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Citation: IRENA (2021), Renewable Readiness Assessment: The Republic of Tunisia, International Renewable Energy Agency, Abu Dhabi. ISBN: 978-92-9260-296-3

About IRENA The International Renewable Energy Agency (IRENA) is an intergovernmental organisation that supports countries in their transition to a sustainable energy future and serves as the principal platform for international co-operation, a centre of excellence and a repository of policy, technology, resource and financial knowledge on renewable energy. IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy – including bioenergy, geothermal, hydropower, ocean, solar and wind energy – in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth and prosperity.

Acknowledgements This report was prepared by IRENA in close collaboration with the Government of Tunisia, as represented by the Ministry of Industry, Energy and Mines and the National Agency for Energy Conservation (ANME). The report benefited from the input of various experts, notably from Amira Klibi (MEMTE), Jihene Touil (UNDP), Rafik Bezzaouia (STEG), Rim Boukhchina (RCREEE), Nafaa Baccari (ANME). IRENA colleagues who provided valuable review and support include: Abdulmalik Oricha Ali (ex- IRENA), Imen Gherboudj, Huiyi Chen, Rafael De Sa Ferreira, Dolf Gielen, Asami Miketa.

Main Contributors: Zoheir Hamedi, Reem Korban, Gürbüz Gönül, Abdelkarim Ghezal (consultant)

Disclaimer

This publication and the material herein are provided “as is”. All reasonable precautions have been taken by IRENA to verify the reliability of the material in this publication. However, neither IRENA nor any of its officials, agents, data or other third-party content providers provides a warranty of any kind, either expressed or implied, and they accept no responsibility or liability for any consequence of use of the publication or material herein.

The information contained herein does not necessarily represent the views of all Members of IRENA. The mention of specific companies or certain projects or products does not imply that they are endorsed or recommended by IRENA in preference to others of a similar nature that are not mentioned. The designations employed and the presentation of material herein do not imply the expression of any opinion on the part of IRENA concerning the legal status of any region, country, territory, city or area or of its authorities, or concerning the delimitation of frontiers or boundaries. THE REPUBLIC OF TUNISIA Renewable Readiness Assessment: Foreword from the Minister of Industry, Energy and Mines

For over three decades, Tunisia has been committed to a clean energy transition through a proactive and uninterrupted energy management policy, positioning itself as a pioneer in the region. Tunisia embarked on an accelerated energy transition to achieve multiple objectives; to realise its energy security through a diversified energy mix and to improve the country’s economic competitiveness within the framework of its strategic vision towards a low-carbon economy.

Tunisia’s energy transition strategy is based on four main pillars: energy security; increasing energy independence; reducing costs; and diversifying energy resources. With abundant renewables sources, renewable energy technologies constitute the main pillar of Tunisia’s energy transition strategy given the socio-economic benefits that this strategy will provide to the Tunisian economy in terms of increased investments, a clean economic growth, job creation and preserving the environment. Similarly, improving energy efficiency would contribute to this energy transition by reducing the demand for energy.

In this regard, a Tunisian solar plan was adopted in 2015, which aims to reduce primary energy demand by 30% and increase the share of renewables in the electricity production mix to 30% by 2030.

I would like to thank the International Renewable Energy Agency (IRENA) for its support throughout the process to deliver the Renewables Readiness Assessment report that provides a detailed analysis on the status of renewable energy in the country and identifies short- to medium-term actions needed to develop enabling frameworks conducive to increased renewable energy investments.

This analysis was conducted through close collaboration between the National Agency for Energy Conservation (ANME), the Ministry of Industry, Energy and Mines and IRENA. It provides relevant and focused information to all the stakeholders in the field of renewable energy, including governmental institutions, public and private-sector companies, and regional and international development organisations.

On behalf of the Ministry of Industry, Energy and Mines let me reiterate my thanks to, all the IRENA team members and national stakeholders who contributed to the completion of this report. I hope that this co-operation will be accelerated in the future, allowing the achievement of the Energy Transition goals in Tunisia.

H.E. Mr Mohamed Boussaîd, Minister of Industry, Energy and Mines, Republic of Tunisia

4 The Republic of Tunisia Foreword from the

IRENA Director-General FOREWORDS

Tunisia’s need to ensure a continuous energy supply, enhance energy security and long-term industrial and socio- economic development provides a compelling case for renewables. As governments advance on recovery plans amid significant public financing constraints, an energy transition with renewables is a central pillar of decarbonising the energy mix. With increasing cost-competitiveness and abundantly available resources, renewable energy solutions will be instrumental in achieving the objectives of improving energy security, reducing cost of energy supply for consumers and advancing environmental preservation.

Tunisia’s energy transition is notably based on the implementation of an energy management strategy that is built on the increase of energy efficiency and the development of renewable energy, with a 30/30 target to reduce primary energy demand by 30% in 2030 compared to the trend scenario; and renewable energy to 30% of the electricity production by 2030, in comparison to the installed 373 MW renewable energy in 2019.

Renewables Readiness Assessment: Tunisia, prepared in collaboration with the National Agency for Energy Conservation (ANME) and the Ministry of Industry, Energy and Mines, identifies key challenges as the country pursues environmentally and economically sustainable power and heat. It offers recommendations under five thematic areas that address renewables applications in the power sector and long-term energy planning, and attract renewable energy financing. The recommended actions present the collective outcome of which is for renewables to reach a much higher share in Tunisia’s energy mix while improving energy security and cost of supply.

Tunisia has made important strides over the past decade to encourage the involvement of the private sector and accelerate the realisation of national objectives, the assessment finds the need to improve the mapping of renewable energy resources, establish an energy planning framework with higher shares of renewables that building capacity of local financing institutions and developers will unlock further investment in the sector, and reinforce Tunisia’s renewable energy targets.

IRENA wishes to thank the team at ANME for their key input and engagement. We also appreciate the valuable contributions of numerous other stakeholder and international partners. I sincerely hope the resulting study helps to accelerate Tunisia’s shift to a sustainable energy future.

Francesco La Camera Director-General, International Renwable Energy Agency

5 Renewable Readiness Assessment:

6 The Republic of Tunisia Contents

Figures 8 CONTENTS Tables 9 Boxes 9 Abbreviations and acronyms 10 Units of measurement 11 Executive summary 12 Introduction 15 1 1.1 Country background 15 1.2 Renewables Readiness Assessment for Tunisia 17

Energy context 18 2.1 Energy supply and demand in Tunisia 19 2.2 Electricity governance 22 2 2.3 Electricity supply and demand 24 2.4 Transmission and distribution 25 2.5 Electricity tariffs 25

Enabling environment for renewable energy 29 3.1 Energy transition strategy 29 • Drivers for the energy transition strategy 30 • Tunisian Solar Plan 32 3.2 Renewable Energy resources and exploitation 33 • Wind energy 33 • Solar energy 34 3 • Hydropower 39 • Biofuels and waste-to-energy 40 • Geothermal energy 40 3.3 Renewable Energy regulatory framework 41 3.4 Renewable Energy institutional framework 47 • Renewable Energy programmes and project pipeline 47 3.5 Financial initiatives for Renewable Energy 50

Key challenges and recommendations 52 4.1 Long-term energy planning 52 4.2 Regulatory framework for Renewable Electricity generation 54 4 4.3 Institutional framework 56 4.4 Financing 57 4.5 Maximising the benefits of Renewable Energy deployment 58

References 61 Annex 1. Renewable Energy institutional roles 64 Annex 2. Sector coupling and the electrification of end-use sectors 66

7 Renewable Readiness Assessment: Figures

Figure 1 Gross domestic product growth: Annual change, Tunisia, 2000–2018 15 Figure 2 Evolution of domestic primary energy supply and demand, Tunisia, 1990–2019 18 Figure 3 Domestic primary energy production of crude oil and natural gas, Tunisia, 1991–2019 19 Figure 4 Total primary energy supply by source, Tunisia, 1990–2018 19 Figure 5 Energy import dependency, Tunisia, 2010–2018 20 Figure 6 Energy import bill, Tunisia, 1993–2017 20 Figure 7 Total final energy consumption, Tunisia, 2018 21 Figure 8 Total final energy consumption by sector, Tunisia, 2018 21 Figure 9 Total final energy consumption by source and sector, Tunisia, 2018 23 Figure 10 Annual peak load, Tunisia, 20017- 2018 24 Figure 11 Evolution of electricity consumption by voltage level, Tunisia, 2018 25 Figure 12 Evolution of electricity consumption in high-voltage and medium-voltage levels by 25 economic sector, Tunisia, 2018 Figure 13 Evolution of medium-voltage electricity selling prices for Uniform tariff subscribers, Tunisia 28 Figure 14 Energy strategy targets, Tunisia 29 Figure 15 Global weighted average of total installed costs and project percentile ranges for 31 concentrated solar power, solar photovoltaic and onshore and offshore wind, 2010 - 2018 Figure 16 Renewable energy target, Tunisia, 2030 32 Figure 17 Wind map of Tunisia 33 Figure 18 Electricity generation of wind farms, Tunisia, 2009–2019 34 Figure 19 Global horizontal irradiance, Tunisia 35 Figure 20 Direct normal irradiance, Tunisia 35 Figure 21 Cumulative installed solar photovoltaic capacity for self-production on the low-voltage grid, 36 Tunisia, 2011–2019 Figure 22 Sector distribution of photovoltaic projects relating to the medium-voltage grid, Tunisia, 37 Figure 23 Distribution of power installations, Tunisia, 37 Figure 24 Registered Solar PV installers 37 Figure 25 Proposed TuNur consolidated solar power project in southern Tunisia 38 Figure 26 Solar collector area installed under Prosol programme, Tunisia, 2005–2018 38 Figure 27 Area of solar collectors, Tunisia, 2018 39 Figure 28 Annual hydropower production, Tunisia, 2005–2018 40 Figure 29 Flexibility solutions 43 Figure 30 Procedure for energy-selling projects under Authorisation scheme, Tunisia 46 Figure 31 Project proposal procedure for energy-selling projects under Concession scheme, Tunisia 47

8 The Republic of Tunisia Tables

Table 1 Main economic indicators, Tunisia, 2015–2018 16 Table 2 Composition of net power generation capacity, Tunisia, 2016 - 2018 24 Table 3 Low-voltage tariff categories, Tunisia 26 Table 4 Current tariffs for low-voltage network, Tunisia, June 2019 26 Table 5 Time schedule for Four-shift tariff, Tunisia 26 Table 6 Medium-voltage tariffs, Tunisia, June 2019 27 FIGURES, TABLES AND BOXES FIGURES, TABLES Table 7 Medium-voltage tariffs, Gray Cement industry, Tunis 28 Table 8 High-voltage electricity tariffs, Tunisia 28 Table 9 Hydropower stations, Tunisia, 2015 39 Table 10 Overview of renewable energy support policies and regulation, Tunisia 41 Table 11 Criteria under the legal regimes for renewable energy projects, Tunisia 42 Table 12 Provisions for self-consumption projects connected to low- and medium-voltage grids, Tunisia 45 Table 13 Revised renewable energy programme targets, Tunisia, 2017–2022 48 Table 14 Geographical distribution of renewable energy projects under Concession scheme, Tunisia 48 Table 15 Renewable capacities announced under the first call for projects, 49 Table 16 Proposed capacity for installation by Tunisian Company of Electricity and Gas, Tunisia 50 Table 17 Financial incentives provided by the Energy Transition Fund for renewable energy, Tunisia, 2018 51

Boxes

Box 1 Five pillars of Tunisia’s Strategic Development Plan, 2016-2020 16 Box 2 Tunisia Solar Plan 32 Box 3 Open Solar Contracts, Tunisia 43 Box 4 Leveraging local capacity and the materials required for renewable energy technologies 56 Box 5 Leveraging local capacity, distribution of human resources and occupational requirements 60

9 Renewable Readiness Assessment: Abbreviations

ANME National Agency for Energy Management (Agence Nationale pour la Maîtrise de l’Energie) ANGED National Waste Management Agency (Agence Nationale de Gestion des Déchets) CSP Concentrated Solar Power CTER Technical Commission for Independent Power Production from Renewable Energy (Commission Technique de production privée de l’électricité à partir des Energies Renouvelables) DNI direct normal irradiance FTE Energy Transition Fund (Fonds de Transition Energétique) GDP gross domestic product HV high voltage IPP independent power producer IRENA International Renewable Energy Agency LV low voltage MIEM Ministry of Industry, Energy and Mines (Ministère de l’Industrie, de l’Energie et des Mines) MISME Ministry of Industry and Small and Medium-sized Enterprises (Ministère de l’Industrie et des Petites et Moyennes Entreprises) MEMTE Ministry of Energy, Mines and the Energy Transition (Ministère de l’Energie des Mines et de la Transition Enérgitque) MV medium voltage NDC Nationally Determined Contribution (national climate pledge under the Paris Agreement) O&M operation and maintenance PPA power purchase agreement PV photovoltaic RRA Renewables Readiness Assessment SDP Strategic Development Plan SME small or medium-sized enterprise STEG Tunisian Company of Electricity and Gas (Société Tunisienne de l’Electricité et du Gaz) SWH solar water heating TFEC total final energy consumption TND Tunisian dinar TPES total primary energy supply TSP Tunisian Solar Plan VRE variable renewable energy

10 The Republic of Tunisia Units of measurement

GW gigawatt GWh gigawatt-hour kWh kilowatt-hour kWp kilowatt peak km kilometre km2 square kilometre ktoe thousand tonnes of oil equivalent kV kilovolt m2 square metre MW megawatt

MWh megawatt-hour OF MEASUREMENT AND UNITS ABBREVIATIONS m/s metres per second

11 Renewable Readiness Assessment: Executive summary

Tunisia has witnessed growing deficits in its energy balance To achieve the country’s update objectives, over the past two decades. This trend is largely the result the TSP has established a target for total of increasing energy consumption in all economic sectors, installed renewable energy capacity at coupled with the decline of hydrocarbon production. 1 860 megawatts (MW) by 2023 and 3 815 MW by This led to an energy deficit amounting to 50% in 2019 2030, a five-fold and ten-fold increase, respectively, compared to 7% in 2010, thus leading the country to from the 2017 installed renewable energy capacity. become more dependent on imported fossil energy. The targets were updated to reflect Tunisia’s climate The electricity generation mix is dominated by natural commitment to reduce the country’s carbon intensity gas, while renewable energy resources represented only by 41% compared to 2010 by 2030 compared to an 3.0% in 2019. This strong dependence on natural gas unconditional target to reduce carbon intensity by 13%, has serious implications for Tunisia’s energy security, specifically as pledged in its Nationally Determined since domestic production of gas has stagnated to the Contributions under the Paris Agreement. The bulk point of even declining in recent years. of the country’s identified mitigation potential arises from the energy sector, including 68% from energy In response to the energy security challenges of the efficiency and 32% from renewable energy. early 2000s, and Tunisia’s vulnerability to volatile international energy prices, the country has decided to The considerable amount of installed renewable embark on an energy transition process as part of its energy capacity needed to meet the targets set out wider sustainable economic and social development in the TSP will require extensive private investment strategy. Amid the coronavirus outbreak in early 2020, support. In response, the Tunisian state adopted renewables and energy efficiency have become a key regulatory reforms in 2015 through a new law (Law part of the country’s recovery plans. No. 2015-12) relating to the production of electricity from renewable energy. The objective is to establish Tunisia’s energy transition is notably based on: a legal framework that is conducive to private- sector investment in the production of electricity • Diversification of the energy mix and integration of that will arise from renewable energy sources through three new regulatory regimes: (i) self- renewable energies generation/consumption; (ii) independent power • Strengthening energy efficiency production for local consumption (concession and authorisation); and (iii) independent power production • Rationalisation of the energy subsidy for export. • Strengthening of the grid and the interconnections Notwithstanding the new legal framework and The implementation of an energy management the various measures adopted by the Tunisian strategy that is built on the increase of two components: government over the past two years, several of these (i) energy efficiency and the development of measures include enabling policy initiatives, update renewable energy, with a 30/30 target to reduce of the current documentation surrounding current primary energy demand by 30% in 2030 compared to electricity purchase agreements, and establishment the trend scenario; and (ii) renewable energy to 30% of guarantees to encourage the development of of the electricity production by 2030. renewable energy. There remain several challenges that hinder the transition, however; these have been The Tunisian Solar Plan (TSP) is the intended operational identified under Tunisia’s national energy strategy. tool to implement the strategy to increase the share of renewable electricity. The latest TSP version was updated Various barriers to renewable energy development by Tunisia’s National Agency for Energy Management were identified through the Renewables Readiness (ANME – Agence Nationale pour la Maîtrise de l’Energie) Assessment (RRA) process. These could be addressed in 2015 and adopted by the government in July 2016. through eight key recommended actions.

