identical heliostats that reflect the sunlight toward the Receiver. The heat transfer fluid temperature will reach 250ºC to 700ºC depending on whether the HTF used is air, steam, or molten salt. The main components of a Power Tower solar field are:

• Mirror: Reflects the direct solar radiation incident on it and concentrates it onto the Receiver. The Mirrors sometimes are referred to as “facets.” The Mirrors are made with a thin silver or aluminum reflective film deposited on a low-iron, highly transparent glass support to give them the necessary stiffness. They are almost identical to the Mirrors for Parabolic Trough, differing only in size and shape. Although small heliostats can be made of flat glass,for larger sizes,a slight curvature is necessary.82

• Receiver83: Collects the radiation reflected by the heliostats and transfers it to the HTF in the form of heat. The receiver is the real core of a Power Tower system and the most technically complex component because it has to absorb the incident radiation under very demanding concentrated solar flux conditions and with the minimum heat loss. Receivers can be classified either by their configuration as flat or cavity systems; or by their technology as tube, volumetric,panel/film,or direct absorption systems. Super alloys or ceramics are the usual materials for Receivers.

• Structure & Tracker: S&T solar tracking system changes the position of the Mirrors on the heliostats following the apparent position of the sun during the day and enabling concentrating the solar radiation onto the Receiver. Each heliostat performs a two-axis tracking with a drive that rotates the Mirrors and a local control that governs the drive unit. The structure, in turn,

must keep the shape and relative position of the elements transmitting the driving force from the tracker and avoiding deformations caused by their own weight or other external forces such as the wind.

The power block of a Power Tower CSP plant resembles that of a Rankine-cycle power plant. The main difference is that, instead of a combustion or nuclear process, the heat used to generate superheated steam is collected in the solar field and transferred using a heat transfer fluid (HTF). The main components of the power block are:



• Heat exchanger: Two different sets of heat exchangers are required in the power block. First HTF-water heat exchangers (usually referred to as SGS, or Steam Generation System) are required to generate the high-pressure and temperature steam that will drive the turbine. This set will not be necessary if steam is used as HTF. Second

82 Due to non-ideal optics because the sun is not a point focus.83 The Receiver has been included in the solar field to keep an analogous structure for all CSP technologies, although in Power Tower systems, the Receiver is physically within the power block.

Figure A1.6 | Main Components of a Heliostat

Azimuth

Facets

Structure

Torque tube

Drive mechanism

Pedestal tube

Local control

Elevation


Annexes | 153

water-water heat exchangers are used to recover the heat from turbine bleeds to preheat the condensate or feed water, thus increasing the Rankine cycle efficiency. If a molten salt thermal energy storage (TES) system is included, a reversible molten salt-HTF heat exchanger also is necessary—unless the very molten salt is used as HTF. Carbon steel and stainless steel are required for their manufacture as well as copper and aluminum in smaller amounts.

• Pumps: They are analogous to the equipment described for Parabolic Trough plants.


• Storage tanks: They are analogous to the equipment described for Parabolic Trough plants.

The state of the art in the field of thermal energy storage (TES) is to use molten salts. The most common mixture used is Solar salt and is composed by sodium nitrate (NaNO3) and potassium nitrate (KNO3). As described above, this salt is stored in two tanks (one “cold” and one “hot”), and a reversible heat exchanger is used to move energy from the solar field and to the power block. This heat exchanger is not necessary if the molten salt is used directly as HTF.

Other elements also are necessary including piping, insulation, electric switchgear, and water treatment equipment. However, these elements either are not specific to CSP technology or pose a minor fraction of the investment costs so have been omitted from this report.

DISH/ENGINE SYSTEM

These systems are small modular units with autonomous generation of electricity. In other words, each Dish/Engine set has its own solar field and power block, except for the power regulation switchgear.

They are parabolic 3-D concentrators (thus requiring two-axes tracking) with high concentration

ratios (600–4000) and a Stirling engine or Brayton mini-turbine located at the focal point using hydrogen, helium, or air as working fluid. Current Dish/Engine systems range from 3 kWe (Infinia) to 25 kWe (Tessera Solar). Their market niche is in both distributed/on-grid and remote/off-grid power applications.

Because the design of Dish/Engine systems is modular, they can compete with PV to serve the same applications. Typically, stand-alone PV systems are being used for rural electrification or electricity supply in remote water pumping stations. Power capacity in this kind of application ranges from a few tenths KW to several hundred kilowatts.

However, besides the higher investment costs for Dish/Engine compared to photovoltaic systems, other concerns need further technical development; such as engine reliability.

Two decades ago, Dish/Engine Stirling systems with concentration factors of more than 3000 suns and operating temperatures of 750ºC had already demonstrated their high conversion efficiency at annual efficiencies of 23 percent and 29 percent peak [2]. However, Dish/Engine systems have not yet surpassed the pilot project plant operation phase.

A Dish/Engine solar field comprises a variable number, from one to dozens, of reflective elements or “facets” in the shape of a paraboloid, or “dish. Each dish can raise the temperature of a certain amount of working fluid from the “cold” to the “high” operation temperature (up to 850ºC). The main components of a Dish/Engine solar collector are:

• Mirror: Reflects the direct solar radiation incident on it and concentrates it onto the Receiver placed in the focal point of the dish. The Mirrors can be made with a thin silver or aluminum reflective film deposited on a low-iron, highly transparent glass support to give them the necessary stiffness and parabolic shape. They are similar to the Mirrors for Parabolic Trough, differing only in size and shape.


Although small facets can be made of flat glass, a slight curvature is necessary84 for larger sizes. A different approach can use a reflective layer coating a flexible film, which is given the parabolic shape through vacuum.

• Receiver: Dish/Engine Receivers can be smaller versions of those used in Power Tower systems. However, simpler versions adaptthe heater tubes of a Stirling engine, although, for these versions, it is hard to integrate multiple cylinder engines[3]. Liquid-sodium heat-pipe solar Receivers solve this issue by vaporizing liquid sodium on the absorber surface, condensing it on the engine’s heater tubes. Thisvaporization-condensation system enables attaining more uniform temperatures on the Receiver’s surface, although complexity and costare higher as well.

• Structure & Tracker: The S&T solar tracking system changes the position of the collector to follow the apparent position of the sun during the day, thus enabling concentrating the solar radiation onto the Receiver. Each collector performs a two-axes tracking with a drive that rotates both the dish and the Receiver and a local control that governs the drive unit. The structure, in turn, must keep the shape and relative position of the elements, transmitting the driving force from the

tracker and avoiding deformations caused by their own weight or other external forces such as the wind. The high precision required—together with the weight of the set Receiver plus engine, and the necessity to prevent the “arm” holding the Receiver from blocking too much light—makes this a demanding task.

The power block of a Dish/Engine CSP collector is a compact set comprising the Receiver described above plus either a Stirling engine, or a Brayton turbine and a compressor. The main components of the power block are:

• Electrical generator: Induction generators are used on Stirling engines tied to an electric utility grid. They are off-the-shelf items and can provide single or three-phase power with high efficiency. For turbines, a different approach might be advisable. The high-speed output of the turbine can be converted to high frequency alternate current in a high-speed alternator converted to direct current by a rectifier and then converted to 50 Hz–60 Hz power by an inverter.

• Heat exchanger: No heat exchanger per se is necessary because the heat transfer takes place at the engine heater tubes.

84 Due to non-ideal optics because the sun is not a point focus.

Figure A1.7 | Main Components of a Dish/Engine System

Stirling engine

Receiver

Mirror

Structure

Local control


Annexes | 155

• Turbine or engine: The design and manufacturing of a turbine and compressor for a Brayton cycle requires special materials and alloys and a highly specialized workforce available to only a limited amount of companies around the world. On the other hand, the small size of the equipment required increases the range of possible manufacturers. Stirling engines are less demanding. The main issue expected (the high precision required in the piston fabrication) is probably solvable if the country has motor vehicle industries. Carbon steel, stainless steel, and special alloys are required for its manufacture.

Dish/Engine systems have not been conceived with thermal energy storage as a guiding principle although experimental approaches using thermochemical energy storage have been made [4].

Other elements also are necessary such as wiring, insulation, and electric switchgear. However, these elements are either not specific to CSP technology or comprise a minor fraction of the investment costs so have been omitted from this report.

ANALYSIS OF THE VALUE CHAIN FOR CSP

A close examination of the value chain reveals three clusters of industries with differing technological complexity85 and investment requirements (Figure A1.9). The three are a group of industries that can be independently developed (independentindustries); a group of industries that are best developed on the backing of existing conventional industries (conventional industries); and a group of industries that, due to their complexity and

Figure A1.8 | Schematic that Shows the Operation of a Heat-pipe Solar Receiver

05

05

04

04

03

03

02

02

01

01

09

09

08

08

07

07

06

06

Sodium pool

Condensing sodium

Engine heater tubes

Heat engine

Generator

Sodium vapor

CONCENTRATED IRRADIATION

Sodium liquid in wick

Absorber surfaceEngine working fluid

Source: adapted from [3].

85 The analysis of technological complexity is based on consulting and interviews with solar experts according to their internal manufacturing processes.


required investment, are not likely to be developed based on the demand of solar applications alone (difficult-to-reach industries).

The group of industries at the top right in Figure A1.9, circled in green, are industries which, due to their technological complexity and large investment requirements, are considered difficult to reach in most parts of the world, including in the Benchmark countries that have successfully developed the solar industry. These industries include the Steam turbine, Electrical generator, HTF Thermal oil, and HTF Pumps.

The conventional group of industries (Condenser, Heat exchanger, Pumps, and Storage Tanks), circled in orange in Figure A1.9, refers to the industries that rely on existing industries and that, therefore,

are easier to develop in countries that already have conventional pressure vessel and tank and pump industries.

The independent group of industries, highlighted in blue in Figure A1.9, includes the Structure & Tracker Solar salt blending, Mirror, and Receiver industries. These industries can be developed independently, as part of solar industry development, so long as the conditions for solar industry development exist.

Overall, and particularly in the short and medium terms, MENA countries are better suited for the development of the conventional and independentgroups of industries that therefore are considered as target industries. Figure A1.11 shows the overall industry score using the normalized Attractiveness index by CSP solar industry and by country.

Figure A1.9 | Investment Requirements vs. Technology Complexity for CSP Technology Industries



Inve

stm

ent R

equi

rem

ents

Steam Turbine

HTF Thermal Oil


HTF Pumps

HighLow

Low

High

Pumps

Receiver

Storage Tanks

Heat exchanger

Structure & Tracker

Solar Salt


Condenser

Mirror


Annexes | 157

The four difficult-to-reach industries (Steam turbine Electrical generator HTF Thermal Oil, and HTF Pumps, marked in green) are the least interesting CSP industries for selected MENA countries to focus on in their current context. It would make sense for the MENA Region to focus on the independent CSP industries (marked in blue) and, according to their relative industrial base, on the conventional CSP

industries (marked in yellow). The recommendation is for MENA selected countries to focus on the conventional and independent groups of CSP industries,86 which, therefore, are considered as target industries.

Some of the barriers to enter the difficult-to-reachgroup of industries include:

Figure A1.10 | CSP Industry Development Opportunities (Normalized Attractiveness Index) in MENA Countries*

0.1

0.2

Attr

activ

enes

s in

dex

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0 AverageMENA

Algeria

Egypt

Jordan

Morocco

Tunisia

Averagebenchmark

CondenserElectric

al generator

Heat exchanger

HTF PumpsHTF Th

ermal O

il

Mirror

Pumps

ReceiverSolar s

altSteam tu

rbineStorage ta

nksStru

cture & Tracker


Note: * The range covered by Benchmark countries is shaded.

Table A1.2 | Main Entry Barriers for the Difficult-to-Reach CSP Industries

HTF Thermal Oil HTF Pumps Steam Turbine Electrical Generator

Entry barriers

Most sales are undertaken by a small number of companies:

BASF (Germany)Dow Chemical (US)Linde (Germany)Solutia (US)

GE Power (US)KSB (Germany)

Alstom (France)GE Power (US)MAN Turbo (Germany)Mitsubishi (Japan)Siemens (Germany)

GE Power (US)MAN Turbo (Germany)Siemens (Germany)


High technology and innovation requirements

Skilled workers, technicians, engineers, and scientists requirements

86 The rest of the CSP industry analysis and recommendations in the report refers to these two groups of industries.


Status

Since 2006, CSP has been a fast-developing process correlated with a renaissance mainly in the United States and Spain; and today starting programs in Algeria, Australia, China, Egypt, India, Morocco, South Africa, and other countries. According to IEA (International Energy Agency) as above:

“CSP is a proven technology. The first commercial plants began operating in California in the period of 1984 to 1991 spurred by federal and state tax incentives and mandatory long-term power purchase contracts. A drop in fossil fuel prices then led the federal and state governments to dismantle the policy framework that had supported the advancement of CSP. In 2006, the market resurged in Spain and the United States, again in response to government measures such as feed in tariffs (Spain) and policies obliging utilities to obtain some share of

power from renewable and from large solar in particular.

“As of early 2010, the global stock of CSP plants neared 1 GW capacity. Projects now in development or under construction in more than a dozen countries (including China, India, Morocco, Spain, and the United States) are expected to total 15 GW.

“Parabolic Troughs account for the largest share of the current CSP market but competing technologies are emerging. Some plants now incorporate thermal storage.”

—IEA (International Energy Agency) [5], p. 9.

Concerning the path from theoretical design to commercial exploitation, CSP is going through the classic phases:

Figure A1.11 | Developing Phases: From Design to Commercial Exploitation

1. Develop theoreticaldesign

2. Laboratory tests3. Construction

of a scale prototype and field test

4. Construction of a commercial prototype

and field test

7. Revision of technologyfor optimization

6. Construction of a commercial plant

5. Constructionof a pilot project


If applied to the four CSP technologies, the status for each one would be:

• Parabolic Trough: Stage 7 - Revision of technology for optimization

• Power Tower: Stage 6 - Construction of commercial plant

• Linear Fresnel and Dish/Engine: Stage 5 - Construction of pilot project.

Annexes | 159

Table A1.3 | Characteristics of Concentrated Solar Power Systems

Technology

Annual Solar-to-Electricity

Efficiency (%)

Land Occupancy*

ha/MWe

Water Cooling

(m3/MWh**)Storage Possible

Possible Backup/ Hybrid Mode

Solar Fuels

Outlook for Improvements

Parabolic Trough

15 Large2.7

3000 or dry Yes, but not yet for DSG***

Yes No Limited

Linear Fresnel

8–10 Medium1

3000 or dry Yes, but not yet for DSG

Yes No Significant

Power Tower

20–35◊ Medium1.6

2000 or dry Depends on plant configuration

Yes Yes Very significant

Dish/Engine 25–30 Small None Depends on plant configuration

Yes, but in limited cases

Yes Through mass production

Source: [5]

Note: * Based on operating power plants data.** Megawatt-hour.*** DSG = direct steam generation.◊ Concepts to be proven with commercial power plants, this means plants in real operation, up to now the figures come from simulations

Typical solar-to-electricity annual conversion efficiencies and other relevant factors for the four technologies, as compiled by a group of experts, are listed in Table A1.3.

The values of Parabolic Trough by far the most mature technology have been demonstrated commercially. Those of Linear Fresnel Dish/Engine, and Power Tower systems are, in general, projections based on component and large-scale pilot plant test data, and the assumption of mature development of current technology. Major improvements can be achieved in the not-so-mature technologies.

Trends

Parabolic Trough technology is leading the commercial deployment around the World but the model based on thermal oil must be improved. Actual efforts go on the way of developing larger collectors (current standard span: 5.76 m) optimizing the design of the heat storage systems and, last but not least, rising the working temperature up to 500ºC by developing new absorber tubes and using new fluids as water/steam, molten salts, or inert gases.

All-aluminum and multilayer aluminum reflectors[6], as well as reflective films ([7], [8]) are entering the market but, despite having advantages compared with conventional glass Mirrors (light weight, no thermal shock, lower expected price), they have disadvantages as well (durability concerns) and scant or no track record.

New Power Tower projects seem to bet for bigger sizes, on the order of 100 MWe, using superheated steam or molten salts as thermal fluids.

Activity in Dish/Engine systems focuses on small dishes with low-maintenance Stirling motors.

Linear Fresnel systems are on an earlier status of deployment, and thus have a long way to go to improve. However, the focus seems to be to optimize them for steam augmentation in fossil power plants or to use them for air-conditioning or water desalination purposes.


Figure A1.12 | Market Share of the Different CSP Technological Approaches Both Operating (Left) and Under Construction (Right) as of 2012

Powertower

3%

Parabolictrough

95%

Parabolic trough Power tower Fresnel Source: NREL Database

Parabolictrough

69%

Powertower26%

Fresnel2%

Fresnel5%


Annexes | 161

Industry Technical Worksheets – CSP

Sector:CSP

Subsystem:Power Block

Value Unit Comments

Weight in the value chain (as a % of total wealth) 0.5 – 1% 50MW parabolic with 7h TES

Cost Structure breakdownMaterials 45%Energy 25%Labor 15%O&M 15%

Component Market Price (Average Sales Price) 25 – 35 kUSD/MWth

Typical demand from a reference customer 75 – 85 MWth, 1 piece

Average production for a factory 200 – 300 MWth/yr

Investment 10 – 20 kUSD/(MWth/yr)

Production requirementsMaterials 100%

Stainless steel, tube 80%Stainless steel, plate 15%Electrodes 5%

Energy 100%Electric 100%Thermal 0%

Top Companies

Foster WheelerGEA

HAMON

1. Guarantees of turbine manufacturer2. Technical barrier: complex design to achieve performance3. Highly skilled workforce required

1. Stainless steel market2. High precision manufacturing under international standards

Key Factors

Barriers to entry

Solar industry:Condenser

Origin

SwitzerlandGermanyBelgium

Materials;45%

Energy25%

Labor15%

O&M15%


Value Unit Comments

50MW parabolic with 7h TES

Cost Structure breakdown 100%Materials 65%Energy 10%Labor 20%O&M 5%

Component Market Price (Average Sales Price) 100 – 150 kUSD/MWe

Typical demand from a reference customer 50

Average production for a factory 2,000 – 3,000 MW/yr

Investment 30 – 50 kUSD/MW/yr


Copper 50%Carbon steel, cast 35%Lubricant oil 5%CrMo steel 10%


Top Companies

ABBGE PowerMitsubishiSiemens

1. Technical barrier: complex design to achieve performance2. Fluctuations in copper market3. Highly skilled workforce

1. Copper market2. Power electronics

MWe, 1 piece

Origin

US

Barriers to entry

Key Factors

Switzerland

JapanGermany

Materials;65%

Energy10%

Labor20%

O&M5%

Sector:CSP


Solar industry:Electrical generator

Weight in the value chain (as a % of total wealth) 1.5 – 2.5%

Annexes | 163

Sector:CSP


Value Unit Comments



Component Market Price (Average Sales Price) 20 – 25 kUSD/MWth


Average production for a factory 350 – 400 MWth/yr

Investment 10 – 20 kUSD/(MWth/yr)


Carbon steel, plate 10%Stainless steel, tube 80%Electrodes 5%Stainless steel, plate 5%

Energy 100% Electric 100%Thermal 0%

Top Companies

Aalborg CSPAlfa Laval

Foster WheelerGEA

HAMON

1. Highly skilled workforce required

1. Stainless steel marke2. High precision manufacturing under international standards3. Adapt existing industries

Solar industry:Heat exchangers

MWth, 1 set SGS + heat recovery + molten salt

Origin

DenmarkSwedenSwitzerlandGermanyBelgium

Barriers to entry

Key Factors

Materials;45%

Energy25%

O&M15%

Labor15%


Sector:CSP


Value Unit Comments



Component Market Price (Average Sales Price) 45 – 55 kUSD/MW


Average production for a factory 300 – 500 MW/yr



Carbon steel, cast 40%Stainless steel, cast 5%Copper 40%CrMo steel 10%

Lubricant oil 5%Energy 100%

Electric 75%Thermal 25%

Top Companies

FlowserveKSB

GE Oil & GasSterling Fluid

Sulzer

1. Highly skilled workforce required

1. High precision manufacturing under international standards2. Motor and power electronics

Solar industry:HTF Pumps

Germany

Germany

Origin

set of 3 to 5 main pumps, antifreeze, recirculation

Switzerland

US

US

Barriers to entry

Key Factors

Materials;15%

Energy30%

Labor25%

O&M30%

Annexes | 165

Sector:csp

Subsystem:Solar Field

Value Unit Comments

Weight in the value chain (as a % of total wealth) 3.5 – 4.5% 50MW parabolic with 7h TES


Component Market Price (Average Sales Price) 8 – 10 USD/kg

Typical demand from a reference customer 16 – 20 10−3 kg/MW 50MW parabolic with 7h TES

Average production for a factory 225 MW/yr

Investment cost for a factory 30 – 50 million USD/(MW/yr)


Diphenyl oxide 73.5%Diphenyl 26.5%


Top Companies

Dow ChemicalSolutia (Monsanto)

1. Byproduct in chemical industry (phenol) with large productions (40 to 600 kt/year)2. Market dominated by a small number of competitors3. Low market opportunities to sell this product to other industries and sectors

1. Adapt existing industries

Solar industry:HTF Thermal Oil

USUS

Barriers to entry

Origin

Key Factor

Materials;70%

Energy15%

Labor10%

O&M5%


Sector:CSP


Value Unit Comments

Weight in the value chain (as a % of total wealth) 5 – 6% 50MW parabolic with 7h TES


Component Market Price (Average Sales Price) 25 – 35 USD/m2

Typical demand from a reference customer 8 – 12 10−3 m2/MW 50MW parabolic with 7h TES

Average production for a factory 300 MW/y

Investment 100 – 200 kUSD/(MW/yr)


Silver / copper coatings 0%Polimeric coatings 10%Float glass 90%


Top Companies

AGC SolarFlabeg GmbhGuardian Ind.

