Tunisia - Electrical Power Systems and Renewable EnergyTunisia - Electrical Power Systems
Overview
Tunisia’s power sector is well developed, and nearly the entire population enjoys access to the national electricity grid. Tunisia has a current power production capacity of 5,547 megawatts (MW) installed in 25 power plants, which produced 19,252 gigawatt hours in 2018. State power utility company STEG controls 91.5% of the country’s installed power production capacity and produces 81% of the electricity. The remainder is produced by Tunisia’s only independent power producer (IPP) Carthage Power Company (CPC), a 471-MW combined-cycle power plant. However, as a result of delays in power plant construction, the power sector does not possess excess generation capacity and is susceptible to brownouts. STEG is hard pressed to meet peak summer electricity demand, let alone keep up with Tunisia’s annual 5% growth in power consumption. Power generation projects at various stages of design and development will help meet an expected doubling in electricity demand over the next 15 years.
Around 97% of Tunisia’s electricity is generated from fossil fuels, mainly natural gas. Nearly 45.5% of Tunisia’s natural gas needs are met through imports (mainly from Algeria); local gas production comes from the concessions of the country’s national exploration company, ETAP, as well as foreign companies’ concessions. Only 3% of Tunisia’s electricity is generated from renewables, including hydroelectric, solar, and wind energy.
While STEG continues to resist private investment in the sector, Parliament’s 2015 energy law encourages IPPs in the area of renewable energy technologies. The law’s implementing decrees and a Power Purchase Agreement template were published in early 2017.
The first IPPs in renewable energy were announdced in the second half of 2017, and so far the GOT has awarded to privates 12 solar projects of 10 MW each and 4 wind project of 30 MW each; all of them are still in the construction phase.
To meet increasing demand for electricity and promote energy conservation, the Government of Tunisia (GOT) allows private companies and households utilizing co-generation and renewable energy technologies to produce electricity for their own consumption and sell up to 30% of excess electricity exclusively to STEG at a fixed price. The GOT may provide grants and incentives for energy conservation and energy efficiency projects.
Leading Sub-Sectors
Though hydrocarbon-based generation will continue to dominate Tunisia's overall energy picture in the near term, the potential for growth in wind and solar power generation is significant. The GOT is highly interested in diversifying into renewable energy technologies to help meet growing domestic electricity demand. The renewable energy law adopted in 2015 encourages private businesses to generate and use clean energy. In April 2019, the Paliament passed a bill to further improve the business climate, which permits businesses to create separate special purpose vehicles entirely dedicated to power generation. This policy change allows companies to produce power for their own consumption at more competitive prices.
At the end of 2018, Tunisia had an installed capacity of 240 MW of wind power, 10 MW of solar, and 62 MW of hydroelectric, representing a combined 5.7% of national energy production capacity. The GOT aims to raise the usage of these types of energy resources to 30% of total power capacity by 2030.
During the last five years, STEG was active in launching power projects, some of which utilize General Electric (GE) combined-cycle technology. Two tenders for gas-fired power plants issued in 2014 were awarded in 2017 and 2018, respectively, pushing their expected completion targets to after 2019. Tunisia is expected to continue launching tenders for gas-fired power plants for the next five years.
Opportunities
While projects are often subject to delays, excellent commercial opportunities exist for the sale of power generation equipment to STEG-operated and IPP electricity projects. The sector also offers opportunities for possible Build-Own-Operate (BOO) or Build-Operate-Transfer (BOT) projects. Much of Tunisia's electricity production comes from gas turbines. Major players in this sector include General Electric (USA), Mitsubishi (Japan), Ansaldo (Italy), and Siemens (Germany).
Before the end of 2019, the GOT is expected to launch a tender for the construction of at least one 470-550mw-MW combined-cycle power plant in Skhira (south Tunisia) as an IPP. Additionally, STEG is expected to launch a tender to put in place a smart grid power distribution pilot project of 400,000 smart meters in Sfax (south Tunisia).
In May 2018, the Ministry of Energy and Mines published a call for private projects to build 1,000 MW of renewable energy power plants, 500 MW wind and 500 MW solar. The projects are still at the prequalification phase.
The GOT plans to launch tenders for about 3.5 gigawatts of renewable energy worth roughly $3.5 billion by 2030, or approximately 350 MW per year over the next 10 years. One third of the projectswill be for wind farms and two thirds for solar photovoltaics.
Tunisia's national grid is connected to those of Algeria and Libya, but various other projects to expand electricity transmission and distribution networks across North Africa as well as Tunisia’s sub-sea connection with Italy have been delayed indefinitely.
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