TheMediterranean Leadership SummitEnergyNetworksandSecurityofSupplyinEuropeYassineBouhara– ChairmanTellGroup
Malta- April2016
www.tellgroup.net
Memberof
Incollaborationwith
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World
EU MENAAlgeria
Source:BMWi 2000, Q-Cells 2007 Assumption [email protected]% Mono
POWERTOTHEWORLDAREANEEDEDTOCOVERTHEWORLDENERGYNEEDS
3
EUROPEANENERGYDEPENDENCYDUALCHALLENGE
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Oil34%
NaturalGas23%
Coal18%
NuclearEnergy12%
Hydroelectric7%
Renewables6%
EU28PrimaryEnergyConsumptionBreakdownbyFuel(2014)
Source:Tell Groupanalysis, BPStatistical Review 2015
§ Primary Energy Production: 789,8Mtoe (2013)
§ Net Imports of Energy : 908,9Mtoe (2013)
§ Russia is EU’s 1st Energy Trading Partner
§ EU’s Energy Dependency Rate: 88.4% for Oil and
65.3% forNatural Gas
Source:Eurostat 2013
Source:Tell Groupanalysis, Eurostat
EU28NaturalGasImportBreakdown(2013)
Russia,39.0%
Norway,29.5%
Algeria,12.8%
Qatar,6.7%
Nigeria,1.8%
Lybia,1.8%
Others,8.4%
EU28CrudeOilImportBreakdown(2013)
Russia,33.5%
Norway,11.7%
KSA,8.6%Nigeria,8.1%
Kazakhstan,5.8%
Lybia,5.6%
Azerbaidjan,4.8%
Algeria,3.9%
Iraq,3.6%
Others,14.4%
Source:Tell Groupanalysis, Eurostat
4
EUROPEENERGYSUPPLYCHALLENGESCHRONICDEFICIT
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PrimaryEnergyBalanceOutlook(inBnToe)
ReducingrelianceonRussianimports
Energydemandgrowth
CO2emissionslimitsMiddleEast
1990 2005 2020 2035
4
2
0
-2
-4
FSU
Africa
S&CAmerica
NorthAmerica
Asia
Europe
NorthAfricanrenewableenergyplansinlinewithEuropeancleanenergyinitiativesandtargets
DevelopmentofenergycooperationframeworkwithNorthAfricanCountries
NorthAfricancountriesareideallypositionedtoplayakeyroleinEU’sfutureenergysupplyscheme
Source:Tell Groupanalysis, BPEnergy Outlook 2035
5
Region Characteristics:
§ Comprised of Morocco,Algeria and Tunisia:
§ Areaof 3million sqm
§ Population of 85million
§ Common culture, languageand heritage
§ Resource-rich countries (oil, gas, minerals)
§ Major potential for solar and wind energy
MAGHREBRENEWABLEENERGYZONE
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Source:Tell Groupanalysis, Ren21, IRENA
RenewableEnergyTargetsRenewableEnergyInstalledCapacityCurrentMaghreb
renewablescapacity
Algeria
Total renewable energy: 255MW§ Hydropower: 228MW§ Solar PV: 2MW§ CSP: 25MW
2030 targets: 22 GW§ Biomass: 1 GW§ Solar PV / CSP: 13.5 GW / 2 GW§ Wind power: 5 GW
10%Tunisia
Total renewable energy: 323MW§ Hydropower: 66MW§ Solar PV: 20MW§ Wind: 245MW
2030 targets: 4 GW§ Biomass: 300MW§ Solar PV / CSP: 1.5 GW / 500MW§ Wind power: 1.7 GW
8%
Morocco
Total renewable energy: 2,680MW§ Hydropower: 1770MW§ Solar PV / CSP: 160MW§ Wind: 750MW
2030 targets: 6 GW§ Hydropower: 2 GW§ Solar PV and CSP: 2 GW§ Wind power: 2 GW
82%
Maghrebrenewables
capacityby2030
18%
69%
13%
6
ALGERIASHAPINGPOWERLANDSCAPEINMEDITERRANEAN
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Country Characteristics:
§ Surface: 2.4 million sqm
§ 10th largest countryworldwide
§ Largest country of theMediterranean basin
§ 10th largest reserves of natural gas (2nd in Africa)
§ 16th largest reserves of crude oil (2nd in Africa)
§ 3rd largest shale gas reserves worldwide
§ One of the highest rate of insolationworldwide
12.2Bn Barrels
provenreserves(OPEP)4.5Tnm3
proven reserves(OPEP)
Crude Oil NaturalGas ShaleGas
20 Tn m3reserves(EIA)
SolarEnergy
Solarpotentialofabout170000TWh/y
(avg of5.7kWh/m2/day)
7
SHALEGASVASTANDUNTAPPEDSHALEGASRESOURCES
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§ According to the EIA, Algeria is estimated to hold thethird-largest amount of shale gas resources in the worldafter China and Argentina with 707 tn cubic feet (Tcf) and5.7 bn barrels of technically recoverable shale gas and oilresources, respectively.
§ At the end of May 20 14 , the Algerian cabinet approvedplans to move forward with exploration of the country'sshale gas resources and authorized Sonatrach to seekforeign Partner for its shale gasprojects.
§ In January 2015, Sonatrach announced plans to invest upto $70 bn over the next 20 years to exploit shale gas inthe southern desert. The company expects to producearound 20 bn m3 of shale gas a year from 200 drill sites .