Rioglass SolarSaint-Gobain

1. Technical barrier: complex manufacturing line2. Highly skilled workforce required3. Capital-intensive unless integrated in existing float glass

1. Energy2. Transport3. Adapt existing industries

France

Barriers to entry

Key Factors

Solar industry:Mirror

GermanyUSSpain

Origin

Belgium

Materials70%

Energy20%

Labor3%O&M

7%

Annexes | 167

Sector:CSP


Value Unit Comments








Carbon steel, plate 5%Carbon steel, cast 50%Stainless steel, cast 15%Copper 25%CrMo steel 5%


Top Companies

Ensival MoretFlowserveGE Power

KSBRuhrpumpen

1. Technical barrier: complex design for molten salt pumps2. Highly skilled workforce required

1. High precision manufacturing under international standards

Solar industry:Pumps

set circulation, condensate, main pressure, moltensalts, other minor

Germany

US

Barriers to entry

Key Factor

Germany

Origin

France

US

Materials;15%

Energy30%

Labor25%

O&M30%


Sector:CSP


Solar industry:Receiver

Value Unit Comments


50MW parabolic with 7h TES


Component Market Price (Average Sales Price) 800 – 1,000 USD/piece

Typical demand from a reference customer 400 – 500 pieces/MWp


Investment 0.4 – 0.6 million USD /(MW/yr)


Stainless steel, tube 52%Borosilicate glass, tube 46%Collars,flanges and bellows 2%Absorbing coating -Getters -Anti reflective coating -


Top Companies

SCHOTT Solar AGSiemens (Solel Solar System)

Archimede

1. Technical barrier: highly specialized coating process with high accuracy2. Technical barrier: vacuum-tight glass to metal welding process and materials3. High specific investment for manufacturing process4. Low market opportunities to sell this product to other industries and sectors5. Highly skilled workforce required

1. Transport

Origin

Italy

GermanyGermany

negligible weightnegligible weightnegligible weight

Barriers to entry

Key Factors

Materials55%

Energy15%

Labor20%

O&M10%

Annexes | 169

Sector:CSP

Subsystem:Thermal Energy Storage

Value Unit Comments



Component Market Price (Average Sales Price) 800 – 900 USD/t

Typical demand from a reference customer 500 – 600 t/MWe 50MW parabolic with 7h TES


Investment n/a million USD/MW/yr


Sodium nitrate (NaNO3) 60%Potassium nitrate (KNO3) 40%


Top Companies

SQMHaifa

1. A mineral vein must exist within the territory

1. Purity of the vein, valorization of byproducts

Solar industry:Solar sale

Origin

ChileIsrael

Barriers to entry

Key Factors

Materials;15%

Energy40%

Labor20%O&M

25%


Sector:CSP


Value Unit Comments



Component Market Price (Average Sales Price) 200 – 250 kUSD/MWe

Typical demand from a reference customer 50 MWe, 1 piece


Investment 60 – 100 kUSD /(MW/yr)


Carbon steel, plate 5%Carbon steel, beam 5%Carbon steel, cast 20%Stainless steel, cast 50%Special alloys 20%


Top Companies

AlstomGE Power

HarbinMAN TurboMitsubishiSiemens

1. Technical barrier: complex design to achieve performance2. Highly skilled workforce required3. High specific investment for manufacturing process

1. Long Term Service Agreements and performance guarantee

USChina

Solar industry:Steam turbine

Germany

Germany

Origin

France

Japan

Barriers to entry

Key Factor

Materials;55%

Energy20%Labor

20%

O&M5%

Annexes | 171

Sector:CSP


Value Unit Comments








Carbon steel, plate 80%Carbon steel, cast 5%Stainless steel, plate 15%


Top Companies

Caldwell TanksDuro Felguera

IMASA

1. Technical barrier: complex design of molten salt tanks and deaerator

1. Manufacturing under international standards

SpainSpain

Solar industry:Storage Tanks

set incl. expansion vessel, overflow tanks, ullage vessels, molten salts, steam drum, deaerator, other

Origin

US

Barriers to entry

Key Factor

Materials;70%

Energy20%

Labor3%

O&M7%


Sector:CSP


Value Unit Comments



Component Market Price (Average Sales Price) 2 – 3 USD/kg

Typical demand from a reference customer 180 – 220 10−3 kg/MWp 50MW parabolic with 7h TES




Carbon steel, beam 90%Carbon steel, plate 5%Electrodes 5%


Top Companies

Albiasa SolarAsturfeito

GossamerIdeas en Metal

MADESBP

SenerSiemens

1. Hot-dip galvanizing of large structures (>12 m) can be a bottleneck2. Technical barrier: complex design to achieve stiffness3. Technical barrier: complex design of hydraulic circuit and components

1. Carbon steel market2. Transport3. Galvanizing4. Adapt existing industries

Origin

Barriers to entry

Key Factors

Solar industry:Structure & Tracker

Spain

SpainGermany

Spain

SpainSpainGermany

US

Materials55%

Energy5%

Labor1%O&M

39%

Annexes | 173

PHOTOVOLTAIC (PV) TECHNOLOGY

This technology converts solar energy directly into electricity using the photovoltaic effect. When solar radiation reaches a semiconductor, the electrons present in the valence band absorb energy and, being excited, jump to the conduction band and become free. These highly excited, non-thermal electrons diffuse, and some reach a junction at which they are accelerated into a different material by a built-in potential (Galvani potential). This potential generates an electromotive force, which converts some of the light energy into electric energy. Unlike CSP, solar PV can use all radiation (direct and diffuse)reaching it.

The basic building block of a PV system is the PV cell, which is a semiconductor layer that converts solar energy into direct-current (DC) electricity. PV cells are interconnected to form a PV Module, typically up to 50 W–200 W. The PV Modules combined with a set of additional application-dependent system components (inverters, batteries, electrical components, and mounting systems), form a PV system. PV systems are highly modular, that is, modules can be linked to supply power ranging from a few watts to tens of megawatts (MW).

R&D and industrialization have led to a portfolio of available PV technology options at different levels of maturity. Commercial PV Modules may be divided into two broad categories: wafer-based Crystalline silicon (c-Si) and Thin Films.

An overview of the main PV technologies follows:

• Crystalline silicon (c-Si) Modules

○ Single-Crystalline silicon (sc-Si)○ Multi-Crystallinesilicon (mc-Si)

• Thin Film (TF) Modules:

○ Amorphous (a-Si) and Micromorph (µc-Si) silicon

○ Cadmium-Telluride (CdTe)○ Copper/Indium Sulfide (CIS) and Copper/

Indium/Gallium di-Selenide (CIGS).

Conversion efficiency is defined as the ratio between the produced electrical power and the amount of incident solar energy per second. This efficiency is one of the main performance indicators of PV cells and modules. Table A1.4 provides the current efficiencies of different PV commercial modules.87

The large variety of PV applications enables a range of different technologies to be present in the market with a direct relation between cost and efficiency. Note that the lower cost (per watt) to manufacture some of the module technologies, namely Thin Films, is partially offset by the higher area-related system costs (support structure, land required, wiring) due to their lower conversion efficiency.

Chips for electronic devices share many of their resources and manufacturing processes with PV elements, especially if silicon-based. However, the purity level required for solar cells is “five nines” (99.999 percent) whereas electronic-grade silicon must be “nine nines.”

Table A1.4 | Conversion Efficiencies of Different PV Commercial Modules

Crystalline silicon (c-Si) (%)

Thin Film (TF)(%)

sc-Si mc-Sia-Si/ mc-Si CdTe

CIS/CIGS

14–20 13–15 6–9 9–11 10–12

Source: [10].

87 Table A1.4 illustrates the range of optimum values. When selecting a technology, the influence of angle, temperature, and diffuse/direct irradiation share must be compared. A one-year simulation of the system is recommended.


Crystalline (c-Si) technologies

The following components belong to the value chain of Crystalline silicon PV and could be considered for local manufacturing in MENA countries.

• Polysilicon: In the first step to make solar cells the raw materials—silicon dioxide of either quartzite88

gravel (the purest silica) or crushed quartz—are first placed into an electric arc furnace, where a carbon arc is applied to release the oxygen. The products are carbon dioxide and molten silicon. At this point, the silicon is still not pure enough to be used for solar cells and requires further purification. This simple process yields commercial brown Metallurgical Grade silicon (MG-Si) of 97 percent purity or better, useful in many industries but not the solar cell industry.

MG-Si is purified by converting it to a silicon compound that can be more easily purified by distillation than in its original state and then converting that silicon compound back into pure silicon. Trichlorosilane (TCS HSiCl3) is the silicon compound most commonly used as the intermediate, although silicon tetrachloride (SiCl4)

and silane (SiH4) also are used. When these gases are blown over silicon at high temperature, they decompose to high-purity silicon. In the course of converting MG-Si to TCS by dissolution with HCl, impurities such as Fe Al and B are removed. This ultra-pure TCS is subsequently vaporized (distilling the TCS achieves an even higher level of purity) and flowed into a deposition reactor, where it is retransformed into elemental silicon.

As an example, in the Siemens process[11], high-purity silicon rods are exposed to trichlorosilane at 900 to 1150ºC. The TCS gas decomposes and deposits additional silicon onto the rods enlarging them according to the chemical reaction 2 HSiCl3 Si + 2 HCl + SiCl4. Electronic-grade purity silicon can be obtained; however, an expensive reactor is required as well as a lot of energy.

In 2006 REC announced construction of a plant based on fluidized bed technology using silane according to the chemical reactions:

3 SiCl4 + Si + 2 H2 4 HSiCl3;4 HSiCl3 3 SiCl4 + SiH4;SiH4 Si + 2 H2.

88 Quartzite, not to be confused with the mineral quartz, is a metamorphic rock formed from quartz-rich sandstone that has undergone metamorphism.

Figure A1.13 | PV Solar Energy Value Chain

Quartzite gravel or quartz (SiO2)

Metallurgical Grade Si


Multicrystalline silicon ingot

Multicrystalline silicon wafers

Monocrystalline silicon ingot

Monocrystalline silicon wafers Multicrystallion silicon ribbons

Solar cell

PV module

Installed PV system

Silane (CH4)

Amorphous silicon deposition

Support structure

Electronic components

CdTe/CIGS

Soda Lime glass

TCO

TF technologies c-Si technologies Common technologies

Source: STA.

Annexes | 175

This process operates at lower temperature and does not generate by-products, and, unlike the Siemens Process, which is a batch process uses fluid bed technology which can be run continuously. The purity is lower, but still enough for solar applications. Other similar processes exist with different advantages and drawbacks such as the Vapour-to-liquid Tokuyama deposition, or even totally different, chemical refinement processes starting with MG-Si, which blow different gases through the silicon melt to remove the impurities.

After either of these processes, polysilicon has typical contamination levels in the range of ppb (parts per billion) and can be cast into square ingots and undergo the wafering process to produce mc-Si cells. For sc-Si cells manufacturing, the atomic structure of the silicon must be dealt with first.

• Ingots/Wafers: Solar-grade purified polysilicon can be cast into square ingots and undergo the wafering process to produce mc-Si cells directly. For sc-Si cells manufacturing, the atomic structure of the silicon must be dealt with first.

In the more widely used[12] Czochralski method, the pure polysilicon is melted again and then a silicon seed single-crystal is put into a Czochralski growth apparatus where it is dipped

into a crucible of molten silicon. The seed crystal rotates as it is withdrawn, forming a cylindrical “ingot” or “boule” of very pure silicon with a singular crystal orientation. However, single crystals grown by the Czochralski process contain impurities because the crucible containing the melt often dissolves[13], and this limits its usage.89

The wafering process starts from the ingot, either single-crystal or poly-silicon. Wafers are sliced one at a time using a circular saw whose inner diameter cuts into the rod or many at once with a multiwire saw. A diamond saw produces cuts that are as wide as the wafer—0.5 millimeter thick. Approximately one-half of the silicon is lost90

from the ingot to the finished circular wafer—more if a single-crystal wafer is then cut to be rectangular or hexagonal. Rectangular or hexagonal wafers are sometimes used in solar cells because they can be fitted together perfectly, thereby utilizing all available space on the front surface of the solar cell. Polysilicon ingots can be directly cast in a rectangular shape, thus avoiding silicon waste.

An alternative method for mc-Si is the ribbon drawing: in a continuous process, a wafer-thin ribbon or sheet of multi-crystalline silicon is drawn from a polysilicon melt. The ribbon is then cut into

Figure A1.14 | Polysilicon Manufacturing Value Chain

Coke Reduction in Arc furnace

˜1,800° C

MetallurgicalGrade silicon

(MG-Si)

Hydrochloric acid(HCl)

High purityTrichlorisilane

(TCS)Quartzite gravelor quartz (SiO2)

Coke (C)

Dissolve in HCl + distillation

Siemens process

Electronic gradepoly-silicon

(9 nines)

Poly-silicon(6–7 nines)

Upgraded MG-Si(>5 nines)

HCl Hydrogen (H2)

Modifiedprocess

REC/Tokuyama

Chemical refinement

Various gases

Source: STA.

89 For some electronic applications, single-crystal wafers are required. Even if “nine nines” purity silicon (99.9999999%) is used, during the Czochralski crystal growth, the crucible slowly dissolves oxygen into the melt that is incorporated in the final crystal in typical concentrations of around 25ppma. To have even lower concentrations of impurity atoms (e.g. oxygen), Float Zone Crystal Growth is used.90 Silicon waste from the sawing process can be recycled into polysilicon, but a greater part of the energy is not recovered.


wafers, avoiding most of the silicon loss caused by sawing.

The wafers are then polished to remove saw marks. It has been found that rougher cells absorb light more effectively; therefore, some manufacturers have chosen not to polish the wafer. However, state-of-the-art manufacturing processes try to optimize light absorption by surface micromachining of the polished wafer.

Doping of the wafers is required for cell manufacturing; however, certain doping techniques must be undergone during ingot manufacturing. For crystalline silicon, some dopants can be added in the crucible during the Czochralski process. Whereas the doping of poly-crystalline silicondoes have an effect on the resistivity, mobility, and free-carrier concentration, these properties strongly depend on the polycrystalline grain size, which is a physical parameter that the material scientist can manipulate. Through the methods of crystallization

to form polycrystalline silicon, an engineer can control the size of the polycrystalline grains that will vary the physical properties of the material.

• c-Si Cells: Single-crystal wafer cells tend to be expensive. Because they are cut from cylindrical ingots, they do not completely cover a square solar cell module without a substantial waste of refined silicon. On the other hand, multi-crystalline silicon or poly-crystalline silicon (mc-Si or poly-Si) is made from cast square ingots—large blocks of molten silicon carefully cooled and solidified. These cells are less expensive to produce than single-crystal silicon cells but are less efficient as well.

The single-crystal wafers are usually lightly p-type doped. To make a solar cell from the wafer, a surface diffusion of n-type dopants (boron and/or phosphorus) is performed on the front side of the wafer. This diffusion forms a p–n junction a few hundred nanometers below the surface. The traditional way91 of doping

Figure A1.15 | Ingot/Wafer Manufacturing Value Chain


Ribbondrawing

Crunching

Melting

Casting

Wafering

Czochralski

Monocrystallinesilicon ingot

Monocrystallinesilicon wafers

Multicrystallinesilicon ingot

Cutting

Multicrystallinesilicon wafers

Multicrystalline silicon ribbons

Source: STA.

91 A more recent way of doping silicon with phosphorus is to use a small particle accelerator to shoot phosphorus ions into the ingot (ion implantation). By controlling the speed of the ions, it is possible to control their depth of penetration. This new process, however, has not been accepted generally by commercial solar cell manufacturers because it is more expensive and complex, This process does have advantages for the manufacture of electronic devices such as metal–oxide–semiconductor (MOS) transistors.

Annexes | 177

(adding impurities to) silicon wafers with boron and phosphorus is to introduce a small amount of boron in the crucible during the Czochralski process. The wafers are then sealed back to back and placed in a furnace to be heated to slightly below the melting point of silicon (2570 degrees Fahrenheit or 1410 degrees Celsius) in the presence of phosphorus gas. The phosphorus atoms “burrow” into the silicon, which is more porous because it is close to becoming a liquid. The temperature and time given to the process are carefully controlled to ensure a uniform junction of proper depth.

One of the key processes in silicon surface micromachining is the selective etching of a sacrificial layer to release silicon microstructures. Improving the surface texturing is one of the important factors required to increase the solar cell short-circuit current, hence the solar cell conversion efficiency due to the enhanced absorption properties of the silicon surface [14]. A mask, inert to the etching agent, is deposited and patterned on the wafers using lithography. Then, wet (liquid) or dry (vapor or plasma) techniques can be applied, and the result is an increased absorption by trapping light in three-dimensional structures.

Because pure silicon is shiny, it can reflect up to 35 percent of the sunlight. To reduce the amount of sunlight lost, an antireflective coating is put on the silicon wafer. The most common coatings used to be titanium dioxide and silicon oxide, although silicon nitride is gradually replacing them as the antireflective coating because of its excellent surface passivation qualities. Actual commercial solar cell manufacturers use silicon nitride because it prevents carrier recombination at the surface of the solar cell. It is typically applied in a layer several hundred nanometers thick using plasma-enhanced chemical vapor deposition (PECVD). The material used for coating is either heated until its molecules boil off and travel to the silicon and condense, or the material undergoes sputtering. In this process, a high voltage knocks molecules off the material and deposits them onto

the silicon at the opposite electrode. Yet another method is to allow the silicon itself to react with oxygen- or nitrogen-containing gases to form silicon dioxide or silicon nitride. Some solar cells have textured front surfaces that, like antireflective coatings, serve to increase the amount of light coupled into the cell. Such surfaces can usually be formed only on single-crystal silicon although, in recent years, methods of forming them on mc-Si have been developed.

The wafer then has a full area metal contactmade on the back surface and a grid-like metal contact made up of fine “fingers” and larger “bus bars” are screen-printed onto the front surface using a silver paste. The rear contact also is formed by screen-printing a metal paste, typically aluminum. Usually this contact covers the entire rear side of the cell, although, in some cell designs, it is printed in a grid pattern. The paste is then fired at several hundred degrees Celsius to form metal electrodes in ohmic contact with the silicon. Some companies use an additional electroplating step to increase the cell efficiency. After the metal contacts are made, the solar cells are given connections such as flat wires or metal ribbons and encapsulated, that is, sealed into silicone rubber or ethylene vinyl acetate (EVA).

• c-Si Modules: The encapsulated solar cells are interconnected and placed into an aluminum frame that has a BoPET (biaxially oriented poly-ethylene terephthalate) or PVF (poly-vinyl fluoride)

Figure A1.16 | c-Si Cell Structure(1) Surface contact

(2) Antireflective coating

(3) n type silicon

(4) p type silicon

(5) p+ type silicon

(6) Back contact

Source: STA.


back sheet and a glass or plastic cover. Front and rear connections are channeled through the junction box.

Thin Film (TF) technologies

The following components belong to the value chain of Thin Film PV and could be considered for local manufacturing in MENA countries.

• TF Modules: Three main types of thin-film Modules can be described: thin-film silicon92

(TF-Si), cadmium telluride (CdTe), and copper-indium-(gallium) amphid films (CIS/CIGS).

Unlike Crystalline Modules, the manufacturing process of Thin-Film Modules is a single process that cannot be split up. Two different manufacturing approaches can be considered:

○ The “superstrate” approach: For CdTe and TF-Si Modules, the manufacturing process starts by depositing a transparent conductive oxide (TCO) such as zinc or tin oxide on the front glass superstrate. The thin (approximately 1/100th times “thinner” than in crystalline cells) photoactive films93 are deposited next, either by sputtering, PECVD or chemical deposition. Between each deposited layer, a laser or mechanical patterning is performed, to create the conductive paths for electron evacuation. A final conductive layer or “back contact” connects the electric circuit; usually a carbon paste doped with copper or lead and a final layer of silver paint are used.

○ The “substrate” approach: For CIS/CIGS Modules the manufacturing process starts by sputtering a molybdenum (Mo) layer on the rear soda lime glass substrate.

To apply the thin CIGS film industrial manufacturers use either a single-step co-evaporation or a two-step method: deposition

of the copper-indium-gallium precursor and ulterior selenization. As in CdTe Modules a CdS layer is applied to act as the n-type semiconductor.

A TCO layer (in fact, two layers, a regular tin or zinc oxide and an ITO or Al doped oxide) closes the circuit, and the module is finally encapsulated with EVA or molybdenum sputtered over glass are commonly used.

CIS/CIGS and, in some recent developments, TF-Si can be manufactured on a transparent conductive organic film instead of glass by means of low-temperature deposition techniques resulting in flexible modules especially useful for building-integrated applications (BIPV).

• Solar glass: Solar glass can be defined depending on the final use (Figure A1.17).

General requirements can be defined for any of these applications such as:

○ Tight tolerances in overall dimensions, warp○ Surface quality smoothness and planarity to

avoid coating problems○ Edge shape and quality required for assembly○ Durability and small loss of properties with

aging○ Reliability and repeatability.

For the substrate-manufactured modules (CIS/CIGS) the back glass must endure high-temperature processes such as molybdenum deposition. A certain amount of sodium is required in the CIS/CIGS photoactive layers, and the usual method to provide it is the thermal diffusion of the existing sodium in soda lime glass. Although soda lime glass is not a high-tech material (it is commonly used in windows, for example), for solar applications, a stable composition and higher quality of surface and edge treatments are required.

92 Three different technologies lie within this term: amorphous silicon (α-Si), micromorphous silicon (μc-Si), and tandem Thin Films (α-Si + μc-Si). The third is the most advanced development.93 These films usually are cadmium sulfide/cadmium telluride (CdTe Modules); cadmium sulfide/various sulfides and/or selenides (in CIGS) of copper, indium, and gallium (CIS/CIGS Modules); and amorphous/microcrystalline silicon (tandem TF-Si).

Annexes | 179

The front glass for substrate-manufactured modules requires low absorption (thus low-iron glass is required), mechanical resistance and low reflection. To reduce reflective94 losses and increase absorption rates,95 referred to collectively as “light trapping effects,” a textured surface is convenient. In single-Crystalline Modules, the photoactive surface is textured, so a flat glass with antireflective coating is used. In Thin-Film Modules, the photoactive surface is likely to be flat, so a “thick” (larger than the coherence96

length of light) texture is commonly used, as opposed to the “thin” texture that can be used in the substrate.

In the superstrate-manufactured modules (TF-Si and CdTe), the front glass undergoes a TCO deposition as a first step. A hazy finish is advantageous for TF-Si, smooth for CdTe. The requirements of low absorption, mechanical resistance and textured surface still apply for the

outer side. However, the inner surface qualitymust be as high as in the back glass for substrate-manufactured modules.

The back glass for superstrate-manufactured modules is the less demanding, with only general requirements to comply. In some manufacturing processes, this rear glass is replaced by a metallic or plastic cover.

