Annual Solar Outlook Report

- 2019 -

By Wim Alen
MESIA Secretary General
wim@mesia.com

Wednesday, January 16th 2019

 Growth in Solar

Global Solar PV Capacity (GW), 2007 - H1 2018

• Solar energy is arguably the fastest growing 500 471
source of power
402
o Since 2006, CAGR of global PV 375
installations = 45%
303

o Over 470 GW currently installed

GW
250 228
worldwide
177
• Solar technologies, namely solar PV, have 137
experienced tremendous cost declines 125 100
70
• Module prices now hover at or below 23
40
8 15
$0.25 US cents/watt
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H
2018
Year

Source: Bloomberg NEF

 2018 Project Updates1

• 200 MW Kom Ombo solar PV project in Egypt received a low bid of 2.752 US$ cent/kWh

• 150 MW project in Jordan’s Round 3 PV program received a low bid of 2.488 US$ cent/kWh

• Other project updates:

o Algeria – 150 MW solar PV tendered on IPP basis and 50 MW tendered on EPC basis

o Egypt – Tender for 100 MW CSP and 200 MW PV is being developed in the West of Nile region

o Jordan – EOI for 30 MW/60 MWh energy storage project was released in Feb 2018

o Morocco - Tender ongoing for 800 MW Noor Midelt hybrid solar project

o Oman – 100 MW Amin solar PV project was awarded and the process to tender the second 500 MW
solar PV project (Solar IPP 2022) began

o Tunisia – 500 MW solar PV RFP released and Round 2 PV auction of 70 MW PV was due in December
2018

1 This is not meant to be an exhaustive list of updates. Information on additional projects can be found in the report.
 Major Trends

• We expect strong growth in the following market segments:

Energy Storage
• Solar PV plus battery storage

• Concentrated Solar Power (CSP)

Electric Vehicles
• EVs sales in the region are growing

• Supporting regulation still needed in most markets

Distributed Generation
• Regulation to support the DG market still lacking in some markets

• Segment is very promising, especially the C&I space

 Battery Storage
Lithium-Ion Battery Pack Prices ($/kWh)
• Lithium ion battery costs declined by almost 80% 1250
between 2010 – 2017

• Solar PV integrated with battery storage can now 1000 1000

compete with fossil fuel generation on an LCOE basis

• Batteries are also useful for, among other applications: 750

$/kWh
o Load shifting
o Peak shaving 500
o Frequency control

• First regional utility scale storage tenders ongoing in 250

209
Jordan and Lebanon

0
2008 2010 2012 2014 2016 2018
Year

Source: Bloomberg NEF

 Concentrated Solar Power
MENA CSP Capacity in Operations
(MW) 2018
• Morocco and the UAE are the biggest CSP markets

• CSP technology costs continuing to decline

o DEWA Phase IV CSP closed at 7.3 US$ cent/kWh

• Parabolic trough and tower are going to be dominant

technologies in the short term

• CSP can offer a round the clock energy solution but with
some limitations

o Time to implement – much longer than PV 25

o Limited track record – Less than 6 GW operating

globally; unfamiliarity with the technology

Source: MESIA
 Cumulative EV Sales (%) Electric Vehicles
RoW
South Korea
Japan
1% 1%
• As of August 2018, global sales crossed 4 million 6%

• EV manufactures have begun to enter the MENA markets

• Government bodies are offering numerous incentives to China

promote EV adoption, including: North America
38%
26%

o Low interest loans

o Discounted car registration fees
o Reduced/zero import duties

• Jordan and the UAE are the most advanced markets in

terms of adoption but policies are being implemented in Europe
28%
other countries as well (e.g. Oman)
China Europe
North America Japan
South Korea RoW

Source: Bloomberg NEF

 Distributed Generation

• We expect growth in this segment to follow the growth experienced in the utility scale segment

• Major challenges across MENA:

o Heavily subsidized electricity prices

o Lack of regulation/policies like net metering, FiT etc.

o Lack of consumer awareness

o Lack of financing options

• Some of these challenges have or are already being addressed in the various MENA markets
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