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CSP guide to the


BUSINESS INTEL L I G E N C E

MENA region
Table of contents
1. MENA industry survey
2. Notable MENA markets
a. Saudi Arabia
b. United Arab Emirates
c. Jordan
d. Morocco

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14-15 May, Dubai

As part of the launch of this year’s MENASOL confer- connect you to local decision-makers to secure a
ence, CSP Today has compiled a guide to the hottest sustainable MENA pipeline. With over 300 top at-
markets open to CSP companies in the region – so tendees, this is by far the biggest, best, and most
that you can inform your business strategy and take influential CSP and PV industry event in the region.
advantage of the lucrative MENA opportunities.
MENASOL 2013 is the leading solar event in the
To find out more about the MENASOL
Middle East and North Africa region. The 2 day con-
conference, visit: www.csptoday.com/mena
ference will help solve your critical challenges and
CSP guide to the MENA region BUSINESS INTELLIGENCE

Part 1 – MENA industry survey


CSP Today and PV Insider conducted an industry survey in November/December 2012 to
assess the current status and priorities of international and local solar companies. Here is a
select summary of the survey results:
What type of information is your Do you have a team dedicated to solar
business looking for regarding the developments in the MENA region?
MENA region in 2013?

Other
Investment Meeting
opportunities new clients
4.1% Yes
12.7%
Cost

% %
parameters 35.7%
5.3% 52.6%

New 15.3%
47.4%
projects
11.3%
15.6%
No
Policy updates
Technology information

Please state in order the 3 most Are you based in the MENA Region?
important markets that are priority for
your business in the Middle East/North 320
Africa region in the next 12 months: 300 312
As a 280
Market Ranking Total Score percentage
Saudi Arabia 1 525 35.28 260

UAE 2 268 18.01 240


Morocco 3 181 12.16
220
Egypt 4 106 7.12
Kuwait 5 67 4.50 200

Oman 6 64 4.30 180


Qatar 7 61 4.10
160
Tunisia 8 52 3.49
140
Algeria 9 44 2.96
Jordan 10 40 2.69 120
Libya 11 24 1.61 100
113
Israel 12 18 1.21
80
Iraq 13 11 0.74
Bahrain 14 11 0.74 60
Yemen 15 9 0.60 40
Iran 16 5 0.34
20
Lebanon 17 2 0.13
Markets were scored on a points system: 3 points for Market 1 (highest priority), 0
2 points for Market 2, 1 point for Market 3 MENA NonMENA

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Part 2 – Notable CSP MENA markets


SAUDI ARABIA
Market analysis
In 2012 the Government of Saudi Electricity & Cogeneration Regulatory Authority
Arabia unveiled its ambitious plan to (ECRA)
install 41GW of solar power by 2032, ERCA is the body responsible for the regulation of the
including 25GW of CSP and 16GW PV. electricity and water desalination industry in Saudi Arabia.
This translates to 10% of domestic use power generated
by 2020 before reaching the 41GW mark by 2030. King Abdulaziz City for Science and Technology
(KACST)
One key factor at play in the adoption of these targets is KACST is an independent scientific organization
the internal consumption of oil reserves, which continues administratively reporting to the Prime Minister. KACST
to increase unabated. If current trends are maintained is both the Saudi Arabian national science agency and its
then Saudi Arabia runs the risk of becoming a net importer national laboratories.
of oil. The IEA (International Energy Agency) recently
estimated that oil production would most like raise to 12.3 Saudi Arabia Solar Industries Association (SASIA)
MB/D by 2034, up from 11MB/D in 2011. SASIA is a non-profit, non-governmental association which
aims to promote solar power in Saudi Arabia and across
Notable agencies the Middle East.
The King Abdullah City for Atomic and
Renewable Energy (K.A. CARE) CSP Today analysis:
K.A.CARE was created by a Royal Order on April 17, 2010, CSP secures large portion of Saudi’s solar market
with a mandate to contribute to sustainable development Article by Heba Hashem, December 21, 2012
in the Kingdom. Located in Riyadh, K.A.CARE endeavours
to meet Saudi Arabia’s future electricity demand, projected Saudi Arabia is gearing up to launch its first CSP bidding
to nearly triple in the next 20 years, while maintaining round in early 2013, which will see it offer 900MW of
the highest industry standards for safety, security and projects. A year later, a larger bid for 1,200MW of CSP is
transparency. scheduled to open.

