Solar Electricity for Regional Consumption or Export: Which way to lean?

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1 6/1/21 Euro-Mediterranean Energy Market Integration Project Germany France Lebanon Belgium Solar Electricity for Regional Consumption or Export: Which way to lean? Dr. Albrecht Kaupp Team Leader The contents of this publication are the sole responsibility of the author and can in no way be taken to reflect the views of the European Union. 1 albrecht.kaupp@gtz.de We support all colors of energy in the region such as solar, wind, hydro, coal, oil shale,,gas and energy efficiency. 2 1

2 6/1/21 Support for the enhanced integration and the improved security of the Euro-Mediterranean energy market Natural Gas Facts and Figures 28 Well price in MENA region $1 - $ 3 per Million BTU Henry Hub USA gas price $ - $8 per Million BTU Gas from Russia to Europe $ 13 per Million BTU equivalent to $ 37 /per 1 m 3 (28) 1 ft 3 natural gas = 1 BTU and 1 ft 3 = 28 m 3 1 normal cubic meter gas = GCV39MJ=18kWh 1.8 Explanation ns Seite Page 4 4 2

3 6/1/21 Second Strategic Energy Review (Quote) 13 November 28 A Mediterranean energy ring now needs to be completed, linking Europe with the Southern Mediterranean through electricity and gas interconnections. In particular the Ring is essential to develop the region's vast solar and wind energy potential. ( Present MED-EMIP Task: To prepare the MEDRING-Update report that forms the basis for the next communication in 21 No later than 21 the Commission will put forward a Communication on the Mediterranean Ring outlining a plan for completing the missing links, including key projects important for diversifying if i the EU s external energy supplies in further away regions, such as the future links from Iraq, the Middle East and Sub-Saharan Africa 6 3

4 6/1/21 First Public Reactions of 29 This policy will only unnecessarily extent the EU-27 energy dependency from the MENA region into the next century. The EU-27 States can generate enough solar electricity on their own soil and do not need to import solar electricity from the MENA Region The countries of the MENA region should produce solar electricity for home consumption under a sustainable energy supply policy and not export it 7 Energy dependency of the EU-27. ( of extra EU import, Ref: EuroStat 28) Country Gas Oil Russia + Norway 64 Algeria 17 3 Libya 3 9 Egypt 3 Qatar 2 Saudi Arabia 9 Iran 7 Sum

5 6/1/21 Key-Issue # 1 Is it possible to built a significant and economically attractive RE based power industry with PV, CSP and Wind without exporting some electricity into well paying EU markets? 9 kwh for each kwp Germany 38 EuroCents/kWh Significant is defined as 3 of the electricity generation in 23 is based on PV, CSP and Wind in a Country of the MENA region. Well paying is defined as full cost recovery of supply costs under Article 9 of the RES Directive with an orientation on various feed-in-tariff schemes. 9 Challenge Easy 1

6 6/1/21 Variables and Constants 11 SAR ( / kwh) System Average Rates (28) Large range of 3 $Cents/ kwh to 1 $Cents/ kwh CSP, PV, EU 27 Residential 1 EU 27 Industry 8 6 7,7 6,69 6,9 6,17 6,8 Wind 4,64 4 3,42 3,32 2,74 2 1,91 IL LB TN MA opt JO DZ LY SY EG Mediterranean Partner Countries Note: Assumed US$-EUR exchange rate: 1.4 6

7 6/1/21 Favourable scenario TUNESIA Unfavourable scenario 4, 4 4, 4 Target 1-4, -4-4, -4-8, -12, , , -12, , , 4 4, 4 rget Ta 4-4, -4-4, -4-8, -12, -8-8, -1,2-12, ,2 13 ( /MWh) TUNESIA Favourable scenario 1 target scenario ( /MWh) 4 target scenario Business-as-usual SAR Solar electricity SAR levy or savings

8 6/1/21 ( /MWh) TUNESIA Unfavourable scenario 1 target scenario ( /MWh) 4 target scenario Business-as-usual SAR Solar electricity SAR levy or savings le scenario Favourab Unfavourable sc cenario Target 1 6, 4, 2, -2, -4, -6, -8, 212 1,, -, EGYPT 6, 4, 2, -2, -4, -6,, 6, 4, 2, -2, -4, -8, -16, , 1, -,, Target , 4, 2, -8, , -1, -1, -1, -2, , -2, -4, -6,, -, -1, -1, 16 8

9 6/1/21 EGYPT ( /MWh) Favourable scenario 1 target scenario ( /MWh) 4 target scenario 1 9 Business-as-usual SAR Solar electricity SAR levy or savings ( /MWh) EGYPT Unfavourable scenario 1 target scenario ( /MWh) 4 target scenario 11 Business-as-usual SAR 1 Solar electricity SAR levy or savings

10 6/1/21 Key-Issue # 2 Is it technically feasible to run submarine power transmission lines across the Mediterranean Sea? YES, but best from Algeria, Morocco, Tunisia and Libya! Egypt is uncertain. and at what approximate wheeling costs? Costs will be around 1-2 $Cents/kWh 19 Technically feasible corridors Red areas are deeper than 2 m, 2 1

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12 6/1/21 Sending electricity around the Mediterranean Basin may not be the best option There are difficulties to achieve 1 AC synchronization and dedicated HVDC lines may be necessary as well 23 Key-Issue # 3 Are there commercially attractive scenarios for interstate import and export of electricity for the region.? Yes in terms of security of supply and increased opportunities to reduce own supply costs for some countries 24 12

13 6/1/21 Normalised Summer Peak Load Curve 1 Summer Load Curves Algeria Egypt Jordan Lebanon Libya Morocco opt Syria Tunisia i Note: Times are harmonized at UTC +2h (Libya time) Normalised Summer Peak Load Curve Algeria Libya Libya (SAR = 3.32 / kwh) Algeria (SAR = 3.42 / kwh) Hour BST Algeria TOU sensitive BST not provided: HV customers pay ca / kwh Libya TOU sensitive BST not provided: MV customers pay ca / kwh Note: Times are harmonised at UTC +2h (Libya time) If time bars are not connected, no specific time definitions were provided for (e.g. Day Energy and Night Energy) 13

14 6/1/21 The unpleasant news All countries except for two have moved in the last 4 years into low to very low operational reserve margins because of fast increasing demand and too little capacity addition. There is little electricity to exchange or to export and it would be also appropriate to invest in demand side management strategies

15 6/1/21 Everything should be made as simple as possible, but not simpler THE END (ALBERT EINSTEIN) 29 1