• TF Materials: The main materials required for TF Modules are:

○ Transparent conductive oxides (TCO): The TCO layer is usually divided in two layers: a highly conductive thick TCO layer and a diffusion barrier. The main layer can consist of tin and/or zinc oxides with dopants such as cadmium or aluminum. Indium tin oxide (ITO or tin-doped indium oxide) is a solid solution of indium (III) oxide and tin (IV) oxide typically 90% In 2O3 10% SnO2 by weight and is one of

Figure A1.17 | Types of Solar Glass

Thin Film PV

Substrate Technology(CIS/CIGS)

Low-iron front glass


Sodium contentMo coating


Front electrode (TCO – ITO)

Standard back glass

Standard back soda-lime glass

Low-iron front glass Standard back glass

SuperstrateTechnology (TF-Si, CdTe)

Source: STA.

94 Primary reflection is reduced because the texture increases the chances of the reflected angle leading the light back onto the surface, rather than out to the surrounding air. Secondary reflection (on underlying surfaces) is reduced because the reflected beam will likely find different surface angles in the entrance and exit paths, thus increasing the chances of the reflected angle leading the light back onto the underlying surface.95 By causing an oblique incident angle on the photoactive surface, texturizing increases the effective path of the light.96 A thick texture has light-trapping properties due to ray optics, while thin textures show interference and polarization effects.


the most widely used transparent conducting oxides because of its two chief properties—its electrical conductivity and optical transparency—as well as the ease with which it can be deposited as a thin film. However its cost has increased over the last years due to low availability of Indium and alternative uses in electronic devices such as liquid crystal displays (LCDs).

○ Molybdenum: The main commercial source of molybdenum is molybdenite (MoS2)[15]. Molybdenum is mined as a principal ore and also is recovered as a byproduct of copper and tungsten mining. In molybdenite processing, the molybdenite is first heated to a temperature of 700 °C (1,292 °F) and the sulfide is oxidized into molybdenum (VI) oxide by air. The oxidized ore is then either heated to 1,100 °C (2,010 °F) to sublimate the oxide, or leached with ammonia, which reacts with the molybdenum (VI) oxide to form water-soluble molybdates. Pure molybdenum is produced by reduction of the oxide with hydrogen.

○ Cadmium sulfide (CdS): Cadmium sulfide occurs in nature as rare minerals, but is more prevalent as an impurity substituent in similarly structured zinc ores, which are the major economic sources of cadmium. As a compound that is easy to isolate and purify, it is the principal source of cadmium for all commercial applications [16].

○ Cadmium telluride (CdTe): Cadmium telluride does not occur in nature and is obtained from its base elements cadmium and tellurium. Cadmium occurs as a minor component in most zinc ores and therefore is a byproduct of zinc production. The principal source of tellurium is from anode sludge produced during the electrolytic refining of blister copper. It is a component of dusts from blast furnace refining of lead as well. Only a small amount estimated to be approximately 800 metric tons per year is available although it has had few uses during History so it has not been the focus of geologic exploration yet.

○ Cadmium chloride (CdCl2): As above, cadmium chloride does not occur in nature. Anhydrous cadmium chloride can be prepared by the action of anhydrous chlorine or hydrogen chloride gas on heated cadmium metal. Hydrochloric acid may be used to make hydrated CdCl2 from the metal or from cadmium oxide or cadmium carbonate.

○ Copper sulfide (CuS): Copper sulfides describe a family of chemical compounds and minerals with the formula CuxSy both minerals and synthetic. Prominent copper sulfide minerals include Cu2S (chalcocite) and CuS (covellite). In the mining industry, the minerals bornite or chalcopyrite, which consist of mixed copper-iron sulfides, are often referred to as “copper sulfides.” Whatever their source, copper sulfides vary widely in composition with 0.5 ≤ Cu/S ≤ 2 including numerous non-stoichiometric compounds.

○ Selenium precursors: Selenium is found impurely in metal sulfide ores in which it partially replaces the sulfur. Commercially selenium is produced as a byproduct in the refining of these ores, most often during copper production. Minerals that are pure selenide or selenate compounds are known but are rare. A usual approach in TF Modules manufacturing is to produce the copper selenide directly on the module by treating a CuS layer with vaporized selenium or H2Se in a process referred to as “selenization.”

○ Indium precursors: Zinc ores are the primary source of indium [17] , in which it is found in compound form. Very rarely, the element can be found as grains of native (free) metal, but these are not of commercial importance. The indium is leached from slag and dust of zinc production. Further purification is done by electrolysis. The exact process varies with the exact composition of the slag and dust.

○ Gallium precursors: Elemental gallium does not occur in nature but as the gallium (III) compounds in trace amounts in bauxite and zinc ores. Gallium is then a byproduct of

Annexes | 181

the production of aluminum and zinc. The sphalerite for zinc production is the minor source; most gallium is extracted from the crude aluminum hydroxide solution of the Bayer process. A mercury cell electrolysis and hydrolysis of the amalgam with sodium hydroxide leads to sodium gallate. Electrolysis then gives gallium metal. For semiconductor use, further purification is carried out using either zone melting or single crystal extraction from a melt (Czochralski process).

Shared technologies

The following components belong to the value chain of both Crystalline silicon and Thin Film PV and could be considered for local manufacturing in MENA countries.

• Support structure: The structure must keep the shape and relative position of the modules, avoiding deformations caused by their own weight or other external forces such as the wind and transmitting the driving force from the tracker if included. In building-integrated applications, the structure also must distribute the loads toward the structural elements of the building.

Although the sun tracking system is not indispensable, as it is in concentrating applications, it increases overall production and usually is profitable for most locations. Rack- or crown-and-pinion electric drives are the most commonly used to move the collector, following the apparent position of the sun during the day, and rotating the collector around its axis or axes with a local control to govern it.

Welded hot-dip galvanized carbon steelframes are the usual choice although aluminum structures can be used in building-integrated applications where the weight is an issue.

• Inverter: An electrical power converter changes direct current (DC) to alternating current (AC). The converted AC can be at any required voltage and frequency with the use of appropriate transformers and switching and control circuits. Solid-state inverters have no moving parts. These inverters are used in a wide range of applications from small switching power supplies in computers to large electric utility high-voltage direct current applications that transport bulk power.

Grid-tied inverters used to supply AC power from DC sources such as solar panels are sine wave inverters designed to inject electricity into the electric power distribution system. Such inverters must synchronize with the frequency of the grid. They usually contain one or more “maximum power point tracking” features to extract the maximum amount of power and include safety features such as anti-islanding protection.

The manufacturing of the inverter is similar to any electronic device based on semiconductor technologies. The main issues to solve are the manufacturing of Silicon Controlled Rectifiers (SCR), or thyristors,97 and the design of a circuitry able to minimize the harmonic distortion.

Analysis of the value chain for PV

For PV industries, Crystalline and Thin Film value chains have been selected as references to analyze the potential to develop a solar industry in MENA countries.98 Clustering PV related industries has been carried out (Figure A1.18) revealing three clusters of industries with differing technological complexity and investment requirements.

The group of industries at the top right in Figure A1.18 (circled in green) are industries that, due to their

97 Thyristor manufacturing processes are similar to those of multilayer thin-film solar cells. However, higher purity materials and restrictive quality controls must be applied.98 Crystalline PV currently has 80–90% of market share, with Thin Film largely making up the remainder. Concentrated Photovoltaic has not been included directly in the study due to its lower penetration rate. However, CPV technology requirements are included in the CSP and PV technology because some of the components (trackers, optics, cells), are common to the other two solar technologies. CPV technology could be of interest to the MENA countries in the future.


technological complexity and large investment requirements, are considered difficult to reachin most parts of the world, including Benchmark countries that have developed the solar industry successfully. Most Crystalline industries, except for the module assembly, fall into this category. Another significant aspect that emerged in the analysis is the particular situation surrounding Crystalline industries, a market with experienced actors in an over-production-capacity situation that has caused a downward pricing pressure along the value chain. Using the first step in the production chain as an example, global Polysilicon demand in 2011 could have been met by the top producers [18]. This high capacity makes it more difficult for new entrants to gain a foothold. For this reason, no new entrants worldwide are expected either from MENA or from

Benchmark countries until a change in the supply or demand paradigm drives a more attractive business case. Currently, barriers against any new production facility for Crystalline and Thin Film technologies entering the market are too high.

The group of industries related to Thin Film components (TF) are in the middle quadrant (circled in blue). The Crystalline Module assembly industry has a similar range of technological complexity and required investment. The shared component industries, Support Structure, and Inverters have lower technological complexity and investment requirements.

For these reasons, and taking into account the current overcapacity, MENA selected countries are

Figure A1.18 | Investment Requirements vs. Technology Complexity for PV Technology Industries




Inve

stm

ent R

equi

rem

ents

HighLow

Low

HighPolysilicon

Ingots/Wafers

Cells

Solar Glass


TF Materials

c-Si Modules

TF Modules

Inverters

Support Structure


Annexes | 183

better suited for the development of the Shared industries (marked in yellow), which therefore are considered target industries. In the medium term, if world overcapacity diminishes, there will be an opportunity for Thin Film and Crystalline PV industries to develop.

Figure A1.19 describes the industry development opportunities for MENA countries (in terms of normalized Attractiveness index) for each PV technology taking the MENA average as the reference.

For these reasons, MENA countries are better suited to the development of the Shared industries, which therefore are considered target industries. The recommendation is for MENA countries to focus on the development of Inverters and Support Structures. In the medium term, if world overcapacity diminishes, there will be an opportunity for Thin Film

PV Solar Glass99 and Modules-related industries to develop.

Beyond the numerical analysis,certain entry barriers to the Crystalline industry make it difficult to get a share in some markets, namely, the Polysilicon Ingots/Wafers and Cells industries. The main obstacles in these markets are shown in Table A1.5.

StatusSolar PV power is a commercially available and reliable technology with a significant potential for long-term growth in nearly all world regions.

PV and CSP are complementary rather than directly competitive, and developers should carefully assess their needs and environment when choosing which solar technology to use.

Figure A1.19 | PV Industry Development Opportunities (Normalized Attractiveness Index) in MENA Countries

Average MENA

Algeria

Egypt

Attra

ctiv

enes

s in

dex

Jordan

Morocco

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

Tunisia

Cells

Modules c-Si

Ingots Wafers

Polysilicon

Solar glass

TF Materials

TF Modules

Inverter

Support Stru

cture

Average Benchmark


99 Solar Glass,especially if combined with LCD production.


PV technology is very versatile so it generally can be substituted for electrical supply systems of every kind. PV has competitive advantages compared to conventional supply:

• Rural areas isolated from the distribution grids have great advantages with respect to electrification of various applications.

• Street lighting systems, safety systems, and other systems are not extensively distributed.

• Urban areas are interconnected with relatively dense distribution grids.

• Integration in buildings decreases solar impacts, improves insulation, and provides for own-consumption backed up with conventional grids.

• Utility-scale electricity production in power plants usually is interconnected with power outputs in the MW range.

The development of solar PV intends to satisfy different types of demands for electricity thanks to its characteristics of accessibility and equivalent costs compared to other possible resources. The basic characteristics of solar PV are:

• The resource is dispersed, limiting energy surface intensity.

• The seasonal, daily, and hourly character of the power supply curve conditions the coupling of demand and supply.

• Off-grid systems need energy storage systems to effectively couple demand and supply.

• PV needs emergency systems in many applications in which 24/24h supply security is required.

• PV’s important value as a sustainable and renewable resource significantly decreases its environmental impacts compared to other technologies.

• PV requires generally fewer permits and other administrative processes than do other sources of energy, and the installation time for PV applications is shorter.

• Installation is limited to a few devices, making O&M relatively simple.

• If the operation conditions are severe, life of the equipment will be reduced.

PV is a commercially mature technology, and it is expanding very rapidly due to effective supporting policies and recent dramatic cost reductions. In addition to commercial PV Modules, a range of technologies are emerging, including concentrating photovoltaic (CPV) and organic solar cells as well as novel concepts with significant potential for performance increase and cost reduction. In accordance with IEA [10],Crystalline silicon (c-Si) Modules represent 85 percent-90 percent of today’s global annual market. Thin Film accounts for 10 percent–15 percent of global PV Module sales. Emerging technologies encompass advanced Thin Films and organic cells. The latter are about to enter the market via niche applications. Concentrator technologies (CPV) use an optical concentrator system that focuses solar radiation onto a small

Table A1.5 | Main Entry Barriers for the Difficult-to-reach PV Industries

Polysilicon Ingots/Wafers Cells

Entry barriers


The market remains dominated by the well-established* polysilicon producers.

The wafer industry is dominated by 5 companies* that share over 90% of the global market.

Most competitors are vertically integrated so have a better control over costs.

Most customers have long-term contracts with existing suppliers making it difficult for new entrants.

Companies which are on the backwards side of the value chain are well positioned to move into this segment.

A large number of skilled workers technicians engineers and scientists on this field is required.

Note: * As referred to in the corresponding technical worksheet

Annexes | 185

high-efficiency cell. CPV technology is being tested in pilot applications. Novel PV concepts aim at achieving ultra-high efficiency solar cells via advanced materials and new conversion concepts and processes. They are the subject of basic research.

Figure A1.20 gives an overview of the cost and performance of different PV technologies.

Trends

The global PV market has experienced vibrant growth for more than a decade with an average annual growth rate of 40 percent. The cumulative installed PV power capacity has grown from 0.1 GW in 1992 to 14 GW in 2008. Annual worldwide installed new capacity increased to almost 6 GW in 2008.

Four countries have a cumulative installed PV capacity of one GW or above: Germany (5.3 GW), Spain (3.4 GW), Japan (2.1 GW) and the US (1.2 GW). These countries account for almost 80 percent of the total global capacity. Other countries (including

Australia, China, France, Greece, India, Italy, South Korea and Portugal) are gaining momentum due to new policy and economic support schemes. Accelerated deployment and market growth will in turn bring about further cost reductions from economies of scale significantly improving the relative competitiveness of PV by 2020 and spurring additional market growth.

Crystalline silicon (c-Si) cells and modules capacities are now mainly located in Asia. Almost 50 percent of this capacity is located in China. The rest is produced in Taiwan (over 15 percent) the EU (over 10 percent) Japan (slightly less than 10 percent) and the US (less than 5 percent). While a large part of c-Si Modules are assembled in China, most of the Thin Film manufacturing plants are located in other parts of the world; the leaders being the US, the EU, Japan and Malaysia [20].

Figure A1.20 | Global PV Module Pricing Learning Curve for C-Si and CdTe Modules, 1979–2015

Cumulative Production Volume (MW)

Glob

al M

odul

e Av

eran

ge S

ellin

g Pr

ice

(201

0 US

D/W

p)

0,10

1 10 100 1,000 10,000

1979

19921998

2002

2004

2014$1.05

2010$1.52 2015

$1.08

2011$1.3-1.5



c-Si CdTe

100,000 1,00,000

1,00

10,00

100,00



1979

19921998

2002

2004

2010$1.52

2014$1.05

2011$1.3–1.5

2015$1.08

Source: IRENA[19].


Figure A1.21 | Market Share of the Different PV Technological Approaches, 2011

sc-Si40%

mc-Si45%

Other1%

Cd-Te8%

CIS-CIGS3%

TF-Si3%

Thin film14%

Other mc-Si sc-Si Cd-Te TF-Si CIS-CIGS


Annexes | 187

Industry Technical Worksheets – PV

Sector:PV

Subsystem:Crystalline silicon

Value Unit Comments

Weight in the value chain (as a % of total wealth) 17%


Component Market Price (Average Sales Price) 85 – 95 kUSD/t

Typical demand from a reference customer 6.5 – 7.5 t/MWp

Average production for a factory 45 – 50 MWp/yr

Investment 700 – 750 kUSD/(MWp/yr)


Wafers 90%Silver 1%Aluminum 4%Etching agents 5%


Top Companies

Canadian Solar IncGintech Energy Corporation

JA Solar Holdings CoKyocera

Hanwha (Q-Cells)Sharp

SolarWorld AGSuntech Power

Yingli Green Energy

Barriers to entry1. Technical barrier: highly specialized surface treatment (etching)2. High specific investment for manufacturing process3. Overcapacity in the sector, downward pricing pressure, vertical integration in most cells manufacturing companies4. Highly skilled workforce required

Key Factor1. Vertical integration to achieve competitive costs

Origin

Solar industry:Cells

CanadaTaiwanChinaJapanSouth Korea

China

JapanGermanyChina

Materials70%

Energy10%Labor

15%O&M5%


Sector:PV


Value Unit Comments





Average production for a factory 150 t/yr

Investment 600 kUSD /(t/yr)


Silicon, high purity 100%Dopants 0% negligible weight

O&M Consumables 100%Carbon 50% cost fractionSteel wire 25% cost fractionCrucible 25% cost fraction


Top Companies

Canadian Solar IncLG-siltron

MEMCShin-EtsuSiltronicSUMCO

Barriers to entry1. High specific investment for manufacturing process2. Overcapacity in the sector, downward pricing pressure, vertical integration in 75% of wafer manufacturing companies3. Global demand in 2011 covered above 90% with already installed capacity of the five top suppliers

Key Factors1. Alternative market (electronics) requires higher purity than solar, additional purification process required2. Vertical integration to achieve competitive costs

Origin

Solar industry:Ingots / Wafers

CanadaSouth KoreaUSJapanGermanyJapan

Materials30%

Energy15%

Labor15%

O&M40%

Annexes | 189

Sector:PV


Value Unit Comments



Component Market Price (Average Sales Price) 0.9 – 1.4 USD/Wp

Typical demand from a reference customer 1 – 100 MWp

Average production for a factory 300 MWp/yr

Investment 45 – 55 kUSD /(MWp/yr)


Cells 10%Glass 60%Aluminum 25%Encapsulant 5%


Top Companies

KyoceraMotech Industries

Sanyo Component Europe GmbHSchott Solar

SharpSolarWorld AG

Sunpower CorpSuntech Power

Trina SolarYingli Green Energy

Barriers to entry1. Overcapacity in the sector, downward pricing pressure, vertical integration in most module manufacturing companies

Key Factors1. Distinguishing features, quality control2. Vertical integration to achieve competitive costs and ensure cell supply and quality

Origin

Solar industry:c-Si Modules

JapanTaiwan

ChinaChinaChina

GermanyGermanyJapanGermanyUSA

Materials80%

Energy5%

Labor10%

O&M5%


Sector:PV


Value Unit Comments





Average production for a factory 16,000 t/yr

Investment 30 – 60 kUSD/(t/yr)


Silicon, metallurgical grade 90% depends on process followedHydrochloric acid 5% depends on process followedHydrogen 5% depends on process followed


Top Companies

GCL-PolyOCI

WackerHemlock

REC FBRMEMC

Barriers to entry1. Technical barrier: highly specialized deposition process with high purity2. High specific investment for manufacturing process3. Overcapacity in the sector, downward pricing pressure4. Global demand in 2011 could have been covered with already installed capacity of the six top suppliers

Key Factor1. Alternative market (electronics) requires higher purity than solar. Capability to reach purity (Siemens, others in development)

Origin

ChinaSouth Korea

Solar industry:Polysilicon

)

GermanyUSNorwayUS

Materials45%

Energy40%

Labor10%O&M

5%

Annexes | 191

Sector:PV

Subsystem:Common systems

Value Unit Comments



Component Market Price (Average Sales Price) 150 – 200 kUSD/MWp

Typical demand from a reference customer 1 – 100 MWp


Investment 70 – 90 kUSD /(MWp/yr)


Silicon 30%Copper 20%Aluminum 50%Special alloys - negligible weight


Top Companies

DanfossFronius

GE EnergyIngeteam

Kaco New EnergySiemens

SMA Solar TechnologiesSolar Max

Barriers to entry1. Technical barrier: complex design to achieve performance2. Most inverter manufacturers are large power electronics companies which diversified into the solar market

Key Factors1. Distinguishing features, quality control2. Maximum power point tracking and anti-islanding protection

Origin

Solar industry:Inverter

DenmarkAustriaUSASpainGermanyGermanyGermanySwitzerland

Materials60%

Energy13%

Labor25%

O&M2%


Sector:PV

Subsystem:Common systems

Value Unit Comments

Weight in the value chain (as a % of total wealth) 13 – 17%


Component Market Price (Average Sales Price) 2 – 3 USD/kg Fixed structure or 1-axis tracking

Typical demand from a reference customer 60 – 100 t/MWp




Carbon steel, beam 90%Carbon steel, plate 5%Electrodes 5%


Top Companies

ConergyHilti

MecasolarSun Power

Barriers to entry1. Technical barrier: complex design to achieve reliability and low maintenance for tracker

Key Factors1. Carbon steel market2. Transport3. Galvanizing4. Adapt existing industries

Solar industry:Support Structure

Up to 30% if 2-axes tracking

Origin

GermanySpain

USASpain

Materials52%

Energy5%

Labor3%

O&M40%

Annexes | 193

Sector:PV

Subsystem:Thin films

Value Unit Comments



Component Market Price (Average Sales Price) 700 USD/kg

Typical demand from a reference customer 220 kg/MWp



Production requirements E.g.: materials for CdTe cellMaterials 100%

Tellurium 50%Cadmium 45%Sulphur - negligible weightIndium 5%Tin - negligible weight


Top Companies

5N Plus IncAdvanced Technology and Materials

Hitachi Metals

Barriers to entry1. Raw material supply depends on existing zinc and copper industries

Key Factors1. Vertical integration or association with zinc and copper industries2. Transport3. Purity of final product4. Valorization of byproducts5. TCO: alternative markets (LCD displays, etc.)