K.A CARE’s mission is to be “the driving force for making Foreign solar power consortiums preparing to participate
atomic and renewable energy, an integral part of a national in the kingdom’s upcoming bids would stand better
sustainable energy mix, creating and leveraging the chances of being selected if they were pre-informed of the
competitive advantages of relevant technologies for the operational and non-operational challenges that lie ahead
social and economic development of the Kingdom of Saudi of them.
Arabia”.
Manpower deficit
Key K.A.CARE Objectives: As a country with one of the world’s highest irradiation
levels, receiving an average of 2,200kWh/m2 a year and
„„CREATE a sustainable economic sector for Saudi Arabia up to 2,550kWh/m2 a year at some locations, Saudi Arabia
anchored by local alternative energy demand market has tremendous potential to develop CSP rapidly. But the
„„CONTRIBUTE to job creation, GDP growth, landscape is not free of obstacles.
environmental footprint reduction and sustainable
development “Financially, things are a bit attainable, but it remains a
„„MAINTAIN highest levels of safety, security and challenge. Human capacity is always on top of my mind
transparency as a number one challenge and priority”, Mr. Abdullah Al
Gahtani, Consultant at King Abdullah City for Atomic and
Renewable Energy’s (K.A.CARE) Strategy Team, tells CSP
Today.

Addressing human capital shortfalls is, in fact, one of


the kingdom’s near-term objectives and is reflected in
its present endeavours. In addition to freeing fuel for
export, diversifying resources, securing funding, and
reducing subsidies, the development of local know-how

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comes under the Electricity & Cogeneration Regulatory Novatec Solar’s Linear Fresnel Collector Technology also
Authority’s current energy policy. holds an advantage with its automated mirror cleaning
that uses very little water. Meanwhile, researchers at
“K.A.CARE initiated (its mission) in April of 2010 to work the Massachusetts Institute of Technology suggest that
on these challenges with all necessary stakeholders – hybrid fossil-CSP plants could be an optimal solution for
local and international. Every dimension has a dedicated the kingdom, as they would overcome some of CSP’s
and extensive study made for it by K.A.CARE in order to shortcomings by boosting efficiency, while providing
resolve the issues and go beyond that”, Mr. Al Gahtani dispatchable power without the need for storage.
explains.
Faith in CSP
According to a K.A.CARE report, human capacity
Saudi Arabia, however, hasn’t restricted itself with
development will necessitate engagement with several
technology preferences and has kept all options open.
local stakeholders – namely the Ministry of Higher
“We are – as K.A.CARE – open for all technologies and
Education; Technical and Vocational Training Corporation;
will focus on technologies that bring added value to
Human Resources Development Fund; Saudi Basic
the country by creating a sustainable, socio-economic
Industries Corporation, and Aramco – as well as
development for the nation. In our announced targets, we
international stakeholders such as universities and training
believe that the proposed CSP will play a larger role and
institutions.
have a much better economic impact on Saudi Arabia than
Building local human capacity now would be highly PV technology”, Mr. Al Gahtani states.
rewarding on the long run; contributing to significant
A CSP-dedicated solar policy framework and an incentive
economies of scale for CSP costs. For example, when it
scheme are still missing, but these are currently being
comes to operations and maintenance – which account for
developed by K.A.CARE with the support of foreign
nearly 30% of costs over the lifetime of a CSP plant – up
consulting companies Poyry, PWC, Vinson & Elkins,
to 90% could be localized and hence considerable savings
Roland Berger, and Morgan, Lewis & Bockius.
could be achieved.
In Saudi Arabia’s ambitious plan for 2032, CSP will
DNI compensates for losses
supply an eventual 25GW of the total 41GW of planned
The kingdom also needs to deal with the operational solar capacity, which would enable it to save billions of
issues of CSP deployment, as dust from sandstorms will dollars worth of exportable oil. It is worth noting that the
be unavoidable. This could easily affect the operation and country’s 2009 domestic consumption of oil and gas was
performance of CSP plants, and should be taken into 69% higher than in 1999, while its consumption of crude
consideration at the early stages of technology selection. oil for power in 2011 was estimated to be 582,000 barrels
per day, up by a staggering 340% from the 2006 level,
“We have losses due to high temperature and so
according to the Sunrise in the Desert Report.
on. But what we gain from high radiation more than
compensates for the loss of efficiency”, Maher Al-Odan, These alarming figures have undoubtedly urged the
senior consultant K.A.CARE, was cited as saying by Saudi kingdom to pick up pace and set a date for its first solar
Gazette. power bid. “K.A.CARE will start with what we named as
the Introductory Round (500-800MW), to be launched
For the successful implementation of CSP in the kingdom,
with the issuance of the draft request for proposals (RFP),
Daniel Strigari, project manager at Abengoa, highlighted
followed by the final RFP – most of which will be CSP and
at the Fourth Saudi Solar Energy Forum the importance
PV. But (we have) not yet specified which one will be how
of measuring and evaluating meteorological conditions,
much”, notes Mr. Al Gahtani. Following that, the first CSP
including DNI, wind, speed, and direction, as well as
bidding round will offer 900MW, while the second will
reduced visibility causes like dust, humidity, fog and haze.
offer 1,200MW.
Pilot projects could help resolve many of these operational
issues. The wide range of applications offered through CSP make
it a natural fit for the kingdom’s needs; be it electricity
Moreover, to adapt operation and maintenance (O&M) and
generation, seawater desalination or enhanced oil
customize technology designs, solutions must be found
recovery. Not only can solar power help Saudi Arabia
for the sandstorms, cleaning requirements, and scarcity
conserve its oil for export, but by deploying 25GW of
of water. Sky Fuel, a Colorado-based firm that has been
CSP by 2032, the country could transform itself into an
seeking Saudi partners, may have an advantage over
exporter of CSP technology.
other parabolic trough manufacturers. Its Sky Trough uses
unbreakable ReflecTech-based mirrors, which could reduce
O&M costs and offer protection from dusty winds.

