Round Table Meeting February 4, 2009

1. Euro-Mediterranean
Energy Market Integration Project
Germany
France
Lebanon Albrecht Kaupp
Team Leader
Belgium
Identification of the
"Mediterranean Solar Plan“ (IMSP)
An EUROPEAID Initiative under the
Union for the Mediterranean (UfM)
This project is funded
by the European Union
1

2. MED-EMIP
MED-EMIP has prepared in July 2008 a Library of 44
EE and RE recommended measures based on own
recommendations and feedback from partners. This
booklet with explanations and justification “WHY” is
continuously expanded based on feedback.
All project ideas are covered by MED-EMIP mandate,
but cannot be implemented by MED-EMIP alone.
Some recommendations are already implemented by
others, some will need additional funding.
This project is funded
by the European Union
2

3. Present MED-EMIP events -2
5. Review of issues and advise for DNAs for COP 15
preparation in Copenhagen, (August, on demand).
6. Preparation of National budget allocation efficiency
charts for the energy sector (ongoing three workshops per
year)
7. Preparation of sample contracts for export of electricity
into the EC. In cooperation with RCREEE (Law firm Kuhbier,
Brussels)
This project is funded
by the European Union
4

4. Background of MSP
The EuroMed Energy Priority Action Plan drawn up at
the Limassol Conference for the period 2008-2013
features the promotion of renewable and sustainable
energy, as well as improvements to the institutional,
legislative and political framework that governs the
development and dissemination of RE technologies.
In this context, the "Mediterranean Solar Plan" has
been declared by Ministers and Heads of State and
Governments as one of the key projects of the UfM.
This project is funded
by the European Union
6

5. Why, how
and when
are the EC-
Consultations
take place ?
This project is funded
by the European Union
7

6. Why “Identification” ?
The ambitious goals of the MSP is 20 000 MW installed
capacity of mostly thermal/photovoltaic solar as well as wind
power plants by 2020 at estimated investment costs of Euro
60 000 Million for the electricity generation, transmission and
distribution infrastructure.
This objective cannot be achieved without large private sector
investments;
Such investments are only forthcoming if terms and conditions
of domestic sales and/or export to the EU-27 are commercially
attractive to investors.
This project is funded
by the European Union
8

7. How to go about it ?
.
• Make an informed judgement by consultation with key
players about how the regional policy landscape (in the
MPCs and the EU) presents obstacles and
opportunities for achieving the objectives of the Plan.
• Ensure that the positions of the countries are taken into
account during the formulation of a MSP.
• Give clear recommendations as to how a
"Mediterranean Solar Plan“ may be developed and
effectively implemented in the region, including how
best to ensure the sustainability of the project's benefits
and attractiveness to private investors.
This project is funded
by the European Union
9

8. When are the consultations taking place ?
• Both experts Mr D.Levy and Mr A.Gazzo will visit
MPCs February/March/April 2009 for consultation
• Report will be finalized June 2009
• Recommendations may be presented at the
MENAREC meeting October 2009 in Morocco
• Further deliberations will follow how to improve the
EU and regional policy landscape towards
achieving the ambitious goal of 20 000 MW installed
capacity by 2020.
This project is funded
by the European Union
10

9. Two interesting issues
at the core of the
subject matter
This project is funded
by the European Union
11

10. Issue 1: Should partners consume their own
expensive solar electricity and/or lobby for export
The average system tariff structure or feed-in-tariff in
€Cents/kWh is not in favor of “home” consumption
Energy Region EU-27
Efficiency Households
Solar PV Solar PV
Grid Feed Battery
-10 3
3 7 7 (15.3) 26
4.4 (9) 14 17 26 26 40 40 60
Wi
EU-27
Industry Solar
Thermal
This project is funded
by the European Union
12

11. PV electricity generation costs
• Pay $ 4500/kWp for PV, and ask a bank to
finance it for 20 years at 5 %.
Explanations
• Install it at a location, Libya, where the
average yield may be 1800 kWh per year.
• Calculate your annual payment for 20 years
to the bank as
1.05 ∗ (1.05 − 1)
20
$ 361 = ∗ 4500
1.05 − 1
20
Your generation cost excluding O&M costs
is 361/1800 = 20 $Cents per kWh
This project is funded
by the European Union
13

12. Wind power plant electricity costs
• Pay $ 2000/kW for wind power plant and ask
a bank to finance it for 20 years at 5 %.
Explanations
• Install it at a location, Egypt, where the
average yield may be 3500 kWh per year.
• Calculate your annual payment for 20 years to
the bank as
1.05 ∗ (1.05 − 1)
20
$ 160 = ∗ 2000
1.05 − 1
20
Your generation cost excluding O&M costs
is 160/3500 = 4.6 $Cents per kWh
This project is funded
by the European Union
14

13. Options to support an RE Market
Feed-in-Tariffs ( To sustain an RE market )
Fast 100% deprecation (To kick-start an RE market)
Earnings from Carbon credits (insufficient for CSP/PV )
“Green Certificates” (insufficient for CSP/PV)
Tax rebates (for residential and small business)
This project is funded
by the European Union
15

14. Issue 2: Level of socially acceptable cross
subsidy in % on average system tariffs to
support feed-in tariffs or similar incentives
in favor of solar electricity.
Are cross subsidies of 1% or 5%
or even 10% acceptable ?
This project is funded
by the European Union
16

15. PV
Latest Electricity Tariff Survey by MED-ENEC
CSP
Wind
This project is funded
by the European Union
17

16. Thank you for your attention
www.medemip.eu
We pick and rate all colors
of energy in the region
such as solar, wind, hydro,
coal, oil shale and gas.
This project is funded
by the European Union
18