Solar industry:TF Materials

CanadaUSAJapan

Origin

Materials60%

Energy20%

Labor15%

O&M5%


Sector:PV

Subsystem:Thin films

Value Unit Comments



Component Market Price (Average Sales Price) 0.5 – 1 USD/Wp

Typical demand from a reference customer 0.5 – 100 MWp


Investment 0.8 – 1.5 million USD /(MWp/yr)


Solar glass 99%Photoactive layer - negligible weightTCO - negligible weightBack contact - negligible weightPolymeric backsheet 1%


Top Companies

First Solar (CdTe)Best Solar (TF Si)

Moser Baer (TF SI)Sharp (TF Si)

Barriers to entry1. High specific investment for manufacturing process2. Technical barrier: highly specialized deposition processes with high purity and thickness control3. Overcapacity in the silicon sector has led prices below thin films, with higher performance

Key Factors1. Vertical integration or association with existing Solar glass line2. R&D to improve performance3. Niche market: weight-constrained applications4. Niche market: flexible substrates

Solar industry:TF Modules

Including TF materials (35%),Solar glass (20%), total 65%

Origin

US

Largely depending on deposition technique

ChinaIndiaJapan

Materials75%

Energy10%

Labor10%

O&M5%

Annexes | 195

Sector:PV

Subsystem:Thin Films

Value Unit Comments



Component Market Price (Average Sales Price) 1.5 – 2.5 USD/kg

Typical demand from a reference customer 8 – 20 t/MWp


Investment 1 – 2 kUSD / (MWp/yr)


Silica 72% Low iron content (impurities)Na2O 14% Sources: Na2CO3, tronaCaO 10% Sources: CaCO3, (dolomite)MgO 2% Sources: dolomiteFining agents and additives 2% E.g. Sb2O3, Na2SO4, NaCl, TiO2


Top Companies

AGC SolarPilkington

Saint Gobain solarGuardian

Barriers to entry1. High overall investment for manufacturing process due to scale2. Solar glass is usually < 1% of total float glass. Alternative demandmust exist to achieve, at least, 70% cap. factor

Key Factors1. Vertical integration or association with existing float glass line2. For CIS/CIGS: stable Na composition, integration of Mo coating3. For CdTe and TF-Si: Integration of TCO deposition to access alternative markets (LCD displays, etc.)4. Transport5. Energy6. Alternative markets: crystalline modules

Solar Industry:Solar Glass

UK

US

Adaptation of an existing floatglass line

Note: composition of final product, some rawmaterials will lose volatile fraction

One/two glass sheets

Origin

Belgium

Germany

Materials6%

Energy62%

Labor2%O&M

30%


ANNEX 2 | Solar Energy Development Scenarios

GLOBAL SOLAR INDUSTRY SCENARIOS

The World Energy Outlook’s “Current Policies” scenario includes all policies in place and supported through enacted measures as of mid-2010. The “New Policies” and “450” scenarios are based on the greenhouse-gas (GHG) emissionsr eductions and other commitments associated with the Copenhagen Accord, on other policies under discussion or announced but not yet implemented, and the

extension or strengthening of some policies already in force and included under the Current Policies scenario. Access to international offset credits for countries participating in emissions-trading schemes is assumed in both the New Policies and 450 scenarios, although the timing, prices of CO2, and scale of trading differ.

Global projected solar installed capacity (2008–35) in the 3 different scenarios analyzed:

Table A2.1 | Projected Global Solar Installed Capacity (GW), 2008–35

Solar Installed capacity (GW) 2008 2015 2020 2025 2030 2035

Current Policies Scenario (conservative scenario)

PV 15 101 206 242

CSP 1 12 31 50

New Policies Scenario (base case)

PV 15 57 110 197 294 406

CSP 1 10 17 30 52 91

450 Scenario (optimistic scenario)

PV 15 138 485 748

CSP 1 42 141 221

Source: [65]

Figure A2.1 | Projected Global CSP Installed Capacity, 2008–35

0

50

1

42

17

1231

52

141

91

221

50

2008

Current Policies Scenario New policies Scenario 450 Scenario

2020 2030 2035

CSP

Inst

alle

d Ca

paci

ty (G

W)

100

150

200

250


Annexes | 197

MENA SOLAR INDUSTRY SCENARIOS

MENA countries projected solar installed capacity (2020)

The assessment included only RE projects to be implemented from 2011 onward. Projects under construction or commissioned before the end of 2010 were not taken into account either in the assessment or in the modeling exercise. In addition, only projects identified by stakeholders interviewed at the time of the study were included in the assessment.

The assessment was completed with information provided by the relevant stakeholders through personal interviews, telephone conversations, and email exchanges. For none of the listed projects was the relevant technical documentation (feasibility studies, land property documentations, equipment quotations) reviewed in detail.

Figure A2.4 and Figure A2.5, highlighting current and future (short-term) development of CSP and PV, show the main areas of interest.

Figure A2.2 | Projected Global PV Installed Capacity, 2008–35

15101

206

242110

294

406

138

485

748

Current Policies Scenario New Policies Scenario 450 Scenario

2008 2020 2030 2035

800

700

600

500

400

300

PV In

stal

led

Capa

city

(GW

)

200

100

0


Figure A2.3 | MENA CSP (Left) and PV (Right) Installed Capacity to 2020 (MW)

Algeria Egypt Jordan Morocco Tunisia Algeria Egypt Jordan Morocco TunisiaMW MW

0

400

800

1200

160016001525

1100

450300

800

200

400

50

150

2000

0

200

400

600

800

1000

Source: [57].


Figure A2.4 | Global CSP Development: Current Capacity and Capacity under Construction (MW)

CSP development intensity considering current and under construction

> 500 MW 200-500 MW 100-200 MW MW MW New capcity under

constructionCurrent capacity(end 2011)

<100 MW

Source: Accenture.

Figure A2.5 | Global PV Development: Current Capacity and Projected Future Capacity by 2014 (MW)

PV development intensity considering current and expected new capacity to 2014

> 10,000 MW 4,000-10,000 MW 2,000-4,000 MW < 2,000 MW MWMW

Current capacityNew future capacity by2014 (BNEFconservative scenario)

Source: Accenture.

Annexes | 199

MENA MARKET POTENTIAL

To understand the MENA countries’ market potential, it is first necessary to forecast the installed capacity of each MENA country and then the solar component demand.

For this purpose, an analysis calculated the possible demand for solar component that could be satisfied by the five MENA countries considered. The analysis divided the world into five separate regions: individual countries, MENA neighboring countries, MENA Region, EU, and rest of the world (ROW).

The methodology to define the component demand is based on the forecasted installed capacity in each of these regions per:

• Projections to 2020 for Europe and the rest of the world [65]

• Objectives and plans of each country to 2020 for the MENA countries[57][66][67].

A linear hypothesis was used to determine annual growth.

Component demand scenario

From these solar installed capacity forecasts, a component demand scenario was built for components considered feasible to be developed in each MENA country.

The basic scenario hypothesis was that a fraction of domestic, MENA Regional, European, and ROW demand could be met from each MENA country if appropriate actions were taken.

After discussion with industry leaders, and taking into account the need to have a track record to supply components in the energy business, the following hypotheses on demand growth were made.

1. The hypothesis of increase in market share is the same for both CSP and PV technologies.

2. A domestic market share increase hypothesis for each MENA country was made to reach 80 percent in 2018 for target industries.

3. Market share to be supplied by each MENA country in neighboring countries (the nearest 2 from those subject to this study) was estimated to reach 5.0 percent of the demand for target industries in 2020.

4. MENA Regional (non-neighboring countries) market share to be supplied by each MENA country was estimated to be 2.5 percent of the demand for target industries in 2020.

5. Market share was estimated for Europe(1.0 percent) and ROW (0.5 percent) in 2020.

6. Actual market share was estimated to be 25 percent for domestic demand. No participation in foreign markets was estimated as of today.

7. A linear increase from actual to forecasted market share has been assumed.

Table A2.2 | Market Share Hypotheses for Each MENA Country to 2020 (%)

CSP/PV Actual Market Share Estimated

(%)

CSP/PV Forecasted Market Share in 2020

Target (%)*

Local 25.0 80.0

Neighboring countries 0.0 5.0

Other MENA countries 0.0 2.5

Europe 0.0 1.0

ROW 0.0 0.5

Note: * For target industries, the forecasted market share is estimated to be reached in 2018 and to stay flat from then on.


CSP AND PV MENA MARKET POTENTIAL BY 2020

Algeria:

Figure A2.7 | Algeria CSP Market Potential to 2020 Taking into Account Market Share Hypotheses

0

2,0001,525 1,900 1,550

4,000

8,025

17,000

Algeria Neighboringcountries

Rest of MENA Europe Rest of the World

Total

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18 ,000

MWAlgeria CSP Market Potential

90882 34

35

36

1,095


Figure A2.6 | Market Share Evolution for Target Industries Hypotheses, 2011–21 (%)100.0%

10.0%

1.0%

0.1%

0.0%2011 2013 2015 2017 2019 2021

Local

NeighboringCountries

Other MENA

Europe

Row


Annexes | 201

Egypt:

Figure A2.9 | Egypt CSP Market Potential to 2020 Taking into Account Market Share Hypotheses

0

2,0001,100 750 3,125

4,000

8,025

17,000

Egypt Neighboringcountries


Total

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18 ,000

MWEgypt CSP Market Potential

35

36

824

653 32

68


Figure A2.8 | Algeria PV Market Potential to 2020 Taking into Account Market Share Hypotheses

-

20,000

Algeria

800473 19 7

408

288

1,195

450 350

45,000

63,400

110,000

Neighboringcountries

Rest of MENA Europe Rest of theWorld

Total

40,000

60,000

80,000

100,000

120,000

MW Algeria PV Market Potential



Jordan:

Figure A2.10 | Egypt PV Market Potential to 2020 Taking into Account Market Share Hypotheses

-

20,000

Egypt

200155 8 26

408

288

846

200 1,200

45,000

63,400

110,000



Total

40,000

60,000

80,000

100,000

120,000

MW Egypt PV Market Potential


Figure A2.11 | Jordan CSP Market Potential to 2020 Taking into Account Market Share Hypotheses

0

2,000450 750 3,125

4,000

8,025

17,000

Jordan Neighboringcountries


Total

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18 ,000

MWJordan CSP Market Potential

35

36

463

26360

68


Annexes | 203

Morocco:

Figure A2.12 | Jordan PV Market Potential to 2020 Taking into Account Market Share Hypotheses

-

20,000

Jordan

15086 10 26

408

288

818

250 1,200

45,000

63,400

110,000



Total

40,000

60,000

80,000

100,000

120,000

MW Jordan PV Market Potential


Figure A2.13 | Morocco CSP Market Potential to 2020 Taking into Account Market Share Hypotheses

0

2,0001,600 1,825 1,550

4,000

8,025

17,000

Morocco Neighboringcountries


Total

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18 ,000

MWMorocco CSP Market Potential

35

36

1,137

95479

34



Tunisia:

Figure A2.14 | Morocco PV Market Potential to 2020 Taking into Account Market Share Hypotheses

-

20,000

Morocco

400234 36 7

408

288

974

850 350

45,000

63,400

110,000



Total

40,000

60,000

80,000

100,000

120,000

MW Morocco PV Market Potential


Figure A2.15 | Tunisia CSP Market Potential to 2020 Taking into Account Market Share Hypotheses

0

2,000300 3,125 1,550

4,000

8,025

17,000

Tunisia Neighboringcountries


Total

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18 ,000

MWTunisia CSP Market Potential

35

36

416

174

173

34


Annexes | 205

SCENARIOS SENSITIVITY ANALYSIS

The moderate scenario was established by estimating the market potential by country defined above. To set up conservative and optimistic scenarios, the

differences between conservative-moderate and optimistic-moderate scenarios as defined in the World Energy Outlook were taken into account.

Algeria:

Figure A2.16 | Tunisia PV Market Potential to 2020 Taking into Account Market Share Hypotheses

-

20,000

Tunisia

5028 52 7

408

288

783

1,200 350

45,000

63,400

110,000



Total

40,000

60,000

80,000

100,000

120,000

MW Tunisia PV Market Potential


Figure A2.17 | Scenarios in Algeria for CSP Potential Market

0

500 20

2010

7781095

2705

2020CSP Conservative scenario CSP Base case CSP Optimistic scenario

MW

1,000

1,500

2,000

2,500

3,000


Figure A2.18 | Scenarios in Algeria for PV Potential Market

2010PV Conservative scenario PV Base case PV Optimistic scenario

400

800

1,200

1,600

MW

2,000

02020

10991195

1494

Source: STA/Accenture


Egypt:

Jordan:

Figure A2.21 | Scenarios in Jordan for CSP Potential Market

0

500 20

2010

329463

1144


MW

1,000

1,500

2,000

2,500

3,000


Figure A2.22 | Scenarios in Jordan for PV Potential Market


400

800

1,200

1,600

MW

2,000

02020

753818

1023


Figure A2.19 | Scenarios in Egypt for CSP Potential Market

0

500 20

2010

585824

2035


MW

1,000

1,500

2,000

2,500

3,000


Figure A2.20 | Scenarios in Egypt for PV Potential Market

2010


400

800

1,200

1,600

MW

2,000

02020

778846

1057


Annexes | 207

Morocco:

Tunisia:

Figure A2.23 | Scenarios in Morocco for CSP Potential Market

0

500 20

2010

8071137

2809


MW

1,000

1,500

2,000

2,500

3,000


Figure A2.24 | Scenarios in Morocco for PV Potential Market


400

800

1,200

1,600

MW

2,000

02020

896974

1217


Figure A2.25 | Scenarios in Tunisia for CSP Potential Market

0

500 20

2010

295416

1027


MW

1,000

1,500

2,000

2,500

3,000


Figure A2.26 | Scenarios in Tunisia for PV Potential Market


400

800

1,200

1,600

MW

2,000

02020

720 783979



ANNEX 3 | Benchmark Competitiveness Analysis Primary Data Definition

The selection of raw data and ready-made indexes was an interactive process. Based on expert judgments, the project team identified categories and subcategories that impacted attractiveness to the investor. A survey on available data that could be used in the analysis was done in parallel. Thus, the final choice was driven by the relevance of information and its availability to the sample countries. The relevance of the data is based on their weighting and aggregation in the model. No individual parameter by itself defines the attractiveness of an individual country.

The data were aggregated into 12 “Competitiveness parameters” and further into 4 “Overarching categories” (Annex 4).

OVERARCHING CATEGORIES100: PRODUCTION FACTORS

This category includes five Competitiveness parameters101 related to production costs:

1. Labor market based on the Primary data102:

○ Labor costs: Minimum monthly wage [24] ○ Labor market efficiency: The 7th pillar of the

Global Competitiveness Index, it measures the efficiency and flexibility of the labor market. These characteristics are critical to ensure that workers are allocated to their most efficient use in the economy. The pillar is composed of flexibility and efficient use of talent [25].

2. Material availability Resources that a country has and trades. The following parameters measure the annual production of the following raw materials or composites in the country:

○ Glass manufacturing [26] ○ Steel manufacturing [27][28] ○ Stainless steel manufacturing [29] ○ Oil manufacturing ability [30][31] ○ Copper manufacturing [32][33] ○ Silicon manufacturing [34] ○ NaNO3/KNO3 availability [35].

3. Relevant manufacturing ability

○ Existence of synergic industries: Existence of experienced workforce in industries connected with solar industry such as float glass, crude steel, cement, aluminum, copper, micro-electronics, power electronics, and galvanization

○ Literacy rates [36] ○ Higher education and training: The 5th pillar of

the Global Competitiveness Index, it measures human capital resources by using quantity and quality of education and on-the-job training [25].

4. Cost of energy

○ Cost of energy (industrial): Price of industrial electrical energy [37][38].

5. Fiscal and financial costs

○ Paying taxes rank: Measures tax systems from the point of view of a domestic company complying with the different tax laws and regulations in each economy. Covers the cost of taxes borne by the case study company and the administrative burden of tax compliance for the firm [41].

○ Lending interest rate: Serves as the floor for bank loans and therefore is a cost for a solar industry when using loans as a mean to raise funds [42].

100 Model notation: OC .is c,

101 Model notation: CP .js c,

102 Model notation:P .kc

Annexes | 209

OVERARCHING CATEGORIES: DEMAND FACTORS

This category includes a single Competitiveness parameter related to demand:

1. CSP PV Component demand

○ CSP Growth Scenario to 2020: Objectives and plans for CSP of each country to 2020 for the MENA countries [43]

○ PV Growth Scenario to 2020: Objectives and plans for PV of each country to 2020 for the MENA countries [43]

○ Maximum yearly global horizontal irradiation (GHI): Maximum value for this irradiation in the country. It is used by PV solar plants to produce energy [44].

○ Maximum yearly direct normal irradiation (DNI): Maximum value for this irradiation in the country. It is used by CSP solar plants to produce energy [44].

○ Electricity demand growth (percent change from 2009 to 2010) [45]

○ Energy imports, net, as a percent of energy use[10][46][47][48][49][50]

○ Cost of energy (residential): Price of residential energy [38][30]

○ CSP global potential market for components to 2020: Based on projections to 2020 for Europe and the rest of the world for CSP [43]

○ PV global potential market for components to 2020: Based on projections to 2020 for Europe and ROW for PV [43].

OVERARCHING CATEGORIES: RISK AND STABILITY FACTORS

This category includes three Competitiveness parameters related to risk both real and perceived:

1. Risk associated with doing business

○ Corruption index: Corruption perceptions index ranks countries according to their perceived

levels of public sector. The indicator includes questions relating to the bribery of public officials, kickbacks in public procurement, embezzlement of public funds, and questions that probe the strength and effectiveness of public-sector anticorruption efforts [51]

○ Ease of Doing Business Ranking 2012: Assesses regulations affecting domestic firms in 183 economies; ranks the economies in 10 areas of business regulation such as starting a business, resolving insolvency and trading across borders [41]

○ Ease of Doing Business 2007–2012 ranking change factor: Higher rankings indicate better, usually simpler, regulations for businesses and stronger protections of property rights. Empirical research funded by the World Bank to justify its work shows that the effect of improving these regulations on economic growth is strong [41]

○ Inflation rate: Consumer price using 2010 indicator [52]

○ OECD Country risk: Country risk is composed of transfer and convertibility risk, such as capital or exchange controls, that prevent an entity from converting local currency into foreign currency and/or transferring funds to creditors located outside the country; and cases of force majeure (war, expropriation, revolution, civil disturbance, floods and earthquakes) [53].

2. Risk associated with demand[54][55][56][57]

○ Existence of clear stable regulatory framework for RE

○ Existence of incentives for PV○ Existence of incentives for CSP○ Existence of RE associations○ Total solar PV capacity: PV capacity already

installed○ Total CSP capacity: CSP capacity already

installed○ Agency for the development of RE: Binary

indicator. (Existing = 1; not existing = 0)


○ Competition in the electricity sector: The analysis includes generation, transmission and distribution of electricity (liberalized market vs. full monopoly). When a full monopoly exists in the country by which one vertically integrated utility generates most of the power, this market structure could indicate a preference for large-centralized conventional production. This preference could discourage new entrants in the electricity sector (Full monopoly = 0; liberalized market = 1).

3. Financial risk

○ Access to credit: It measures the legal rights of borrowers and lenders with respect to secured transactions through a set of indicators and the sharing of credit information through another. Some of these indicators are strength of legal rights index, credit information, public credit registry coverage and private credit bureau coverage [58].

OVERARCHING CATEGORIES: BUSINESS SUPPORT

This category includes three Competitiveness parameters related to business support:

1. Industry structure

○ Presence of large international industrial companies: Measured as percent of international industrial companies—in the Top 100 Companies (by revenue)—that settle in MENA country [59].

○ Percent industrial GDP: Comprises value added in mining, manufacturing (also reported as a separate subgroup), construction, electricity, water, and gas. It is calculated without deductions for depreciation of fabricated assets or depletion and degradation of natural resources [52].

○ Local clustering: Measured as existing clustering in the country.

2. Innovation capacity

○ Patent filings per million population 2010: This parameter provides concrete information about intellectual property: patents divided per million populations [60][58].

○ Innovation score: The 12th pillar of the Global Competitiveness Index, it measures innovation scores using several indicators such as capacity for innovation, quality of scientific research institutions, company spending on R&D, university-industry collaboration in R&D, Government procurement of advanced technology products, availability of scientists and engineers, and Utility patents [61].

○ Technological readiness: The 9th pillar of the Global Competitiveness Index, it is composed of technological adoption (that is, availability of latest technologies) and ICT (information and communication technology) use [61].

○ Business sophistication: The 11th pillar of the Global Competitiveness Index, it is composed of several indicators: local supplier quantity, control of international distribution, willingness to delegate authority, among others [25].

3. Logistical infrastructure

○ Quality of port infrastructure 2010: Measures the quality of port infrastructure. WEF: (1=extremely underdeveloped to 7=well developed and efficient by international standards) [62] [25].

○ Infrastructure: The 2nd pillar of the Global Competitiveness Index, it is composed of transport, energy, and telephony infrastructure [61].

Logistics performance index: Provides feedback on the logistics “friendliness” of the countries in which they operate and those with which they trade [63].

Annexes | 211

ANNEX 4 | Benchmarking Model and Index Weights

PRIMARY DATA NORMALIZATION

For the primary data normalization, different strategies exist ([82][83] and [84]). In this analysis, rescaling and Z-scores were considered. The rescaling method was chosen.

Each primary datum has been normalized through:

pkc k

ck

k k

=− ( )

( ) − ( )P P

P P

min

max min

Thus, each country normalized datum is measured from 0 to 1 where 1 would be associated with the highest value and 0 with the lowest one. Normalized data have been redefined to have a positive correlation with the Attractiveness index where necessary. Alternatively, Z-scores normalization (parameter minus average divided by standard deviation) could have been used. Further discussion on advantages and disadvantages can be found in [85].

Rescaling is vulnerable for extreme values or outliers, which can distort the transformation. However, it widens the range of indicators lying within small intervals, thus increasing the spread among countries so enabling easier interpretations.

PARAMETER AGGREGATION

Two different aggregation strategies are used. For primary data that are part of the value chain with a monetary value, their relative contribution (materials availability) has been used. Those that correlate with the Competitiveness parameter but have no monetary value associated are equally weighted unless expert judgment dictates otherwise.

Among the different aggregation approaches—additive methods, geometric aggregation, and

noncompensatory multicriteria analysis [84]—the additive and geometric methods were used and the sensibility checked. Different aggregation coefficients were used for each solar industry. The aggregation methodology follows:


sj k,j k which

fulfills the normalization condition.103 For a given country and solar industry the score for a Competitiveness parameter is equal to

CPjs c

j ks

k kcp,

,= ×∑

For easier comparing, the Competitiveness parameters are normalized in tables

cpjs c j

s c,s c,s c

,s c,s c

maxmaxma= ( )j( )j

s( )s

CPjCPj


2. The aggregation impact of each normalized Competitiveness parameter within its Overarching category is modeled through a weighting factor i j

si j,i j

which fulfills the normalization condition. For a given country and solar industry, the score for an Overarching category is equal to

OC is c

i js

j js ccp,

,,= ×∑

For easier comparing, the Overarching categories are normalized in tables

ocis c i

s c

i

,

s c,

,

max= ( )

OC

OC


s which fulfills the normalization condition. For a given

103 α β γk i j

sα βj

α βj i

s

i, ,α β, ,α βi j, ,i j, ,α β, ,α βj, ,j

α βj

α β, ,α βj

α β∑ ∑α β∑ ∑α βj k∑ ∑j kα βj kα β∑ ∑α βj kα βs∑ ∑sα βsα β∑ ∑α βsα βk∑ ∑k , ,∑ ∑, ,α β, ,α β∑ ∑α β, ,α βj k, ,j k∑ ∑j k, ,j kα βj kα β, ,α βj kα β∑ ∑α βj kα β, ,α βj kα β ∑= =α β= =α βα β∑ ∑α β= =α β∑ ∑α β =α β∑ ∑α β1,α β∑ ∑α βα β∑ ∑α β= =α β∑ ∑α β1,α β∑ ∑α β= =α β∑ ∑α β 1, 1.


country and solar industry, the Attractiveness index is equal to

AI OCs cis

i is c, ,= ×∑

For easier comparing, the Attractiveness indexes are normalized in tables

ais cs c

s

,,

max= ( )

AI

AI

4. Where necessary, partial scores aggregating Competitiveness parameters, Overarching categories, and Attractiveness indexes for groups of industries and/or countries also are shown.

