The Algerian gas and electricity company, CEEG, recently invited prequalifications for a new concentrated solar power (“CSP”) programme in Algeria.
The Middle East and North Africa (“MENA”) region offers significant potential for the development of solar and renewable energy projects.
Algeria
The Algerian gas and electricity company, CEEG, whose parent company is the state owned utility distribution company Sonelgaz, recently invited prequalifications for a new concentrated solar power (“CSP”) programme in Algeria.
With this programme seeking to provide 300 MW of solar power by 2015 and 2 GW by 2020, this represents a significant investment opportunity.
Current targets
The Algerian Ministry of Energy and Mines (“MEM”) has set a target of producing 22 GW of electricity from renewable energy by 2030, with 10 GW being earmarked for export markets. By this date, 40% of domestic energy consumption is expected to come from renewable sources.
The CEO of Sonelgaz has publicly stated that they will allocate nearly $30 billion to achieve this target, which involves an average increase in renewable energy production of 1.2 GW per year.
MEM envisages that this target will be achieved in stages, with the initial pilot and small-scale implementation phases paving the way for larger scale deployment from 2016 onwards.
Renewable energy split
Algeria predicts that CSP will be the largest source of renewable energy. As such, there is emphasis on CSP in the 2020 targets. In comparison to photovoltaic (“PV”) power plants, for which the production target is 800 MW by 2020, CSP is expected to provide some 50% more at 1.2 GW.
This emphasis on CSP continues to be reflected in the 2030 targets, where the intention is to implement 200 MW of PV per year between 2021 and 2030, compared to the planned intention of 500-600 MW per year for CSP.
Perhaps unsurprisingly given the geography of Algeria, PV and CSP are both expected to vastly overshadow wind farm development. By 2015, it is expected that there will be a total wind output of 30 MW. However between 2016 and 2030 1.7 GW of new projects will be implemented, marking a definite increase in wind capacity.
Kuwait
Due to significant natural reserves, Kuwait’s energy production is heavily reliant on its own oil and gas reserves. Kuwait is also a major exporter of oil, therefore decreasing its reliance on oil for power production would increase available exports.
Recently announced targets for renewable energy production include meeting 1% of demand by 2020 and 15% by 2030. This places Kuwait broadly in line with other GCC and MENA countries and hence presents a large investment opportunity.
Shagaya Renewable Energy Park
Last year, the Kuwaiti Government proposed plans to create a 2 GW renewable energy park located in Shagaya, near Kuwait City, with power to be sourced from CSP, PV and wind. This is to be split into three phases and is set to be completed by 2030.
Following the recent completion of a pre-qualification process for the first phase, the Kuwait Institute for Scientific Research has invited bids for a 50 MW CSP plant. Largely a pilot phase, this is the smallest of the three, with the second and third expected to produce 930 MW and 1 GW respectively.
This first phase will be funded by the Government, however the final two phases will be offered to investors on a build-operate-transfer basis for 25 years. The Government has also pledged to buy all output.
Oman
Oman is a significant exporter of oil and gas. However, it is also dependent upon the same for the majority of its own power production. Similar to certain other GCC countries, despite having its own abundant supply of oil, it also imports natural gas in order to meet energy demands.
With a renewable energy production target of 10% to be achieved by 2020, reducing the reliance on fossil fuels for power production will also free up export capacity and decrease reliance on gas imports.
The Authority of Electricity Regulation, Oman, is currently preparing to issue consent for a 303 kW PV pilot project. A consortium of bidders has already been selected and the project is likely to be closely watched as a precedent for future investment.
