Onshore Wind: Large market potential in the Middle East and North Africa (MENA)

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20 GW planned by MENA countries until 2020.

Dii, the international alliance for desert power, sees an enormous potential for wind energy on the southern shore of the Mediterranean. While 2013 figures recently indicated that the EU wind energy market is consolidating, Dii’s analysis shows that south of the Mediterranean conditions for onshore wind are particularly favorable. Wind speeds at very good sites e.g. in Western Morocco, central Algeria or Egypt reach more than 8-10 m/s at 50 meters height. Suitable sites that can be well connected to the grid in Morocco, Algeria, Libya, Egypt and in Saudi Arabia also reach very good wind speeds. In other words, wind energy is cost competitive with current mid and base load power plants. Electricity from wind power costs 50-70 EUR/MWh at good sites in MENA. Additionally, countries in the region have approved very ambitious wind power targets: Approx. 20 GW have been targeted by the following eight MENA countries until 2020: Morocco (2 GW), Algeria (0.5 GW), Tunisia (0.6 GW), Libya (1.5 GW), Egypt (7.2 GW), Jordan (1.2 GW), and Saudi Arabia (5 GW).

2.7 GW onshore wind until 2015

The market growth in MENA is already visible. Already today 1.4 GW are in operation, of which 22% has been installed in 2013. Currently projects of 1.3 GW are either under construction or shortly before construction. Today onshore wind meets less than 1% of the energy demand in the region. In its latest report, Desert Power: Getting Started, Dii forecasted that onshore wind could meet around 50% of the energy demand in the region due to the cost competitiveness of the technology and the vast quantity of available sites with favorable wind speeds.

Algeria in-depth report – Wind plants are competitive

Together with the Algerian utility Sonelgaz, Dii has analyzed the wind potential in Algeria. Given the very good wind conditions at selected sites and assuming favorable local financing opportunities, wind power plants in Algeria can achieve LCOEs of 6.5 €ct/kWh to 8.5 €ct/kWh. When including transmission costs to Italy via a HVDC interconnector, wind electricity exports from Algeria could amount to 9-10 €ct/kWh. Therefore electricity from Algerian onshore wind plants can be commercially competitive at Italian wholesale market prices in 2015.

Market development needs transparency

Nevertheless, several non-economic hurdles have to be overcome: a self-sustained market requires sound regulation, and not just for the private sector. Main measures include: secure land access, secure grid access, a transparent permitting landscape, access to creditworthy customers and high-quality meteorological data. Priority should be given to practical renewable energy support schemes and power purchase agreements. An essential aspect is long-term, secure access to the grid. Local inhabitants should benefit and be involved in the development process. It is also important for approval processes to be transparent and standardized. Reliable measurement and irradiation data will contribute to a foreseeable return on investment.

About Dii

With partner companies from 16 countries, Dii is looking to turn “power from the deserts” into reality. The activities of the industry initiative, which was founded in 2009, are focused on creating an industrial-scale market for renewable energies from the desert regions of North Africa and the Middle East and connecting them among others to the European power markets. These activities include the identification of suitable solutions and market-based support for generating and transmitting energy from solar and wind sources in the deserts to satisfy local demand and remote areas. In 2013 Dii’s shareholders decided to transform Dii into a permanent organization and also to open it to a wider range of companies that can benefit from its extensive know-how and network of experts and decision makers.