12 • assessment through zoning Enhance renewables resource • • and scheduling framework Establish arenewable energy planning as follows: The RRA’s main recommendations can be summarised high renewable energy potential. guidance onidentifying cost-effective zones with Renewable Energy Agency (IRENA), provides assessment platform hosted by theInternational Atlas for Renewable Energy, anonlineresource renewable energy technologies. The Global zones across Tunisia’s territory for different will beessential to definepromising development energy resources. More detailed resource data the recent assessment campaigns on renewable database, therefore, shouldbeimproved to reflect resource databases. Tunisia’s current resource Long-term energy planningrelies ondata from broader flexibility solutions (IRENA,2020a). and collaboration are significant andmay lead to context, theopportunitiesfor regional dialogue energy development prospects inTunisia. Inthis should provide long-term visibility onrenewable integration ofVREinto thesystem. The plan infrastructure development to enablethesmooth The plancould alsoaddress electricity grid and power sector planning. must besupported by robust long-term energy to address system constraints. VRE deployment new capacity, locations andtechnologies canhelp electricity system beyond 2023. Advance planson scheduling for capacity additions to the national planning methodology that willincluderealistic grid, thecountry willrequire aholistic long-term (VRE) sources (i.e. solar and wind power) to the 4 gigawatts (GW) ofvariable renewable energy With theTSP callingfor additionsofabout Amid thecoronavirus outbreak 2020, inearly renewables and energy efficiency have becomea of key part COVID-19 pandemicrecovery the country’s recovery plans. 13 • • strengthen human resources institutionalrolesClarify and • • power development grid Simplify procurement procedures for of project implementation (Section 4.3). responsibilities ofeachduringthevarious stages public institutions involved, includingtheroles and under astandard template andwould list the agreements. The platform would include guidelines various involved institutions interms ofproject transparency and clarity oftheroles ofthe creating asingleonlineplatform may ensure IRENA hasfound that combining efforts and guidance to theprivate sector. Help Deskprovided by theANMEthat would provide Nations Development Programme. Measures includea international partners inthefield,suchasUnited Tunisia hastaken preliminary measures, supported by energy projects. Inresponse, theGovernment of ministries and public institutions involved in renewable for projects, given theconsiderable numberof understanding theprocedures to obtainauthorisation Private-sector developers have faced difficulties grid infrastructure reinforcement. between renewable generation development and Concessions scheme. This would ensure alignment and windcapacity totalling 1 would reflect plannedadditionsofbothsolar identify gridinfrastructure scenarios. Suchstudies key renewable energy stakeholders could help IRENA has established that integrated studies with to sendouttheelectricity produced. plant completion dates andconnection to thegrid resulting inatimelagbetween renewable energy to long-runningpublicprocurement procedures, Company (STEG) ofElectricity andGas issubject transmission infrastructure by theTunisian The acquisition andimplementation ofgrid The Republic ofTunisia 000 MWunderthe

EXECUTIVE SUMMARY Renewable Readiness Assessment:

• Renewable energy transition will bring with it Create a dedicated financing mechanism ample benefits, including the opportunity to build for solar water pumping human resources and skills. In this context, public institutions may opt to strengthen their current • Design a programme encouraging farmers to human capacity through enhanced training substitute solar photovoltaic (PV) energy for sessions on the technical, economic, administrative diesel, given the important socio-economic and legal aspects relating to the development of impacts of solar water pumping. This programme renewable energy projects. may be developed under the broader Prosol and Prosol électrique programme mechanisms, such Establish an independent that the state subsidy, including the credit system, electric power regulator is compatible with the repayment capacity of farmers. • The procedures to create and establish an independent regulatory authority for the electricity Involve local banks in the financing sector are being finalised as part of Tunisia’s NDCs of renewable energy to ensure the achievement of its renewable energy targets. The authority will ensure compliance with • The development of renewable energy applications regulations and will promote a transparent and fair in Tunisia, particularly for farmers and small- and competitive environment for private producers.1 medium-size enterprises, requires involvement by local banks. To improve the capacity for project risk • The regulatory authority will, among other assessment at local financial institutions and boost responsibilities, oversee a range of project their confidence to develop lending schemes, the development procedures for renewable energy, government should reinforce their human and including the monitoring of legislation to ensure technical capacity. effectiveness and the validation of technical conditions for electricity evacuation. It also will • The search for favourable foreign financial lines ensure the streamlining of not only the governing should be strengthened, particularly through administration but also of the various market bilateral co-operation and climate financing actors. programmes guaranteed by the Tunisian Guarantee Company (Société tunisienne de garantie)2 or Operationalise the Energy Transition Fund reinforced by the Central Bank of Tunisia. This should reduce concerns that surround private • The Energy Transition Fund (FTE – Fonds de sector investment risk over the need to commit transition énergétique) is the principal financing 30% equity for PV installations and thus improve tool for energy efficiency and renewable energy financial viability. activities in Tunisia. For the fund to effectively support renewables in the country, work must • The Energy Transition Fund, Tunisia Investment begin to mobilise the necessary funding from Authority and Tunisian Guarantee Company can the public and private sectors to foster their be complemented with guarantee funds or secure development. To do this effectively will require a credit lines (e.g. liquidity guarantees or credit lines) combination of incentives, loans and credit lines to local commercial banks by international finance from international finance institutions. institutions like the French Development Agency (AFD) and International Finance Corporation.

1 Several international partners are working with ANME to establish an electricity regulatory authority to oversee licenses, power grid connections and third-party access for auto producers. 2 A public interest company that guarantees various loans granted to small- and medium-size enterprises by credit institutions.

14 Source: Trading Economics (2020). Figure 1. kilometres (km northeast ofthecountry. The total surface area coverage ofTunisia is163 Tunisia is located in the northernmost part of Africa. Tunisia’s capital, Tunis, is in the 1.1 Introduction of GDPgrowth since 2000 is shown inFigure 1. has struggled to maintain this level, with a 2.6% growth rate in 2018. The evolution growth following arecession in2011, reaching 4.0% in2012. Since then,however, it Africa. Despite politicalinstability, Tunisia haswitnessed arapid recovery ofitsGDP over theperiod2000–2010, andwas considered themost competitive economy in Tunisia hadanaverage annualgross domestic product (GDP) growth rate of4.3% tothe Sahel theeast anddesertinthesouth. mountainous regions inthenorthwest, steppes inthecentre, vast plainsinthenorth, arid withinthecountry andaridinthesouth.The landscapesimilarlycontrasts, with from oneregion to another-Mediterranean inthenorthandalongcoast, semi- economic hub and attractive tourist destination. The climate varies considerably Tunisia benefitsfrom uniqueclimatic features, placingthe country asanemerging of 1.1%. Total urbanpopulation is69% (INS,2018a). The population ofTunisia in2017 reached million,withanannualgrowth 11.54 rate Economics, 2020) andtheSahara representing more than30%(RES4MED, 2016). ( (

( GDP growth (%) 3 2 1 0 4 6 8 5 3 2 7 . . . 1 0 0 0 ...... Country background 0 0 0 0 0 0 0 0 0 ) ) ) 2 0 4 0 . Tunisia, 2000–2018 Gross domesticproduct growth: Annual change, 0 7 2 3 0 0 . 8 1 2 2 ), witharable landconstituting 19%oftotal landarea (Trading 0 1 0 . 3 2 2 0 0 4 3 . 7 2 6 0 0 . 15 2 4 2 0 0 5 3 . 2 5 0 0 5 6 . 2 2 0 0 7 6 . 2 7 0 0 3 8 4 . 2 0 . 0 2 0 9 2 0 1 0 3 . 2 5 0 1 1 - 1 2 4 . 9 0 . 1 0 2 2 2 0 . 1 9 3 2 3 0 . 1 0 4 The Republic ofTunisia 2 1 0 . 1 2 5 A n 2 1 0 n . 1 3 6 u a 2 1 0 l .

1 8 g 610 square 7 r 2 o 2 0 . w 1 5 8 t 2 h 1 0 .

1 4 ( 9 % )

INTRODUCTION Renewable Readiness Assessment:

Table 1. Main economic indicators, Tunisia, 2015–2018

2015 2016 2017 2018 Investment rate 19.9 18.4 19.3 20.4 (% of GDP) Unemployment rate 15.4 15.5 15.5 15.5 (%) Rate of coverage 69.7 69.8 68.8 69.2 (exports/imports in %) Budget deficit 4.8 6.2 5.9 4.6 (% of GDP) Government debt 55.4 61.9 69.9 71.4 (% GDP)

Source: Central Bank of Tunisia (2018). Note: GDP = gross domestic product; GNDI = gross national disposable income.

Several factors challenge the national economic Box 1. Five pillars of Tunisia’s Strategic situation today, including the devaluation of the Development Plan, 2016-2020 Tunisian dinar, thus amplifying the public debt and foreign trade deficit to record highs. As of September • Good governance includes fighting corruption 2018, Tunisia has a public debt of 71.4% relative to and easing the administrative barriers to GDP, with a foreign trade deficit that widened by economic participation, in order to increase 16.8% over 2017 (Trading Economics, 2020). Table 1 opportunities for success for all citizens. presents further details on the economic indicators recorded in Tunisia during the last few years. • Shifting to a hub economy focuses on increasing productivity for competitiveness Tunisia has undertaken a series of reforms, including a and positioning Tunisian businesses in global Strategic Development Plan (SDP) that was adopted value chains. for the period 2016–2020 to boost economic activity and investment, as well as to reassure stakeholder • Promoting human development and social confidence. The SDP represents a new development inclusion emphasises quality education, model that is based on the promise of a new social women’s participation in economic and contract under which the state is expected to provide political activity, improved health outcomes, a level playing field to ensure inclusion and equal and a social protection system. opportunity. • Tackling regional disparity seeks to achieve The main objective of the SDP is the transformation the ambitions of economic development and modernisation of Tunisia’s existing economic in rural regions through advancing model, aiming to reduce unemployment to 11.5% and investment in infrastructure and supporting reach an average GDP growth rate of 5% in 2020. entrepreneurship.

• Promoting green growth for sustainable development to ensure the sound utilisation of natural resources, with emphasis on rationalising water and energy use.

16 studying andpromoting renewable energy. the government’s policies in energy management de l’Energie), thepublic agency responsible for executing Management (ANME –Agence Nationale pourlaMaîtrise in conjunction withtheNational Agency for Energy IRENA developed thisRRA assessment for Tunisia Moyennes Entreprises,). (MISME –Ministère del’Industrie et desPetites et Ministry ofIndustry andSmallMediumEnterprises to March 2020, renewable energies were taken upby de laTransition Enérgitique). From September 2018 Energy Transition (Ministère del’Energie desMineset were taken up by the Ministry of Energy, Mines and the from March 2020 to October 2020, renewable energies as Ministry ofIndustry, Energy andMines.However, des Mineset desEnergies Renouvelables), now known Mines and Renewable Energy (Ministère del’Energie request ofthepreviously known Ministry ofEnergy, The RRA elaboration process was launchedat the mobilises resources for priority actions. energy. The RRA alsoconsolidates existing efforts and opening amore enablingenvironment for renewable of new policiesorthereform ofexisting ones,thus presented to governments to guidetheformation Short-and medium-term recommended actions are recommendations to overcome existing barriers. to renewable energy deployment andto arrive at for multi-stakeholder dialogue to identify challenges and consultative process. Itprovides aframework deployment inacountry. The RRA isacountry-led evaluation oftheconditions for renewable energy (RRA) asatool for carryingoutacomprehensive developed theRenewables Readiness Assessment The International Renewable Energy Agency (IRENA) 1.2 3 Photograph: National Agency for Energy Conservation (ANME) Meteline –Kchabta windparkinBizerte the Ministry ofEnergy, MinesandRenewable Energy. Given therole ofthedifferent institutions in renewable energy governance, citations withinthe report are referenced to theMinistry ofIndustry andSmallMediumEnterprises and for Tunisia RenewablesReadiness Assessment 3 17 the RRA process inTunisia. out thenecessary actions andconclusions drawn from sector, for endorsement by MEMTE.This report lays process to further advance the renewable energy recommended actions identified through theRRA enabled localstakeholders to validate theset of country’s commitments to renewable energy. It renewable energy best practices and highlight the The event provided theopportunity to review global conditions for thesector. corresponding recommendations to ensure favourable challenges for renewable energy deployment andthe The mainobjectives were to discuss theidentified open dialogueamongawiderange ofstakeholders. 21 June 2018 to validate these findings and facilitate ANME organised an expert validation workshop on successful deployment ofrenewables. IRENAand barriers andbottlenecks were identified to theensure a specialfocus onrenewable energy. Potential was outlinedduringthefirst stage ofprocess, with A general overview of the Tunisian energy sector the SDP. hub economy aspartofthebroader framework of the aimofrecognising Tunisia’s positionas aregional key issues to betackledinimplementing theTSP, with (TSP), was putinplace in2015. The RRA highlights the renewable energy action plan,theTunisian SolarPlan particularly since theintroduction ofthecountry’s efforts to assess the context for renewables in Tunisia, policy objectives. This coincides withthegovernment’s renewable energy policies cancontribute to itsnational Crucially, the analysis considers how the country’s enabling conditions for thedevelopment ofrenewables. comprehensive analysis ofthepresence orabsence of Applying theRRA framework to Tunisia provides a The Republic ofTunisia

INTRODUCTION Renewable Readiness Assessment: Energy Context

The energy sector is a key contributor to Tunisia’s various economic sectors. In the past two decades, however, the country has witnessed a growing energy balance deficit, largely as a result of relying on fossil fuel sources – oil and natural gas – to meet its heightened energy demand. The decline of its own hydrocarbon resources has led to increased dependence on fossil fuel imports, which rose to record levels in 2019 when the deficit in the balance of primary energy reached 5 672 thousand tonnes of oil equivalent (ktoe), as shown in Figure 2, highlighting that 49% of total energy consumed is imported.

In response, Tunisia has begun to leverage its wide array of renewable energy sources to diversify its energy mix. This is coupled with energy efficiency programmes to alleviate its energy balance deficit.

Figure 2. Evolution of domestic primary energy supply and demand, Tunisia, 1990–2019

10000

9000

8000

7000

6000

5000

4000

3000 Total Primary Energy (thousand toe) Primary Energy Total 2000

1000

0 1 1 1 7 7 7 2 2 2 3 3 3 5 5 5 8 8 8 9 6 9 6 9 6 4 4 4 0 0 0 1 1 1 1 1 1 1 1 9 1 0 1 9 9 9 9 9 9 9 0 0 0 9 0 0 0 0 9 0 0 0 9 0 0 0 0 0 0 0 0 0 0 9 9 9 9 9 9 9 9 9 0 0 1 0 0 2 0 0 0 0 0 1 1 2 1 1 2 2 2 1 2 1 1 2 2 1 2 1 2 2 2 2 2 2 2 2 2 2 2 Total domestic supply Total demand

Source: (MISME, 2019a)

18 Sources: INS(2018a), MISME(2019a). Figure 4. Sources: INS(2018a), MISME(2019a). Figure 3. energy production fell from 5 during recent years. Between 1990and2019, primary production ofnatural gashasstagnated andeven declined implications for Tunisia’s energy security, asdomestic 97.5%. The strong dependence onnatural gashasserious electricity generation mixisdominated by natural gasat The country is close to being fully electrified at 99.8%. The 2.1 Domestic primary energy H N C P B G N prodcution (thousand toe) r Energy supplyanddemandin Tunisia i o y e u a o i 4 6 5 3 2 7 d o a t m c 1 f u

l l u t 0 0 0 0 0 0 0 r e a r o h e 0 0 0 0 0 0 0 a a r e l y r l 0 0 0 0 0 0 0 0 s r

Total energy primary supply(TPES)by source, Tunisia, 1990–2018 Tunisia, 1991–2019 energyDomestic primary production oilandnatural ofcrude gas,

G m a a a n n 1 a 9 s d d l 9 , 1

s s w e o a c l a s o t r 1 n e , 9

d 9 w

TPES (ktoe) 3 a 1 1 i 0 4 6 8 2 2 n ry

d 0 0 0 0 0 0 o 0 0 0 0 0 0 i 1 0 0 0 0 0 0 0 9 l 9 5 400 ktoe to 3 2 989 1 234 1 638 9 82 0 0 4 1 9 9 9 0 7 1 3 053 9 1 924 1 1 750 9 9 9 71 0 0 3 9 5 703 ktoe. 2 0 0 1 3 554 2 2 732 2 934 0 79 0 6 2 0 0 2 0 19 0 3 4 087 2 remainder largely camefrom biomass andwaste sources. of TPES, totalling 4665 ktoe (Figure 4)(MISME,2018b). The (including primaryandsecondary oil)accounted for 40.8 % energy supply(TPES), equivalent to 5 In 2018, natural gasaccounted for 48.7% oftotal primary shown inFigure 3. significantly since 2010 (54%and 47%, respectively), as Domestic production ofoilandnatural gashasdropped 3 091 1 121 0 2 12 0 0 4 0 0 0 5 5 2 0 5 083 3 933 1 058 2 0 39 0 7 0 0 4 1 0 2 0 0 9 5 055 4 573 4 1 076 1 2 89 0 0 0 6 1 5 2 0 1 1 5 209 4 552 4 2 1 081 100 2 0 0 0 4 0

1 1 C 3 6 r The Republic ofTunisia u d e 2

0 o 5 436 1 082 4 612 569 ktoe, andoil 1 2 5 103 i l 0 0 0 2 1 7 2 N 0 a 1 7 t u 4 665 5 569 1 090 2 r 103 0 a 0 0 1 l 1

2 8 G 0 1 a 9 s

ENERGY CONTEXT Renewable Readiness Assessment:

Primary energy demand reached 9 606 ktoe in 2019 The country’s energy deficit problem is likely to against 8 358 ktoe in 2010, with an average annual deteriorate further given rising energy demand, growth rate of 1.7%. After a dip in 2016, the energy coupled with depleting oil and gas production. demand/supply balance deficit accelerated again The current increase in energy imports highlights in 2017, strengthening a major structural deficit that Tunisia’s economic and social vulnerability amid compels the country to further rely on energy imports, volatile international energy prices, further increasing from an import dependency rate of 7% in amplified with the devaluation of the Tunisian dinar 2010 to 60% in 2018, as shown in Figure 5. (TND). Figure 6 shows the evolution of the energy import bill, which peaked in 2014 at more than TND 7 billion (over USD 3.5 billion at the time or USD 2.5 billion at mid-2019 exchange rates).

Figure 5. Energy import dependency, Tunisia, 2010–2018

2018

2017

2016

2015

2014 Year 2013

2012

2011

2010

0% 10% 20% 30% 40% 50% 60% 70%

Sources: ONE (2018a), MISME(2019b).

Figure 6. Energy import bill, Tunisia, 1993–2017

Millions (TND)

2019 194 6 285 3 388

2018 801 5 676 2 523

0 2 000 4 000 6 000 8 000 10 000 12 000 Crude Oil Oil products Natural Gas

Source: INS (2018b).