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UNITED ARAB EMIRATES


Market analysis
In 2008, the government of the UAE Abu Dhabi Water and Electricity Authority (ADWEA)
announced the objective of covering / Abu Dhabi Water & Electricity Company (ADWEC)
7% of its energy demand using The Abu Dhabi Water & Electricity Authority researches
renewable energy by 2020. Owing to and develops ways to more efficiently produce, distribute
the local environmental conditions and resources, it is and consume water and electricity. ADWEA is owned
expected that solar energy will play a vital role in providing by the Abu Dhabi Government, but is financially and
new installed capacity. administratively independent.
The Emirate of Dubai has also announced a 1 GW Solar ADWEC is a wholly owned subsidiary of ADWEA, and
Park to be built by 2030. The 1 GW Mohammad Bin the single buyer and seller of water and electricity in the
Rashid Al Maktoum solar park, named after the Dubai Emirate of Abu Dhabi.
sovereign, constitutes a total investment of AED 12 billion
(EUR 2.5 billion; USD 3.3 billion), and is intended to be Masdar
operational by 2030. 200MW of the 1GW of solar power Masdar was launched in 2006 and organised around
to be installed in this project will comprise PV, while three business units and an independent, research-driven
800MW will be CSP, according to the Chairman of the graduate university. The company aims to “advance
Dubai Supreme Council of Energy, Waleed Salman. renewable energy and sustainable technologies through
education, R&D, investment and commercialisation.”
The United Arab Emirates’ (UAE) economic and
demographic growth is the main driver of the country’s Emirates Solar Industries Association (ESIA)
rapid increase in energy demand. ESIA is a non-profit, non-governmental association and
aims to provide an all-inclusive platform bringing together
Notable agencies stakeholders of the UAE solar industry. ESIA aims to
Dubai Supreme Energy Council expand the use of all solar technologies at national and
regional level, to strengthen the local UAE solar industry,
The Dubai Supreme Council of Energy (DSCE) was formed
and to facilitate business opportunities for its members.
in August 2009. The Governing body seeks to ensure that
the Emirate’s growing economy will have sustainable energy
while preserving the environment. The Authority is developing CSP Project in the Spotlight
alternative and renewable energy sources for the Emirate, Shams 1
while increasing energy efficiency to reduce demand. Shams 1 in Abu Dhabi uses parabolic trough technology.
Upon completion it will have a capacity of 100MW, which
The Dubai Supreme Council of Energy is the governing makes it among the largest parabolic trough power
body tasked with policy development, planning and stations in the world. It will displace 175,000 tons of
coordinating with concerned authorities & energy bodies CO2 per year and its power output will be enough to
to deliver new energy sources while employing a balanced power 20,000 homes. The station will consist of 258,048
approach to protecting the environment. parabolic trough mirrors, 192 solar collector assembly
loops with 8 solar collector assemblies per loop, 768 solar
Mission: Support Dubai’s economic growth through secure
collector assembly units, and 27,648 absorber pipes.
energy supply & efficient energy use while meeting the
following environmental & sustainability objectives: The basic and detailed engineering is developed by
AG Ingeniería, and the project is consulted by Fichtner
„„Effective planning of energy sector
Consulting Engineers. The equipment is designed and
„„Develop an integrated approach to securing energy
delivered by Foster Wheeler, and the power station
supply and employing efficient energy practices for the
equipped by Abengoa Solar's ASTRO collectors. The
sustainable growth of Dubai
125MW steam turbine is provided by MAN Turbo, parabolic
„„Ensure sustainability of energy supply while preserving
glass mirrors by Flabeg, absorber tubes by Schott AG, and
environment
the Therminol heat transfer fluid is provided by Solutia.
„„Rationalize use of energy and ensure environmental
sustainability The project is developed by Masdar, in cooperation
„„Plan and facilitate the execution of the strategic with Spain's Abengoa Solar and France's Total. The
initiatives, demand management and supply options power station is developed under a 25-year build, own
with view of diversifying energy sources and operate contract. It occupies approximately 2.5
„„Set a governance framework to streamline existing square kilometres, and will be followed by Shams 2
energy practices across the DSCE entities to optimise and Shams 3 stations.
synergy and energy efficiency

