The Mediterranean Solar Plan: Project proposals for renewable energy in the Mediterranean Partner Countries region

doi:10.1016/j.enpol.2012.01.052

Energy Policy

Volume 44, May 2012, Pages 291-300

https://doi.org/10.1016/j.enpol.2012.01.052 Get rights and content

Abstract

This paper presents a first assessment of the renewable energy projects, proposed by the nine Mediterranean Partner Countries (MPCs) under the Mediterranean Solar Plan (MSP) and the associated potential economic impacts. As one of the priority projects of the Union for the Mediterranean (UfM), the MSP's objective which attracted most attention until now is the intention to deploy an additional 20 GW of renewable electrical capacity in the Southern and Eastern Mediterranean region (covering the MPCs plus Turkey) by 2020. The main findings of this research are: (1) as of February 2010, a total of 10.3 GW of renewable project proposals were identified in the MPCs, corresponding to about half of the 20 GW target; (2) investment needs for the identified projects could amount to EUR 21 billion by 2020, which represents about five times the amount invested by the region in conventional electricity generation in the last decade; and (3) the difference between the cost of renewable electricity generation and the economic cost of its fossil fuel alternatives could amount to EUR 1.2 billion. Insights stemming from the results of this research can generate useful regional messages for energy policy leaders in the MPCs to accelerate the development of renewable energy projects.

Highlights

► We conducted a systematic survey of renewable energy projects in the Mediterranean. ► The identified projects correspond to half the MSP 20 GW target. ► Maturity assessment is used to classify the advancement of the projects. ► We estimated the investment needs and required subsidies in the region by 2020.

Introduction

The creation of the Union for the Mediterranean (UfM) in 2008 in Paris started a new form of cooperation between the two shores of the Mediterranean Sea. This union was built on the experience of the Barcelona process, launched in 1995 (MSP Experts Group, 2010). As one of the priority initiatives of the UfM, the MSP aims at coping with the challenges posed by energy demand increase, security of supply and environmental sustainability in the Euro–Mediterranean region. More specifically the MSP aims at boosting energy efficiency (EE) and developing renewable energy (RE) sources in the Mediterranean region, with a special focus on wind and solar technologies. Among other things the MSP has the objective of developing 20 GW of additional renewable electricity capacity by 2020 (UfM Secreteriat, 2010).

The MSP Strategy Paper, issued by the MSP Experts Group in 2010, proposed the setting up of common legal, regulatory and investment frameworks to ensure the development of 20 GW renewable energy projects in the Southern and Eastern Mediterranean region by 2020 (Resources and Logistics, 2010). Among the Mediterranean countries, European Union's “Mediterranean Partner Countries¹” (or MPCs) are expected to face enormous pressure in terms of increasing energy demands as their Gross Domestic Product (GDP) growth rates reach four times that of the European countries by 2025 (Bleu, 2008).

These countries also possess substantial renewable energy potentials in terms of wind, solar and hydro power. A review of identified literature shows that the MPC region has exceptional solar resources in addition to significant wind resources; a statement which is in accordance with International Energy Agency (IEA) analysis (IEA, 2005). Despite these significant potentials, there is still limited research on the assessment of these potentials and deployment of renewable energy projects in the region. In fact renewable energy investments in the Middle East and Africa represented only 2.5% of such global new investments made in 2009 (UNEP, 2010). The current installed capacities for onshore wind, concentrated solar power (CSP), and photovoltaic (PV) technologies are small in comparison with the identified economic and technical potentials² in the MPCs. For instance, the MED-CSP study by DLR (2005) identifies approximately 108,000 GW of economic potential for CSP in the MPCs whereas the installed capacity is currently estimated at 0.4 GW only.³ On the contrary, most of the hydropower economic potential has already been developed. Study by DLR (2005) identifies a total economic potential for hydro power of approximately 22.5 GW whereas the installed capacity is currently 20 GW (OME, 2008).

In this context, and following the Paris Summit, the European Investment Bank (EIB) was mandated⁴ by the Euro–Mediterranean finance ministers to propose a roadmap for the deployment of renewable energy technologies in the Mediterranean region (ECOFIN/FEMIP, 2008). This research complies with the main objectives of the mandate by addressing the following goals:

•
Identify planned renewable energy projects (so called “project proposals”) and assess their level of maturity; and
•
Quantify the main economic impacts of the implementation of the identified projects; more specifically, estimate (i) the necessary investment volume; (ii) the cost of renewable power generation in comparison with the alternative fossil fuel power generation; and (iii) the required subsidies⁵ for the deployment of the identified projects by 2020.

Section snippets

Literature review: Projects identification and economical assessment

The implementation of renewable energy projects in the MPC region is relatively new. The work presented here is of particular interest since as of today, academic research specific to the MPC region in the fields of renewable energy potentials, project identification and economical impact forecasts has remained limited.

Methodology

The methodology adopted was two fold: projects were first identified and assessed in terms of maturity, and secondly a model was set-up and used in order to assess the economic impacts of these projects in the MPC region.

Fig. 1 provides an overview of the methodology used to identify project proposals and estimate the economic impact of their implementation.

Regional outlook

As a result of the research process, 90 projects⁹ were identified with a total capacity of 10.3 GW (see Table 4). About 21% of this capacity (2.2 GW) corresponds to projects which are at an advanced stage of development, of which, however, only 0.6 GW (or 6% of the total) have a financing plan in place, and thus

Regional implications

The research presented here identified 90 renewable energy project proposals under the MSP totalling for an expected additional renewable energy capacity of 10.3 GW by 2020 in the MPC region. It is the first known survey to systematically identify renewable energy projects in the whole MPC region, along with their level of maturity and “key” characteristics (name and locations, planned capacity, costs). Insights stemming from the results of this research can generate useful regional messages in

Conclusion

The Mediterranean Solar Plan is one of the six main initiatives of the Union for the Mediterranean, which notably displays the ambition to deploy 20 GW of additional renewable power capacity by 2020. Focused on the Southern and Eastern Mediterranean region, this paper is the first research to generate a detailed and systematic survey of the proposed renewable energy project proposals, assess the economic impacts, and present recommendations for their implementation within the 2010–2020

Acknowledgements

This research was financed under the Facility for Euro-Mediterranean Investment and Partnership (FEMIP) Trust Fund, an EIB-managed multi-donor Fund, which supports the development of the private sector in the Mediterranean region via financing studies and technical assistance.

The authors would also like to thank those who supported this work in providing data and advice, in particular MWH consultants (Mr. Ahmed Ounalli, Mr. Salem Mahmoud Elkhodary, and Mr. Remon Zakaria) who provided the

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The Mediterranean Solar Plan: Project proposals for renewable energy in the Mediterranean Partner Countries region

Abstract

Highlights

Introduction

Section snippets

Literature review: Projects identification and economical assessment

Methodology

Regional outlook

Regional implications

Conclusion

Acknowledgements

The Real Cost of Electricity Generating Alternatives: A Portfolio Approach

Unlocking the Sunbelt – Potential of Photovoltaics

The Economics of Wind Energy

Projected Costs of Generating Electricity

Energy Policies of IEA Countries. Turkey 2009 Review

World Energy Outlook 2010, Special Focus Renewables in the MENA

World Energy Outlook 2005 – Middle East and North Africa Insights