WEIGHTS DISTRIBUTION

For each industry, primary data, Competitiveness parameters, and Overarching categories are given a weight ( j k

sj k,j k, i j

si j,i j and i

s) representing their relative importance for an investor.

Figure A4.1 | Investment Requirements vs. Technology Complexity for CSP Technology: Group Definition

Inve

stm

ent r

equi

rem

ents

Difficult to reach

High

Low

Low High

Solar Salt

Heat exchanger

Storage Tanks

Mirror

Pumps

Condenser


GROUP I

GROUP II

GROUP III

GROUP IV


HTF Thermal Oil

Steam Turbine

Condenser

Condenser

Conventional

Structure &Tracker

Independent



OVERARCHING CATEGORIES’ WEIGHTS

Annexes | 213

The global impact of each Overarching category is modeled through a factor i

s. The weight factors used have been classified into four types according to their technological complexity and investment requirements from information gathered during the research phase of the project and from interviews with sectoral experts.104

1. Industries with the highest capital requirements have the same weighting as Polysilicon (PV) or Steam turbine (CSP). They have been gathered as Industries Group I.

2. Industries with a combination of high capital requirement and an important technology complexity or vice versa have the same

weighting. Industries Group II comprises Cells (PV), Mirror, HTF Pumps, and Receivers (CSP).

3. All industries in Group III, namely, TF Materials (PV) and Pumps and Condenser (CSP), have the same weighting.

4. Industries Group IV has the lowest capital requirements and lowest technology complexity and therefore have the same weighting as Support structure (PV and CSP).

Table A4.1 to Table A4.7 show how the weights have been used to represent the relative importance of the Overarching categories for the CSP and PV industries.

Figure A4.2 | Investment Requirements vs. Technology Complexity for PV Technology: Group Definition


High

High

GROUP I

GROUP IIGROUP III

LowLow

Inve

stm

ent R

equi

rem

ents

Difficult to reach PV -Crystalline

Support Structure

PV -Thin Film

Inverters

TF Modules

c-Si Modules

TF Materials

Solar Glass

Polysilicon

Ingots/ Wafers

Cells

GROUP IV

PV -SharedTF


104 At least three experts have been consulted from each industry. The weights proposed by the experts were averaged, and the result was rounded so that the last significant number was 0 or 5. With this procedure, at least 90% of the weights proposed were within a ±5 range. The experts’ identities were not disclosed to protect confidentiality.


Table A4.1 | Weight Factors for Overarching Categories in Industries within Group I: CSP Industries

Overarching Category ( is) HTF Thermal Oil Steam Turbine Electrical Generator

Production 0.20 0.20 0.20

Demand 0.10 0.10 0.10

Risk and stability 0.65 0.65 0.65

Business support 0.05 0.05 0.05

Table A4.2 | Weight Factors for Overarching Categories in Industries within Group II: CSP Industries

Overarching category ( iis) Receiver Mirror HTF Pumps


Demand 0.10 0.10 0.10


Business environment 0.05 0.05 0.05

Table A4.3 | Weight Factors for Overarching Categories in Industries within Group III – CSP Industries

Overarching Category ( is) Pumps Condenser

Production 0.40 0.40

Demand 0.10 0.10

Risk and stability 0.45 0.45

Business environment 0.05 0.05

Table A4.4 | Weight Factors for Overarching Categories in Industries within Group IV: CSP Industries

Overarching Category ( is) Structure & Tracker Heat Exchanger Solar Salt Storage Tanks

Production 0.65 0.65 0.65 0.65

Demand 0.10 0.10 0.10 0.10

Risk and stability 0.20 0.20 0.20 0.20

Business environment 0.05 0.05 0.05 0.05

Table A4.5 | Weight Factors for Overarching Categories in Industries within Group I: PV Industries

Overarching category ( is) Polysilicon Ingots/Wafers Solar Glass


Demand 0.10 0.10 0.10


Business environment 0.05 0.05 0.05

Annexes | 215

COMPETITIVENESS PARAMETERS’ WEIGHTING FACTORS

The global impact of each Competitiveness parameter is modeled through a factor i j

s, .

Competitiveness parameters associated with production factors (5)

Competitiveness parameters related to the Production factors Overarching category have been weighted according to the share of costs in each manufacturing solar industry (Annex 1). This cost distribution includes Labor costs, Material costs, Energy costs, and O&M costs. The following hypotheses were made:

• Labor market Competitiveness parameter is weighted with the percent representing labor costs rescaled to include fiscal and financial costs.

• Relevant manufacturing ability and Material availability Competitiveness parameters are weighted so that they add up to the percent cost

representing Materials and O&M costs rescaled to include fiscal and financial costs. This weight is distributed among both Competitiveness parameters according to the solar industry’s technological complexity. The higher the complexity in an industry, the higher the relevance of manufacturing ability vs. the ease of availability of materials (raw materials or composites).

• Cost of energy Competitiveness parameter is weighted with the percent representing energy costs rescaled to include fiscal and financial costs.

• Fiscal and Financial cost Competitiveness parameter is assumed to be 5 percent of total cost. This value is used to rescale the percent costs in Annex 1 so that the weights fulfill the normalization condition.105

The production Competitiveness parameters are defined according to these hypotheses. Results for CSP and PV industries are shown in Figure A4.5 and Figure A4.6.

Table A4.6 | Weight Factors for Overarching Categories in Industries within Groups II and III: PV Industries

Overarching Category ( iis) Cells Materials

Production 0.35 0.40

Demand 0.10 0.10

Risk and stability 0.50 0.45

Business environment 0.05 0.05

Table A4.7 | Weight Factors for Overarching Categories in Industries within Group IV: PV Industries

Overarching Category ( is)

Crystalline Modules TF Modules Inverters

Support Structure

Production 0.65 0.65 0.65 0.65

Demand 0.10 0.10 0.10 0.10

Risk and stability 0.20 0.20 0.20 0.20

Business environment 0.05 0.05 0.05 0.05

105 α β γk i j

sα βj

α βj i

s


α βj

α β, ,α βj



Figure A4.3 | Investment Requirements vs. Technology Complexity for CSP Technology



Inve

stm

ent R

equi

rem

ents

Steam Turbine

HTF Thermal Oil


HTF Pumps

HighLow

Low

High

Pumps

Receiver

Storage Tanks

Heat exchanger

Structure & Tracker

Solar Salt


Condenser

Mirror


Table A4.8 | Percentage Used to set up a Weight Factor for Relevant Manufacturing Ability and Material Availability According to Technological Complexity: CSP Industries

Percentage According to Solar Industry’s Technological Complexity

CSP Industries Relevant Manufacturing Ability Material Availability

Structure & Tracker 20 80

Solar salt 20 80

Heat exchanger 40 60

Storage tanks 40 60

Mirror 50 50

Condenser 50 50

Pumps 50 50

Electrical generator 80 20

Receiver 90 10

HTF Thermal Oil 90 10

HTF Pumps 90 10

Steam turbine 90 10

Annexes | 217

Figure A4.4 | Investment Requirements vs. Technology Complexity for PV Technology


High

High

Low

Inve

stm

ent R

equi

rem

ents

Low

Difficult to reach PV -Crystalline

Support Structure

Inverters

TF Modules

c-Si Modules

TF Materials

Solar Glass

Polysilicon

Ingots/ Wafers

Cells

PV -Thin Film PV -SharedTF


Table A4.9 | Percentage Used to set up a Weight Factor for Relevant Manufacturing Ability and Material Availability According to Technological Complexity: PV Industries

Percentage According to Solar Industry’s Technological Complexity

PV Industries Relevant Manufacturing Ability Material Availability

Inverters 20 80

Support structure 20 80

TF Modules 50 50

TF materials 50 50

Solar glass 50 50

c-Si Modules 50 50

Polysilicon 90 10

Ingots/Wafers 90 10

Cells 90 10


Figure A4.5 | Production Competitiveness Parameters for CSP Industries100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

1.1. Labor market

1.3. Relevant manufacturing ability

1.5. Fiscal and Financial costs

1.2. Material availability

1.4. Cost of energy

Receiv

er

Mirror

Stru

cture

& Tr

acke

rHTF

Ther

mal O

ilHTF

Pumps

Heat e

xchange

r

Solar s

altSt

orage

Tanks

Pumps

Stea

m tu

rbine

Electri

cal g

enera

tor

Conde

nser

0%


Figure A4.6 | Production Competitiveness Parameters for PV Industries100%

90%

80%

70%

60%

50%

40%

30%

20%

Polys

ilicon

Ingo

ts/W

afer

s

Cells

c-Si M

odule

s

Mater

ials

Solar

glas

s

TF M

odule

s

Inve

rter

Supp

ort S

truct

ure

10%

0%

1.1. Labor market 1.2. Material availability

1.4. Cost of energy1.3. Relevant manufacturing ability

1.5. Fiscal and Financial costs


Annexes | 219

Competitiveness parameters associated with demand factors (1)

CSP and PV Component demand is the only Competitiveness parameter associated with demand factors, and it fulfills the normalization condition

i js

j

n

i jsi

, ,=∑ = =1

1 1so .

Competitiveness parameters associated with risk and stability factors (3)

The impacts of Competitiveness parameters associated with risk and stability factors are modeled though a weight factor i j

si j,i j which fulfills the

normalization condition i js

j

ni

,=∑ =1

1.

All the industries are allocated the same weight except the industries that require the highest investment—industries within Group I and HTF pumps106—because the relative importance of the financing risk is higher for these exceptions.

Competitiveness parameters associated with business support factors (3)

The impacts of Competitiveness parameters associated with business support factors are modeled though a weight factor i j

si j,i j which fulfills the

normalization condition i js

j

ni

i j,i j=∑ =1

1.

All the industries have the same weight except the industries with the highest technological complexity—Group I and the Receiver industry—because the relative importance of the innovation capacity within the business Competitiveness parameter category is higher for these two exceptions.

PRIMARY DATA’S WEIGHT FACTORS

The global impact of each Primary datum is modeled through a factor .

Labor market (2)

These two parameters are weighted equally for all industries except for those with the highest or lowest technology complexity.

Table A4.10 | Competitiveness Parameters Associated with Risk and Stability Factors

Competitiveness Parameters ( i ji j

si j,i ji j,i j

)

Industries Group I and HTF pumps

Industries Groups II, III, and IV

Risk associated with doing business

0.10 0.25

Risk associated with demand

0.10 0.25

Financing risk 0.80 0.50

Table A4.11 | Competitiveness Parameters Associated with Business Support Factors

Competitiveness Parameters ( i ji j

si j,i ji j,i j)

Industries Groups I

and II

Industries Groups III

and IV

Industry structure 0.15 0.33

Innovation capacity 0.70 0.34


0.15 0.33

106 HTF Pumps, similarly to industries within Group I, is considered difficult to reach and therefore to finance in most parts of the world.


Material availability (7)

Several materials are required to develop solar industries. Seven materials were detected as particularly important, and the weighting was allocated by the relative importance of each material to each solar industry. As an example, the Receiver industry requires glass and stainless steel in different proportions (in monetary terms), and this difference is taken into account when allocating the weights.

Relevant manufacturing ability (3)The three parameters within this category have equal weight factors for all industries. The parameter Existence of synergic industries j k

sj k,j k = 0.6 requires

prior training to prepare the workers for that specific manufacturing process. Thus, this parameter is considered more important than the 2 other parameters—Literacy rates and Higher education

and training—which each have the same weight factor j k

sj k,j k = 0.2.

Cost of energy (1)

Cost of energy (industrial) is the only Primary data associated with its Competitiveness parameter, and it fulfills the normalization condition j k

s

j

ni

j k,j k=∑ =1

1 so j k

sj k,j k = 1.

Fiscal policy (2)

These two data have equal weight factors for all industries, and they fulfill the normalization condition

j ks

j

ni

j k,j k=∑ =1

1 so j ksj k,j k = 0.5.

Table A4.13 | Weight Factors Applied to Primary Data within the Material Availability Competitiveness Parameter; Example: Receiver Industry

Primary Data ( j ksj k,j k) Receive-r

Glass manufacturing in the country 0.30

Stainless steel manufacturing in the country

0.70

Steel manufacturing in the country 0.00

Oil manufacturing ability in the country 0.00

Copper manufacturing in the country 0.00

Silicon manufacturing in the country 0.00

NaNO3/KNO

3 availability in the country 0.00

Table A4.14 | Weight Factors Applied to Primary Data within the Relevant Manufacturing Ability Competitiveness Parameter

Primary Data ( j ksj k,j k)

CSP Industries

PV Industries

Existence of synergic industries

0.60 0.60

Literacy rates 0.20 0.20

Higher education and training 0.20 0.20

Table A4.15 | Weight Factors Applied to Primary Data within the Fiscal Policy Competitiveness Parameter


CSP Industries

PV Industries

Paying taxes rank 0.50 0.50

Lending interest rate 0.50 0.50

Table A4.12 | Weight Factors Applied to Primary Data within the Labor Market Competitiveness Parameter

Highest/Lowest Tech. Complexity CSP Industries

Highest/Lowest Tech. Complexity PV Industries

Primary Data ( j k

sj k,j k)

General Weight Factors

Group I and II (Except Mirror)*

Structure & Tracker, Solar

Salt

Groups I and II (Except Solar

Glass)**

Inverter, Support

Structure

Labor cost 0.50 0.25 0.75 0.25 0.75

Labor market efficiency 0.50 0.75 0.25 0.75 0.25

Note: * Regarding technological complexity, Mirror industry is considered at similar level as Condenser or Pump industries.

** Regarding technological complexity, the Solar glass industry is considered at similar level as Modules or TF Modules industries.

Annexes | 221

107 At least three experts from each industry were consulted. The weights proposed by the experts were averaged, and the results were rounded so that the last significant number was 0 or 5. With this procedure, at least 90% of the weights proposed were within a ±5 range. The experts’ identities were not disclosed to protect confidentiality.108 At least three experts were consulted from each industry. The weights proposed by the experts were averaged, and the result was rounded so that the last significant number was 0 or 5. With this procedure, at least 90% of the weights proposed were within a ±5 range. The experts’ identities were not disclosed to protect confidentiality.

Component demand (9)The weight factors were allocated by distinguishing CSP and PV industries, considering the relative importance107 of each datum, then rescaling to fulfill the normalization condition j k

s

j

ni

j k,j k=∑ =1

1.

Risk associated with doing business (5)These 4 data have equal weight factors for all industries, and they fulfill the normalization condition

j ks

j

ni

j k,j k=∑ =1

1 so j ksj k,j k = 0.2.

Risk associated with demand (8)The weight factors were allocated by distinguishing CSP and PV industries, considering the relative importance108 of each datum, then rescaling to fulfill the normalization condition j k

s

j

ni

j k,j k=∑ =1

1.

Financing risk (1)Access to credit is the only Primary data associated with its Competitiveness parameter, and it fulfills the normalization condition j k

s

j

ni

j k,j k=∑ =1

1 so j ksj k,j k = 1.

Industry structure (3)These 3 data have equal weight factors for all industries, and they fulfill the normalization condition

j ks

j

ni

j k,j k=∑ =1

1 so j ksj k,j k = 0.33109.

Table A4.16 | Weight Factors Applied to Primary Data Within the Component Demand Competitiveness Parameter


CSP Industries

PV Industries

CSP growth scenario to 2020 0.20 0.00

PV growth scenario to 2020 0.00 0.20

Maximum yearly global horizontal irradiation (GHI)

0.00 0.15

Maximum yearly direct normal irradiation (DNI)

0.20 0.00

Electricity demand growth (Change 2010 over 2009)

0.20 0.15

Energy imports, net, as a % of energy use

0.20 0.15

Cost of energy (residential) 0.00 0.15

CSP global potential market for components to 2020

0.20 0.00

PV global potential market for components to 2020

0.00 0.20

Table A4.17 | Weight Factors Applied to Primary Data Within the Risk Associated with Doing Business Competitiveness Parameter


CSP Industries

PV Industries

Corruption index 0.20 0.20

Ease of Doing Business ranking 0.20 0.20

Ease of Doing Business 2007–12 ranking change factor

0.20 0.20

Inflation rate 0.20 0.20

OECD country risk 0.20 0.20

Table A4.18 | Weight Factors Applied to Primary Data Within the Risk Associated with Demand Competitiveness Parameter


CSP Industries

PV Industries

Existence of clear stable regulatory framework for RE

0.25 0.25

Existence of incentives for PV

0.00 0.15

Existence of incentives for CSP

0.15 0.00

Existence of RE associations

0.15 0.15

Total solar PV capacity 0.00 0.15

Total CSP capacity 0.15 0.00

Agency for the development of RE

0.15 0.15

Competition in the electricity sector

0.15 0.15


Iinnovation capacity (4)These 4 data have equal weight factors for all industries, and they fulfill the normalization condition

j ks

j

ni

j k,j k=∑ =1

1, so j ksj k,j k = 0.25.

Logistical infrastructure (3)

These three data have equal weight factors for all industries, and they fulfill the normalization condition

j ks

j

ni

j k,j k=∑ =1

1, so j ksj k,j k = 0.33150.

COMPARISON OF MENA AND BENCHMARK COUNTRIES AS STATISTICAL POPULATIONS

Figure A4.7 and Figure A4.8 show the global Attractiveness index by country for CSP and PV technologies, respectively. These figures show that MENA countries and Benchmark countries belong to two different statistical populations (samples). This variance means that the two groups are at different levels of attractiveness for developing solar industries.

The results are stable with a low sensitivity to the aggregation model used.

109 One of the parameters is weighted as 0.34 to fulfill the normalization condition.

Table A4.19 | Weight Factors Applied to Primary Data within the Industry Structure Competitiveness Parameter


CSP Industries

PV Industries

Presence of large international industrial companies

0.33 0.33

% industrial GDP 0.33 0.33

Local clustering 0.34 0.34

Table A4.20 | Weight Factors Applied to Primary Data within the Innovation Capacity Competitiveness Parameter


CSP Industries

PV Industries

Patent filings per million population 2010

0.25 0.25

Global Competitiveness Report 2011–12 Innovation score

0.25 0.25

Global Competitiveness Report 2011–12 Technological readiness

0.25 0.25

Business sophistication 0.25 0.25

Table A4.21 | Weight Factors Applied to Primary Data within the Logistical Infrastructure Competitiveness Parameter


CSP Industries

PV Industries

Quality of port infrastructure 2010

0.33 0.33

Global Competitiveness Report 2011–12 Infrastructure

0.34 0.34

Logistics Performance Index

0.33 0.33

Annexes | 223

Figure A4.7 | Global Attractiveness Index by Country for CSP: MENA and Benchmark

Prob

abili

ty d

istr

ibut

ion,

CSP

0

0.1

Benchmark countriesMENA countries

0.2 0.4 0.6 0.8 1 1.2

0.2

JordanAlgeria

Tunisia

Morocco

Egypt

Chile

India

Spain

South AfricaGermany

China

Japan

United States

0.3

0.4

0.5


Figure A4.8 | Global Attractiveness Index by Country for PV: MENA and Benchmark

Algeria

Egypt

Jordan

Morocco

Tunisia

Chile

China

Germany

India

Japan

South Africa

Spain

United States

00

0.1

0.2

0.3

0.4

0.5

0.2 0.4 0.6 0.8 1 1.2

Prob

abili

ty d

istr

ibut

ion,

PV

MENA countries Benchmark countries



MODEL ROBUSTNESS USING DIFFERENT AGGREGATIONS

The Competiveness index was then calculated using different normalization and aggregation techniques to check whether relative ranking varied. The results of the following normalization and aggregation techniques are shown in Table A4.23 and Table A4.24.

1. Rescaling factor analysis, linear aggregation (base case)

2. Rescaling equal weights, linear aggregation3. Rescaling factor analysis, geometric aggregation4. Rescaling equal weights, geometric aggregation5. Z-scores equal weights, linear aggregation.

The Model aggregates the primary data (Annex 3 and Annex 4) into different Competitiveness parameters that are further aggregated into Overarching categories and finally into an Attractiveness index per industry and country. The weighting for each aggregation is related to the impact of the datum on the component’s value chain and on the decision to invest.

Each country’s normalized datum rages from 0 to 1 where 1 would be associated with the highest value and 0 with the lowest. Normalized data have been redefined to have a positive correlation with the Attractiveness indexes where necessary.

Five calculation methods were used. They are presented in Table A4.22.

Two aggregation techniques were used: arithmetic and geometric.

The arithmetic model follows:


sj k,j k which

fulfills the normalization condition.110 For a given country and solar industry, the score for a Competitiveness parameter is equal to

CPjs c

j ks

k kcp,

,= ×∑

cpjs c j

s c,s c,s c

,s c,s c

maxmaxma= ( )j( )j

s( )s

CPjCPj


2. The aggregation impact of each Competitiveness parameter within its Overarching category is modeled through a weighting factor i j

si j,i j which


OC CPis c

i js

j js c,

,,= ×∑

ocis c i

s c

is

,,

max= ( )

OC

OC


s which fulfills the normalization condition. For a given

Table A4.22 | Calculation Methods Used for Parameter Aggregation and Normalization

Aggregation Weighting Normalization

1 Arithmetic Associated with the value chain

Max-Min

2 Arithmetic Equal weights

Max-Min

3 Geometric Associated with the value chain

Max-Min

4 Geometric Equal weights

Max-Min

5 Arithmetic Equal weights

Z-scores

110 α β γk i j

sα βj

α βj i

s


α βj

α β, ,α βj


Annexes | 225

country and solar industry, the Attractiveness index is equal to

AI OCs cis

i is c, ,= ×∑

ais cs c

s

,,

max= ( )

AI

AI

4. Partial scores aggregating Competitiveness parameters, Overarching categories, and Attractiveness indexes for groups of industries and/or countries provide valuable information.