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CSP project in the spotlight

CSP project in the spotlight


Shams 1
Current status Commissioning
Gross capacity 100MW
Developers Masdar
Abengoa
Total
Technology Parabolic Trough
EPC Abener
Teyma
Madinat Zayed
State/region UAE
Cooling Dry

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Jordan
Market analysis
Solar energy generation has massive Ministry of Energy and Mineral Resources.
potential in Jordan. The government
In addition, the Ministry of New and Renewable Energy
has big plans for development
has requested expressions in interest and shortlisted 5
stemming from the desire to reduce
CSP projects. Currently four of them have already, or are
dependence on expensive energy imports and satisfy
about to, sign a memorandum of understanding - meaning
growing demand for energy.
that they will submit concrete development plans for
In the 2007 Energy Strategy, the Government of Jordan the Ma’an Development Area. Shortlisted developers
set ambitious goals for the share of renewable energies have until May 2014 to submit their final proposals and
in primary energy supply to increase from the current 1% technology selections.
to 10% by 2020. The planned installed capacity should
Firas Rimawi, advisor to the CEO at the South Company for
amount to 300MW – 600MW (CSP, PV and hybrid power
Construction and Development (the development agency for
plants) by 2020 with the aim to locally produce 90% of
the south of Jordan) comments: “The Ma’an Development
energy by 2020. The Renewable Energy and Energy
area is ideal for solar; it is flat, making for easier construction
Efficiency Law was enacted in February 2010 which allows
and is well connected to roads, so making the logistics much
unsolicited or direct proposal submission.
easier. It is now up to the developers to submit competitive
proposals and make this happen” he says.
Notable agencies
Central Electricity Generating Company (CEGCO) And Georgio Akiki, AREVA Solar’s Business Development
Manager - Middle East adds: “Although the deadline is
The Central Electricity Generating Company (CEGCO)
2014, proposal submission can take place at any time.
is the largest power generator in Jordan with seven
The MEMR will evaluate proposals within 6 months of
power generation complexes nationwide, totalling around
submission and sign a Power Purchase Agreement within
1,550MW of installed power capacity of a mixed portfolio
2 months of the Notification of Acceptance,” he says.
of technology and fuel types that meet around 59% of the
country’s current electricity consumption. But not all the proposals will come to fruition – NEPCO would
struggle to connect all five projects to the national grid.
On July 18, 2011 it was announced that ACWA Power, the
Saudi-based Water desalination and Power Generation Akiki comments: “Technical constraints mean that the
Company, completed its acquisition of a 65% controlling government will select only the best possible projects
stake in Enara Energy Investments PSC that in turn owns using the direct proposal mechanism to develop the
51% of CEGCO. targeted 1800MW renewable energy projects as per the
energy strategy.”
In April, 2012, ACWA Power then completed the acquisition
of a further shareholding CEGCO from Malakoff Corporation He also cites finance as a barrier to development.
of Malaysia, by purchasing the latter’s 25% stake in Enara. “Unfortunately, attracting investment for renewable
energy projects has been challenging. There are a
Ministry of Energy and Mineral Resources
variety of reasons for this, including unfavourable market
The Ministry of Energy and Mineral Resources was
conditions, challenges in project financing due to the
established in 1984 and entrusted with administering and
financial crisis and the relatively small size of Jordan as a
organising the energy sector.
market for renewable energy.”
Electricity Regulatory Commission of Jordan
The ERC, established in 2001, was created to apply the However, Jordan is a part of the MENA CSP scale-up initiative
government policy of restructuring the electricity sector which is eligible for funding from the Clean Technology Fund
on the basis of equity, and provide electricity services to (CTF). Another positive move is that the government has
more than one and a half million consumers. now published proposals for upper limits for power purchase
National Electric Power Company (NEPCO) agreements for each type of renewable energy. This will,
Provides electrical generation and transmission in Jordan. according to Rimawi, make it easier for developers to submit
proposals that are both realistic and competitive.

