OVERVIEW AND PERSPECTIVES OF RENEWABLE ENERGY AND ENERGY EFFICIENCY

IN THE MEDITERRANEAN REGION

Dr. Houda Ben Jannet Allal

Barcelona, 16 December 2013

OVERVIEW

MEDITERRANEAN REGION: IMPORTANT CROSS-ROADS FOR GLOBAL ENERGY MARKETS

7% of world population, 500 million people, 90 million more people by 2030, nearly all in the South

10% world GDP, $7.5 trillion of GDP, 2.5% p.a. average growth to 2030

8% of world’s primary energy demand

Transit corridor for global energy markets

Heavily impacted by current financial crisis and important socio-political changes

High (untapped) for energy efficiency and renewable energy

A Region particularly sensible to the impact of climate change

3

ENERGY DEMAND OVERVIEW

40% increase in overall demand by 2030.

4 500

6 500

8 500

10 500

12 500

700

800

900

1 000

1 100

1 200

1 300

1 400

1 500

1990 2000 2010 2020 2030

GDP (billion dollars (ppps 2005))

Mtoe

Proactive ScenarioConservative ScenarioGDP

MEDITERRANEAN ENERGY DEMAND OUTLOOK, by Scenarios

4

Only 20% increase if robust policies and measures are put in place.

MEDITERRANEAN ENERGY CONSUMPTION PER CAPITA

Today per-capita energy consumption in the South Mediterranean countries is nearly three times less than the level of that in the countries in the

North.

By 2030 the North will still be consuming twice as much as the South on a per capita basis.

0

1 000

2 000

3 000

1990 2000 2010 2020 2030

kgoe/capita

NorthSouth

5

ENERGY DEMAND BY FUEL

The future will remain fossil fuel based (70%) and RES will take a significant

share (up to 16%) under the PS

0

200

400

600

800

1000

1200

1400

1990 2009 CS 2030 PS 2030

Mtoe

Renewables & Waste

Hydro

Nuclear

Gas

Oil

Coal

6

HEAVY RELIANCE ON FOSSIL FUELS WILL ENDURE

To 2030 the Mediterranean region will remain a net importer of fossil fuels regardless

of the Scenario.

Gas production could nearly double and demand increase between 40% and 70% from 2010 to

2030

0

200

400

600

800

1000

1200

Demand Production Demand Production Demand Production

Mtoe

Gas

Oil

Coal

2009 Conservative Scenario 2030 Proactive Scenario 2030

MEDITERRANEAN FOSSIL FUEL DEMAND AND PRODUCTION OUTLOOK

7

8

GAS ERA AND OIL PEAK

Export capacity would substantially increase under the Proactive Scenario to over 180 bcm in 2030.

-100

102030405060708090

100110

Algeria Egypt Libya Israel

bcm GAS EXPORT POTENTIAL

2010 CS 2030 PS 2030

ELECTRICITY

Electricity demand in the South will nearly triple

by 2030.14% could be saved under the alternative

scenario.

MEDITERRANEAN ELECTRICITY BOOM AHEAD

0

1000

2000

3000

1990 2009 Conservative 2030

Proactive 2030

TWh

South

North

MEDITERRANEAN ELECTRICITYGENERATION

84%70%

54% 58%

42%46%

30%

16%

10

Over 380 GW will need to be added to meet electricity demand. Less than 320 GW in a Proactive Scenario.

RES represent 42% of installed capacity in the CS; 53% in the PS

INSTALLED GENERATION CAPACITY

13% 9% 6%

12% 4%3%

33%35%

28%

14%

10%

10%18%

15%

16%10%

27%

37%

100

200

300

400

500

600

700

800

900

1 000496 GW 878 GW 812 GWGW

Non-hydro RenewablesHydroNuclearGasOilCoal

2009 2030 PS2030 CS

11

Over 700 billion Euros will be needed to 2030.

Spared gas could compensate the additional cost of clean generation technologies.

POWER GENERATION INVESTMENTS

0

100

200

300

400

CS PS CS PS

billion Euros RenewablesNuclearFossil Fuels

North Med South Med

12

RENEWABLES

RENEWABLES IN THE MEDITERRANEAN

14

2009 CS 2030 PS 2030

MED 78.9 156 200

World* 1609 2745 2745

250

750

1250

1750

2250

2750

3250

Share of the Mediterranean in global renewable energy demand

Mto

e

Renewables in the Mediterranean accounts for 5% of global total renewable energy demand.