The geometric model is explained next:


sj k,j k which

fulfills the normalization condition.111 For a given country and solar industry, the score for a Competitiveness parameter is equal to

CPjs c

k kcp j k

s, ,= +Π 1 α

cpjs c j

s c

js

,,

max= ( )

CP

CP

2. The aggregation impact of each Competitiveness parameter within its Overarching category is modeled through a weighting factor i j

si j,i j which


OC CPis c

j js c i j

s, , ,= Π β

ocis c i

s c

is

,,

max= ( )

OC

OC


s which

fulfills the normalization condition. For a given country and solar industry, the Attractiveness index is equal to

AI OCs ci i

s c is, ,= Π γ

ais cs c

s,

,

max=

log(AI )log( (AI ))

4. Partial scores aggregating Competitiveness parameters, Overarching categories, and Attractiveness indexes for groups of industries and/or countries provide valuable information.

Weighting is either:

1. Equally weighted, or2. Associated with the value chain: For each

industry, primary data, Competitiveness parameters, and Overarching categories weight ( j k

sj k,j k, i j

si j,i j and i

s) represent their relative importance to an investor.

Primary data have been transformed into 0–1 results through two normalization techniques: Max-Min and Z-scores.

Max-Min normalization is based on the formula:

pP P

P Pkc k

ck

k k

=− ( )

( ) − ( )min

max min

Z-scores normalization is based on the formula:

pP

kc k

c

=− µ

σ

µ and σ being the mean and the standard deviation of the datum, respectively.

111 α β γk i j

sα βj

α βj i

s


α βj

α β, ,α βj



Table A4.23 | Rankings for CSP Technology Using Different Normalization and Aggregation Techniques

CSP

Base case


Linear Aggregation





Z-Scores, Equal Weights,

Linear Aggregation


United States 1.00 1 1.00 1 1.00 1 0.98 2 1.00 1

China 0.91 2 0.98 3 0.94 2 1.00 1 0.90 3

Japan 0.88 3 0.91 4 0.75 3 0.91 4 0.69 4

Germany 0.86 4 0.99 2 0.57 7 0.87 5 0.95 2

South Africa 0.78 5 0.61 7 0.59 6 0.76 7 −0.15 7

Spain 0.77 6 0.89 5 0.61 5 0.92 3 0.60 5

India 0.72 7 0.55 8 0.66 4 0.78 6 −0.35 8

Chile 0.65 8 0.70 6 0.31 9 0.72 8 0.10 6

Egypt 0.52 9 0.42 11 0.35 8 0.60 11 −0.47 10

Morocco 0.43 10 0.51 9 0.29 10 0.67 9 −0.43 9

Tunisia 0.39 11 0.47 10 0.21 11 0.62 10 −0.49 11

Algeria 0.22 12 0.29 13 0.05 12 0.41 13 −1.00 13

Jordan 0.22 13 0.34 12 0.04 13 0.49 12 −0.85 12

Figure A4.9 | Rankings of Attractiveness Indexes per Country, Aggregated for CSP Technology, with Different Normalization and Aggregation Techniques

Glob

al C

SP A

ttrac

tiven

ess

inde

x ra

nkin

g

1

United States

China

Japan

Germany

South Afri

ca

Spain

India ChileEgypt

MoroccoTu

nisiaAlgeriaJo

rdan

2





Base case

3

4

5

6

7

8

9

10

11

12

13

-



Annexes | 227

Table A4.24 | Rankings for PV Technology Using Different Normalization and Aggregation Techniques

PV

Base Case


Linear Aggregation






Aggregation


United States 1.00 1 1.00 1 0.87 2 0.98 2 1.00 1

China 0.98 2 0.98 3 1.00 1 1.00 1 0.90 3

Japan 0.97 3 0.91 4 0.87 3 0.91 4 0.69 4

Germany 0.96 4 0.99 2 0.75 5 0.88 5 0.95 2

India 0.79 5 0.55 8 0.80 4 0.78 6 −0.35 8

South Africa 0.76 6 0.61 7 0.75 6 0.77 7 −0.15 7

Spain 0.73 7 0.89 5 0.74 7 0.92 3 0.60 5

Chile 0.61 8 0.70 6 0.55 9 0.72 8 0.10 6

Egypt 0.58 9 0.42 11 0.59 8 0.60 11 −0.63 11

Morocco 0.43 10 0.51 9 0.54 10 0.68 9 −0.43 9

Tunisia 0.42 11 0.50 10 0.50 11 0.62 10 −0.49 10

Algeria 0.26 12 0.29 13 0.32 12 0.41 13 −1.00 13

Jordan 0.25 13 0.34 12 0.28 13 0.49 12 −0.85 12

Figure A4.10 | Rankings of Attractiveness Indexes per Country, Aggregated for PV Technology, with Different Normalization and Aggregation Techniques

Glob

al P

V At

tract

iven

ess

inde

x ra

nkin

g

United S

tate

s

China

Japa

nGer

man

y

India

Sout

h Afric

a

Spain

Chile

Egyp

t Mor

occo

Tunisi

a

Alger

ia Jo

rdan

-

1

2

3

4

5

6

7

8

9

10

11





Base case

12

13




PARAMETER AGGREGATION CONSISTENCY

For non-value-chain-related parameters, consistency is checked using Cronbach’s Alpha [64], which assesses how well a set of items is correlated. Cronbach’s Alpha is defined as:

=n R

1 (n 1)Ri,j

i,j+ −

Where ni,j is the number of the components of a Competitiveness parameter, and R

– is the mean

correlation of the items (for example, the mean of the non-diagonal terms of the correlation matrix). The coefficient increases with the number of parameters and with their correlation. Cronbach’s Alpha is equal to zero if no correlation exists (the parameters are independent), and to one if the parameters are perfectly correlated. Hence, a high alpha indicates that the underlying items proxy well the desired characteristic. Nunnaly[86] suggests a value of 0.7 as an acceptable threshold. The results are shown in Table A4.25.

Table A4.25 | Cronbach’s Alpha (α) for Competitiveness Parameters

Competitiveness Parameter

Relevant Manufacturing

Ability

Risk Associated with Doing Business

Risk Associated

with Demand (PV)

Risk Associated

with Demand

(CSP)Innovation Capacity

Logistical Infrastructure

0.71 0.74 0.83 0.80 0.94 0.93

Annexes | 229

ANNEX 5 | Case Studies

Annex 5 presents some case studies relating to solar industries able to be developed in MENA countries. The cases are:

• Mirror industry in Egypt• Support structure in Egypt• Support structure in Morocco• TF Modules in Morocco• Receiver in Tunisia.

Although the cases were assessed in particular countries, this fact should not prevent the other countries from seeking to develop these industries. The case countries were selected based on the results of the Benchmark analysis and the additional complementary analysis carried out on the individual solar industries.

CASE STUDY: MIRROR INDUSTRY IN EGYPT

Egypt recently increased its solar capacity target for 2020 from 120 MW, of which 100 MW CSP and 20 MW PV, to 1300 MW, of which 1100 MW CSP and 200 MW PV.112 This target represents a significant increase over the earlier objective and raises the likelihood of development of a local component industry in Egypt.

The driving force for internal demand is the growth of installed capacity of solar power plants in Egypt. Therefore, a forecast up to 2020 has been made to deduce the solar component demand for each of the five MENA countries.

Demand for solar components is not only domestic but also can come from other countries and regions. For this reason, demand from four separate regions—neighboring MENA countries, the MENA Region as a

whole, the European Union and the Rest of the World (ROW)—also has been forecasted.

The annual demand in m2 is shown in Figure A5.2. In the long run, the yearly installed capacity is the key number to determine whether a manufacturing industry will have a stable demand.

• Global and European forecasted component demand is based on their forecasted installed capacity. A linear hypothesis was used to determine annual growth. A residual market share has been assumed for Europe (1.0 percent) and ROW (0.5 percent) in 2020.

• For MENA countries, [57], [66], and [67] define a similar scenario, called “moderate.” Market share to be supplied by Egypt in its neighboring countries (Jordan and Tunisia) has been estimated to reach 5.0 percent of the demand for target industries in 2020. MENA Regional(Algeria and Morocco) market share to be supplied by each MENA country has been estimated to be 2.5 percent of the demand for target industries in 2020.

• A domestic market share increase hypothesis for each MENA country has been made to reach 80 percent in 2018 for target industries.

• Actual market share has been estimated to be 25 percent for domestic demand. No participation in foreign markets has been assumed. A linear increase from actual to forecasted market share has been assumed.

Figure A5.2 represents a comparison of annual demand of the Mirror industry following the aforementioned hypotheses vs. maximum and minimum production of a typical Mirror factory.

112 Intermediate objective of the Egyptian solar plan, as communicated by the Ministry of Electricity and Energy. The plan involves the installation of 3500 MW of solar energy by 2027, of which 2800 MW CSP and 700 MW PV.



10.0%

1.0%

0.1%

0.0%2011 2013 2015 2017 2019 2021

Local


Other MENA

Europe

Row


Figure A5.2 | Comparison of Total Demand for Mirror Industry vs. Range of Production for a Mirror Factory in Egypt, 2014–20 (m2)

Mill

ions

0

2014

Local demand MENA countries demand

Maximum production

Europe and ROW demand

Minimum production

2015 2016 2017 2018 2019 2020

1

1

2

2

3

3

4


Note: See Annex 1.

Annexes | 231

IMPACTS OF MIRROR INDUSTRY DEPLOYMENT

The Mirror industry deployment impact is shown in terms of cumulative cash flow and job creation. The following data are based on information detailed in Annex 1.

The Mirror factory requirements are:

• Average investment: US$37.5 million +/- 10%• Range of production

for a factory: 1.5–3 million m2/year• Component

production cost: 25 US$/m2 +/- 10%• Component market

price: 30 US$/m2 +/- 10%• On-site labo 50–80 jobs

Figure A5.3 shows the cumulative cash flow taking into account the requirements cited above and the fact that the factory is able to adjust its production according to the demand from 2014 to 2020. Three different cash flows are shown: investment and cash flow for only domestic demand, for Regional demand, and for Europe and ROW demand.

The ratio used to calculate the number of jobs is 90–180 jobs per factory. If the factory runs at maximum production, it will employ 180–250 workers; if the factory runs at minimum production, 60–90 workers will be employed.

CASE STUDY: SUPPORT STRUCTURE INDUSTRY IN EGYPT

Egypt recently increased its solar capacity target to 2020 from 120 MW, of which 100 MW CSP and 20 MW PV, to 1300 MW, of which 1100 MW CSP and 200 MW PV. This target is a significant increase over the earlier objective and raises the likelihood of development of a local component industry in Egypt. The Support structure industry can be implemented to develop both CSP and PV support structure components.

The driving force for internal demand is the growth of installed capacity of solar power plants in Egypt. Therefore, a forecast to 2020 has been made to deduce the solar component demand for each of the 5 MENA countries. Demand for solar components is not only domestic but also can come from other countries and regions. Thus, demand from four

Figure A5.3 | Cumulative Cash Flow for a Mirror Industry in Egypt, (US$ mil)

Cash

flow

(mlli

on U

S$)

−40

2013

Local demand MENA countries demand Europe and ROW demand Accumulated cash flow

2014 2015 2016 2017 2018 2019 2020

−30

−20

−10

0

10

20



separate regions—neighboring MENA countries, the MENA Region as a whole, the European Union, and the ROW—also has been forecasted.

The annual demand in m2 is shown in Figure A5.5. In the long run, the yearly installed capacity is the key number to determine if a manufacturing industry will have a stable demand.

• Global and European forecasted component demand is based on the forecasted installed capacity in each of these regions. A linear hypothesis was used to determine annual growth. A residual market share has been assumed for Europe (1.0 percent) and ROW (0.5 percent) in 2020.

• For MENA countries[57], [66], and[67] define a similar scenario, called “moderate.” Market share to be supplied by Egypt in its neighboring countries (Jordan and Tunisia) has been estimated to reach 5.0 percent of the demand for target industries in 2020. MENA Regional

(Algeria and Morocco) market share to be supplied by each MENA country has been estimated to be 2.5 percent of the demand for target industries in 2020.



Figure A5.5 represents a comparison of annual demand of Support structure industry following the aforementioned hypotheses vs. maximum and minimum production of a typical support structure factory.


10.0%

1.0%

0.1%

0.0%2011 2013 2015 2017 2019 2021

Local


Other MENA

Europe

Row


Annexes | 233

IMPACTS OF SUPPORT STRUCTURE INDUSTRY DEPLOYMENT

The Support structure industry deployment impact is shown in cumulative cash flow and job creation. The following data are based on information detailed in Annex 1.

The support structure factory requirements are:

• Average investment: US$16 million• Range of production

for a factory: 5000 – 40000 tons/yr• Component

production cost: 2100 US$/ton +/- 10% • Component market

price: 2550 US$/ton +/- 10%• On-site labor: 20–50 jobs.

Figure A5.6 shows the cumulative cash flow taking into account the requirements cited above and the fact that the factory is able to adjust its production according to the demand from 2014 to 2020. Three different cash flows are shown: investment and cash flow only for domestic demand, for Regional demand, and for Europe and ROW demand.

The number of jobs necessary to run a factory for a nominal production 5000–6000 ton of support structure per year is 20 workers (for either PV or CSP).

The ratio used to calculate the number of jobs is 20–50 jobs per factory. If the factory runs at maximum production, it will employ 50–65 workers; if the factory runs at minimum production, 18–22 workers will be employed.

Figure A5.5 | Comparison of Total Demand for Support Structure Industry vs. Range of Production for a Support Structure Factory in Egypt, 2014–20 (tons)

Thou

sand

s

0

5

10

15

20

25

30

35

40

45

Minimum production

Local demand

2014 2015 2016 2017 2018 2019 2020

MENA countries demand Europe and ROW demand

Maximum production



CASE STUDY: SUPPORT STRUCTURE INDUSTRY IN MOROCCO

Morocco’s solar capacity target to 2020 is 2000 MW, of which 1400 MW CSP and 600 MW PV. The Support structure industry can be implemented to develop both CSP and PV support structure components.

The driving force for internal demand is the growth of installed capacity of solar power plants in Morocco. Therefore, a forecast to 2020 has been made to deduce the solar component demand for each of the 5 MENA countries. Demand for solar components is not only domestic but also can come from other countries and regions. Thus, demand from four separate regions—neighboring MENA countries, MENA Region as a whole, the European Union, and the ROW—also has been forecasted.

The annual demand in m2 is shown in Figure A5.8. In the long run, the yearly installed capacity is the key number to determine whether a manufacturing industry will have a stable demand.

• Global and European forecasted component demand is based on the forecasted installed capacity in each of these regions. A linear hypothesis

was used to determine annual growth. A residual market share has been assumed for Europe (1.0 percent) and ROW (0.5 percent) in 2020.

• For MENA countries [57], [66], and[67] define a similar scenario called “moderate.” Market share to be supplied by Morocco in its neighboring countries (Algeria and Tunisia) has been estimated to reach 5.0 percent of the demand for target industries in 2020. MENA Regional(Egypt and Jordan) market share to be supplied by each MENA country has been estimated to be 2.5 percent of the demand for target industries in 2020.



Figure A5.8 represents a comparison of annual demand of Support structure industry following the aforementioned hypotheses vs. maximum and minimum production of a typical support structure factory.

Figure A5.6 | Cumulative Cash Flow for a Support Structure Industry in Egypt, 2013–20 (US$ mil)

Cash

flow

(mill

ion

US$)

−30

2013


2014 2015 2016 2017 2018 2019 2020

−20

−10

0

10

20

30

40

50

60

70

80


Annexes | 235


10.0%

1.0%

0.1%

0.0%2011 2013 2015 2017 2019 2021

Local


Other MENA

Europe

Row


Figure A5.8 | Comparison of Total Demand for Support Structure Industry vs. Range of Production for a Support Structure Factory in Morocco, 2014–20 (tons)

Thou

sand

s

0

10

Local demand

2014 2015 2016 2017 2018 2019 2020

Minimum production

MENA countries demand Europe and ROW demand

Maximum production

20

30

40

50

60



IMPACTS OF SUPPORT STRUCTURE INDUSTRY DEPLOYMENT

The Support structure industry deployment impact is shown in terms of cumulative cash flow and job creation. The following data are based on information detailed in Annex 1.

The support structure factory requirements are:

• Average investment: US$16 million• Range of production

for a factory: 5000–40000 tons/yr• Component production

cost: 2100 US$/ton +/− 10% • Component market

price: 2550 US$/ton +/− 10%• On-site labor: 20–50 jobs.

Figure A5.9 shows the cumulative cash flow considering the requirements cited above and the fact that the factory is able to adjust its production according to the demand from 2014 to 2020. Three

different cash flows are shown: investment and cash flow only for domestic demand, for Regional demand, and for Europe and ROW demand.

The number of jobs necessary to run a factory for a nominal production 5000–6000 tons of support structure per year is 20 workers (for either PV or CSP).

The ratio used to calculate the number of jobs is 20–50 jobs per factory. If the factory runs at maximum production, it will employ 50–65 workers; if the factory runs at minimum production, 18–22 workers will be employed

CASE STUDY: THIN FILM MODULES INDUSTRY IN MOROCCO

The TF Modules industry is a dynamic segment with venture-funded upstart companies and has as its main advantage its scalable production capacity. For development and small-scale production, it has few barriers. However, when scale becomes greater, access to capital could become an important factor.

Figure A5.9 | Cumulative Cash Flow for a Support Structure Industry in Morocco, 2013–20 (US$ mil)

Cash

flow

(mill

ion

USD)

−202013


2014 2015 2016 2017 2018 2019 2020

0

20

40

60

80

100


Annexes | 237

The driving force for internal demand is the growth of installed capacity of solar power plants in Morocco. Therefore, a forecast to 2020 has been made to deduce the solar component demand for each of the five MENA countries. Demand for solar components is not only domestic but also can come from other countries and regions. Thus, demand from four separate regions has been forecasted: neighboring MENA countries, the MENA Region as a whole, the European Union, and ROW.

The annual demand in MW is shown in Figure A5.11. In the long run, the yearly installed capacity is the key number to determine whether a manufacturing industry will have a stable demand.

• Global and European forecasted component demand is based on the forecasted installed capacity in each of these regions. A linear hypothesis was used to determine annual growth. A residual market share has been assumed for Europe (1.0 percent) and ROW (0.5 percent) in 2020.

• For MENA countries[57], [66], and[67] define a similar scenario called “moderate.” Market share to be supplied by Morocco in its neighboring countries (Algeria and Tunisia) has been estimated to reach 5.0 percent of the demand for target industries in 2020. MENA Regional(Egypt and Jordan) market share to be supplied by each MENA country has been estimated to be 2.5 percent of the demand for target industries in 2020.



Figure A5.11 represents a comparison of annual demand of Support structure industry following the hypotheses aforementioned vs. maximum and

Figure A5.10 | Market Share Evolution for Target Industries Hypotheses, 2011–21 (%)

100.0%

10.0%

1.0%

0.1%

0.0%2011 2013 2015 2017 2019 2021

Local


Other MENA

Europe

Row



minimum production of a typical support structure factory.

Figure A5.12 shows the cumulative cash flow considering the requirements cited above and the fact that the factory is able to adjust its production according to the demand from 2014 to 2020. Three different cash flows are shown: investment and cash flow only for domestic demand, for Regional demand, and for Europe and ROW demand.

CERTIFICATION AND TESTING PROCEDURES

Both Figure A5.11 and Figure A5.12 show that exports would play a fundamental role in reaching a threshold demand for the development of TF modules industry in Morocco. The module certification is an essential step to enable exports. This certification and testing procedure is, in fact, a Regional opportunity

to develop an international institute of TF Modules certification.

CASE STUDY: RECEIVER INDUSTRY IN TUNISIA

The main drawback for the deployment of a Receiver industry is the lack of internal and regional demand and small share foreseen in the European and ROW market.

In Tunisia, the driving force for internal demand is the growth of installed capacity of solar power plants. Therefore, a forecast to 2020 has been made to deduce the solar component demand for each of the five MENA countries.

Demand for solar components is not only domestic but also can come from other countries and regions. For this reason, demand has been forecasted for

Figure A5.11 | Comparison of Total Demand for TF Modules Industry vs. Range of Production for a TF Modules Factory in Morocco, 2014–20 (MW)

0

2014

Local demand

Minimum production

MENA countries demand

Maximum production


2015 2016 2017 2018 2019 2020

75

150

225

300


Annexes | 239

four separate regions: neighboring MENA countries, the MENA Region as a whole, the European Union, and ROW.

The annual demand in pieces is shown in Figure A5.14.In the long run, the yearly installed capacity is the key number to determine whether a manufacturing industry will have a stable demand.

• Global and European forecasted component demand is based on the forecasted installed capacity in each of these regions. A linear hypothesis was used to determine annual growth. A residual market share has been assumed for Europe(1.0 percent) and ROW (0.5 percent) in 2020.

• For MENA countries, [57], [66], and[67] define a similar scenario called “moderate.” Market share to be supplied by Tunisia in its neighboring countries (Algeria and Morocco) has been estimated to reach 5.0 percent of the demand for target industries in 2020. MENA Regional (Egypt and Jordan) market share to be supplied by each MENA country has been estimated to be 2.5 percent of the demand for target industries in 2020.



Figure A5.14 represents a comparison of annual demand of the Receiver industry following the aforementioned hypotheses vs. maximum and minimum production of a typical Receiver factory.

Despite Tunisia’s technical capabilities, expected demand is not enough to justify venturing in a Receiver manufacturing project. This situation may change if an established manufacturer decided to set up a facility in Tunisia (either by itself or through a partnership mechanisms such as joint venture or similar). A manufacturer with a solid track record would enable reaching a higher share in export markets, thus reaching a minimum demand threshold.

Figure A5.12 | Cumulative Cash Flow for a TF Modules Industry in Morocco, 2013–20 (US$ mil)

−2502013 2014 2015 2016 2017 2018 2019 2020


−200

−150

−100

−50

0

50

100

Cash

Flo

w (m

illio

n US

$)



Figure A5.13 | Market Share Evolution for Target Industries Hypotheses, 2011–21 (%)

100.0%

10.0%

1.0%

0.1%

0.0%2011 2013 2015 2017 2019 2021

Local


Other MENA

Europe

Row


Figure A5.14 | Comparison of Total Demand for Receiver Industry vs. Range of Production for a Receiver Factory in Tunisia, 2014–20 (000 units)

Thou

sand

s

0

10

20

30

Local demand

2013 2014 2015 2016 2017 2018 2019 2020

Maximum production

MENA countries demand

Minimum production


40

50

60

70

80


Note: Figure A5.8 shows annual demand in pieces. Each receiver piece is a 4 m long steel and glass tube.