§ The government is offering a range of fiscal incentives forunconventional projects:
§ Royalties fixed at 5%, as opposed to thetypical 5.5-23% range; and§ Income tax reduced to 19%, from 30% forconventional projects .
OilandNaturalGasBassin andPipelineInfrastructureinAlgeria
8
WINDENERGYSAHARAWINDPOWER
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§ In Algeria, the first attempt to connect wind turbines to the electricity distributionnetwork started back in 1957, with the installation of a 100 kW wind turbine on the siteof Grand Vent (Algiers).
§ Designed by the French engineer ANDREAU, this prototype was originally installed in St.Alban England. This bipale of pneumatic, variable-pitch, 30 meters height and adiameter of 25 m was bought by Electricité et Gaz d' Algérie and dismantled to beinstalled in Algeria.
§ After solar, wind power constitutes the second axis ofdevelopment for renewable energies in Algeria.
§ Despite having lower wind speed than Morocco andTunisia, the Algeria Sahara benefits from good potential forwind power with wind speeds varying between 2 et 6 m/s.
§ The most promising sites are situated in the region of Adrarin the south where Sonelgaz commissioned 12 turbines tothe Spanish manufacturer Gamesa totaling 10 MW in 2014.The Adrar site serves as a pilot project for a wind capacityprogramthat plans to bring 639 MW online by 2023.
Algeriaaveragewindspeedbyregion(inm/sat10mheight)
Source:WindEnergyDivision,RenewableEnergyDevelopmentCenter
9
ALGERIASOLARENERGY13.5GWPLAN
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SolarmapofAlgeria
Source:Renewable Energy Partner
Renewable energyGovernment Plan :
§ 22,000 MW of renewable power generating capacity including 13,500 MWof solar PV at 2030 horizon
§ 20 year PPA anda FiT at circa $0.15 Kwh
§ constructionof over 50 solar PV projects over the next six years
§ The global cost of the renewable electricity program is expected to reachbetween$60-100 bn
§ 300 bn m3 of expected total natural gas savings, over the period of 2011and 2030
PilotPhase
Initialdeployment
Largescaledeployment
Utilityscaledeployment
2011- 2013 2014- 2015 2016- 2020 2021- 2030
CompletedProjects
§ 1.1 MW solar PV plant in Ghardaïa testing four differenttechnologies (monocrystallin, polycrystallin, amorpheus andthin film) commissioned in July2014
Projects in final commissioning stage:
§ 243 MW solar PV plants awarded toYINGLI SOLAR
§ 100 MW solar PV plants allocated toBELECTRIC
Source:Renewable Energy Partner
10
VIABILITY
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Source:BNEFFeb2016+RNEEstimatesSource:BNEF, WBL-EL
Source:NREL,Roland Berger
PVGlobalInstallation(GWp) PVCapacityvsDemand(inMW)
LeveragedCostofElecticityofPVvsWind($/KWH)
Best
10%
Low
7 818
29 3138
4556
65 7079
88100
0
20
40
60
80
100
120
2008 2009 2010 2011 2012 2013 2014 2015 2016f 2017f 2018f 2019f 2020f
Manuf Market established in China/SouthEastAsia
Next growth wave => India/Turkey/MENA57 GW in 2015, 64 GW in 2016f
80000
60000
40000
20000
China Taiwan SEA Japan Korea USA OthersEU
India Germany ROW
Demand Capacity
80000
60000
40000
20000
China Taiwan SEA Japan Korea USA Others EU
India Germany ROW
80000
60000
40000
20000
China Taiwan SEA Japan Korea USA Others EU
India Germany ROW
11
MAGHREBRENEWABLE ASSETSTYPICALRENEWABLEENERGYINVESTMENT
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Inception Proliferation Ubiquity
AlgeriaTunisia
Morocco
Maturemarkets
RenewableEnergyAssetInvestmentCurve
Pre-consent/AssetReadytobebuilt
AssetsUnderconstruction/Expansion
Managementofoperatingassets
HighestValueCreationExpectedIRR>25%
ModerateValueCreationExpectedIRR10-20%
LimitedValueCreationExpectedIRR<10%
Market Cycle
Asset Development Stage
Investor returns
Capital Availability Low High High
Source:Tell Groupanalysis, Renewable Energy Partner
12
RENEWABLE ENERGYANDJOBCREATIONRENEWABLEENERGYEMPLOYMENTBYTECHNOLOGY
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Source: IRENA Annual Review 2015
13
ALGERIAKEYTAKEAWAYHYBRIDENERGYOPPORTUNITIES
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OilandGasLeaderInMediterraneanBasin
§ Opecmember§ Significant Oil, Gas, Shale gas resources§ Energyprovider for south Europe andMaghreb
EnergyDNA§ Expertise of O&G explorationand exploitation§ Largest Oil extracting company inAfrica§ Energydistributionand management trackrecord
SolidInfrastructure§ Power grid covering 99% of population§ TransMediterraneanpipelines§ International power interconnections
Institutionalframework§ New legislationandenergypolicies§ Government tax incentives§ Attractive Feed-in-tariffs
EnergyDiversification§ Unique potential forwind, solar and hydro power§ Multi technology government renewable energyprogram
BenefitsofSolarEnergy§ Security§ Connecting§ Job Prosperity
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EU
Source:BMWi 2000, Q-Cells 2007 Assumption [email protected]% Mono
POWERTOTHEEUROPEANUNIONAREAREQUIREDTOCOVERTHEEUENERGYNEEDS
15
CONTACTUS
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