20 8 energy consumption (TFEC) reached approximately 5 4 Source: IEA(2019), MISME(2019b). Figure 8. Note: LPG=liquefiedpetroleum gas. Source: MISME(2018b). Figure 7. (Observatoire National de l’Energie), According to theNational Energy Observatory as shown inFigure 7. followed by natural gasandelectricity inequalshares, 7 620 ktoe. Oilproducts accounted for 53% ofTFEC, 710 ktoe710 in 2019; excluding biomass, sector (Figure 9). Biomass intheTunisian context mainlyrelates to modernmeansofbiomass, asdefined by theInternational Energy Agency’s statistics database, usedin relation to Tunisia’s residential National Observatory ofEnergy andMines(Observatoire National del’energie et desMines). The National Energy Observatory isthepublicinstitution mandated by MEMTE to ensure theeffective collection ofdata relevant to energy. Since April2017, ithasbeen renamed the 12.5% 0.8% 17.8% Total finalenergy consumption by sector, Tunisia, 2018 Total finalenergy consumption, Tunisia, 2018 16.3% 27% 8% S Oil o la 5 p it amounted to r, 52.6% ro

4 G d total final e u 6% o c t t h s e rm a N l,

a e t t u c ra 21 . l ga E respectively), asshown inFigure 8. the commercial andagricultural sectors (8%and6%, and theresidential sector (27%). This isfollowed by economy, including transport (32%), industry (27%) Energy isusedinvarious end-usesectors inthe s le 47.2% 32% c t 6.3% ric 27% B it io y m a s 10.% s Die s e l G C T Agric Re I n o a ra o d il s s m u n o id s s lin m u t p e ry e lt n o e F ric t u rt u ia re

e ia l 14.0% l l o K il e ro The Republic ofTunisia s e L n 6.5% P e G 0.7% 15.3% J P e e t t

c f u o e k ls e

ENERGY CONTEXT Renewable Readiness Assessment:

Figure 9. Total final energy consumption by source and sector, Tunisia, 2018

4000

3500

3000

2500

2000

1500

1000

500 Total final energy consumption (thousand toe) consumption final energy Total 0 Commercial and Transport Industry Residential Agriculture public services Biofuels and waste 0 0 855 12 0 Electricity 9 493 430 387 100 Natural Gas 185 907 252 190 26 Oil Products 2364 2162 583 101 398

Source: IEA (2019), MISME (2019a).

The source of TFEC differs from one economic • Directorate General for Electricity and Renewable activity to another. Figure 9 shows that natural gas Energy: Responsible for implementing state policy is consumed mainly by the industrial sector, while the in the renewable energy sector and examining energy consumption of the agricultural, residential requests for private production and self- and transport sectors is dominated by petroleum consumption of electricity from renewable energy. products, particularly liquefied petroleum gas in households that are not connected to the natural gas • Directorate General for Energy from Hydrocarbon distribution network. sources: Re-sponsible for implementing state policy in the hydrocarbon sector. 2.2 Electricity governance • Directorate General for overseeing Strategy As of March 2020, the Tunisian electricity sector is and Co-ordination: Responsible for developing managed by the Ministry of Energy, Mines and the programmes and strategies, as well as national Energy Transition. For the past two years, renewable and sectoral policies, pertaining to the energy energy portfolio was managed by the Ministry of sector, coupled with action plans to ensure better Industry, Small and Medium Size Enterprises. MEMTE management of resources. is responsible for electricity infrastructure, planning and the implementation of national policy in the field • Directorate General for Manufacturing Industries: of electricity, energy efficiency and renewable energy, Responsible for implementing government policy with regulatory oversight also carried out by the relevant to industry, including development of an ministry. Yet, Tunisia has no independent regulator. enabling environment for the promotion of the Instead, MEMTE monitors and analyses the evolution renewables industry. of supply and demand, with two directorates responsible for carrying out specific activities in the energy sector:

22 Mines andRenewable Energies. of projects submitted by theMinistry ofEnergy, overseeing matters relevant to theimplementation proposing theextension ofconcession benefitsand for Independent Power Production is responsible for basis. Moreover, theInterdepartmental Commission and securingpublicsubsidiesonacase-by-case monitoring thenegotiations for concession awards High Commission for Independent Power Production, examination oftenders submitted for decisionto the concession developers, reviewing thereports and the terms andconditions to begranted to IPP a defacto regulator, isresponsible for suggesting d’Electricité), aninter-ministerial bodyservingas Interdépartementale de la Production Indépendante Independent Power Production (Commission The matter relating to independent power production. to thedevelopers ofconcessions; aswell asany other investors, the benefits from which are to be granted (iii) pass rulings on granting tax incentives to IPP power producers (IPP); (ii) award contracts to IPPs; public tender process to (i)select independent on theprocedures andselection criteria for the an inter-ministerial bodyresponsible for deciding established underLaw No. 96-27, was organised as Production Indépendante d’Electricité), acommission Production The campaigns for thedeployment ofrenewable energy. électrique) anddeveloping awareness andtraining renewable energy programmes (i.e. Prosol and Prosol responsibilities include managing the specific de transition énergétique). ANME’s additional manages theEnergy Transition Fund (FTE–Fonds ANME isresponsible for proposing regulations and and thedeployment ofrenewable energy. Moreover, policies for promoting energy efficiency measures responsible asof1985for executing thegovernment’s Energy, MinesandtheEnergy Transition, became ANME, apublicinstitution undertheMinistry of projects. implementation andoperation ofrenewable energy and low-voltage linesandpipelines,includingthe electricity andgasinTunisia inhigh-,medium- the production, transmission anddistribution of a state-owned company responsible for managing Société Tunisienne d’Electricité STEG et duGaz). is Tunisian Company (STEG ofElectricity andGas – and distribution from 1962 to 1996was heldby the The monopolyonelectricity generation, transmission Interdepartmental Commission for High Commission for Independent Power (Commission Supérieure dela

23 to transport electricity. MEMTE electricity 30%andusethenational gridnetwork subscribed power greater thanthe threshold set by sell electricity to otherconsumers orcompanies with companies adoptingrenewables for self-production to to allow for corporate PPAs. This provides theright for Law 2019-47, dated 29May 2019, withadjustments Law No. 2015-12, however, was amendedby with acontract subject to approval by MEMTE. case MEMTE-onopinionofthetechnical commission, prices are set by theMinister incharge ofenergy -inthis (iii) independent power production for export. The fixed local consumption (concession andauthorisation); and consumption; (ii)independent power production for three new regulatory regimes: (i)self-generation/ maximum rate. With that saidthelaw introduced energy to STEG at fixed prices withinthelimitsof through thenational grid,andselltheexcess produced the generated electricity to otherconsumption points renewable energy to generate electricity, transport proliferation, whichincludeselectricity production from Law No. 2015-12 sets theframework for renewable energy Turbine Tunisia. 2018, theconcessions are operationalised by Power to meet scheduledloan repayments. AsofFebruary unforeseen gas supply contamination and the struggle Bibane, southernTunisia, andshutdown in2010 dueto d’El Bibane, SEEB, 27 MW)commissioned in2003 inEl agreement andTunisia’s second IPP(Société d’Electricité thus paving theway for thesecond concession electricity from flared gasled to achangeinlegislation, agreement (PPA). Aprivate initiative to generate operation in2002 undera20-year power purchase 471 megawatts (MW)). This power station began Tunisia’s first IPP (Carthage Power Company inRadès, been granted, authorisingthecreation andoperation of renewable sources). Onlyoneconcession agreement has private power production (either from conventional or by state authorities.Itdoesnotallow, however, unsolicited generation ofelectricity through concessions provided Law No. 96-27 (April 1996)authorisestheprivate electricity from renewable energy resources. queries andconcerns relevant to theproduction of belonging to thestate domain.Italsoexamines all of developing private renewable projects onlands is theentity responsible for verifying thefeasibility to the validity of authorisations. In addition, CTER and Renewable Energies whileapproving extensions authorisation undertheMinistry ofEnergy, Mines from renewable sources, subject to thesystem of Renouvelables) approves power generation projects (CTER –Commission Technique desEnergies The Technical Commission for Renewable Energy The Republic ofTunisia

ENERGY CONTEXT Renewable Readiness Assessment:

2.3 Electricity supply and demand In this context, domestic production of natural gas stood at approximately 2 139 ktoe, equivalent to 58% By the end of 2018, total installed power generation of the country’s overall electricity production needs. capacity had reached 6 147 MW, of which STEG owns With domestic natural gas production declining, and operates 74.6% (4 587 MW). The remainder includes Tunisia’s energy security could face serious challenges the natural gas combined-cycle IPP, commissioned in in the coming years. 2002 and managed by Carthage Power Company, with an installed capacity of 471 MW. Natural gas accounts Tunisia’s peak load has experienced robust growth for 94.5% of domestic installed power capacity. See during the past decade, as shown in Figure 10. The modifications in Table 2. The evolution of the power annual peak in electricity demand increased from generation capacity during the period 2016-2018 and 2 172 MW in 2005 to 4 025 MW in 2017 (STEG, 2018a), its composition are detailed in the table. climbing at an average pace of 161 MW/year and with an average annual growth rate of 5.5%. In 2018, Electricity production by STEG and Carthage Power however, the peak load dropped due to heightened Company during the period 2013–2018 increased energy efficiency measures. Since 2000, peak load from 16 995 gigawatt-hours (GWh)/year to demand has transitioned from the winter period 19 060 GWh/year (STEG, 2019a), recording an average at night to the summer season in the day due to an annual growth rate of 3%. increase in residential and commercial space cooling.

Table 2. Composition of net power generation capacity, Tunisia, 2016 - 2018,

Types of equipment 2016 2017 2018 Steam turbines 1 020 920 660 Combined-cycle gas turbines 1 639 1 612 1 612 Tunisian Company of Open-cycle gas turbines 1 772 2 004 2 004 Electricity and Gas Hydro 62 62 66 Wind 240 240 245 Total STEG 4 753 4 838 4 587 Solar rooftop* 36 45 62 Independent power producer 471 471 498 Total installed capacity (MW) 5 260 5 315 6 147

* Based on interviews conducted with National Agency for Energy Management (Agence Nationale pour la Maîtrise de l’Energie) and Tunisian Company of Electricity and Gas (STEG – Société Tunisienne de l’Electricité et du Gaz).

Figure 10. Annual peak load (MW), Tunisia, 20017- 2018

4 200 4 025 4 000 3 916 3 800 3 599 3 600 3 465 3 400 3 353 3 200 3 400 3 010 3 024 3 000 3 144 2 800 2 660 Peak load (MW) Peak 2 600 2 416 2 467 2 400 2 200 2 000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: STEG (2019a), STEG (2018a); STEG (2016).

24 Source: STEG (2019a). Source: STEG (2019a). during theperiod2005-2018. consumption for thedifferent economic sectors 2017. Figure 11illustrates theevolution ofelectricity accounting for 47% oftheelectricity consumed in customers connected to the low-voltage (LV) grid, growth in consumption has been recorded by STEG 45% in2005to 67% in2018. Since 2013, thelargest of total electricity consumption, hasincreased from remains thelargest consumer ofelectricity. Itsshare slowdown ineconomic growth, theindustrial sector growth rate of4%perannum.Despite Tunisia’s in 2005to 15 Electricity consumption increased from 10 Figure 12. Figure 11. 7

3 9 0 H G igh W

h V 48% 4% o lt 8% economic sector, Tunisia, 2018 and medium-voltage levels by consumption inhigh-voltage Evolution ofelectricity Tunisia, 2018 consumption by voltage level, Evolution ofelectricity 671 GWh in2018, recording anaverage a ge T A o g u 13% r i r c i s u Me m l t u

d r iu e m 8% 8%

V 67% I S n o e d lt r 1 u a

v 3 s ge i 0 c t r e 2 4% i s G al W h L o 6 w

8 355 GWh T 5

r V an 6 o G s lt p W a o ge r h t

25 2 400 kilovolt (kV)level, 2 transmission linesin2018, with208kmat the STEG operated about6 2.4 175 Tunisia’s electricity distribution network totalled (400 kV, direct current, about200km). with a capacity of 600 MW between Tunisia and Italy signed to buildanunderwater interconnection line infrastructure project known asELMEDhasbeen national gridfor renewable energy absorption,an To expand interconnections andthecapacity ofthe (STEG, 2019a). used mainlyfor reliability andemergency purposes national consumption and theinterconnections are countries in the region represents less than 1% of two 225kVinterconnections. Electricity trade with 150 kVlineandtwo 90kVlines.Tunisia alsohas via one400kVline, two 225kVlines,one The transmission gridiscurrently interconnected reached in2018, 2.3% asin2017 (STEG, 2019a). 90-kV level. The rate ofloss onthetransmission grid LV: 4 voltage (HV): 21 customers; MV: 19 connected to theelectricity gridis4.05 million(high estimated at 99.8%. The number of STEG customers 75 The numberofMV/LV transformer substations reached medium-voltage (MV)linesand115 categories. LV network are presented inTable 4for the respective categories are definedin Table 3. Tariff prices forthe contracted (in kilovolt amperes). The two LV consumer (in kilowatt-hours (kWh)) andthelevel ofpower (residential ornon-residential), monthly consumption LV tariffsdependonthesector ofthe consumer the electricity tariffsisthelevel ofthesupply voltage. the Ministry ofFinance. The underlyingprincipleof submitted by STEG andafter approval of MEMTE and is set by theTunisian government basedonaproposal The sellingprice ofelectricity suppliedto consumers 2.5 382 kmat the150-kVlevel and1 065 in2018. Tunisia hasanelectrification rate 389 kmby theendof2018, including59 Transmission anddistribution Electricity tariffsElectricity 030 130 customers) (STEG, 2019a). 910 kmat the225-kVlevel, 906 kilometres (km)of The Republic ofTunisia 698 kmLV lines. 406 kmat the 291 customers; 691 km

ENERGY CONTEXT Renewable Readiness Assessment:

Table 3. Low-voltage tariff categories, Tunisia

Low-voltage tariff categories Economic Category Normal Category Level of power supply: ≤ 2 kVA Level of power supply: > 2 kVA Monthly electricity consumption Monthly electricity consumption is up to 200 kWh goes beyond 200 kWh Electricity billing is based on progressive Electricity billing is based on progressive tranches tranches with monthly consumption with monthly consumption (1–200 kWh; 201–300 kWh; (1–50 kWh; 51–100 kWh; 101–200 kWh) 301–500 kWh; greater than 500 kWh)

Source: STEG (2019a). Note: kVA = kilovolt ampere; kWh = kilowatt hour.

Table 4. Current tariffs for low-voltage network, Tunisia, June 2019

Power Energy price (USD/kWh) charge Range of monthly consumption (kWh/month) Tariff* Sector (USD/ kVA/ 1–50 51–100 101–200 201–300 301–500 501 + month) Economic Category Residential 0.022 (1 and 2 kVA and 0.24 0.0322 consumption Non- ≤ 200 kWh/month) residential 0.035 Economic Category Residential 0.059 0.073 0.114 0.139 (1 and 2 kVA consumption > 200 kWh/month) Non- 0.24 0.065 0.081 0.117 0.131 Normal Category residential (> 2 kVA)

Source: STEG (2019b). Note: USD = U.S. dollar; kVA = kilovolt ampere; kWh = kilowatt-hour. * TND 1 = USD 0.355 (July 2020).

Table 5. Time schedule for Four-shift tariff, Tunisia

Time schedule September to May June to August Day 07:00–18:00 06:30–08:30; 13:30–19:00 Morning peak summer – 08:30–13:30 Evening peak 18:00–21:00 19:00–22:00 Night 21:00–07:00 22:00–06:30

Source: STEG (2019b).

For MV subscribers, there are two main tariffs: Uniform In addition to the two main tariffs, three special tariffs tariff and the Four-shift tariff. exist for irrigation services in water pumping and agriculture alike, as well as emergency services. These Under the Four-shift tariff, the price per kWh varies are shown in Table 6. Electricity sold to farmers for according to the time of electricity consumption. water pumping is the least expensive. The distribution of the four shifts (day, morning peak summer, evening peak and night) differs between seasons, as shown in Table 5.

26 Table 6. *** Duringthewinter months, from September to May, thetariffisnot considered. The tariffappliesonlyduringpeaksummerhours. ** Pumpingfor irrigation tariff refers to theirrigation service charges (water tariffs) that are nolongerapplicable. * TND1=USD0.355 (July 2020). Note: NA=notapplicable;USDU.S. dollar;kW=kilowatt; kWh =kilowatt-hour. Source: STEG (2019a). Photograph: National Agency for Energy Conservation (ANME) Solar PV sites inTunis Agricultural irrigation Emergency services Pumping for irrigation** Four-shift Uniform Tariff Medium-voltage tariffs, Tunisia, June 2019 Power charge (USD*/kW/ month) 3.69 2.01 1.68 NA NA 0.094 0.064 0.086 0.081 Day 27 Morning peak summer Energy price (USD/kWh) Cut-off 0.123 0.137 NA 0.084 Evening peak 0.0663*** Cut-off 0.122 0.110 The Republic ofTunisia 0.046 0.063 0.067 0.076 Night

ENERGY CONTEXT Renewable Readiness Assessment:

In addition to the above tariffs, there were natural Prices also depend on government policies, including gas tariffs for grey cement industries. These related those wherebysubsidies are provided by the state to to high pressure and medium pressure lines (Table 7). the energy sector.

For HV users, only the four-shift tariff is available. This The increases during the past decade have been holds the distinction of being considered a special significant and have affected all electricity consumers, tariff for emergency scenarios, as shown in Table 8. apart from low-consumption households. As an indication, Figure 13 presents the evolution of the price Due to increased natural gas imports, electricity selling of electricity sold to those companies connected to prices in Tunisia have been subject to several rises. the MV grid with the Uniform tariff. For this category, These price adjustments are not periodic and depend the total increase stands at about three times those of on the evolution of oil prices and the exchange rate of 2010 prices. the local currency.

Table 7. Medium-voltage tariffs for grey cement industry, Tunis

Subscription fee Price of Energy Subscribed Tariff (USD/MJ-h- Indexation flow (MJ/h) (USD/month) Energy price* month) formula

High pressure ≥ 41 868 105.99 0.06 1 xPg 0.020

Medium pressure 4 187 – 125 604 7.1 0.21 1.032 xPg 0.020

millimes Pg=purchase of natural gas in units of thermies Note: MJ = megajoule; h = hour; USD = U.S. dollar; * Price of energy based on the purchase price of natural gas of 0.005 (USD/MJ).

Table 8. High-voltage electricity tariffs, Tunisia

Power charge Energy price (USD/kWh) Tariff (USD/kW/ Morning peak Day Evening peak Night month) summer Four-shifts 3.35 0.069 0.103 0.094 0.054 Emergency services 1.74 0.075 0.117 0.106 0.056

Source: STEG (2019a). Note: USD = U.S. dollar; kW = kilowatt; kWh = kilowatt hour.