Annexes | 241

AN

NE

X 6

| B

en

ch

mark

ing

An

aly

sis

Re

sult

sP

RIM

AR

Y D

AT

A

Tab

le A

6.1

| P

rim

ary

Data

Re

late

d t

o P

rod

ucti

on

Facto

rs: M

EN

A C

ou

ntr

ies

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g

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go

ry O

Cisc,

Co

mp

eti

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ne

ss

Para

me

ter CP

jCP

jCP

sc,

sc,

sc

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mary

Data

Pk

Pk

Pc

Alg

eri

aE

gyp

tJo

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Mo

rocco

Tu

nis

ia

1. P

rod

ucti

on

fa

cto

rs1.

1 L

ab

or

mark

et

1.1.

1 L

ab

or

co

sts

(1/(

US

$/y

ear)

x 1

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0.3

71

0.3

38

1.1.

2 L

ab

or

mark

et

eff

icie

ncy

3.4

13

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3.9

73

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3.9

7

1.2 M

ate

rial

availa

bili

ty1.

2.1

Gla

ss m

an

ufa

ctu

rin

g (

103 t

/year)

0.4

20

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0.0

00

.00

0.0

0

1.2.2

Sta

inle

ss s

teel m

an

ufa

ctu

rin

g

0.0

00

.10

0.0

00

.00

0.0

0

1.2.3

Ste

el m

an

ufa

ctu

rin

g

0.1

00

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0.0

00

.10

0.1

0

1.2.4

Oil

man

ufa

ctu

rin

g a

bili

ty

0.0

00

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0.0

20

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0.0

0

1.2.5

Co

pp

er

man

ufa

ctu

rin

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0.0

00

.00

0.0

00

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0.0

0

1.2.6

Sili

co

n m

an

ufa

ctu

rin

g

0.0

00

.00

0.0

00

.00

0.0

0

1.2.7

NaN

O3/K

NO

3 a

vaila

bili

ty

0.0

00

.10

0.0

00

.00

0.0

0

1.3

Rele

van

t m

an

ufa

ctu

rin

g

ab

ility

1.3

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xis

ten

ce o

f sy

nerg

ic in

du

stri

es

0.5

00

.75

0.2

50

.50

0.2

5

1.3

.2 L

itera

cy r

ate

s (%

)75

.06

6.4

91.

05

6.1

78

.0

1.3

.3 H

igh

er

ed

ucati

on

an

d t

rain

ing

3.5

13

.44

4.3

33

.62

4.6

7

1.4

Co

st o

f en

erg

y

1.4

.1 C

ost

of

en

erg

y (

ind

ust

rial)

(1

/(U

S$

c/k

Wh

))0

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0.1

70

.07

0.0

80

.11

1.5

Fis

cal an

d

fin

an

cia

l co

st1.

5.1

Payin

g t

axes

ran

k0

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0.2

10

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0.3

90

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1.5

.2 L

en

din

g in

tere

stra

te0

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90

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70

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No

te: U

nit

s o

f m

easu

re a

re d

isp

layed

wh

ere

po

ssib

le, b

ut

mo

st d

ata

are

co

mp

ose

d in

dic

es

so h

ave n

o u

nit

s.


Tab

le A

6.2

| P

rim

ary

Data

Re

late

d t

o P

rod

ucti

on

Facto

rs: B

en

ch

mark

Co

un

trie

s

Ove

rarc

hin

g

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go

ry O

Cisc,

Co

mp

eti

tive

ne

ss

Para

me

ter CP

jCP

jCP

sc,

sc,

sc

Pri

mary

Data

Pk

Pk

Pc

Ch

ile

Ch

ina

Ge

rman

yIn

dia

Jap

an

So

uth

A

fric

aS

pain

Un

ite

d

Sta

tes

1. P

rod

ucti

on

fa

cto

rs1.

1. L

ab

or

mark

et

1.1.

1 L

ab

or

co

sts

(1/

(US

$/

year)

x 1

0-3)

0.1

82

0.4

82

0.5

02

0.6

89

0.0

88

90

.40

50

.08

75

0.0

66

3

1.1.

2 L

ab

or

mark

et

eff

icie

ncy

4.6

44

.68

4.4

14

.25

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4.0

63

.84

5.5

7

1.2 M

ate

rial

availa

bili

ty1.

2.1

Gla

ss m

an

ufa

ctu

rin

g

(10

3 t

/year)

0.0

013

.00

2.3

41.

72

1.20

0.2

61.

114

.80

1.2.2

Sta

inle

ss s

teel

man

ufa

ctu

rin

g

0.0

01.

00

0.0

00

.25

0.5

00

.00

0.0

00

.50

1.2.3

Ste

el m

an

ufa

ctu

rin

g

0.2

51.

00

0.7

50

.75

1.0

00

.50

0.5

00

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1.2.4

Oil

man

ufa

ctu

rin

g

ab

ility

0

.00

0.9

40

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0.4

41.

00

0.1

00

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0.7

6

1.2.5

Co

pp

er

man

ufa

ctu

rin

g

1.0

00

.75

0.0

00

.25

0.0

00

.25

0.1

00

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1.2.6

Sili

co

n m

an

ufa

ctu

rin

g

0.0

01.

00

0.5

00

.00

0.5

00

.00

0.0

00

.00

1.2.7

NaN

O3/K

NO

3

availa

bili

ty

1.0

01.

00

0.0

00

.00

0.0

00

.00

0.0

00

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1.3

Rele

van

t m

an

ufa

ctu

rin

g

ab

ility

1.3

.1 E

xis

ten

ce o

f sy

nerg

ic

ind

ust

ries

0.2

51.

00

1.0

01.

00

1.0

00

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0.7

51.

00

1.3

.2 L

itera

cy r

ate

s (%

)9

6.5

95

.99

9.0

74

.09

9.0

88

.09

7.9

99

.0

1.3

.3 H

igh

er

ed

ucati

on

an

d

train

ing

4.6

74

.34

5.7

33

.88

5.2

74

.03

4.9

5.5

7

1.4

Co

st o

f en

erg

y

1.4

.1 C

ost

of

en

erg

y

(in

du

stri

al)

(1

/(U

S$

c/k

Wh

))

0.0

50

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0.0

60

.10

0.0

60

.10

0.0

60

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1.5

Fis

cal an

d

fin

an

cia

l co

st1.

5.1

Payin

g t

axes

ran

k0

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30

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0.2

00

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60

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0.6

1

1.5

.2 L

en

din

g in

tere

stra

te0

.95

20

.94

20

.99

30

.917

0.9

84

0.9

02

0.9

61

0.9

67

Annexes | 243

Tab

le A

6.3

| P

rim

ary

Data

Re

late

d t

o D

em

an

d F

acto

rs: M

EN

A C

ou

ntr

ies

Ove

rarc

hin

g

Cate

go

ry O

Cisc,

Co

mp

eti

tive

ne

ss

Para

me

ter CP

jCP

jCP

sc,

sc,

sc

Pri

mary

Datu

m P

kP

kP

cA

lge

ria

Eg

yp

tJo

rdan

Mo

rocco

Tu

nis

ia

2. D

em

an

d

facto

rs2.1

. C

SP

an

d P

V

Co

mp

on

en

t d

em

an

d

2.1

.1 C

SP

gro

wth

scen

ari

o t

o 2

020

(M

W)

1525

110

04

50

160

03

00

2.1

.2 P

V g

row

th s

cen

ari

o t

o 2

020

(M

W)

80

020

015

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00

50

2.1

.3 G

HI yearl

y m

axim

um

(kW

h/(

m2·d

ay))

6.3

50

6.5

80

5.5

90

6.0

80

5.7

20

2.1

.4 D

NI yearl

y m

axim

um

(kW

h/(

m2·d

ay))

7.7

40

8.2

00

6.9

50

7.2

60

6.8

20

2.1

.5 E

lectr

icit

y d

em

an

d g

row

th (

%)

67.6

3.8

7.2

5.4

2.1

.6 E

nerg

y im

po

rts

net

03

124

30

429

34

9

2.1

.7 C

ost

of

en

erg

y (

resi

den

tial)

(U

S$

c/k

Wh

)6

.07

1.5

611

.98

17.5

610

.2

2.1

.8 C

SP

glo

bal m

ark

et

20

20

(M

W)

65

63

29

46

910

164

96

2.1

.9 P

V g

lob

al m

ark

et

20

20

(M

W)

924

83

08

83

100

48

64

Tab

le A

6.4

| P

rim

ary

Data

Re

late

d t

o D

em

an

d F

acto

rs: B

en

ch

mark

Co

un

trie

s

Ove

rarc

hin

g

Cate

go

ry O

Cisc,

Co

mp

eti

tive

ne

ss

Para

me

ter CP

jCP

jCP

sc,

sc,

sc

Pri

mary

Datu

m P

kP

kP

cC

hile

Ch

ina

Ge

rman

yIn

dia

Jap

an

So

uth

A

fric

aS

pain

Un

ite

d

Sta

tes

2. D

em

an

d

facto

rs2.1

. C

SP

an

d P

V

Co

mp

on

en

t d

em

an

d

2.1

.1 C

SP

gro

wth

scen

ari

o t

o

20

20

(M

W)

970

20

00

010

00

020

00

23

59

20

00

2.1

.2 P

V g

row

th s

cen

ari

o t

o

20

20

(M

W)

013

00

03

30

00

60

00

110

00

80

08

36

715

00

0

2.1

.3 G

HI yearl

y m

axim

um

(k

Wh

/(m

2·d

ay))

6.8

70

5.8

90

3.1

50

5.4

00

3.7

00

5.8

60

4.8

70

4.8

20

2.1

.4 D

NI yearl

y m

axim

um

(k

Wh

/(m

2·d

ay))

7.5

60

8.2

103

.370

5.8

30

4.1

20

8.1

00

7.2

60

7.2

50

2.1

.5 E

lectr

icit

y d

em

an

d

gro

wth

(%

)3

.013

.25

.06

.02.8

8.4

1.4

4.3

2.1

.6 E

nerg

y im

po

rts

net

40

23

42

39

43

60

414

322

411

35

6

2.1

.7 C

ost

of

en

erg

y

(resi

den

tial)

(U

S$

c/k

Wh

)24

.22

7.9

33

6.4

6.8

22

14.0

228

.211

.4

2.1

.8 C

SP

glo

bal m

ark

et

20

20

(M

W)

56

512

1026

58

05

310

119

713

27

1214

2.1

.9 P

V g

lob

al m

ark

et

20

20

(M

W)

73

08

020

174

25

43

75

712

010

90

66

40

83

45


Tab

le A

6.5

| P

rim

ary

Data

Re

late

d t

o S

tab

ilit

y a

nd

Ris

k F

acto

rs: M

EN

A C

ou

ntr

ies

Ove

rarc

hin

g

Cate

go

ry O

Cisc,

Co

mp

eti

tive

ne

ss

Para

me

ter CP

jCP

jCP

sc,

sc,

sc

Pri

mary

Datu

m P

kP

kP

cA

lge

ria

Eg

yp

tJo

rdan

Mo

rocco

Tu

nis

ia

3. R

isk a

nd

st

ab

ilit

y

facto

rs

3.1

Ris

k a

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ted

w

ith

do

ing

b

usi

ness

3.1

.1 C

orr

up

tio

n in

dex

2.9

03

.10

4.7

03

.40

4.3

0

3.1

.2 E

ase

of

Do

ing

Bu

sin

ess

ran

kin

g 2

012

0.1

90

.40

0.4

80

.49

0.7

5

3.1

.3 E

ase

of

Do

ing

Bu

sin

ess

20

07–1

2

ran

kin

g c

han

ge

0.0

00

.49

0.0

70

.29

0.3

6

3.1

.4 In

flati

on

rate

0.9

60

.89

0.9

50

.99

0.9

6

3.1

.5 O

EC

D c

ou

ntr

y r

isk

0.3

30

.20

0.2

00

.33

0.3

3

3.2

Ris

k a

sso

cia

ted

w

ith

dem

an

d3

.2.1

Exis

ten

ce o

f cle

ar

stab

le r

eg

ula

tory

fr

am

ew

ork

fo

r R

E

0.5

00

.50

0.5

00

.75

0.5

0

3.2

.2 E

xis

ten

ce o

f in

cen

tives

for

PV

0.2

50

.00

0.0

00

.00

0.0

0

3.2

.3 E

xis

ten

ce o

f in

cen

tives

for

CS

P0

.25

0.0

00

.00

0.0

00

.00

3.2

.4 E

xis

ten

ce o

f R

E a

sso

cia

tio

ns

0.5

01.

00

0.5

01.

00

1.0

0

3.2

.5 T

ota

l so

lar

PV

cap

acit

y0

.00

1.0

00

.28

16.3

80

.60

3.2

.6 T

ota

l C

SP

cap

acit

y20

20

020

0

3.2

.7 A

gen

cy f

or

the d

evelo

pm

en

t o

f R

E0

.00

1.0

00

.00

1.0

01.

00

3.2

.8 C

om

peti

tio

n in

th

e e

lectr

icit

y s

ecto

r0

.25

0.2

50

.10

0.2

50

.00

3.3

Fin

an

cia

l ri

sk3

.3.1

Access

to

cre

dit

0.1

80

.57

0.1

80

.46

0.4

6

Annexes | 245

Tab

le A

6.6

| P

rim

ary

Data

Re

late

d T

o S

tab

ilit

y a

nd

Ris

k F

acto

rs: B

en

ch

mark

Co

un

trie

s

Ove

rarc

hin

g

Cate

go

ry O

Cisc,

Co

mp

eti

tive

ne

ss

Para

me

ter CP

jCP

jCP

sc,

sc,

sc

Pri

mary

Datu

m P

kP

kP

cC

hile

Ch

ina

Ge

rman

yIn

dia

Jap

an

So

uth

A

fric

aS

pain

Un

ite

d

Sta

tes

3. R

isk a

nd

st

ab

ilit

y

facto

rs

3.1

Ris

k a

sso

cia

ted

w

ith

Do

ing

B

usi

ness

3.1

.1 C

orr

up

tio

n in

dex

7.2

03

.50

7.9

03

.30

7.8

04

.50

6.1

07.1

0

3.1

.2 E

ase

of

Do

ing

B

usi

ness

ran

kin

g 2

012

0.7

90

.50

0.9

00

.28

0.8

90

.81

0.7

60

.98

3.1

.3 E

ase

of

Do

ing

B

usi

ness

20

07–1

2

ran

kin

g c

han

ge

0.1

00

.18

0.1

70

.19

0.1

10

.12

0.1

30

.15

3.1

.4 In

flati

on

rate

0.9

90

.97

0.9

90

.88

1.0

00

.96

0.9

80

.98

3.1

.5 O

EC

D c

ou

ntr

y r

isk

0.5

00

.50

1.0

00

.33

1.0

00

.33

1.0

01.

00

3.2

Ris

k a

sso

cia

ted

w

ith

dem

an

d3

.2.1

Exis

ten

ce o

f cle

ar

stab

le r

eg

ula

tory

fr

am

ew

ork

fo

r R

E

1.0

01.

00

1.0

01.

00

1.0

00

.50

1.0

00

.50

3.2

.2 E

xis

ten

ce o

f in

cen

tives

for

PV

0.0

01.

00

1.0

00

.50

1.0

00

.50

1.0

00

.50

3.2

.3 E

xis

ten

ce o

f in

cen

tives

for

CS

P0

.00

1.0

01.

00

0.5

00

.00

0.5

01.

00

0.5

0

3.2

.4 E

xis

ten

ce o

f R

E

ass

ocia

tio

ns

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

3.2

.5 T

ota

l so

lar

PV

cap

acit

y1

29

00

24

70

04

50

470

00

420

04

20

0

3.2

.6 T

ota

l C

SP

cap

acit

y0

30

60

09

05

54

1

3.2

.7 A

gen

cy f

or

the

develo

pm

en

t o

f R

E1.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

0

3.2

.8 C

om

peti

tio

n in

th

e

ele

ctr

icit

y s

ecto

r1.

00

0.5

00

.75

0.5

00

.50

0.0

01.

00

0.7

5

3.3

Fin

an

cia

l ri

sk3

.3.1

Access

to

cre

dit

0.7

40

.63

0.8

70

.78

0.8

70

.99

0.7

40

.98


Tab

le A

6.7

| P

rim

ary

Data

Re

late

d t

o B

usi

ne

ss S

up

po

rt F

acto

rs: M

EN

A C

ou

ntr

ies

Ove

rarc

hin

g

Cate

go

ry O

Cisc,

Co

mp

eti

tive

ne

ss

Para

me

ter CP

jCP

jCP

sc,

sc,

sc

Pri

mary

Datu

m P

kP

kP

cA

lge

ria

Eg

yp

tJo

rdan

Mo

rocco

Tu

nis

ia

4. B

usi

ne

ss

sup

po

rt

facto

rs

4.1

In

du

stry

str

uctu

re4

.1.1

Pre

sen

ce o

f la

rge

inte

rnati

on

al

ind

ust

rial

co

mp

an

ies

116

18

8

4.1

.2 In

du

stri

al G

DP

(%

)6

24

03

03

23

5

4.1

.3 L

ocal clu

steri

ng

00

01

0

4.2

. In

no

vati

on

cap

acit

y4

.2.1

Pate

nt

filin

gs

per

mill

ion

po

pu

lati

on

20

10

2.1

47.4

67.4

44

.76

5.5

8

4.2

.2 G

CR

* 20

11–1

2

inn

ovati

on

sco

re2.3

72.8

44

.16

3.0

23

.58

4.2

.3 G

CR

20

11–1

2

tech

no

log

ical

read

iness

2.8

33

.31

3.8

13

.69

3.8

2

4.2

.4 B

usi

ness

so

ph

isti

cati

on

2.9

33

.82

3.8

83

.78

4.1

6

4.3

Lo

gis

tical

infr

ast

ructu

re4

.3.1

Qu

alit

y o

f p

ort

in

frast

ructu

re 2

010

3.2

04

.20

4.4

04

.40

5.0

0

4.3

.2 G

CR

20

11–1

2

infr

ast

ructu

re3

.43

3.8

14

.13

3.9

54

.36

4.3

.3 L

og

isti

cs

perf

orm

an

ce

ind

ex

2.3

62.6

12.7

42.3

82.8

4

No

te: *

Glo

bal C

om

peti

tiven

ess

Rep

ort

Annexes | 247

Tab

le A

6.8

| P

rim

ary

Data

Re

late

d t

o B

usi

ne

ss S

up

po

rt F

acto

rs: B

en

ch

mark

Co

un

trie

s

Ove

rarc

hin

g

Cate

go

ry O

Cisc,

Co

mp

eti

tive

ne

ss

Para

me

ter CP

jCP

jCP

sc,

sc,

sc

Pri

mary

Datu

m P

kP

kP

cC

hile

Ch

ina

Ge

rman

yIn

dia

Jap

an

So

uth

A

fric

aS

pain

Un

ite

d

Sta

tes

4. B

usi

ne

ss

sup

po

rt

facto

rs

4.1

In

du

stry

st

ructu

re4

.1.1

Pre

sen

ce o

f la

rge

inte

rnati

on

al in

du

stri

al

co

mp

an

ies

48

21

317

715

25

4.1

.2 In

du

stri

al G

DP

(%

)4

24

728

26

24

32

26

22

4.1

.3 L

ocal clu

steri

ng

01

10

10

11

4.2

. In

no

vati

on

cap

acit

y4

.2.1

Pate

nt

filin

gs

per

mill

ion

p

op

ula

tio

n 2

010

19.2

219

.05

75

.86

.32276

.016

.477.4

78

3.0

4.2

.2 G

CR

* 20

11–1

2 in

no

vati

on

sc

ore

3.4

53

.92

5.3

93

.58

5.5

93

.53

3.5

55

.57

4.2

.3 G

CR

20

11–1

2

tech

no

log

ical re

ad

iness

4.2

63

.57

5.6

13

.36

5.0

63

.64

.95

5.2

3

4.2

.4 B

usi

ness

so

ph

isti

cati

on

4.3

24

.37

5.6

64

.27

5.9

14

.32

4.5

15

.35

4.3

Lo

gis

tical

infr

ast

ructu

re4

.3.1

Qu

alit

y o

f p

ort

in

frast

ructu

re 2

010

5.5

04

.30

6.4

03

.90

5.2

04

.70

5.6

05

.50

4.3

.2 G

CR

20

11–1

2

infr

ast

ructu

re4

.67

4.6

36

.35

3.6

05

.69

4.0

25

.83

5.6

8

4.3

.3 L

og

isti

cs

perf

orm

an

ce

ind

ex

3.0

93

.49

4.1

13

.12

3.9

73

.46

3.6

33

.86

No

te: *

Glo

bal C

om

peti

tiven

ess

Rep

ort

.


