On the other hand, Arab countries, which located in the southern side, feel that they need to increase RE projects with a growth rate linked with their own reserve of fossil fuels, which could margin the future role of RE resources.
Although it has been announced that some of targets of the Union for Mediterranean, UfM, include limiting the growth of energy demand and facilitate co-operation on technology aspects, until now and after two years of launching the UfM, thirteen project proposals have been announced but there is no real projects have been established. Actually, there are some obstacles on the road, and these obstacles are technical (i.e. national electricity grids and overseas cables), financial (i.e. represented in establishing financing schemes to support these projects), and political (the Arab-Israeli conflict). What are the effects of these constraints and how to overcome it? This is the main issue of this article.
Arab world is distributed into two continents; Africa and Asia. The main use for RE resources, mainly wind energy and hydropower applications, are located in the African part. The total installed capacities and the maximum demand in year 2009 have reached 171GW and 115GW, respectively. For the renewable portion, hydropower represents 3.4% of the electricity generation, meanwhile wind shares with 0.2%. The share of the region in oil and gas fields is increasing continuously, and it is expected to reach 49% and 24% of both sources, respectively, in 2030.
On the other hand, there are three objectives that currently underline European energy policy; competitiveness, security, and de-carbonization. In this context the European target by the year 2020 is to consume 20% of its electricity needs from renewable sources. The security of the EU’s energy supplies may be threatened if a high proportion of fossil fuel imports are concentrated among relatively few partners. Almost two thirds of the EU imports of gas came from Russia, Norway, and Algeria, while 60% of crude oil imports came from Russia, Norway, Libya, and Saudi Arabia.
Arab countries electricity demand continues to increase by up to 8% yearly, which makes it one of the fastest growing power markets in the world. Meanwhile, European consumption has steadily increased by 1-2% per year. In order to keep talks between Europe and the region alive, Europe tried to promote closer relations with different Arabian entities, League of Arab States, the Arab Maghreb Union, Middle East and North Africa Countries, and the Gulf Cooperation Council. One of these talks is the Union for Mediterranean.
Most of the existing EU initiatives are directed to be more dependent on green energy. Accordingly, the UfM has been originally proposed as part of Sarkozy's election campaign and converted following objections of Northern EU states and the European Commission to include all EU member states, not just those bordering the Mediterranean, and built upon the existing Barcelona process. The UfM has been formally founded in March 2008 and the first summit of the heads of states was held in Paris on the 13–14 July 2008.
The UfM pays special attention to concrete projects and results. One of the major projects proposed is the Mediterranean Solar Plan, MSP, whose prime objective is the development of sustainable energy in the Mediterranean region by developing 20 GW of RE sources by the year 2020, improving energy efficiency, and developing electricity grid interconnections.
According to MSP, the deployment phase planned for the period 2011-2020. Now, this schedule is surrounded with doubts sourced from, until now there is no real mechanisms to establish projects. In addition, all RE projects either under construction or planned in the Arab region following "business as usual" scheme and the national momentum, not as a result of the UfM plans.
The requested infrastructure to transfer green energy from south to north needs huge investment. How these capitals will be covered? What about the share of both parties? Are Treasuries in the south side ready to finance these Mega-projects? Or they already have a long list of their national priorities?. More and above, this infrastructure needs at least 6-8 years to be ready to transfer what we can call it "the organic electricity" generated from RE resources.
RE indicators in the Arab Region could be observed in the conservative movements to build green energy projects, this could be noticed through the following indicators:
• Building around 1000 MW grid connected wind farm projects and another three solar thermal power stations are under construction in Egypt, Algeria, and Morocco.
• Announcement of eleven countries for generating a certain portion of energy from renewable sources, which could increase the electricity generation from these sources to 6% by the year 2020.
• Establishing the "Regional Centre for Renewable Energies and Energy Efficiency" in Cairo on June 25, 2008 with participation of ten Arabian countries.
• Masdar City, the US$15-billion future energy initiative in Abu Dhabi, where the headquarter of the UN’s International Renewable Energy Agency (IRENA) is now located, is to be the world’s first carbon-neutral, waste-free city depending completely on renewable energy and re-used water.
• In addition, other countries, such as Saudi Arabia have been working on performing their action plans and strategies.
Another critical issue which is, financing schemes applied for clean energy projects in the region had passed through three phases: the first one is the Grant Phase, which applied in late eighties and early nineties, the second one is Self-Finance/Grant Phase and it has been practiced from the middle of nineties until the beginning of the Millennium, meanwhile the last one, Self-Finance Phase, has been applied during the last ten years. The source of the grant portion used in these phases was introduced from foreign agencies through governmental agreements, mostly from European partners. These phases helped in paving the road of wind and solar applications in the Arab region. It is expected that, without applying these schemes for UfM projects, doubts in revolutionizing energy sector in the Arab countries will increase to be more than realities, especially local loans are available on a commercial-basis; high interest rate and short repayment period, which affect the projects profitability.
As a conclusion, applying such approach; including the previous three phases, could enhance rapidly the road of other technologies; such as solar energy and biomass, to be distributed and promoted in the Arab region.
In addition, minimizing cost of RE systems could be reached by localizing the manufacturing of RE equipment in the Arab countries. This could increase the growth rate of establishing these projects, and this will be matched with Arabian voices ask to move from the consumer bank to developer's bank. These voices don't like, only, to pump money into foreign markets but also to share manufacturers their dividends.
According to the current situation, the future targets of RE in the Arab region will not be affected by the MSP, which says "… in the Mediterranean region, concentrated solar power offers the prospect of an abundant low carbon energy source". Also, national projects announced to be installed until 2020 are planned to respond the national energy demand not to be partially exported to Europe. Constrains facing the 20 GW show that the target of exporting RE from north Africa countries to Europe needs an additional 10 years, at least, to be real not an illusion.
Minimizing these expected extra 10 years, 2030 instead of 2020, as much as possible needs to enhance and motivate the role of private sector in these plans through Public Private Partnership, PPP, based on low risk basis. Private sector is expected to work in establishing projects, manufacturing, and grid infrastructure. In addition, readiness of the EU countries to import organic-electricity from southern countries means that they will pay more against using clean and sustainable source of energy.
However, framework conditions for the implementation of large-scale projects differ within the countries, which follow a wide range of development priorities and energy strategies. So, European side has to put common views to link between energy, development and energy security interests in the region.
Last but not least, there are many promising renewable energy resources such as wind, solar, and biomass in many parts of Arab countries. This creates an ideal opportunity for distributed generation technologies that complement the energy balance locally and in Europe. For this reason, the region is also perceived to be the ideal place for the deployment of new and renewable innovative electrification technologies if financial and regulatory issues are available and distributed between parties in a clear manner.
Finally, it is increasingly obvious that both parties now need to restructure the deployment phase, if it is to ensure that UfM is not just a continuation of old policies under a new name. In addition, EU has to find an alternative source of electricity which was expected to import from the south and should adopt itself to postpone the 2020 targets to 2030 !!!.
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