Figure 13. Evolution of medium-voltage electricity selling prices for Uniform tariff subscribers, Tunisia

7 7.2 6 6.0 5 5.7 5.7 5.2 4 4.7 4.9 4.3 3.9 3 3.6 3.3 2 2.9 3.1 2.5 2.5 2.7 2.2 2.2 2.3 price (UScents/kWh) price 1

Medium-voltage electricity Medium-voltage 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Price (UScents/kWh)

Source: STEG (2019a), STEG (2018a); STEG (2016).

28 Figure 14. • • follows: The mainobjectives ofthisstrategy, developed in2014 andupdated in2019, are as defined inFigure 14. the development of renewable energy, such that the main targets are achieved, as management strategy withtwo components: theincrease ofenergy efficiency and Tunisia’s energy transition isbasedontheimplementation ofanenergy the competitiveness ofitseconomy andprotect theenvironment. and energy consumption to strengthen itsenergy security, andshouldsafeguard transition. This shouldbebasedonarevision ofthemodesproduction, processing The results ofthisdebate concluded that Tunisia must fullyengageinanenergy organisations andacademia,amongothers. various institutions, publicandprivate organisations, civilsociety, experts, financial the new policy through extensive consultations with key energy stakeholders from A national energy debate was launchedin2013 to definethe strategic objectives of process as part of its wider sustainable economic and social development strategy. international energy prices, Tunisia hasdecidedto embarkonanenergy transition In response to energy security challengesandthevulnerability to volatile 3.1 for Renewable Energy Enabling environment production mixto reach 30%in2030. Renewable energy: Increase theshare ofrenewable energy intheelectricity to thebaselinescenario. energy to reduce overall primaryenergy consumption by 30%in2030, compared Energy efficiency: Strengthen policies and measures for the rational use of Energy strategy targets Energy transition strategy Energy strategy targets, Tunisia Renewable energy Energy eciency 29 Reduce primarydemand 30% ofoverall electricity production by 2030 by 30%by 2030 The Republic ofTunisia

ENABLING ENVIRONMENT FOR RENEWABLE ENERGY Renewable Readiness Assessment:

ANME initiated work in 2017 on a low carbon Global average prices have dropped from strategy to 2050 that would include carbon pricing approximately USD 241/megawatt hour (MWh) to instruments. The Partnership for Market Readiness, USD 66/MWh for solar photovoltaic (PV), United Nations Development Programme and World while onshore wind prices have dropped from Bank are supporting Tunisia in the implementation approximately USD 79/MWh to USD 46/MWh. of its Nationally Determined Contributions (NDC) Solar PV prices continued to fall between 2017 and and low carbon strategy. In this context, Tunisia’s 2018, albeit at a slower pace, reaching USD 62/MWh NDCs pledge to include measures to reduce carbon in 2018. Onshore wind prices have edged slightly intensity by 41%, including an unconditional target of upward, reaching USD 55/MWh. The Middle East/ 13% and a conditional target of 28%. Moreover, 75% North Africa region has seen remarkably low prices of these reductions stem from mitigation measures in for new renewable energy projects, especially solar renewable energy. This commitment is well reflected PV. Tunisia, itself, recorded the lowest bid in Africa in the TSP and includes measures to build institutional for a 500 MW solar PV tender at USD 0.0244/kWh capacity and further address the planning gaps from (pvmagazine, 2019a). the first round to the second round of NDC reviews in 2020 (UNDP, 2018a). 3. Environmental: Tunisia, in its NDCs, has included measures to reduce its carbon intensity with a The low carbon strategy, to be finalised in 2020, will focus on reducing greenhouse gas emissions by be based on carbon pricing instruments, in line with 41%, with 75% of these reductions stemming from Tunisia’s Energy Conservation Policy (30-30 target), mitigation measures in renewable energy and FTE and development of its Nationally Appropriate energy efficiency. The development of renewable Mitigation Actions. It also will depend on international energy is a central pillar of decarbonising the support through financial and technical assistance energy mix while securing a reliable energy supply. (UNDP, 2018b). In 2018 alone, renewable energy generation from solar PV and wind avoided nearly 1.5 million tonnes Drivers for the Energy transition strategy: of carbon emissions.

1. Energy Security: With a growing energy balance Moreover, around 20 energy efficiency actions deficit, there is a compelling case for renewables, have been included in the calculation of avoidable based on a decline in conventional resources emissions, covering the industrial, building, transport against a sustained increase in demand. The ability and agriculture sectors. This commitment is well of renewable energy to address energy imports reflected in the TSP, and the country has taken is significant. Renewable energy solutions bring measures to build institutional capacity and further about important benefits to energy security, address the planning gaps from the first round to the including availability, accessibility, affordability second round of NDC reviews in 2020 (UNDP, 2018a). and a long-term outlook. In 2017, ANME initiated work on a low carbon 2. Economics: With the reduction in the cost strategy to 2050 that would include carbon pricing of renewable energy technologies over the instruments. The Partnership for Market Readiness, past decade, governments have continued United Nations Development Programme and World to search for renewables projects to benefit Bank are supporting Tunisia in the implementation of from economies of scale. its NDC and low carbon strategy.

30 Source: IRENA(2019a). Figure 15. 2018 USD/kWh    

2010 Fossilfuelcostrange

2012  Onshore wind concentrated solarpower, solarphotovoltaic andonshore andoffshore wind, 2010-2018 Global weighted average oftotal installed costsandproject percentile ranges for 2014

2016

2018

2020 ­€‚

2010 ƒ

2012 Solar photovoltaic Auction database 2014

2016

2018

31 2020 ‚ „

2010 ƒ LCOE database 2012

2014 O shore wind

2016

2018

2020

2022 ­ƒ‚

2010 ‚ Concentrating solarpower

2012 The Republic ofTunisia 2014

2016

2018

2020 €­

2022

ENABLING ENVIRONMENT FOR RENEWABLE ENERGY Renewable Readiness Assessment:

Tunisian Solar Plan To achieve the objectives of the national strategy, the TSP has set a total capacity for renewable electricity The TSP is the operational tool to implement the generation of 1 860 MW by 2022 and 3 815 MW by Tunisian strategy for the deployment of renewables in 2030, in comparison to the installed 373 MW renewable the power sector. As such, it focuses only on on-grid energy in 2018 (IRENA, 2020b). The distribution of electricity generation, based on wind, solar PV, CSP projected capacity between the different renewable and biomass. The first version of the TSP was launched technologies is shown in Figure 16. in 2009. The present version is the result of several improvements made over the years to reflect Tunisia’s national strategy and targets. It was finalised by ANME in 2015 and adopted by the Tunisian government in Box 2. Tunisian Solar Plan July 2016. Tunisia took note of the notable progress in renewable energy deployment In December 2017, and • Objective: 30% renewable energy in electricity has further updated and extended the targets to 2022. production in 2030

• NDC pledges: Reduce carbon intensity by Figure 16. Renewable energy target, 41%, with 75% of the reduction resulting from Tunisia, 2030 the energy sector 100 MW 450 MW • Target for installed renewable capacity: 3 815 megawatts (2030)

1 755 MW • Market access mechanism: Net metering – Self-production – Independent power production for domestic consumption – 3 815 MW Private concession by tender – Direct public 2030 investment by Tunisian Company of Electricity and Gas (STEG) 1 510 MW • Investment cost (2015): USD 9 436 million

• Renewable projects (2015): USD 7 465 million Wind Solar PV CSP Biomass • Project for strengthening the electrical Source: ANME (2015b). system: USD 1 971 million Note: CSP = concentrated solar power; PV = photovoltaic; MW = megawatt. • Funding: Public sector: USD 3 106 million; Private sector: USD 6 331 million

• Impacts: 1. Cumulative energy savings over the period 2015–2030: 16 million tonnes of oil equivalent

2. Cumulative carbon dioxide emissions reduction over the period 2015–2030: 38 million tonnes of carbon dioxide equivalent

3. Gain on the energy bill: USD 16 billion

4. Jobs created: Approximately 10 000.

32 status ofany region, country, territory, city orarea orofitsauthorities,concerning thedelimitation offrontiers orboundaries. Disclaimer: This mapisprovided for illustration purposesonly. Boundaries andnamesshown onthismap donotimplytheexpression ofany opiniononthepartofIRENAconcerning the Notes: m=metre; m/s =metres persecond. Sources: IRENA:GlobalAtlas; Map data: Technical University of Denmark (DTU), 2021, 2021 OpenStreetMap contributors, 2021 United Nation administrative boundaries. 980 as asuccess story, withatotal installed area of thermal energy for heating water canberegarded and PV at 62 MW(IRENA,2020b). The useofsolar with windenergy at 245 MW, hydropower at 66MW) reached approximately 352 MWby theendof2019, installed renewable power generating capacity had role inthecountry’s energy supply. Tunisia’s total however, renewable energy currently plays aminor resources, particularlysolarandwind energy; Tunisia isendowed withabundant renewable energy 3.2 Figure 17. and Kebili). the southernregions (Tataouine, Western Cape, Gabes and Nabeul,inthecentral region (Kasserine) andin 80 metres height) are found intheregions ofBizerte sites (speed exceeding 7metres persecond (m/s) at suitable sites for windfarms. The most interesting Tunisia’s wind map illustrates the existence of several atlas for theentire country (Figure 18). This was possible through thedevelopment ofawind Centre (Centro NacionaldeEnergias Renovables). collaboration withSpain’s National Renewable Energy Wind resources were evaluated by ANMEin2009 Wind energy (ANME, 2018). 000 square metres (m and exploitation Renewable energy resources Wind mapof Tunisia 3 3 2 6 ° ° N N 2 ) at theendof2017 8 8 ° ° E E 1 1 2 2 ° ° 33 E E 3 3 2 6 recorded in2014 at 507 GWh, asshown inFigure 17. in 2017 reached 449 GWh, andpeakproduction was production of the three wind farms installed by STEG with a total capacity of 190 MW. The total electricity Together they account for a total of 143 wind turbines the sites of Metline and Kchabta (Bizerte region). STEG launchedtwo otherwindfarms in2012 at (RES4MED, 2016). 800 kilowatts, andlarger MW turbinesof1.32 two smallturbinemodelsof300kilowatts and comprised ofthree diverse windturbineprofiles: 55 MWin2008.The windfarm ofSidiDaoudis initial capacity of10MWandlater expanding to at theSidiDaoudsite in thenortheast, withan in 2001, whenSTEG brought onlineawindfarm Tunisia’s windgeneration development began potential development opportunitiesinoffshore wind. 8 energy potential inTunisia isestimated at more than is estimated to beabout32 The total area available for windpower development Medenine andtheMonastir region (IRENA,n.d). found intheeastern areas ofTozeur, theeast coast of conditions (speed between 6.5m/s and7m/s) canbe By comparison, sites withless attractive wind ° ° N N 000 MW (GIZ, 2013). This potential does not consider W i n d s T p A n e u n m e u d / a n s l a

> 9 8 7 6 5 4 < a

i = ------v 1 t s

e 1 9 8 7 6 5 0 1 4 0 r i a a 0 g e 0 m h e i g h t 200 km².The gross wind The Republic ofTunisia

ENABLING ENVIRONMENT FOR RENEWABLE ENERGY Renewable Readiness Assessment:

Figure 18. Electricity generation of wind farms (gigawatt hours), Tunisia, 2009–2019

507 500 474 448 449 453

358

196 139 98 109 Electricity generation (GWh) generation Electricity

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Sources: MISME (2019a).

Solar energy With these favourable conditions, the productivity of PV solar systems in Tunisia is very high. According to Tunisia has solar resources exceeding 3 000 hours/year, IRENA’s Global Atlas, annual electricity production although hours of sunshine vary throughout the by PV solar systems varies between 1 450 kWh per different regions. Most of the southern provinces have kilowatt-peak (kWp) in the northwest region and a solar exposure time of more than 3 200 hours/year, 1 830 kWh/kWp for systems installed in the extreme with peaks of 3 400 hours/year on the south coast (Gulf southeast region. of Gabes), while the minimum period of insolation in the northern provinces is between 2 500 and 3 000 Direct normal irradiance (DNI) is the main parameter for full-sun hours equivalent (Renewable and Sustainable evaluating the potential for concentrated solar power Energy Reviews, April 2016). Solar irradiation (CSP) technology. Generally, the DNI should be at least ranges from 1 800 kWh/m2/year in the north to 2 000 kWh/m2/year to provide a viable energy yield. 2 600 kWh/m2/year in the south. In Tunisia, as shown in Figure 21, direct solar irradiation in the south and in most of the central region exceeds Global horizontal irradiance is a reliable resource this typical DNI value. The DNI in some regions of the measure for solar PV installations. As shown in extreme southeast of Tunisia can reach a value of Figure 20, the daily average global solar irradiance is 2 300 kWh/m2 /year. between 4.2 kWh/m2/day in the northwest of Tunisia and 5.8 kWh/m2/day in its far south.

34 status ofany region, country, territory, city orarea orofitsauthorities,concerning thedelimitation offrontiers orboundaries. Disclaimer: This mapisprovided for illustration purposesonly. Boundaries andnamesshown onthismap donotimplytheexpression ofany opiniononthepartofIRENAconcerning the Sources: IRENA:GlobalAtlas, Map data: World ESMAP, Bank, 2021, 2021 OpenStreetMap contributors, 2021 United Nation administrative boundaries. Figure 20. status ofany region, country, territory, city orarea orofitsauthorities,concerning thedelimitation offrontiers orboundaries. Disclaimer: This mapisprovided for illustration purposesonly. Boundariesandnamesshown onthismapdonotimplytheexpression ofany opiniononthe partofIRENAconcerning the Sources: IRENA:GlobalAtlas, Mapdata: World ESMAP, Bank, 2021, 2021 OpenStreetMap contributors, 2021 United Nation administrative boundaries. Figure 19. Direct irradiance, normal Tunisia Global horizontal irradiance, Tunisia 3 3 3 3 2 6 2 6 ° ° ° ° N N N N 8 8 8 8 ° ° ° ° E E E E 1 1 1 1 2 2 2 2 ° ° ° ° E E E E 35 3 3 3 3 2 6 2 6 ° ° ° ° N N N N G l D o i b r a e l c H t T T A A N n n o k u n n k u r W o u u W i z a a r n h n h > 2 2 1 1 1 1 1 1 < m l l o

/ > 2 1 1 1 1 < 1 0 9 8 7 6 5 4 a a / = m 0 9 8 7 6 i n 2 i = 0 0 0 0 0 0 0 0 m v v a 2 0 0 0 0 0

s 2 s 0 0 0 0 0 0 0 0 1 t

e e 2 1 0 0 0 0 0 1 0 l

2 a 4 r 0 r ------

Ir i 6 0 i - - - - -

a 0 a 0 l a 2 2 2 1 1 1 1 1

0 a 0 2 2 1 1 1 g Ir g 2 1 0 9 8 7 6 5 0 1 0 9 8 7 e e r 0 0 0 0 0 0 0 0 0 0 0 0 0 a 0 0 0 0 0 0 0 0 0 0 0 0 0 r d a i d a i t a i o t i n o n The Republic ofTunisia

ENABLING ENVIRONMENT FOR RENEWABLE ENERGY Renewable Readiness Assessment:

Solar PV The financial mechanism for this programme, The use of solar PV systems in Tunisia began with exclusively intended for residential consumers decentralised rural electrification and pumping connected to the LV grid, combines subsidies granted for drinking water supply, supporting low-income by the FTE and loans repaid over a period of seven populations with very high subsidies. Only about 100 years via the consumer’s STEG electricity bill. pumping stations, concentrated in the south of the country, have been installed. Tunisia had about 13 200 By the end of 2019, 3 644 solar PV systems were rural households electrified by PV systems by the end connected to the LV grid. The total PV capacity of 2014, totalling an installed capacity of approximately installed is evaluated at around 11 298 kWp, 90% of 1 450 kWp. Despite this advancement, no information which were installed in the residential sector. Figure is currently available on the real operating number of 22 illustrates the evolution of the cumulative solar PV systems, as there is no monitoring procedure. Solar capacity connected to the LV grid. PV systems for decentralised rural electrification have minimal potential, given that STEG’s With continuing increases in electricity rates and the electricity network covers most remote areas, while significant price decline of PV systems, the profitability limited potential exists for pumping for small-scale of solar energy continues to improve for all electricity irrigation. consumers, including those connected to the MV grid. In this context and until February 2020, MIEM has Grid-connected solar PV systems are recent in granted the necessary authorisation for 150 solar PV Tunisia. Their installation started upon the issuance installations, totalling a capacity of approximately of Law No. 2009-7, which authorises self-production 26 megawatts-peak (MWp), with intended for of electricity from renewable energy sources. Grid- production to the MV grid (ANME, 2020). The distribution connected solar PV has mainly been implemented of the PV energy projects is largely in the agriculture through the Prosol électrique programme, initiated in sector, followed by the industry and tertiary sectors, with May 2010 by ANME and STEG. 64% of the installations below 100-kilowatt capacity.

Figure 21. Cumulative installed solar photovoltaic capacity for self-production on the low-voltage grid, Tunisia, 2011–2019

80 000 72 971 70 000 61 673 60 000

48 773 50 000

38 939 40 000

30 000 25 837 2 5 0 6 1 2 0 9 8 5 20 000 15 511 1 6 7 1 3 2 8 9 5 3 Cumulative installed solar PV capacity (kW) capacity solar PV installed Cumulative 10 000 7 982 4 016 6 2 4 0

1 450 3 5 1 7 411 1 9 0 7 5 4 0 2 3 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Number of systems Installed capacity (kW)

Sources: IRENA (n.d.); World Bank (2020). Disclaimer: The designations employed and the material presented in this map do not imply any opinion on the part of IRENA concerning the legal status of any region, country territory or area, or concerning the delimitation of frontiers or boundaries.