Tab

le A

6.9

| W

eig

ht

Facto

r fo

r an

Ind

ust

ry W

ith

in a

n A

ttra

cti

ve

ne

ss In

de

x (s i)

– W

eig

hti

ng

Ove

rarc

hin

g C

ate

go

rie

s:

CS

P I

nd

ust

rie

s

Ove

rarc

hin

g

Cate

go

ry ( is )

Re

ce

ive

rM

irro

rS

tru

ctu

re

& T

racke

r

HT

F

Th

erm

al

Oil

HT

F

Pu

mp

sH

eat

Exch

an

ge

rS

ola

r S

alt

Sto

rag

e

Tan

ks

Pu

mp

sS

team

T

urb

ine

Ele

ctr

ical

Ge

ne

rato

rC

on

de

nse

r

Pro

du

cti

on

0.3

50

.35

0.6

50

.20

.35

0.6

50

.40

.20

.20

.40

.35

0.3

5

Dem

an

d0

.10

0.1

00

.10

0.1

00

.10

0.1

00

.10

0.1

00

.10

0.1

00

.10

0.1

0

Ris

k a

nd

sta

bili

ty0

.50

0.5

00

.20

0.6

50

.50

0.2

00

.45

0.6

50

.65

0.4

50

.50

0.5

0

Bu

sin

ess

en

vir

on

men

t0

.05

0.0

50

.05

0.0

50

.05

0.0

50

.05

0.0

50

.05

0.0

50

.05

0.0

5

Tab

le A

6.1

0 |

We

igh

t F

acto

r fo

r an

Ind

ust

ry W

ith

in a

n A

ttra

cti

ve

ne

ss In

de

x (s i)

– W

eig

hti

ng

Ove

rarc

hin

g C

ate

go

rie

s:

PV

In

du

stri

es

Ove

rarc

hin

g C

ate

go

ry

( is )

Po

lysi

lico

nIn

go

ts/

Wafe

rsC

ells

Cry

stallin

e

Mo

du

les

TF

M

ate

rials

So

lar

Gla

ssT

F

Mo

du

les

Inve

rte

rS

up

po

rt

Str

uctu

re

Pro

du

cti

on

0.2

00

.20

0.3

50

.65

0.4

00

.20

0.6

50

.65

0.6

5

Dem

an

d0

.10

0.1

00

.10

0.1

00

.10

0.1

00

.10

0.1

00

.10

Ris

k a

nd

sta

bili

ty0

.65

0.6

50

.50

0.2

00

.45

0.6

50

.20

0.2

00

.20

Bu

sin

ess

en

vir

on

men

t0

.05

0.0

50

.05

0.0

50

.05

0.0

50

.05

0.0

50

.05

WE

IGH

TS

Annexes | 249

Tab

le A

6.1

1 |

We

igh

t F

acto

r W

ith

in a

n O

ve

rarc

hin

g C

ate

go

ry (s i,

j) –

We

igh

tin

g C

om

pe

titi

ve

ne

ss P

ara

me

ters

: C

SP

In

du

stri

es

Co

mp

eti

tive

ne

ss

Para

me

ters

(ij

s ij,ij)

Re

ce

ive

rM

irro

rS

tru

ctu

re

& T

racke

rH

TF

T

he

rmal O

ilH

TF

P

um

ps

He

at

Exch

an

ge

rS

ola

r S

alt

Sto

rag

e

Tan

ks

Pu

mp

sS

team

T

urb

ine

Ele

ctr

ical

Ge

ne

rato

rC

on

de

nse

r

Lab

or

mark

et

0.2

20

.09

0.3

80

.06

0.0

70

.07

0.1

90

.19

0.0

70

.07

0.2

20

.09

Mate

rial

availa

bili

ty0

.07

0.4

00

.41

0.0

80

.08

0.4

80

.33

0.0

70

.16

0.4

00

.07

0.4

0

Rele

van

t m

an

ufa

ctu

rin

g

ab

ility

0.6

30

.40

0.1

00

.74

0.7

20

.32

0.3

30

.60

0.6

40

.40

0.6

30

.40

En

erg

y

ch

eap

ness

0.0

20

.06

0.0

50

.06

0.0

70

.07

0.1

00

.10

0.0

70

.07

0.0

20

.06

Fis

cal an

d

fin

an

cia

l co

st0

.06

0.0

60

.06

0.0

60

.07

0.0

70

.05

0.0

50

.07

0.0

70

.06

0.0

6

CS

P P

V

Co

mp

on

en

t d

em

an

d

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

Ris

k a

sso

cia

ted

w

ith

Do

ing

B

usi

ness

0.2

50

.25

0.2

50

.10

0.1

00

.25

0.2

50

.10

0.1

00

.25

0.2

50

.25

Sta

te

co

mm

itm

en

t an

d

sup

po

rt

0.2

50

.25

0.2

50

.10

0.1

00

.25

0.2

50

.10

0.1

00

.25

0.2

50

.25

Fin

an

cia

l ri

sk0

.50

0.5

00

.50

0.8

00

.80

0.5

00

.50

0.8

00

.80

0.5

00

.50

0.5

0

Ind

ust

ry

stru

ctu

re0

.15

0.1

50

.33

0.1

50

.15

0.3

30

.33

0.1

50

.15

0.3

30

.15

0.1

5

Inn

ovati

on

cap

acit

y0

.70

0.7

00

.34

0.7

00

.70

0.3

40

.34

0.7

00

.70

0.3

40

.70

0.7

0

Lo

gis

tical

infr

ast

ructu

re0

.15

0.1

50

.33

0.1

50

.15

0.3

30

.33

0.1

50

.15

0.3

30

.15

0.1

5


Tab

le A

6.1

2 |

We

igh

t F

acto

r W

ith

in a

n O

ve

rarc

hin

g C

ate

go

ry (s i,

j) –

We

igh

tin

g C

om

pe

titi

ve

ne

ss P

ara

me

ters

: P

V I

nd

ust

rie

s

Co

mp

eti

tive

ne

ss

Para

me

ters

(ij

s ij,ij)

Po

lysi

lico

nIn

go

ts/

Wafe

rsC

ells

Cry

stallin

e

Mo

du

les

TF

M

ate

rials

So

lar

Gla

ssT

F

Mo

du

les

Inve

rte

rS

up

po

rt

Str

uctu

re

Lab

or

mark

et

0.1

10

.21

0.1

10

.11

0.1

70

.13

0.1

20

.27

0.3

8

Mate

rial availa

bili

ty0

.04

0.0

60

.07

0.4

00

.31

0.2

10

.36

0.4

70

.41

Rele

van

t m

an

ufa

ctu

rin

g

ab

ility

0.3

20

.55

0.6

60

.40

0.3

10

.21

0.3

60

.12

0.1

0

En

erg

y c

heap

ness

0.4

60

.11

0.1

10

.04

0.1

70

.39

0.1

00

.09

0.0

5

Fis

cala

nd

fin

an

cia

l co

st0

.08

0.0

70

.05

0.0

50

.06

0.0

60

.05

0.0

50

.06

CS

P P

V C

om

po

nen

t d

em

an

d1.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

Ris

k a

sso

cia

ted

wit

h

Do

ing

Bu

sin

ess

0.1

00

.10

0.2

00

.25

0.2

50

.10

0.2

50

.25

0.2

5

Sta

te c

om

mit

men

t an

d s

up

po

rt0

.10

0.1

00

.20

0.2

50

.25

0.1

00

.25

0.2

50

.25

Fin

an

cia

l ri

sk0

.80

0.8

00

.60

0.5

00

.50

0.8

00

.50

0.5

00

.50

Ind

ust

ry s

tru

ctu

re0

.15

0.1

50

.15

0.3

30

.33

0.3

30

.33

0.3

30

.33

Inn

ovati

on

cap

acit

y0

.70

0.7

00

.70

0.3

40

.34

0.3

40

.34

0.3

40

.34

Lo

gis

tical in

frast

ructu

re0

.15

0.1

50

.15

0.3

30

.33

0.3

30

.33

0.3

30

.33

Annexes | 251

Tab

le A

6.1

3 |

We

igh

t F

acto

r W

ith

in a

Co

mp

eti

tive

ne

ss P

ara

me

ter

(s j,

k)

– W

eig

hti

ng

No

rmalize

d P

rim

ary

Data

: C

SP

In

du

stri

es

Pri

mary

Data

(

jk

s jk,jk)

Re

ce

ive

rM

irro

rS

tru

ctu

re &

T

racke

rH

TF

T

he

rmal O

ilH

TF

P

um

ps

He

at

Exch

an

ge

rS

ola

r S

alt

Sto

rag

e

Tan

ks

St

Pu

mp

sS

team

T

urb

ine

Ele

ctr

ical

Ge

ne

rato

rC

on

de

nse

r

Lab

or

co

sts

0.2

50

.50

0.7

50

.25

0.2

50

.50

0.7

50

.50

0.5

00

.25

0.2

50

.50

Lab

or

mark

et

eff

icie

ncy

0.7

50

.50

0.2

50

.75

0.7

50

.50

0.2

50

.50

0.5

00

.75

0.7

50

.50

Gla

ss

man

ufa

ctu

rin

g

in t

he c

ou

ntr

y

0.3

01.

00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

Sta

inle

ss s

teel

man

ufa

ctu

rin

g

in t

he c

ou

ntr

y

0.7

00

.00

0.0

00

.00

0.5

30

.53

0.0

00

.69

0.6

90

.69

0.0

00

.69

Ste

el

man

ufa

ctu

rin

g

in t

he c

ou

ntr

y

0.0

00

.00

1.0

00

.00

0.2

40

.47

0.0

00

.31

0.3

10

.31

0.5

00

.31

Oil

man

ufa

ctu

rin

g

ab

ility

in

th

e

co

un

try

0.0

00

.00

0.0

01.

00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

Co

pp

er

man

ufa

ctu

rin

g

in t

he c

ou

ntr

y

0.0

00

.00

0.0

00

.00

0.2

40

.00

0.0

00

.00

0.0

00

.00

0.5

00

.00

Sili

co

n

man

ufa

ctu

rin

g

in t

he c

ou

ntr

y

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

NaN

O3/K

NO

3

availa

bili

ty in

th

e c

ou

ntr

y

0.0

00

.00

0.0

00

.00

0.0

00

.00

1.0

00

.00

0.0

00

.00

0.0

00

.00

Exis

ten

ce

of

syn

erg

ic

ind

ust

ries

0.6

00

.60

0.6

00

.60

0.6

00

.60

0.6

00

.60

0.6

00

.60

0.6

00

.60

Lit

era

cy r

ate

s (%

)0

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

0

(Con

tinue

d)


Pri

mary

Data

(

jk

s ,)

Re

ce

ive

rM

irro

rS

tru

ctu

re &

T

racke

rH

TF

T

he

rmal O

ilH

TF

P

um

ps

He

at

Exch

an

ge

rS

ola

r S

alt

Sto

rag

e

Tan

ks

St

Pu

mp

sS

team

T

urb

ine

Ele

ctr

ical

Ge

ne

rato

rC

on

de

nse

r

Hig

her

ed

ucati

on

an

d

train

ing

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

Co

st o

f en

erg

y

(in

du

stri

al)

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

Payin

g t

axes

ran

k0

.50

0.5

00

.50

0.5

00

.50

0.5

00

.50

0.5

00

.50

0.5

00

.50

0.5

0

Len

din

g

inte

rest

rate

0.5

00

.50

0.5

00

.50

0.5

00

.50

0.5

00

.50

0.5

00

.50

0.5

00

.50

CS

P g

row

th

scen

ari

o t

o

20

20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

PV

gro

wth

sc

en

ari

o t

o

20

20

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

Maxim

um

yearl

y g

lob

al

ho

rizo

nta

l ir

rad

iati

on

(G

HI)

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

Maxim

um

yearl

y d

irect

no

rmal

irra

dia

tio

n

(DN

I)

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

Ele

ctr

icit

y

dem

an

d

gro

wth

(c

han

ge 2

010

o

ver

20

09

)

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

En

erg

y

imp

ort

s n

et

as

% o

f en

erg

y

use

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

Tab

le A

6.1

3 |

Co

nti

nu

ed

(Con

tinue

d)

Annexes | 253

Pri

mary

Data

(

jk

s ,)

Re

ce

ive

rM

irro

rS

tru

ctu

re &

T

racke

rH

TF

T

he

rmal O

ilH

TF

P

um

ps

He

at

Exch

an

ge

rS

ola

r S

alt

Sto

rag

e

Tan

ks

St

Pu

mp

sS

team

T

urb

ine

Ele

ctr

ical

Ge

ne

rato

rC

on

de

nse

r

Co

st o

f en

erg

y

(resi

den

tial)

-P

V

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

CS

P g

lob

al

po

ten

tial

mark

et

for

co

mp

on

en

ts

to 2

020

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

PV

glo

bal

po

ten

tial

mark

et

for

co

mp

on

en

ts

to 2

020

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

Co

rru

pti

on

in

dex

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

Ease

of

Do

ing

B

usi

ness

ra

nkin

g 2

012

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

Ease

of

Do

ing

B

usi

ness

20

07–2

012

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

Infl

ati

on

rate

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

OE

CD

co

un

try

risk

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

Exis

ten

ce o

f cle

ar

stab

le

reg

ula

tory

fr

am

ew

ork

fo

r R

E

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

Exis

ten

ce o

f in

cen

tives

for

PV

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

(Con

tinue

d)

Tab

le A

6.1

3 |

Co

nti

nu

ed


Pri

mary

Data

(

jk

s ,)

Re

ce

ive

rM

irro

rS

tru

ctu

re &

T

racke

rH

TF

T

he

rmal O

ilH

TF

P

um

ps

He

at

Exch

an

ge

rS

ola

r S

alt

Sto

rag

e

Tan

ks

St

Pu

mp

sS

team

T

urb

ine

Ele

ctr

ical

Ge

ne

rato

rC

on

de

nse

r

Exis

ten

ce o

f in

cen

tives

for

CS

P

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

Exis

ten

ce

of

RE

ass

ocia

tio

ns

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

To

tal so

lar

PV

cap

acit

y0

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

0

To

tal C

SP

cap

acit

y0

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

5

Ag

en

cy

for

the

Develo

pm

en

t o

f R

E

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

Co

mp

eti

tio

n in

th

e e

lectr

icit

y

secto

r

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

Access

to

cre

dit

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

Pre

sen

ce

of

larg

e

inte

rnati

on

al

ind

ust

rial

co

mp

an

ies

0.3

30

.33

0.3

30

.33

0.3

30

.33

0.3

30

.33

0.3

30

.33

0.3

30

.33

Ind

ust

rial G

DP

(%

)0

.33

0.3

30

.33

0.3

30

.33

0.3

30

.33

0.3

30

.33

0.3

30

.33

0.3

3

Lo

cal

clu

steri

ng

0.3

40

.34

0.3

40

.34

0.3

40

.34

0.3

40

.34

0.3

40

.34

0.3

40

.34

Pate

nt

filin

gs

per

mill

ion

p

op

ula

tio

n

20

10

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

Tab

le A

6.1

3 |

Co

nti

nu

ed

(Con

tinue

d)

Annexes | 255

Pri

mary

Data

(

jk

s ,)

Re

ce

ive

rM

irro

rS

tru

ctu

re &

T

racke

rH

TF

T

he

rmal O

ilH

TF

P

um

ps

He

at

Exch

an

ge

rS

ola

r S

alt

Sto

rag

e

Tan

ks

St

Pu

mp

sS

team

T

urb

ine

Ele

ctr

ical

Ge

ne

rato

rC

on

de

nse

r

GC

R*

20

11–1

2

Inn

ovati

on

sc

ore

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

GC

R 2

011

–12

Tech

no

log

ical

read

iness

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

Bu

sin

ess

so

ph

isti

cati

on

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

0.2

50

.25

Qu

alit

y o

f p

ort

in

frast

ructu

re

20

10

0.3

30

.33

0.3

30

.33

0.3

30

.33

0.3

30

.33

0.3

30

.33

0.3

30

.33

GC

R 2

011

–12

Infr

ast

ructu

re0

.34

0.3

40

.34

0.3

40

.34

0.3

40

.34

0.3

40

.34

0.3

40

.34

0.3

4

Lo

gis

tics

Perf

orm

an

ce

Ind

ex

0.3

30

.33

0.3

30

.33

0.3

30

.33

0.3

30

.33

0.3

30

.33

0.3

30

.33

No

te: *

Glo

bal C

om

peti

tiven

ess

Rep

ort

.

Tab

le A

6.1

3 |

Co

nti

nu

ed


Tab

le A

6.1

4 |

We

igh

t F

acto

r W

ith

in a

Co

mp

eti

tive

ne

ss P

ara

me

ter

(s j,

k)

– W

eig

hti

ng

No

rmalize

d P

rim

ary

Data

: P

V I

nd

ust

rie

s

Pri

mary

Data

(

jk

s jk,jk)

Po

lysi

lico

nIn

go

ts/

Wafe

rsC

ells

Cry

stallin

e

Mo

du

les

TF

M

ate

rials

So

lar

Gla

ssT

F

Mo

du

les

Inve

rte

rS

up

po

rt

Str

uctu

re

Lab

or

co

sts

0.2

50

.25

0.2

50

.50

0.5

00

.50

0.5

00

.75

0.7

5

Lab

or

mark

et

eff

icie

ncy

0.7

50

.75

0.7

50

.50

0.5

00

.50

0.5

00

.25

0.2

5

Gla

ss m

an

ufa

ctu

rin

g in

th

e c

ou

ntr

y0

.00

0.0

00

.00

0.4

40

.00

1.0

00

.64

0.0

00

.00

Sta

inle

ss s

teel

man

ufa

ctu

rin

g in

th

e

co

un

try

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

0

Ste

el m

an

ufa

ctu

rin

g in

th

e c

ou

ntr

y0

.00

0.5

00

.44

0.4

40

.00

0.0

00

.29

0.4

41.

00

Oil

man

ufa

ctu

rin

g a

bili

ty

in t

he c

ou

ntr

y0

.00

0.0

00

.11

0.0

00

.00

0.0

00

.00

0.4

40

.00

Co

pp

er

man

ufa

ctu

rin

g

in t

he c

ou

ntr

y0

.00

0.0

00

.00

0.1

10

.00

0.0

00

.07

0.1

10

.00

Sili

co

n m

an

ufa

ctu

rin

g in

th

e c

ou

ntr

y1.

00

0.5

00

.44

0.0

01.

00

0.0

00

.00

0.0

00

.00

NaN

O3/K

NO

3 a

vaila

bili

ty

in t

he c

ou

ntr

y0

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

Exis

ten

ce o

f sy

nerg

ic

ind

ust

ries

0.6

00

.60

0.6

00

.60

0.6

00

.60

0.6

00

.60

0.6

0

Lit

era

cy r

ate

s (%

)0

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

Hig

her

ed

ucati

on

an

d

train

ing

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

0

Co

st o

f en

erg

y

(in

du

stri

al)

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

01.

00

1.0

0

Payin

g t

axes

ran

k0

.50

0.5

00

.50

0.5

00

.50

0.5

00

.50

0.5

00

.50

Len

din

g in

tere

st r

ate

0.5

00

.50

0.5

00

.50

0.5

00

.50

0.5

00

.50

0.5

0

CS

P g

row

th s

cen

ari

o t

o

20

20

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

0

PV

gro

wth

scen

ari

o t

o

20

20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

00

.20

0.2

0

(Con

tinue

d)

Annexes | 257

Pri

mary

Data

(

jk

s jk,jk)

Po

lysi

lico

nIn

go

ts/

Wafe

rsC

ells

Cry

stallin

e

Mo

du

les

TF

M

ate

rials

So

lar

Gla

ssT

F

Mo

du

les

Inve

rte

rS

up

po

rt

Str

uctu

re

Maxim

um

yearl

y g

lob

al

ho

rizo

nta

l ir

rad

iati

on

(G

HI)

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

5

Maxim

um

yearl

y d

irect

no

rmal ir

rad

iati

on

(D

NI)

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

00

.00

0.0

0

Ele

ctr

icit

y d

em

an

d

gro

wth

(ch

an

ge 2

010

o

ver

20

09

)

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

5

En

erg

y im

po

rts

net

as

%

of

en

erg

y u

se0

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

0.1

50

.15

Co

st o

f en

erg

y

(resi

den

tial)

-PV

0.1

50

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00

.00

(Con

tinue

d)

Tab

le A

6.1

4 |

Co

nti

nu

ed


Pri

mary

Data

(

jk

s ,)

Po

lysi

lico

nIn

go

ts/

Wafe

rsC

ells

Cry

stallin

e

Mo

du

les

TF

M

ate

rials

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lar

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ssT

F

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du

les

Inve

rte

rS

up

po

rt

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uctu

re

Exis

ten

ce o

f R

E

ass

ocia

tio

ns

0.15

0.15

0.15

0.15

0.15

0.15

0.15

0.15

0.15

Tota

l sol

ar P

V ca

paci

ty0.

150.

150.

150.

150.

150.

150.

150.

150.

15

Tota

l CSP

cap

acity

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Agen

cy fo

r the

dev

elop

men

t of

RE

0.15

0.15

0.15

0.15

0.15

0.15

0.15

0.15

0.15

Com

petiti

on in

the

elec

tric

ity

sect

or0.

150.

150.

150.

150.

150.

150.

150.

150.

15

Acce

ss to

cre

dit

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

Pres

ence

of l

arge

in

tern

ation

al in

dust

rial

com

pani

es

0.33

0.33

0.33

0.33

0.33

0.33

0.33

0.33

0.33

Indu

stria

l GDP

(%)

0.33

0.33

0.33

0.33

0.33

0.33

0.33

0.33

0.33

Loca

l clu

ster

ing

0.34

0.34

0.34

0.34

0.34

0.34

0.34

0.34

0.34

Pate

nt fi

lings

per

mill

ion

popu

latio

n 20

100.

250.

250.

250.

250.

250.

250.

250.

250.

25

GCR

2011

–12

Inno

vatio

n sc

ore

0.25

0.25

0.25

0.25

0.25

0.25

0.25

0.25

0.25

GCR

2011

–12

tech

nolo

gica

l re

adin

ess

0.25

0.25

0.25

0.25

0.25

0.25

0.25

0.25

0.25

Busin

ess s

ophi

stica

tion

0.25

0.25

0.25

0.25

0.25

0.25

0.25

0.25

0.25

Qua

lity

of p

ort i

nfra

stru

ctur

e 20

100.

330.

330.

330.

330.

330.

330.

330.

330.

33

GCR

2011

–12

Infr

astr

uctu

re0.

340.

340.

340.

340.

340.

340.

340.

340.

34

Logi

stics

Per

form

ance

Inde

x0.

330.

330.

330.

330.

330.

330.

330.

330.

33

Tab

le A

6.1

4 |

Co

nti

nu

ed

Annexes | 259

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[94] J. Granado, D. Coady and R. Gillingham, “The Unequal Benefits of Fuel Subsidies: A Review of Evidence for Developing Countries,” International Monetary Fund (IMF) Working Paper, Washington, DC, 2010.

[95] Chadbourne & Parke LLP, “Renewable Energy Opportunities in The Middle East,” Project Finance NewsWire, 2013. [Online]. Available: http://www.chadbourne.com/RenewableEnergyOpportunitiesinTheMiddleEast_projectfinance/.

http://www.york.ac.uk/che/pdf/tp29.pdf

http://www.york.ac.uk/che/pdf/tp29.pdf

www.glassforeurope.com/en/industry/index.php.

www.glassforeurope.com/en/industry/index.php.

http://www.masen.org.ma/index.php?Id=5&lang=en#/_.

http://www.chadbourne.com/RenewableEnergyOpportunitiesinTheMiddleEast_projectfinance/.

http://www.chadbourne.com/RenewableEnergyOpportunitiesinTheMiddleEast_projectfinance/.

MENA ENERGY SERIES | REPORT NO. 94834-MNA

http://www.worldbank.org/en/region/mena | www.esmap.org | http://www.worldbank.org/en/country/egypt

MIDDLE EAST AND NORTH AFRICAENERGY AND EXTRACTIVES GLOBAL PRACTICETHE WORLD BANK GROUP

http://www.worldbank.org/en/region/mena

www.esmap.org

http://www.worldbank.org/en/country/egypt

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