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Renewable energy country attractiveness indices: Country focus - Tunisia - EY - Global

Country focus: Tunisia

Significant solar potential signals exciting opportunities

Tunisian flag

RankingQ3Q2
All renewables index341na
Wind index331na
Solar index121na

Source: EY analysis
1 Joint


Contacts

Email Hichem Ben Hmida
+216 70 749 111

Email Hela Gharbi
+216 70 749 111

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Policy

Reliance on fossil-fuel reserves and lack of political support has meant that renewable energy development has not been a high priority for Tunisia. However, rapid expansion of the market, recognition of the its RES potential and a number of major international solar initiatives has produced a commitment to diversify power generation, in particular through investment in wind and solar.

Its electricity generated by RES is about1%; but government aims to increase this to 11% by 2016, and 25% by 2030.

Since 1985, Tunisia has had a “Rational Use of Energy” policy and has tried to establish an institutional and legal framework and financial environment to help energy conservation and management, including development of the National Fund for Energy Conservation in 2005. Among the MENA countries, it is acknowledged as a “pioneer” in energy efficiency and renewables policy.

Incentives

Tunisia does not currently have a specific incentive system for renewables comparable to a FIT or REC scheme, but uses direct financial and tax incentives instead, with capital subsidies, grants and rebates available.

Currently direct financial incentives are aimed mainly at water heating and small-scale energy substitution, but tax incentives do exist for renewable energy, like the reduction of customs duty and VAT exemption on the import and local manufacture of raw materials and equipment.


Grid

Investment will be needed to increase grid capacity and ensure the infrastructure can receive and distribute power from large-scale projects. The Government has introduced legislation allowing surplus electricity produced by plants attempting to be self-sufficient to be sold on to the Tunisian Electricity and Gas Company, up to 30% of total production, plus a flat network fee for transporting output to the place of consumption.

To address grid issues, inter-connections with those of Algeria and Libya and European countries are planned, including a 1GW connection with Italy expected to be operational by 2016.


Solar powwer

Tunisia has significant solar potential, and can support large scale CSP generation. Its PV market is expected to continue to develop, although the intense desert heat does make panels less efficient. However, the Government has introduced subsidies to lower solar panel costs by around 30% to encourage installation.

Nur Energie has announced plans to construct CSP tower projects totaling 2GW, with the first ready for construction in 2012-13. Another CSP project in the pipeline is El Borma, which will total 150MW.


Wind power

Tunisia’s north region has strong wind power potential. Current energy output is around 114MW with total potential estimated at about 1GW. MAKE forecast additional capacity of 692MW through to 2016.


National and international investment programs

In 2009, the Government launched the Tunisian Solar Plan, a €2b PPP spanning 2010-16 which aims to fund around 40 renewable projects, specifically solar and wind. Around 70% of this is expected to come from the private sector which will lead 29 projects, and approximately 40% of resource will go to energy export infrastructure development.

Tunisia is also involved in the early stages of the Mediterranean Solar Plan, a separate EU-backed scheme that hopes for investment of around €38b to create 20GW of new solar and other RES around the Mediterranean Sea, with the output exported to Europe to help the EU meet its 20% target of electricity from RES by 2020.

Tunisia will also be part of the DESERTEC “super-grid” connecting various African and European countries in an effort to harness and distribute power from the region’s vast solar resource. By 2050, the project will have invested around €400b in solar plants and transmission lines to meet a large proportion of both MENA and continental Europe’s electricity demand.

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