36 (mitigationmomentum, 2016). cooling, this falls to between 4GW and65 GW 1 with irradiation from 50 gigawatts (GW) to potential of CSP plants in Tunisia to vary Studies by DESERTEC found thegross Concentrated solarpower annual production capacity estimated at 100MW. created inTunisia duringtheperiod2011–2019, withan addition, five manufacturing units for PV modules were registered companies, among which 150 were active. In of PV systems. By theendof2019, ANMElisted 350 a network ofcompanies specialisinginthe installation Solar PV demand in Tunisia has led to the creation of Sources: NurEnergie (n.d.). Figure 24. Source: ANME(2019). Figure 22. 5 GW. Butwithlimited water available for 250 solar PV installers (number)

2 51 0 1

0 51 grid,medium-voltage Tunisia projects relating to the Sector ofphotovoltaic distribution Registered SolarPVinstallers

20 26% 2% 29 2 A 0 g 1

1 80 r i c

32 u l t u r 34 e 2 0 1 2 114 I n d 52% 48 u s t r y N 28 e 2 w 0 1 T

3

q 142 e u r a t i

l 75 ar i fi y e d

37 c 31 2 o 0 m 1 4 Tunisia Figure 23. p (Figure 26). direct-current submarinecablefrom Tunisia to Italy solar CSPplant intheSahara Desertanda2GW HV Project. The proposed project consists ofa2 its electricity production to Europe: theTuNur CSP to build a CSP plant in southern Tunisia and export private company, to theTunisian government in2008 Separately, anambitiousproject was presented, by a region (Oued ofGabes Akarit). however, for a50–100 MWcapacity CSPproject inthe plants. Apre-feasibility study was conducted in2009, Currently, Tunisia doesnothave any CSPgeneration 173 Source: ANME(2019). a n

i 84 e s 20≤ < 43 50k 2 T 0 P o 1 23% W

5 216 c t Distribution ofpowerDistribution installations, a < c l 30k

q 78 u a 7% l i 50 ≤ fi W

e 32 2 d 0 c 6%

P 1 c 25%

6 248 o c < m 10 k p

101 > a 30 k n i e W s 28 The Republic ofTunisia 2 W 0 1 c 7 276 39% A 10 ≤ c

t 110 i v e

P c c o 39 < 2 250 MW m 20 k 0 p 1

8 156 a n i e

117 W s

ENABLING ENVIRONMENT FOR RENEWABLE ENERGY Renewable Readiness Assessment:

Figure 25. Proposed TuNur consolidated solar power project in southern Tunisia

Sources: Nur Energie (n.d.).

Figure 26. Solar collector area installed under Prosol programme, Tunisia, 2005–2018

885 920 825 820 765 701 720 635 620 570 504 520 429 420 358

320 278 198 220 118 120 58 23 solar collector area (thousand square meters) (thousand square area solar collector 20 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Prosol area of solar collectors (1000m2)

Sources: ANME (2019).

Solar water heating The project helped revitalise the market, restore The solar water heating (SWH) sector in Tunisia was the technology’s reputation and create a more initiated in the 1980s through the creation, in 1982, of competitive local business. The project stopped the first manufacturing unit for solar water heaters and in late 2001, however, with the depletion of the the establishment of a specific consumer credit system. funds reserved for the grant (USD 6.6 million). Hindered by technical skill levels, however, the country The market then declined significantly to less than experienced a sharp decline in annual installations from 8 000 m2 in 2004. approximately 5 000 m²/year installed collector area to only several hundred square metres in the mid-1990s. As of 2005 the Tunisian government decided to boost the SWH market by implementing the Prosol The market was revived through a Global Environmental programme, based on an innovative financing Facility project that provided a grant of up to 35% of and incentive mechanism. The programme offers the purchase price and the establishment of technical capital grants combined with value-added tax requirements and guarantees for solar water heaters exemption, reduction of custom duties and reduced sold on the market to restore consumer confidence in interest loans paid back through electricity bills SWH technology. (Solarthermalworld, 2017).

38 1 solar collectors installed inTunisia isestimated at until theendof2018, thecumulative total area of From thecommercialisation ofSWH systems in1982 competition from heavily subsidisednatural gas. attractive for end users in the tertiary sector due to residential sector; thepayback periodoften isnot has notexperienced thesamedynamicasin collectors by theendof2016. This specificprogramme Prosol, whichhadinstalled around 28 sector alsowas established in2009, namedTertiary A programme specific to the commercial and industrial cumulative solarcollector area installed underProsol. Figure 27 illustrates theevolution ofannualand since itsstart in2005,however, isabout885 2011. The total collector’s area installed undertheProsol period 2008–2010, themarket registered adecrease in After reaching anannualpeakof80 start oftheProsol programme. more thanten timestheaverage recorded prior to the water heaters intheresidential sector hadreached whereby, by 2008,theannualinstalled area ofsolar This programme transformed theTunisian SWH market 6 18 MW. (northwest region) in1956, witha total capacity of two hydropower stations inArroussia andNebeur exploited inTunisia through theinstallation of Hydropower was thefirst renewable resource Hydropower • • • • • • characterised by thepresence of: The SWH market offer at theendof2016 was equipment modelssoldontheTunisian market. in thenumberofsuppliers, installation companies and SWH has been accompanied by a significant growth 040 water heaters. This isatraining andqualification programme for installers whoare required to respect aspecific codeand complywithdefinitive criteria and standards duringthe installation ofsolar three technical control offices. heating systems; and 12 qualifiedinstallation companies of collective solar 16 engineeringconsulting firms; 250 approved modelsofSWH systems; ANME; according to theQualisollabel 1 53 suppliers, including ten localmanufacturers; 200 installers, ofwhich500were qualified, 000 m², as shown in Figure 28. The evolution of 000 m 6 established by 000 m² of solar 000 m²ofsolar 2 during the duringthe 000 m². 000 m².

39 Figure 27. STEG electricity production. approximately 18 GWh, which represented 0.12% of Electricity produced from hydropower in2018 totalled production is very limited, asshown in Figure 29. hydropower isvariable, anditsshare oftotal electricity energy potential islimited. The production of Tunisia doesnothave large damsanditshydraulic Table 9. 66 MW, spread over seven stations, asshown in Its installed hydro capacity by 2018 stood at Source: STEG (2019a). Table 9. T e Hydropower stations r t i R ar 3% e y P Bouherthma s Sidi Salem Sidi Salem i d Aroussia Fernana Sejnene Nebeur Kasseb r TOTAL e Hydropower stations, Tunisia, 2015 o n s t Tunisia, 2018 Area ofsolarcollectors, o i al l P 1982 -2004 r o s 12% o 1 040 000 m l T e r t i ar 2 y P The Republic ofTunisia r Residential P o Capacity s o (MW) 36.0 13.0 l 0.6 4.8 0.7 9.7 66 1.3 85%

1982-04 r o s o l

ENABLING ENVIRONMENT FOR RENEWABLE ENERGY Renewable Readiness Assessment:

Figure 28. Annual hydropower production, Tunisia, 2005–2018

145

110

92

79 70 60 54 56 49 50 45 38 Annual hydropower production (GWh) production Annual hydropower 18 17

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Sources: MISME (2019a).

Biofuels and waste-to-energy One pilot biogas plant capable of generating 2.4 GWh/year of electricity was developed in 2010. There is minimal use of traditional biomass fuels in The plant is set up to use waste from the wholesale Tunisia as almost the entire country has access to market of Bir El Kassaa; however, it remains offline electricity and to non-solid fuels for cooking. The due to technical problems (ANME, 2017). production of charcoal has remained almost stable over the last decade, averaging 150 ktoe/year, and Geothermal energy wood is frequently used in traditional ovens. The southern part of the country, specifically the The National Waste Management Agency (ANGED – Kebili, Gabes and Tozeur regions, is rich in hot springs Agence Nationale de Gestion des Déchets) estimates that - a good indicator of geothermal activity. These the country produces approximately 6 million tonnes of geothermal resources originate from the extensive organic waste annually (2.2 million tonnes of household Continental Intercalary aquifer, covering an area of waste, 2.2 million tonnes from farms and agri-industry, 1 million km2 and spreading into the neighbouring 1 million tonnes from olive oil processing, 400 000 tonnes countries of Libya and Algeria. The aquifer is about from poultry droppings and 200 000 tonnes from waste 2.8 km deep and has temperatures ranging from 30°C water treatment). According to ANGED, the potential to 80°C (UN, 2008). for generating electricity through waste is estimated at 1 000 GWh/year. Various challenges currently exist Use of geothermal energy in the power sector, to exploit this potential, including initial investment however, is underdeveloped due to the low enthalpy cost constraints, a lack of technical knowledge, limited of geothermal resources. Therefore, many geothermal knowledge on biomass resources, lack of clarity on applications are based on direct use of geothermal the long-term supply of power plants from low-cost heat in agriculture (e.g. for heating greenhouses, waste, and overlapping roles between ANGED and powering irrigation pumps) and recreational thermal municipalities, both responsible for waste collection. baths.

40 Source: STEG (2019a). developers. framework more attractive to various kindsofprivate discussions in2012 to putinplace anew legislative renewable energy, the Tunisian government began mobilise private investment for thedevelopment of Aware oftheneedto establish regulatory reforms to No. 2009-2773 (28September 2009)(MEMTE,2016). and procedures for theseprojects were set by Decree their production surplusesto STEG. The requirements companies connected to theMVandHVgridsto sell cover their needs. The law provides the possibility for exploit renewable resources to produce electricity to companies active indifferent economic sectors to authorises households,companies andgroups of No. 2009-7 (adopted 9 February 2009).This law set up in 2009 through the promulgation of Law of renewable energy to produce electricity was The first regulatory framework allowing for theuse 3.3 Table 10. Law No. 96-27 of1April1996 Governmental Decree No. 2020-105 2019-47 of29May 2019 Law No. 2015-12 was amendedto Law 2018 Governmental decree of30August 26 July2017 Governmental decree No. 2017-983 of 9 March 2017 Governmental decree No. 2017-389 of 9 February 2017 and30August 2018 Ministerial Decisionsissued on 2016 Ministerial Decisionof6December 24 August 2016 Governmental decree No. 2016-1123 of Law No. 2016-71 of30September 2016 Law No. 2015-12 of11May 2015 Decree No. 96-1125 of20June1996 Renewable energy regulatory framework Overview ofrenewable policiesand regulation, energy support Tunisia Legislation • • • • • • • • • • • • • • Establishes concessions onelectricity production Amended andcompleted decree No. 2016-1123 ofAugust 24, 2016 Amended to allow for corporate power purchase agreements (STEG)Electricity andGas sources underauthorisation schemeto theTunisian Company of contracts for thesaleofelectricity produced by renewable energy Approves therevision ofthestandard power purchase agreement énergétique) Regulates theEnergy Transition Fund (Funds detransition Investment Law Supports investment through financialincentives underthe electricity invarious production regimes Ratifies typical contracts for thepurchase andtransmission of Ratifies connection grid codes power producers from renewable energy Designates members ofthetechnical committee for independent relating to electricity production from renewable energy Sets theconditions and procedures for thecompletion ofprojects Establishes thelaw oninvestment energy Liberalises rulesregarding theproduction (andexport) ofclean private sector investment Promotes the development ofrenewable energy andencourages electricity generation to private consumers Sets the conditions and procedures for granting the concession of 41 the key texts outlinedinTable 10. generation from renewable energy is defined through Currently, theregulatory framework for electricity for itsimplementation (i.e. decree, order, decision). This law provides several legaltexts that are essential • • • provides for three regulatory regimes, asfollows. production (andexport) ofcleanenergy. This new law investment andliberalise rulesregarding the renewable energy, encourage private-sector implemented to promote thedevelopment of produced from renewable energy sources, was Law No. 12of11May 2015, relating to electricity electricity sources from cleanenergy developments. In 2015 Tunisia adopted anew legislation relating to IPPs intended for export. IPPs to meet theneedsoflocalconsumption Production projects for self-consumption Type The Republic ofTunisia

ENABLING ENVIRONMENT FOR RENEWABLE ENERGY Renewable Readiness Assessment:

According to Law No. 2015-12, renewable energy projects are to be developed under four different legal regimes. These are set out in Table 11.

Table 11. Criteria under the legal regimes for renewable energy projects, Tunisia

Legislation Type • Installations connected to the low-voltage grid need approval from Energy production for self-production the Tunisian Company of Electricity and Gas (STEG). • Installations connected to the medium- and high-voltage grids require an authorisation from the Ministry of Industry, Energy and Mines. • A prior agreement is granted by MIEM following a call for projects. • The agreement is valid for a period of two years for photovoltaic Authorisation scheme: energy-selling projects and three years for wind projects, during which the projects ≤ maximum power developer will have to form the project company and complete the plant with a possibility for extension by one year subject to challenges within the project. • The developer receives authorisation from MIEM to operate and produce electricity after the commissioning test by the Tunisian Company of Electricity and Gas. • MIEM grants a concession after a public call for tenders. • Projects are carried out in accordance with the concession Concession scheme for energy-selling procedures defined by Decree No. 96-1125 of 20 June 1996. projects > maximum power • Project Agreement (PPA and concession agreement) are submitted to Parliament for validation. Concession scheme for energy export • MIEM grants a concession after a call for tenders. projects • Contracts are submitted to Parliament for validation.

Source: GIZ (2014); ANME (2015a). Note: Maximum power = the maximum installed capacity of electricity generation projects from renewable energy intended to meet the needs of local consumption. It is subject to authorisation by MIEM and is set by Decree No. 2016-1123: 10 MW for solar PV and solar thermal; 30 MW for wind energy; 15 MW for biomass; and 5 MW for projects using other renewable resources.

Meteline – Kchabta wind park in Bizerte Photograph: National Agency for Energy Conservation (ANME)

42

Figure 29. integrated different measures to address curtailment, to address VREcurtailment. Inthiscontext, Chinahas measures that may betaken at different timescales aspects. Figure 25 shows the different flexibility players, includingbothtechnical andinstitutional need to be undertaken to integrate all energy system coupling). Therefore, proper planningmethodologies demand (demand-side management andsector distribution systems, storage andmore flexible by different sectors, includingtransmission and Flexibility in the energy system can be provided for aheadoftime. flexibility sources need to be exploited and planned effective management oflarge-scale VRE,several Flexibility for theEnergy Transition findsthat, for the In thiscontext, IRENA’s analysis inPower System under theconcession schemecome online. become amajorconcern whenlarge-scale projects current gridinfrastructure limitations. This will capacity from renewable energy sources dueto may need to be reinforced to handle additional taking curtailment into account, asthecurrent grid national planto maintain gridstability isessential, in its Tunisia Solar Plan (TSP) for theyear 2030. A Tunisia hasset ambitious renewable energy targets Box 3. Cost issues dueto highRate in Tunisia Addressing power system flexibility 10 sec…. Frequency stability Flywheels Synthetic inertia of Change Regulation Frequency Flexibility solutions Geographic dispersion ofVRE* DemandResponse 1 min…. Improved VREforecasting Retrofitting units,new flexible units Down regulation by VRE Increased need Batteries for operating DEMAND SIDEFLEXIBILITY 10 min…. reserves Balancing Intra-day markets Pooling ofresources 30 min…. Load following Increased net 43 load ramps fulfil the TSP. solutions to enableTunisia to reach key goalsand aims to helptheMIEMassess different flexibility each production regime. IRENA’s FlexTool analysis disaggregated renewable energy targets defined for 43 oflaw No. 2015-12. The planisexpected to include years 2021 –2025, asstipulated by articles40and currently drafting theupdated national planfor the planning comes asatimelyassessment, asMIEMis Addressing variable renewable energy inlong-term renewables initsfuture power system by 2030. various solutionsto Tunisia’s goalofincluding30% can beusedto carryoutlong-term analysis, proposing storage and sector coupling. Moreover, theFlex Tool concept of flexibility, including flexible demand, energy traditional andinnovative technologies that enrichthe that analyses thepower system holistically, considering different countries. The Flex tool isauser-friendly tool assess thecurrent flexibility ofthepower system in tools. Assuch,IRENAhasdeveloped theFlex tool to mathematical computation usingtheappropriate complex multi-step process that requires significant IRENA findsthat planning a for flexibility is and pumpedhydro solutions(IRENA,2018a). side programmes withafocus oninterruptible loads infrastructure development, integration ofdemand- implementation ofwholesaleenergy markets, grid including theimprovement ofoperational practices, EVs Pumped Hydro commitment Co-optimised hydro-thermal unit 1 hour…. increased challengesto dispatch inflexible units Unit Commitment Power-to-Heat ELECTRICITY STORAGE Increased cycling, 1 day …. OPERATIONAL FLEXIBILITY SUPPLY SIDE FLEXIBILITY Power-to-Gas VREIMPACTS SECTOR COUPLING OPERATIONS The Republic ofTunisia SOLUTIONS days …. SYSTEM Time

ENABLING ENVIRONMENT FOR RENEWABLE ENERGY Renewable Readiness Assessment:

For the integration of renewables onto the electricity The approval of the plan by government decree on a grid, key items under Law No. 2015-12 must be proposal by MIEM is followed by agreement from the accounted for. These include power system flexibility ministers in charge of finance, national defence, state for the integration of variable renewable energy property, agriculture, environment, equipment and (VRE) onto the grid. Current grid infrastructure local communities. and operations accommodate the current share of renewables in the grid, which is at 2.5%. The Meanwhile, Article 40 of Chapter VI deals with the TSP expects a share of 30% by 2030, however, timing of the national plan: it must be finalised and and therefore further measures must be taken. approved within five years from the date of the law’s In this context, Article 3, Article 4 and Article 40 entry into force. The plan will include disaggregated of Law No. 2015-12 account for power flexibility renewable energy capacity targets by technology and measures. production regime.

Law No. 2015-12 requires the creation of a national Self-consumption scheme plan to produce renewable electricity. MIEM, in The main regulatory and administrative provisions for consultation with the national council of energy, renewable energy production for self-consumption is responsible for developing a national plan for vary according to the nature of the project, with the electricity generation from renewable energy. primary distinction being between projects connected Article 3 of Chapter II of the law lists the requirements to the LV grid or the MV grid (Table 12). of the national plan (i.e. grid stability, consistency in supply and demand, reserves, rate of industrial integration, and inventory zones), while Article 4 of Chapter II sets out the process for agreement of the national plan.