Renewables in the MED to account for 7.3% of RE energy demand by 2030 in the Conservative and 15% in the Proactive Scenario.

*World figures come from IEA New Policies Scenario

A SUNNY AND WINDY FUTURE

Renewables to supply 10% of primary energy demand by 2030 in the Conservative and 15% in the Proactive Scenario.

Most of the increase is expected to come from wind and solar.

Renewables will account for 42% of total installed generation capacity in the Conservative and 53% in the Proactive Scenario.

900

1 000

1 100

1 200

1 300

1 400

2010 Conservative 2030 Proactive 2030

Mtoe

Wind

Solar

Geothermal

Hydro

Biomass and wasteNon Renewables

MEDITERRANEANENERGY DEMAND BY FUEL

15

RENEWABLE ELECTRICITY GENERATION

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

0

500

1 000

1 500

2 000

2 500

3 000

3 500

Renewables

Hydro

Nuclear

Gas

Oil

Coal

TW

hCoal14%

Oil8%

Gas33%

Nuclear25%

Hydro14%

RES6%

2010

36%

RES electricity increased by more than 2.5 times in 1990-2010

Renewables are expected to compete directly with natural gas as the dominant electricity source

by 2030 (over 1000 TWh), under the PS 16

THE MEDITERRANEAN SOLAR PLANS

RE TARGETS IN SOUTH MEDITERRANEAN COUNTRIES

Source: OME, MEP 201118

OPPORTUNITIES BUT ALSO BARRIERS

CONSENSUS ON EE & RE IMPORTANCE

EIB / OME / UfM Conference on energy efficiency, 10 December 2013, Brussels

All stakeholders, one voice

Institutional and regulatory frameworks, subsidies, electricity tariffs, exchange of best practices, innovation …

Ministerial meeting, 11 December 2013, Brussels

Importance of EE and RE, but not only

UfM energy community

20

ELECTRICITY TARIFFS IN THE MEDITERRANEAN

21

Alg

eri

a*

Eg

yp

t

Isra

el

Jo

rda

n

Le

ba

no

n

Lib

ya

Mo

roc

co

Pa

les

tin

e

Sy

ria

Tu

nis

ia

Tu

rke

y

EU

Ita

ly

Sp

ain

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.05

0.01

0.13

0.05

0.02

0.09

0.12

0.060.05

0.09

0.16

0.25

0.19

0.08

0.16

0.13

0.02

0.150.16

0.11 0.11

0.23

0.280.27

0.37

Residential electricity tariffs in the Mediterranean

2012

Min MaxUSD/kWh

* average selling price* average selling price* average selling price* average selling price

SUBSIDIES TO FOSSIL FUELS

Source: IEA, WEO 201322

CONCLUSION

KEY MESSAGES (1)

Current energy trends in the Mediterranean are not sustainable. Business as usual is not an option:

Overall energy demand could grow by 40% by 2030, where fossil fuels will continue to dominate the energy mix and natural gas will overtake oil.

Electricity boom ahead: average annual growth rate of about 2.8% and 5% in the South: overall over 380 GW of additional capacity needed.

The energy challenge is in the South:

Population will grow by over 80 million people;

Overall energy demand and CO2 emissions would double;

Electricity demand would nearly triple; 200 GW of generation capacity to be installed; 24

KEY MESSAGES (2)

Under the Proactive Scenario, based on improving efficiency and exploiting renewable energy potential:

10% savings in final energy by 2030

Reducing by nearly half the expected fossil fuel import requirements by 2030

Electricity demand could be met with less generation capacity and a higher share of renewable sources

Electricity, through renewable technology and grid developments, emerges as the strong driver for reinforcing regional cooperation

But also energy efficiency which is nowadays confirmed by all stakeholders as a MUST

25

26

Substantial potential for EE & RES in the region, driven by decreasing costs of technologies and very favorable climate conditions

Strong electricity demand growth=>role for RES-e

Evolving energy efficiency and renewable energy policy support frameworks in some countries

Initiatives to improve bankability

… BUT… obstacles to be removed:

Subsidies to fossil fuels/low energy prices

Very diversified institutional frameworks

Need for interconnections

Stronger S-S and S-N cooperation needed

Innovation, R&D, capacity building and best practices share ….

KEY MESSAGES (3)

Contact: Pedro Moraledapedro.moraleda@ome.org

Contact: Pedro Moraledapedro.moraleda@ome.org