Csp today analysis of Jordan Ultimately the industry must wait until the 2014 deadline
As stated above, the Renewable Energy and Energy before it will know how the CSP industry is likely to develop -
Efficiency Law allows unsolicited or direct proposal based on which proposals are successful. Only then will it also
submission. Effectively investors and developers are know whether the government will provide financial incentives
free to identify and develop renewable grid-connected or whether it will need to seek international funding. For
electricity production projects such as wind parks, solar now all developers can do is ensure that their proposals are
systems or others on their own and propose these to the watertight and cost efficient in the hope of being accepted.

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MOROCCO CSP project in the spotlight


Market analysis Ouarzazate I

The first announcement to be made Current status Development


in Morocco came in 2009 with the Gross capacity 160MW
Moroccan Solar Plan, which targeted Developers Acciona
2,000MW of solar by 2020 (or 14% of ACWA
Aries
the projected energy demand). A more comprehensive SENER
plan was outlined in the Renewable Energy Law (February TSK
11, 2010), which aimed to foster and promote renewable Technology Parabolic Trough
energy, as well as regulate the commercialisation and EPC TSK
exportation of renewable energy. State/region Sousse Massa Draa

Significantly, the law also detailed the creation of the Net annual production – 550
expected (gwh)
National Agency for the Promotion of Renewable Energy
and Energy Conservation (ADEREE) (16.09 of January
13, 2010). This was a reorganisation and renaming of the
existing Centre for the Development of Renewable Energy
(CDER). Finally, it allowed public/private cooperation with
regulator Office National de l’Electricité (ONE).

Notable agencies
Moroccan Agency for Solar Energy (MASEN)
MASEN aims to implement a program for the
development of integrated electricity production projects
from solar energy with a minimum total capacity of
2,000MW. MASEN is responsible for the design of
integrated solar development projects in the areas of
Morocco suitable for solar energy.
Notes on the project
Other features of MASEN’s role include:
In September 2012 MASEN announced Saudi’s ACWA
„„Conducting the technical, economic and financial Power in a consortium with Spain’s TSK and Aries were
studies which are necessary to the qualification of solar awarded to build and operate the 160MW Ouarzazate
sites CSP plant in southern Morocco. The consortium
„„Contribution to research and to the raising of the passed the two rounds since Q4 2010 when MASEN
funding necessary to the realization and to the unveiled a call for tenders.
exploitation of the solar projects The Ouarzazate project will feature 160MW of output
„„Project management and infrastructure implementation power and 4 hours of thermal storage with molten salts.
This is the first phase for a more ambitious plan to
l’Office National de l’Electricité (ONE) develop solar energy in Morocco in the Ouarzazate site
and other regions in the country with financing support
ONE is the sole publicly-owned utility in Morocco, and
from World Bank and African Development Bank. The
holds a 25% stake in MASEN.
four firms, TSK, Acciona, SENER and Aries Ingeniería
The Moroccan Agency for Development of Renewable y Sistemas provide ACWA with the experience and
Energy and Energy Efficiency (ADEREE) know-how in engineering, construction, commissioning
and operation of concentrated solar power plants.
ADEREE is responsible for overseeing the development The Ouarzazate plant will use parabolic trough tech-
and promotion of renewable energy in Morocco. nology. SENERtrough®, the solar collector assembly
developed by SENER.
Ministry of Energy, Mines, Water & Environment
TSK-Acciona-SENER-Aries will face the challenge to
The Ministry of Energy and Mines is responsible for the design, build and commission a more cost-competitive
development and implementation of government policy in plant for the Moroccan government and other
the areas of energy, mining and geology, as well as control countries interested in this technology.
of other areas under its jurisdiction.

For more information about MENASOL 2013 (14-15 May, Dubai), including the full agenda, speaker list and networking
opportunities please visit: www.csptoday.com/mena
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