Solar PV site in Tunis Photograph: National Agency for Energy Conservation (ANME)

44 Tunisia Table 12. Sources: MDICI(2017); ANME(2014). installations solar photovoltaic provisions for Specific contract Validity of requirements Administrative requirements Technical power capacity Renewable producers Eligible self- Characteristics Provisions for self-consumptionprojects connected to low- andmedium-voltage grids, • • • • • • • • Inverters must becertified by STEG. Management. by theNational Agency for Energy Photovoltaic modules must becertified Maîtrise del’Energie) Management (Agence Nationale pour la lists oftheNational Agency for Energy Qualified installers are extracted from the one year One year, withtacitrenewal for periodof STEG Project request subject to approval from to theLV network dispatch from renewable energy connected with thespecifications for electricity Installation must betechnically compliant that oftheSTEG subscriber Installed power capacity must notexceed LV network (STEG)Electricity andGas connected to All customers oftheTunisian Company of Projects connected to low-voltage (LV) grid Self-consumption scheme 45 • • • • • • • • • according to thehourlyperiod tariffofsurplusproductionSales differs energy plant the annual production of the renewable ofsurplusproduction:Sale upto 30%of 20 years privée àpartirdesEnergies Renouvelables). (Commission Technique deproduction Power Production from Renewable Energy Technical Commission for Independent in charge ofenergy (on theadvice ofthe Obtain an authorisation by the minister and high-voltage network. renewable energy installations to theMV and evacuation ofenergy produced from with thespecifications for the connection Installation must betechnically compliant are available for afee Wheeling services to areas of consumption STEG greater than30%ofannualproduction to the producer cannotsellsurpluselectricity No limitations onpower contracted but voltage grid Any facility connected to theMVorhigh- STEG agriculture ortertiary sector subscribedto establishment operating intheindustrial, Any localauthority, publicorprivate medium-voltage (MV)grid Projects connected to The Republic ofTunisia

ENABLING ENVIRONMENT FOR RENEWABLE ENERGY Renewable Readiness Assessment:

Authorisation scheme As such, the PPA between developer and utility must Under the Authorisation scheme, energy-selling include the following key items (MEMTE, 2017b): projects can be initiated subject to meeting all the regulatory and technical requirements, with final • Contract term: Initial term of 20 years, with a take approval from MIEM. The agreements are granted or pay mechanism. within the limit of the overall installed capacity defined in the annual notice relating to the renewable capacity • Tariffs: Individually determined, based on offer to be achieved through the authorisation system. made by developer.

Following lengthy discussions regarding the • Connection costs: Developer’s responsibility, guaranteed purchase tariffs and the modalities of their including initial connection and reinforcement costs. application and revision, however, the decision was taken to grant authorisations only based on calls for • Technical requirements: Electricity produced is projects announced by MIEM and within the limits of supplied in line with connection codes, approved by the objectives set by the annual notice. According to the ministry. this approach, electricity sales prices are not fixed and, instead, are offered by private developers interested • Force Majeure: No compensation is available under in participating in calls for projects. Figure 30 sets the PPA for either party affected in the context. out the procedure applied under the Authorisation STEG is entitled to suspend performance under scheme. political force majeure.

Power purchase agreements • Transfer conditions: Capital transfers are allowed, The PPA is an essential formal consensus that governs subject to approval by MIEM. the power transaction between the renewable energy producer and the off-taker, serving as a key element In addition to the PPA, several other key documents are of project bankability. PPAs should be designed to required: agreements on implementation, operation be relevant to country context for private project and maintenance, supply and installation, as well as developers and government alike. Accordingly, Tunisia finance facility term sheets. In this context IRENA, has developed bankable documentation (projects together with the Terrawatt Initiative, launched agreements), including a standard PPA form under the Open Solar Contracts project to standardise the Authorisation and Concession schemes, approved contracts and thereby simplify and streamline project under the decision of 30 August 2018 (repealing that development and finance practices. In this regard, the of 9 February 2017) by MIEM. Open Solar Contracts project will reduce risk, save time and unlock greater investment by providing confidence to the project developers (IRENA, 2018a).

Figure 30. Procedure for energy-selling projects under Authorisation scheme, Tunisia

First-stage Land Provisional bidding criteria requirements authorisation

Developer provisions Site proposal criteria Preliminary site authorisation • Project capacity, equipment specifications, • Resource potential 1. Obtain the preliminary agreement of MEMR and an implementation plan for the project • Availability of the site for purchase or lease 2. Create the project company • Term sheets agreed upon by lenders and by providing an agreement or ownership 3. Obtain the authorisations required by the backing parties title depending on whether it is under regulations, conducting studies relating to • An analysis of local industrial integration private or state ownership electrical connection and environmental • Environmental and social impact assessment impact, financial closure, acquisition of equipment and construction of the plant 4. Conclude PPA with STEG 5. Install and commission the plant 6. Obtain the final authorisation 7. Operate the plant

Source: MEMTE (2017a).

46 7 professionals inthefieldof renewable energy. of taxrevenues set asidefor thevocational training of Professionnelle) is responsible for managing the 1.5% National deFormation Continue et dePromotion Training andProfessional Promotion (Centre The following: active in the field of vocational training, including the Furthermore, several associations andinstitutions are Annex I). institutions andtheirrespective roles are presented in and subsidies(furtherdetails ontheenergy-relevant providing support for schemesinthe form ofgrants enabling strategy andregulatory framework, to deployment ofrenewable energy, from setting an There are various supportmechanismsfor the are responsible for renewable energy deployment. Several institutions involved inelectricity governance 3.4 The schemeprocedure isoutlinedinFigure 31. with thelegislation inforce following callfor tenders. to becarriedoutthrough concessions inaccordance minimum power (Figure 31),defined by MIEM,are production projects withcapacity exceeding by Decree No. 2015-12, whichstates that private Projects undertheConcession schemeare defined Concession scheme Source: BennaniandAssociés (2018). Figure 31. Tunisia updated thetargets intheTSP inMay 2019 to accurately reflect thecurrent targets andprogress undertaken inthe country. institutional framework Renewable energy National Centre for Continuous Vocational Minimum power Project proposal procedure for energy-selling projects underConcessionscheme, Tunisia renewable sources 30 MW Other Wind 5 MW Biomass SolarPV 10 MW 15MW bidders Private bidwithpre-qualified • capabilities technical andfinancial Pre-qualification basedon • Two-stage selection process 47 during theperiod2017–2020. of this capacity may be advanced and implemented 2020–2025 at 1 250 additional capacity to be installed during the period MW.The samedocument sets the capacity of1 000 PV andwindenergy, andaimsto achieve anadditional programme for theperiod2017–2020 islimited to solar 2020. According to thisannouncement, theproduction electricity capacity to beinstalled duringtheperiod2017– in January2017 that itwould adjust therenewable regulatory framework, MIEMmadeanannouncement Following thecompletion oftherenewable energy pipeline Renewable energy programmes andproject standards. Tunisian national certification system accords to ISO development, certifying compliance andensuringthe la Propriété Industrielle) isresponsible for standards Property (Institut National delaNormalisation et de National Institute of Standardisation and Industrial In thefieldof certification and standardisation, the necessary knowledge to buildcompetency andskills. programmes andproducts to disseminate the et Electriques) are responsible for developing training Centre the de Formateurs et d’IngénieriedeFormation) and Training Development (Centre National deFormation The Mechanical andElectrical Industries Technical National Centre for Instructor Training and (Centre Technique desIndustries Mécaniques submitted to theministry Finalisedagreements • for 20years Power purchase agreement • operate andmaintain project) finance, construct, own, Project company (design, • . It also specifies that a portion MW. Italsospecifiesthat aportion Project development 7 The Republic ofTunisia

ENABLING ENVIRONMENT FOR RENEWABLE ENERGY Renewable Readiness Assessment:

The renewable electricity generation programme for In 2019, the renewable energy targets set in the TSP the period 2017–2020 was updated in April 2018 by were updated and extended to 2022. MIEM. According to this adjustment, the power level to be achieved during this period was set at 1 860 MW MIEM launched pre-qualification tenders on 23 May instead of the 1 000 MW initially planned. The largest 2018 for the realisation by concession (build, own, capacity increase was recorded for projects under operate) of five solar PV plants, totalling a capacity concessions, as shown in Table 13. of 500 MW, and four wind farms with a total capacity of 500 MW. The sites planned for these projects Notably, the upward revision of renewable energy already have been selected and they mostly belong capacity for the period 2017–2020 was decided after to the state, except for 200 MW of wind, for which a national conference in Tunis on 7-8 December 2017. the land should be proposed by the developers Discussion took place on the possibility of accelerating with a maximum capacity of 100 MW per project. the implementation of the TSP. By increasing the The geographical distribution of solar PV and wind capacity for concessions, the Tunisian government concessions is provided in Table 14. seeks mainly to cut costs via economies of scale.

Table 13. Revised renewable energy programme targets, Tunisia, 2017–2022

Solar photovoltaic Type of project Mode of realisation Wind (MW) (MW) Tender (independent power Concession 500 500 producer) Authorisation Call for projects 130 140 Self-consumption Spontaneous requests 80 130 Tunisian Company of Tender (engineering, procurement Electricity and Gas 80 300 and construction) (STEG) Total 790 1 070

Source: MEMTE (2018a).

Table 14. Geographical distribution of renewable energy projects under Concession scheme, Tunisia

Renewable energy Regions with projects Capacity technology under Concession scheme (MW) Kairrouan 100 Sidi Bouzid 50 Solar photovoltaic Gafsa 100 Tozeur 50 Tataouine 200 Kebili 100 Wind Nabeul 200 Pending developer proposals 200

Sources: MEMTE (2018b), MEMTE (2018c).

48 Table 15. Source: MISME(2019c). scheme isprovided inTable 15. this first call for projects underthe Authorisation breakdown ofrenewable energy plants covered by capacity ofPV power plants was set at 10MW. The plants shouldnotexceed 30 MW, andthemaximum authorisation inMay 2018, thecapacity ofwindpower 210 MWfrom solarPV andwind.For projects under the first call for projects for thedevelopment of scheme, MISMEproceeded inMay 2017 to launch For renewable projects undertheAuthorisation bid recorded inAfrica (MEMTE,2019a). 200 MWTataouine project (Table 14)was thelowest USD 0.0244/kWh bidtendered by Scatec Solarfor the bids received were below USD0.03/kWh, the USD 0.0286/kWh (MEMTE,2019a). While allthe were allwithintherange ofUSD0.0244/kWh to for the500MWsolartender. The proposed bids delay inthebiddingprocess, five bids were received energy salesto STEG (ANSAmed, n.d.). Despite the year concession contract at the start of 2019 with Candidates were invited to present bidsfor a20- • • • include: power plants (Refere, 2018). The pre-qualified lists private tenders for theconcession ofPV andwind developers whopre-qualified to participate in two MIEM announced on23November 2018 thelist of Solar photovoltaic Wind private sites -still pending. state lands;and 12 companies for theconcession ofwindfarms on PV power plants onstate land; 16 companies andconsortia for theconcession of Source Authorisation scheme,Authorisation Tunisia Renewable capacitiesannouncedunderthefirstcall for projects, Total capacity 60-120 (MW) 60 10 49 size (MEMTE,2019c). of several solarpower plants notexceeding 10MWin a third tender for the development and construction Under theAuthorisation scheme, Tunisia hasinitiated with acapacity of1MW(MEMTE,2019b). capacity and7.2 cents (USD0.072)/kWh for projects 4.5 cents (USD0.045)/kWh for projects with10MW were announced inApril2019 withanaverage tariffof which was extended to April2018, andtheresults submitting applications was set for 15August 2018, with acapacity notexceeding 1MW. The deadlinefor capacity of10MW; and10MWfor solarPV plants of 70 MW; 60MWfor projects withamaximum projects for solarPV power plants with atotal capacity MIEM launchedasecond callon30May 2018 for Kairouan, Sfax, Kasserine, Tataouine, andBeja. Gafsa located ondifferent sites inthe regions ofSidiBouzid, selected following the first call for projects will be costs required for thisconnection. The solarprojects plants to theelectricity gridandhave estimated the have confirmed thepossibility of connecting these developers. Preliminary studies carriedout by STEG All project sites were proposed by theselected 1 MWcapacity (MEMTE, 2018d). 6.7/kWh to USDcents 9.7/kWh for thesolarplants of 6.9/kWh for the10MWsolarplants andfrom USDcents tariffs vary from USD cents 4.6/kWh to USD cent and four projects of1MWcapacity. The proposed six solarPV projects, withaunitcapacity of10MW, out ofthiscallfor projects allowed theselection of The evaluation results of the proposals that came Authorisation scheme Solar photovoltaic proposals under Maximum Individual capacity up to 30 Up to 1 1 to 10 (MW) April 2018; extended 4 MWinApril2018; The Republic ofTunisia extended to April to March 2019 January 2019 Deadline 2019

ENABLING ENVIRONMENT FOR RENEWABLE ENERGY Renewable Readiness Assessment:

Table 16. Proposed capacity for installation 3.5 Financial initiatives for by Tunisian Company of renewable energy electricity and gas, Tunisia The FTE is the specific instrument for the financial Installed capacity Source support of energy policy in Tunisia. It was established (MW) by the Finance Law No. 54-2013 of 30 December Solar photovoltaic 300 2013 (article 67 -68) to replace the National Fund for Wind 80 Energy Management, created in 2005, and whose field of action was limited to the granting of direct Source: Bennani & Associés (2018). subsidies for certain energy management actions. Through the creation of this new fund, the Tunisian Wind projects under Authorisation scheme state seeks to boost the country’s energy transition For wind projects, proposals received for the first through diversification by providing funding to: round were conditional on changes being made to the terms of the PPA. As a result, bidding companies were • encourage investment in the field of energy invited to submit new proposals by 18 December 2018 conservation; (an extension from the initial deadline of 15 August 2018), based on the new PPA that was approved by • support the creation and promotion of energy order on 30 August 2018 and published in Tunisia’s companies; Official Gazette on 28 September 2018. • facilitate the implementation of national programmes Results were announced on 10 January 2019 and four contributing to energy conservation; and authorisations were granted with an average of tariff received of 4.26 cents (USD 0.0426) /kWh (MEMTE, • support the implementation of the NDC through 2019d). the provision of smart subsidies, loans and equity.

STEG renewable energy projects The FTE is funded by several resources, including: STEG designed a programme for its future renewable energy development in the period 2017–2022. STEG • taxes on the first registration of cars; began building a solar PV power plant in 2017 with a capacity of 10 MW (extended to 20 MW) in Tozeur, • taxes on air-conditioning appliances; southeast Tunisia. The first 10 MW was commissioned in the beginning of 2020 while the latter 10 MW is • taxes on energy products consumed; under construction. • taxes on used engine and spare part imports; According to the notice published by MIEM, the total capacity of the renewable energy plants to be built • donations and grants from individuals and legal by STEG during the period 2017–2022 amount to entities to the fund; and 380 MW, of which 300 MW comprise solar PV and 80 MW comprise wind energy. STEG has completed • resources from the fund’s interventions. the preliminary studies for these plants and the selection of their sites. The FTE also may be financed through other resources that can be allocated for its benefit, including funding provided by international development funds. The rules governing the organisation, functioning and modalities of FTE intervention were fixed by Governmental Decree No. 2017-983 of 26 July 2017. In accordance with this decree, the support provided by the FTE may be provided in the form of:

• direct subsidies for tangible and intangible investments;

• additional credits to loans granted by banking institutions;investment funding in the form of equity investment; and

50 • • • • • loans are asfollows: energy projects. The conditions for receiving these may alsoprovide subsidisedloansfor renewable according to thepurposeofinvestment. The FTE cost oftheinvestment, withaceiling amount defined the FTEare definedusuallyasapercentage ofthe The amounts ofthevarious subsidiesprovided by •

Table 17. Sources: MDICI(2017); ANME(2014).

Intangible The maximumgrace periodistwo years. seven years. The repayment periodoftheloanmust notexceed amount ofcredit granted by thebank. The amount oftheFTEloanmust notexceed the exceed 50%ofthecost oftheinvestment. The maximum amount of the FTE loan must not of theproject. The needfor abankto participate inthefinancing initiated by thestate andlocalcommunities. funding ofnational projects andprogrammes Tangible investments investments Biogas production tertiary sectors Collective solarwater heating inindustrial and (storage >300litres) Individual solarwater heater (storage <300litres) Individual solarwater heater Feasibility studies low-voltage grid(residential) Solar photovoltaic self-production connected to Assistance andsupportactivities low-voltage grid(non-residential) Solar photovoltaic self-production connected to Other intangible investments medium- andhigh-voltage grids Renewable energy self-production connected to by renewable resources Electricity production notconnected to thegrid Tunisia, 2018 Financial incentives provided by theEnergy Transition Fundfor renewable energy, Investment 51 30 30 USD 158/system USD 78/system 70 per kilowatt USD 470–590 70 70 20% per kilowatt USD 390–2 350 renewable energy are summarisedinTable 17. additional loansaccorded by theFTEin2018 for The different rates andamounts ofsubsidiesand USD 390 of thecost oftheinvestment, ranging between The grants provided vary between 15%and30% site-specific criteria. eligible to receive incentives from thisfund,subject to context, projects undertheAuthorisation schemeare new investment projects. Intherenewable energy which enablestheprovision ofgrants andloansfor Law No. 2016-71 -theTunisian Investment Fund (FTE) of subsidies,anew fundhasbeenestablished under While theFTE’s supportislimited to theprovision granting ofsubsidies. defined, anditscurrent intervention islimited to the participation in thecapital market have yet to be additional loansandrepayable endowments or the technicalities ofsupportingthefundthrough the FTE’s available interventions beingJuly2017, Despite thepublication of thedecree setting out Rate (%) 000 andUSD1 Subsidy solar collector square metre of USD 100per Max. amount 78 27 27 19 19 (USD) 2 11 700 1

000 000 400 400 500 500 200 170 The Republic ofTunisia 000, respectively. - - - 39 - - - - - 235 39 Transition Fund loan ceiling

000 000

000 Energy

ENABLING ENVIRONMENT FOR RENEWABLE ENERGY Renewable Readiness Assessment: Key challenges and recommendations

Conscious of the vulnerability and dependency of its energy situation, Tunisia has set ambitious targets for the development of renewable energy, particularly in the power sector.

To achieve these objectives, Tunisia has undertaken several measures, including:

• adoption of the TSP;

• creation of an independent regulatory authority for the electricity sector to enhance the framework for the mobilisation of renewable energy investment;

• development of innovative financing tools for promoting renewables in the residential sector; and

• strengthening of the FTE.

Despite the recent reforms to encourage the involvement of the private sector and accelerate the realisation of national objectives, there are several barriers that continue to hold back more accelerated renewables deployment. The next section presents the main challenges and the corresponding recommended actions to overcome them, a result of the RRA process.

4.1 Long-term energy planning

Achieving higher shares of renewable energy in the electricity mix - as well as successful integration of VREs such as wind and solar energy - into the national electricity grid requires an integrated long-term energy planning process. Several key factors should be considered, including:

• evolution of electricity demand and the corresponding electricity production and transmission infrastructure;

• capacity of the current electricity grid to accommodate higher shares of renewables and the need for its reinforcement;

• renewable energy potential in different application segments (utility scale, remote decentralised systems and cities);

• land availability and access; and

• topographical constraints and limitations.

Yet, Tunisia does not have a solid long-term timeframe to account for capacity additions. The integrated planning for the period 2017–2022 was set mainly by MIEM with reference to the objectives of the TSP. The preparatory phase of this programme did not include all the relevant stakeholders and did not consider the various aspects relating to the implementation of energy planning, such as access to land.

52 of variable renewable power (Annex II). distribution infrastructure to integrate highershares to reduce theinvestment needsintransmission and coupled with sector coupling, also has the potential When deployed aspartof aholistic strategy storage, well as when integrated with renewable power supply. value for gridmanagement asastand-alone asset, as rapidly decreasing costs, storage bringssubstantial economies of scale and national climate pledges. With implementation constraints, technological advances, to permitregular updates, takinginto account system alsomust beevaluated andrevised asneeded Within theplanningframework, themonitoring development prospects inTunisia. provide long-term visibility onrenewable energy integration ofVREinto the system. The planshould infrastructure development that will help smooth the constraints. The plan may also address electricity grid institutional buy-in and rapid resolution of possible a range ofstakeholders, thereby ensuringstronger solidified through aparticipatory approach involving The long-term energy planningprocess must be higher shares ofrenewables Establish an energy planning framework with solar PV) into electricity systems (IRENA, 2019b). ease theintegration ofvariable renewables (wind and technologies andapproaches are available that can avoid curtailment. Fortunately, numerous new investments inthegridto maintain reliability and these ambitioustargets willrequire corresponding when theconcession schemescome online. Achieving power deployment -islikely to increase, particularly with thereduction inthecost ofVRE,solarandwind 30% renewable share intheelectricity mix) -coupled Moreover, to meet theambitioustargets oftheTSP (i.e. the development ofthisplan. preparatory phaseto definethenecessary studies for be developed although,in2018, ANMEinitiated the reinforcing theelectricity grid.Suchaplanisyet to to acorresponding assessment ofthecost of assets, however, isyet to bedeveloped, inaddition cost assessment for thedevelopment ofgeneration could beastarting point. Acomprehensive least- targets, thezones currently allocated for concessions systems. With respect to utility-scale generation decentralised grids,andresidential distributed assets that includeutility-scale power plants, remote ideally consider amixofrenewable power generation of different renewable energy technologies; and will have to be data driven; include a holistic evaluation the date thelaw entered into force. The national plan to produce renewable electricity withinfive years from Furthermore, Law No. 2015–12 calls for a national plan 53 foundations for theuptake ofrenewables. in theregion, at anoperational level, to buildsolid States (LAS) are currently supporting every country Energy Efficiency (RCREEE) and the League of Arab the Regional Centre for Renewable Energy and In thiscontext, IRENA-with itsregional partners • • • • • should include, butnotbelimited to: wind energy. Agenuine resource mappingprocess resources across thecountry, particularlyfor solarand by thedetailed zoning oftherenewable energy establishment of a solid resource database provided The long-term planningprocess requires the resources Improve themappingofrenewable energy 2018).and REN21, stimulate behavioural andmarket growth (IRENA,IEA demonstration as well as specific sector targets, would financial instruments for research, development and policies, suchasmandates andtaxes, coupled with in deployment. Ingeneral, push,pullandintegrated long-term by promoting competition and innovation for robust engagement by theprivate sector inthe where government programmes would pave theway for theuptake ofrenewables inend-usesectors, step, IRENAfindsthat policiesare the main driver of end-usesectors (see Annex I).Asthesecond sectors could beassessed, including, electrification deployment ofvarious technology optionsinend-use As a first step, the potential and feasibility for the heating andcooling, alongwiththetransport sectors. applies to endusers intheindustrial andresidential institutions andotherrelevant stakeholders. This also the government to thepublic,investors, international use sectors would signal the political commitment of and cleartargets for renewables deployment inend- sector hasbeenthegovernment’s priority, strong While renewable energy penetration inthepower for end-usesectors Consider adopting renewable energy targets land topography. environmentally sensitive areas; and distance to loadcentres; distance to thegridandnearest sub-station; various renewable energy resources; quantitative assessment ofresource potential for The Republic ofTunisia

KEY CHALLENGES AND RECOMMENDATIONS Renewable Readiness Assessment:

The partnership is conducting a zoning and suitability Furthermore, based on past experiences - and given study for utility-scale and decentralised solar and wind the inadequacy of information and lack of clarity on applications to harness the datasets and methods the regulatory environment and tendering process developed through the Global Atlas initiative. The - stronger involvement of key stakeholders in the study would combine the resource quality with revision process of the regulatory framework would local constraining criteria, such as the transmission enable addressing some of the key concerns of private distance and load centres, to provide insight into the investors. theoretical installable capacity and prospective zones in each case for long-term planning to accommodate Under the Self-consumption scheme, developers high shares of VRE, policy and regulatory regime are subject to complex administrative procedures, planning. including the requirement for a preliminary validation of the installation request by STEG, the examination Additional analyses would assess the financial viability of the project by the technical commission CTER and of identified resource-rich areas, such as estimated the publication of the agreement signed by MIEM investment needs and the levelised cost of electricity. in Tunisia’s Official Journal. According to the In the urban context, 3D building rooftop and resource renewable energy guides released in May 2019, irradiation models may assist in identifying the optimal validating requests for projects connected to the MV/ business and policy models required to activate this HV grid takes six months. The lengthy administrative market. procedures particularly discourage small-scale renewable energy project developers from advancing Simplify procurement procedures for power their projects. grid development In addition, the current regulatory framework STEG is currently developing studies for the stipulates a complex metering and billing system development and reinforcement of the national for establishments connected to the MV grid, which electricity grid infrastructure to align renewable are registered under the uniform tariff regime. This generation development with grid infrastructure mode of energy metering excludes those consumers reinforcement to enable smooth integration of that do not match the required renewable energy renewable electricity. These studies would identify the production profile, including solar PV projects by local necessary grid infrastructure development scenarios administrations for public lighting purposes. needed, based on planned solar and wind electricity capacity additions to the grid, reaching to 1 000 MW The tariffs for the sale of surplus electricity produced as per current plans. are currently set at low levels and have not been revised since 2014, despite multiple increases in The implementation of grid infrastructure projects electricity prices. This has constrained growth by STEG, however, is subject to lengthy public electricity production, pushing self-consumers to procurement procedures, delaying the evacuation reduce their installed renewable capacity to levels in of electricity from the completed renewable energy line with their own consumption needs, rather than projects. Simplification and streamlining of such selling excess production to STEG. procedures will help reduce delays and thus prevent possible curtailment of electricity. With respect to the Authorisation scheme, one of the main concerns for private developers is the 4.2 Regulatory framework for renewable absence of standardised contractual documents electricity generation for bid submissions, thus resulting in discrepancies and lack of transparency, eventually reducing the The implementation of the current regulatory bankability of PPAs. In general, the absence of any framework for renewables presents several obstacles guarantee scheme regarding the off-taker risks limits and challenges for private sector participation. the attractiveness of PPAs. Strengthening the confidence of private investors to invest in renewables would require the The results of the first call for projects of May 2017 enhancement of relevant primary and secondary highlighted the constraints in project bankability, legislation (particularly, Law No. 2015-12, Decree No. where most private sector offers were conditional 2016‑1123 and ministerial orders of 9 February 2017). upon the change in the structure of the PPA.

54 for thecontractual documents necessary for bid developers. The platform would serve asthedatabase Authorisation schemeandmadeaccessible to allproject A virtualplatform shouldbecreated under thecurrent implementation oftheprojects underthisscheme. of theconcession agreements leadsto delays inthe the requirement to have theparliamentary approval the national utility, STEG. UndertheConcession scheme, rising electricity costs, thuspresenting atrade-off for Corporate PPAs under Law 2019-47 willhedgeagainst period notexceeding three years. occupation ofstate landby theprivate sector for a considering analternative law that allows temporary to private investors. To overcome thisproblem, MIEMis does notset clearcriteria for theallocation ofstate land state land;however, renewable energy Law No. 2015-12 This situation hasprompted developers to search for energy facilities. to obtaintheauthorisation to usethemfor renewable several administrative procedures must befollowed These landholdings are generally agricultural, and the price ofsuchlandhasincreased considerably. renewable energy and withinproximity of the grid, by thesedevelopers inregions withhighpotential for pertaining to landacquisition. With theinterest shown private developers have often raised concerns the overall renewable energy market. Additionally, developer andlenderconfidence intheprocess and of windenergy alsohas reflected theabsence of 30 May 2018 for 70 MWofsolarPV and130MW The second round ofcallsfor projects launchedon from theministry to private stakeholders. due to insufficient communication and information were unaware oftheconsultative process undertaken fully reflected ontheground – various stakeholders the PPA template. These changes,however, were not MIEM reviewed thecontract andmadeamendments to Building onfeedback received from thefirst round, selected at thisround ofcallfor projects. Owing to thisproblem, nowindproject hasbeen scale projects, to identify themost viable locationsfor solarPVand before the next round oflarge- therefore, would beadvisable A complete zoninganalysis, wind energy investments. 55 surplus generation ofself-producers. and periodicreview ofthesalestariffsassociated with this regard, thegovernment may consider adjustment procedure for net-metering should be simplified. In while technical requests by STEG may berevisited. The the obligation for ministerial agreement ismandatory, grid withcapacitiesnotexceeding acertain threshold, small self-production projects connected to theMV With respect to theself-consumption schemefor Streamline administrative procedures would includethe PPA template (IRENA,2018a) (Box 3). be includedinthebiddingprocess for solarprojects. This provide thenecessary contractual templates that would In thiscontext, theOpenSolar Contracts initiative can directly, ascorporate PPAs diminishSTEG revenues. duration of the PPA, STEG may need to be engaged may aidagainst expensive electricity tariffs. For the corporate buyer ofelectricity (IRENA,2018b). This winning bidders would thenbeableto signPPAs with possible bidsfor capacity andpower, where the an auction process runby thesystem operator lowers better understand export criteria. IRENAfindsthat may becompared to that ofutility-scale PPAs to With the inclusion of corporate PPAs, the key elements best practice. projects alsoshouldbereviewed asperinternational project document templates for renewable energy development of standardised PPAs. Other contractual PPAs are advisedto bereviewed, alongwiththe The key designelements ofcurrent renewable energy procurement Standardise PPAs for renewable power accelerate project implementation. could beplaced undertheauthority ofMIEMto scheme canalsobesimplified.Anapproval mechanism The project approval processes undertheConcession (Recommendation S.4.1). locations for solarPV andwindenergy investments most attractive, technically viableandeconomical of large-scale projects, withaview to identifying the therefore, would beadvisableaheadofthenext round of project developers. Acomplete zoning analysis, acquisition agreements, thusdampeningtheappetite encounter obstacles in the form of complex land- Projects undertheAuthorisation schemealsomay provide clarity. will strengthen procurement process transparency and submissions. The publicdisclosure ofthesedocuments The Republic ofTunisia

KEY CHALLENGES AND RECOMMENDATIONS Renewable Readiness Assessment:

Box 4. Open Solar Contracts, Tunisia The initiative presents templates for six core contracts: The energy sector today has a legacy where 1. Implementation agreement power generation projects were predominantly large in scale and technically complex. Due to 2. Power purchase agreement their highly intricate transaction structures, these 3. Supply agreement projects require customised and complex legal and 4. Installation agreement financial solutions, which have been inherited by 5. Operation and maintenance agreement renewables. This has resulted in high transaction 6. Finance term sheet costs and prolonged project development timelines, hindering further capacity growth, particularly in Work on the contracts was supported by the review small- to medium-scale renewable energy projects. of specific model clauses to address cross-cutting Redesigning prevailing market practices, therefore, matters in a consistent manner and to reduce need to become a priority in project development complexity. These include: and finance, along with reforming the overly 1. Governing law complicated contractual framework. 2. Dispute resolution In response, the International Renewable Energy 3. Grid connection principles Agency (IRENA) and the Terrawatt Initiative have 4. Corruption and sanction jointly launched a drive to simplify and streamline 5. Force majeure the contractual framework for solar power, so as to unlock greater investments globally. The Open The resulting contract templates are intended to be Solar Contracts initiative, supported by multiple used in conjunction with one another. This will ensure reputable law firms, will provide a standardised that the scope of work and the risks are appropriately contractual documentation solution that will be allocated. freely and publicly available and is designed to be universally applicable. The initiative aims to decrease transaction costs, shorten project development timelines and establish a balanced risk allocation between public and private parties. The initiative also aims to simplify due diligence The initiative aims to decrease processes by financiers and to build the ground for project aggregation and securitisation. These would transaction costs, shorten eventually support the rapid and widespread scale-up project development timelines of solar power to the required level. and establish a balanced risk allocation between public and Contract templates have been finalised and are private parties. available to the global solar power community on www.opensolarcontracts.org.

4.3 Institutional framework Public institutions involved in renewable energy Current procedures for the execution of renewable projects, including STEG and MIEM, face the challenge energy projects involve several ministries and public of insufficient human resources, thus hindering institutions. In addition to MIEM and STEG, institutions the fulfilment of their commitments vis-à-vis dealing with land, agriculture, finance planning various processes during project development and and environment are involved, along with several implementation. The limitations in number and skills commissions (e.g. CTER), ministries responsible for of staff are often a source of delay in the execution of the control of protected areas and restricted zones, procedures, especially under the Self-production and authorities issuing building permits, and those Authorisation schemes. responsible for financial and fiscal incentives. The substantial number of actors involved in the process Furthermore, in the absence of an independent poses a challenge in the absence of a clear and regulatory authority for the electricity sector, such transparent definition of the responsibilities of each regulatory function is currently performed by MIEM. institution, sometimes resulting in conflicting roles.

56 renewable energy developers. a transparent andcompetitive environment for to oversee the electricity sector would enable creating anindependent regulatory authority On thebroader issue ofelectricity sector operation, regulatoryelectricity authority environment through establishment ofan Improve therenewable energy investment • • energy, localcapabilities could bereinforced by: institutions involved inthedevelopment ofrenewable To ensure theeffectiveness ofthe key public • • The platform would includedetails onthefollowing: developing aguidebook. should be given to creating an online platform and roles ofvarious public institutions, consideration and time-consuming. To provide clarification onthe obtaining therequired authorisations are complicated Tunisia’s renewable power projects, the procedures for With many ministries andpublicinstitutions involved strengthen institutionalcapacity institutionalresponsibilitiesClarify and operation ofrenewable energy projects. transparency duringthe development, execution and over guaranteeing investors’ rights andensuring provide recommendations to MIEM,raising concerns specialised authority functions asanadvisorybodyto the publicadministration. At present, however, the of possible disputes and appeals against decisions of specialised authority responsible for the examination Law No. 2015-12 provides for the creation of a energy to meet NDCtargets. administrative andlegalaspects of renewable value chain,includingthetechnical, economic, for skilldevelopment across therenewable energy organising tailored capacity-building programmes assigned duties;and available to relevant publicinstitutions to perform making adequate andqualifiedhuman resources authorisations. Procedures necessary for obtainingsuch institution. authorisations that should be obtained from each energy project implementation.Administrative institutions across thevarious stages ofrenewable Roles and responsibilities of thevarious public 57 their projects through bankcredits. promoters generally seek to close the financing of small proportion of the investment. Renewable energy In addition,theincentives granted by theFTEcover a no provision has beenmadesofar to thiseffect. consumed energy products to resource theFTE,but the FTEenvisages thepossible impositionoftaxes on (USD 36million)(ANME, 2015a). The law establishing require anannualbudget ofmore thanTND100million exchange rates), whilethenew scope ofsupportwill TND 40 million (about USD 14 million at July 2020 Current annualresources are intheorder of mobilisation ofsubstantial additionalresources. The expansion ofFTEsupportwillrequire the solar water heating andsolarPV. problems for companies that are active inthefields of with significant delay, causingseriousfinancial charge ofmanagingtheFTE-iscurrently processed payment ofsuchgrant supportby theANME-in to grant contribution to renewable projects. The tested, andthe participation oftheFTEisstill limited The practicality ofthesenew schemesisnotyet original function ofgrant support. financing andequity participation, inaddition to the of this fundin renewable energy investments through 2017-983 of26 July2017. Itallows theparticipation its supporthave beenbroadened through Decree No. The actions financed by thisfundandthe forms of energy and energy efficiency activities in Tunisia. The FTEisthemainfinancing tool for renewable 4.4 Financing • • • • • The regulatory authority would, amongotheractions: legislation andprocedures. interpretation orimplementation ofestablished settle conflicts amongmarket actors relating to the project development andimplementation; and administrative framework for renewable energy enforce compliance with the governing renewable energy producers to thegrid; ensure non-discriminatory access for private grid connection concerns; validate technical conditions for evacuation and energy-related legislation; monitor effective implementation of the renewable The Republic ofTunisia

KEY CHALLENGES AND RECOMMENDATIONS Renewable Readiness Assessment:

Access to bank loans represents a major constraint intermediary financial institutions tends to attract for renewable energy developers, especially for small investments to the sector. This increase will lead to projects, since local banks are not accustomed to Tunisia’s Central Bank’s endorsement of national loan assuming renewable energy project-specific risks guarantee schemes. In this context, the scope of the and generally require additional guarantees as a Tunisian Guarantee Company (Société Tunisienne de precondition for loan approval. Garantie) mechanism could be expanded to include renewable energy projects. Operationalise the FTE Dedicated capacity building programmes can be Most small-scale applications of solar water heaters developed to target the local financial sector and and PV rooftop systems in the residential sector, to incentivise project developers to improve the developed under the Prosol and Prosol électrique knowledge of, and enable easier access to, the programmes, have benefited from FTE support thanks available financial tools. This will help reduce and to its dedicated financing structures. Development better address the risks, as well as enhance investment of clear and transparent procedures is needed to conditions relating to renewable energy projects. implement FTE provisions and define operational conditions and modalities, as well as to equip the 4.5 Maximising the benefits of fund with adequate resources to support renewable renewable energy deployment energy development at a larger scale. The structure of the fund may be revisited, for instance, to give it Deployment of renewable energy presents considerable financial autonomy and help it act as an effective socioeconomic benefits and opportunities for local financial intermediary that makes credit lines and value creation along the various segments of the value equity investment available to different projects. chain. This includes the sourcing of raw materials, manufacture and assembly of components, construction Create a dedicated financing mechanism for and installation, and operation and maintenance. solar water pumping IRENA’s assessment of Tunisia’s renewable energy Water pumping is vital to the agriculture sector. A manufacturing potential found that there is unfulfilled dedicated programme for solar water pumping set up potential to leverage local value creation along the by the government - or MIEM under FTE support - and entire value chain of large-scale solar and wind supported by an appropriate financing mechanism projects. For example, certain electrical and mechanical could encourage farmers to use solar PV systems as components of wind turbines can be produced locally a substitute for diesel generator sets. Such financing that could account for more than 70% of wind turbine mechanism could rely on concessional lending costs (EIB and IRENA, 2015). schemes compatible with the repayment capacity of farmers. Tunisia has well-qualified staff for research and development activities, such that intellectual property Encourage the involvement of local banks in rights are well protected, and the quality of its renewable energy financing research institutes is acknowledged. Despite these assets, upgrading programmes are necessary for local The development of renewable energy solutions, companies to move from low-value to relatively high- especially for farmers and small- and medium-size value activities (EIB and IRENA, 2015). enterprises (SME), requires a stronger involvement of local banks in the financing of renewable energy Implement upgrading programmes targeting projects. The technical dimension of local banks specific industrial actors may need to be reinforced to develop capacity for renewable energy projects. Appropriate partnership/ Industrial upgrade programmes can serve as strong co-financing mechanisms should be explored with assets in the effort to strengthen the capabilities international financing institutions and bilateral funding of local firms. These programmes would aim to partners, including climate funding instruments and enhance the technological capabilities of SMEs by programmes, to meet the country’s NDC commitments. enabling them to capture value from renewable energy investments and to facilitate closer linkages In turn, allowing local banks to serve as a financial with business partners. Therefore, with the support intermediary to receive resources from international of public authorities and other local stakeholders, banks may address risk concerns surrounding lending developing industrial and service-sector policies can procedures. In this case, setting up credit lines through help promote the solar and wind value chains.

58 deployment. sort of industries most relevant to renewable energy for plants intheseindustries, andthusindicates the The figure below shows themainmaterials needed offshore windindustries. in thesolarphotovoltaic (PV) andonshore and 2017a; 2017b; 2018c) examines theserequirements The Leveraging Local Capacity report series(IRENA, requirements. thorough understanding ofthematerials andlabour of value creation, however, policy makers needa and welfare. To designeffective policiesinsupport growth, create new jobsandenhance humanhealth Renewable energy development candrive economic Box 5. wind plan(500MW) Materials for asolarphotovoltaic plant(1MW)onshore windplant(50MW)andoffshore Wind plant Wind plant 1 MWSolar 500 MW Onshore O shore PV plant 50 MW and thematerials required for Leveraging localcapacity renewable energy technologies

electrical steel

Low alloy and

Concrete

Glass 201241 70

tonnes

tonnes 22 836 656

Copper 190

Steel

tonnes

and Iron

tonnes

tonnes 56

Steel 115 149

Lead

tonnes 5 860

tonnes

Concrete

(grey cast 033

Steel

iron) 681

Polymer materials

71 59

tonnes

tonnes 47

tonnes 391

insulation plant, anda500MWoffshore windplan. for a1MWsolarPV plant, a50MWonshore wind The figure below indicates the materials required into industrial capabilitiesthat canbeleveraged. Examining theserequirements provides insights aeronautics. used inotherindustries, suchasconstruction and as welding, lifting,andpainting machinesthat are a windturbinerequires specialist equipment, aswell are similar. Manufacturing themaincomponents of foundations. For offshore wind,the requirements 6 are necessary for thefoundations, andnearly wind facility, almost 23 For atypical 50megawatt (MW)onshore and electrical equipment. modules, inverters, trackers, mounting structures manufacture ofPV components, suchascells and raw materials andintermediary products for the Leveraging thiscapacity canprovide expertise,

XLPE 000 tonnes ofsteel andiron for theturbinesand

47

Fiberglass 370

tonnes

Polyproylene

tonnes 066

Aluminium 19

tonnes 27

tonnes 168

Aluminium and alloys

Fiberglass

tonnes 15

66

tonnes

Silicon tonnes 7

Copper and alloys

Chromium 87

High-alloy 000 tonnes of concrete 94

tonnes

steel

23

tonnes The Republic ofTunisia

Pre-stressed 7

tonnes Copper

Electronics and electrics 46

concrete 4

tonnes

50

tonnes

material

NdFeB 2

30

tonnes

Plastic 6 37

Oil and coolant

tonnes

tonnes

KEY CHALLENGES AND RECOMMENDATIONS Renewable Readiness Assessment:

Box 6. Leveraging local capacity, distribution In the procurement and manufacturing segment, of human resources and factory workers and technicians represent 64% of occupational requirements the labour need, followed by engineers (12%). In the O&M segment, construction workers account for The Leveraging Local Capacity report series of the 48% of the labour force requirements, followed by International Renewable Energy Agency (IRENA, safety experts (19%) and engineers (15%). 2017a; 2017b; 2018c) generates valuable information for policy makers on the occupational and skill structure Similarly, for the development of a 50 MW onshore along the value chain. The figure below illustrates the wind project, a total of 144 000 person-days is labour force requirement for solar photovoltaic plants needed. Human resource requirements are highest and onshore and offshore wind farms. in O&M (43% of total), followed by construction and installation (30%) and manufacturing (17%). To develop a typical 50 MW solar photovoltaic project, a total of approximately 230 000 person- For offshore wind, the majority of human resources days is required from project planning to (totalling 2.1 million person-days for a 500 MW farm) manufacturing, installing and operation and lies in the manufacturing and procurement segment. maintenance (O&M), as well as decommissioning. Existing manufacturing facilities for onshore wind The highest labour force requirements are in O&M can serve the needs of the offshore sector, as many (56%), followed by procurement and manufacturing components are comparable. Significant synergies (22%) and construction and installation (17%). also exist between the offshore oil and gas industry and the offshore wind sector.

Human resource needs for renewable energy infrastructure

Grid Operation and Decommis- Procurement Manufacturing Transport Installation Connection Maintenance sioning

50 MW solar PV: % Project Planning 1% 2 56% 229 055 person-days 22% 17% 2%

50 MW onshore wind: Project Planning 2% 1 % 43% 144 420 person-days 17 % 30% 7%

500 MW oshore wind: % 24% Project Planning 1 % % 1 % 2.1 million person-days 59 11 5%

Educate and train skilled workforce Professionnelle); and (v) the Research and Technology Centre for Energy Technologies (Centre de Recherches Investment in the education and training of engineers et des Technologies de l’energie). Such stakeholders and other high-skilled workers is considered a key have been development and dissemination of energy building block for expanding local institutional capacity policies, research activities and training on low- and in renewable technologies. Agencies and associations medium-power renewable applications (e.g. rooftop already active in such initiatives include (i) the PV, solar water heaters, water pumping). Cairo-based Regional Center for Renewable Energy and Energy Efficiency (RCREEE); (ii) the regional Similar efforts could address the training needs of RE-ACTIVATE project of the Germany International large-scale projects. The role played by international Cooperation Agency (GIZ – Deutsche Gesellschaft für institutions on educational policies through the Internationale Zusammenarbeit GmbH); (iii) ANME; inclusion of renewables in educational programmes (iv) the National Centre for Continuing Vocational and strategic planning to meet the required skills Training and Professional Promotion (Centre needs, therefore, will be essential to instil a skilled National de Formation Continue et de Promotion workforce.

60 Guide_to_Design_2015.pdf. www.irena.org/-/media/Files/IRENA/Agency/Publication/2015/Jun/IRENA_Renewable_Energy_Auctions_A_ IRENA (2018b), https://opensolarcontracts.org. IRENA (2018a), www.irena.org/publications/2019/Feb/Innovation-landscape-for-a-renewable-powered-future. IRENA (2019b), in-2018.pdf. www.irena.org/-/media/Files/IRENA/Agency/Publication/2019/May/IRENA_Renewable-Power-Generations-Costs- IRENA (2019a), building-sector-in-Tunisia_December%202015.pdf . www.mitigationmomentum.org/downloads/NAMA-proposal-for-renewable-energy-and-energy-efficiency-in-the- IRENA (2020b) , www.irena.org/publications/2020/Jan/Arab-VRE-planning. IRENA (2020a), INS (2018b), Energy ImportBill,http://dataportal.ins.tn/en (accessed 16January2019). www.ins.tn/en/themes/energie (accessed 16January2019). INS (National Institute ofStatistics) (2018a), Energie, Statistiques Tunisie, www.iea.org/statistics/balances (accessed 16January2019). IEA (International Energy Agency) (2019), Data andStatistics, IEA,Paris, consumption_in_Tunisia_and_export_to_the_EU.pdf. https://energypedia.info/images/2/2b/Renewable_energy_potential_for_electricity_generation_for_national_ and Export to theEU,FinalReport, DeutscheGesellschaftfürInternationale Zusammenarbeit (GIZ) GmbH,Bonn, GIZ (2013), www.giz.de/en/downloads/giz2014-en-renewable-energy-resources-tunisia.pdf. Governing Network Access for Producers of Electricity from Renewable Energy Sources inTunisia, GIZ,Bonn, GIZ (DeutscheGesellschaftfürInternationale Zusammenarbeit) (2014), energy_manufacturing_potential_en.pdf. Abu Dhabi,https://irena.org/-/media/Files/IRENA/Agency/Publication/2015/femip_study_evaluating_renewable_ Renewable Energy Manufacturing Potential in the Mediterranean Partner Countries, EIB, Luxembourg City; IRENA, EIB (European Investment andIRENA(International Bank) Renewable Energy Agency) (2015), www.bct.gov.tn/bct/siteprod/documents/sup_bc_ang.pdf. Central ofTunisia Bank (2018), http://rnepartner.com/wp-content/uploads/2018/08/RnE-Tunisia-market-update-2018.pdf. Bennani &Associés (2018), tunisia_cf029e32-4eed-40e5-8707-01ac67d83208.html. www.ansamed.info/ansamed/en/news/sections/economics/2018/12/05/enel-vying-for-solar-and-wind-project-in- ANSAmed (n.d.), “Enelvying for SolarandWind Project inTunisia”, 5December, (National Agency for Energy Management), www.anme.tn , (accessed 20March 2021). ANME (Agence Nationale pourlaMaitrisedeL’energie) (2019), Agence Nationale pourlaMaîtrisedel’Energie References Study on the Renewable Energy Potential for Electricity Generation for National Consumption in Tunisia Renewable Energy Auctions: A Guide to Design, International Renewable Energy Agency, AbuDhabi, Open Solar Contracts, International Renewable Energy Agency, AbuDhabi, Renewable Power Generation Cost in2018, IRENA,AbuDhabi, Innovation Landscape for aRenewable -Powered Future, IRENA,AbuDhabi, Renewable Capacity Statistics 2020, IRENA,AbuDhabi, Power Sector PlanninginArab Countries: Incorporating variable renewables , IRENA,AbuDhabi, Renewable Energy inTunisia , Bennani&Associés ,Tunisia Office, Tunis, Annual Report on Banking Supervision2017, CentralAnnual Report onBanking ofTunisia, Bank Tunis, 61 Analysis of theRegulatory Framework The Republic ofTunisia Evaluating

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IRENA (2017a), Renewable Energy Benefits: Leveraging Local Capacity for Solar PV, International Renewable Energy Agency, Abu Dhabi, www.irena.org/-/media/Files/IRENA/Agency/Publication/2017/Jun/IRENA_Leveraging_for_Solar_PV_2017.pdf. IRENA (2017b), Renewable Energy Benefits: Leveraging Local Capacity for Onshore Wind, IRENA, Abu Dhabi , www.irena.org/-/media/Files/IRENA/Agency/Publication/2017/Jun/IRENA_Leveraging_for_Onshore_Wind_2017.pdf. IRENA, IEA (International Energy Agency) and REN21 (2018), Renewable Energy Policies in a Time of Transition, International Renewable Energy Agency, Abu Dhabi; Organisation for Economic Co-operation and Development/ IEA, Paris; and REN21, Paris, www.irena.org/-/media/Files/IRENA/Agency/Publication/2018/Apr/IRENA_IEA_REN21_Policies_2018.pdf. MDICI (Ministry of Development, Investment and International Cooperation) (2017), Investment Law, MDICI, Tunis, www.mdici.gov.tn/en/ministry/investment/presentation. MISME (2019a), Tunisia Energy Status 2019, Tunis, Ministry of Industry and Small and Medium Enterprises, www.tunisieindustrie.gov.tn/ MISME (2019b), National Energy Balance, Tunis, Ministry of Industry and Small and Medium Enterprises, www.tunisieindustrie.gov.tn/ MISME (Ministry of Industry, Small and Medium Enterprises) (2019c), Renewable Energy guide summary, Tunis, Ministry of Industry and Small and Medium Enterprises, www.tunisieindustrie.gov.tn/upload/ENR/Guide_detaille_ENR_tunisie_mai2019.pdf MEMTE (2019a), “Result of the restricted call for tenders for electricity production from solar PV projects in the concession regime”, Ministry of Industry and Small and Medium Enterprises, Tunis, www.energymines.gov.tn/web/resultat-AOR-500MW.pdf MEMTE (2019b), “Results of the second round of the call for projects for electricity production from renewable energy under the authorisation scheme”, Tunis, www.energymines.gov.tn/web/documents/resultat-second-round-solaire-10mw.pdf MEMTE (2019c), Call for projects for the production of electricity from renewable energies within the framework of the authorization system third round, Ministry of Energy, Mines and Renewable Energy, Tunis, www.energymines.gov.tn/web/addendum-troisieme-round.pdf MEMTE (2019d), Results of the second round of the call for projects for electricity production from renewable energy under the authorisation scheme, Tunis, www.energymines.gov.tn/web/documents/resultat-second-round-solaire-1mw.pdf MEMTE (2018a), Tunisia Renewable Energy Programme, Ministry of Energy, Mines and the Energy Transition, Tunis, www.energymines.gov.tn/web/Actualites/livret_pst.pdf MEMTE (2018b), “Call for prequalification applications for the concession of wind power plants with a total capacity of around 500 MW”, Ministry of Energy, Mines and the Energy Transition, Tunis, www.energymines.gov.tn/web/autorisation-eo.htm MEMTE (2018c), “Call for prequalification applications for the concession of photovoltaic solar plants with a total capacity of around 500 MW”, Ministry of Energy, Mines and Renewable Energy, Tunis, www.energymines.gov.tn/web/autorisation-pv.htm MEMTE (2018d), “List of prequalified companies for the 200 MW concession”, Ministry of Industry, Mines and Renewable Energy, Tunis, www.energymines.gov.tn/web/documents/liste-MEMprequalifies-PV.pdf MEMTE (2017a), Procedural Manual – Electricity Production Projects from Renewable Energy Subject to the Authorisation System, Ministry of Industry and Small and Medium Enterprises, Tunis, www.energymines.gov.tn/web/documents/Contrat-ventePPA.pdf.

62 https://globalsolaratlas.info/map?c=11.523088,8.173828,3 (accessed 30July2020) World (2020) Bank , https://info.undp.org/docs/pdc/Documents/TUN/Tunisia%20MRP%20English.pdf. UNDP (2018b), York, UNDP (United Nations Development Programme) (2018a), “Tunisia: Country Profile”, Factsheets, UNDP, New https://orkustofnun.is/gogn/unu-gtp-30-ann/UNU-GTP-30-20.pdf. United Nations University, GeothermalTraining Programme, Reykjavik, UN (United Nations) (2008), “Geothermal Energy Development in Tunisia: Present Status andFuture Outlook”, https://tradingeconomics.com/tunisia/gdp-growth-annual (accessed April17) Trading Economics (2020), www.steg.com.tn/fr/institutionnel/perspective_qualite.html STEG (2016), Retrospective Electricity Statistics (2005-2015), Tunisian Company Tunis, ofElectricity andGas, STEG (2018a), www.steg.com.tn/fr/clients_res/tarif_electricite.html. STEG (2019b), “Electricity Tariffs HT-MT for September 2018”, Tunisian CompanyGas, ofElectricity and Tunis, Tunis,Gas, www.steg.com.tn/fr/institutionnel/publication/rapport_act2018/Rapport_Annuel_steg_2018_fr.pdf . STEG (Tunisian Company ofElectricity andGas) (2019a), www.solarthermalworld.org/news/tunisia-national-subsidy-scheme-prosol-extended-2020 Solarthermalworld (2017a), www.res4med.org/wp-content/uploads/2017/11/Country-Profile-Tunisia-Report_05.12.2016.pdf. Mediterranean –Country Profiles: Tunisia, RES4MED (Renewable Energy Solutions for the Mediterranean) (2016), www.pv-magazine.com/2018/11/29/tunisia-shortlists-developers-for-500-mw-tender. pv magazine(2018), “Tunisia shortlists developers 29November, for 500MWtender”, www.pv-magazine.com/2019/04/01/tunisia-reveals-winners-of-second-70-mw-pv-tender. pv magazine(2019b), “Tunisia reveals winners ofsecond 70 1April, MWPV tender”, www.pv-magazine.com/2019/07/23/lowest-bid-in-tunisias-500-mw-solar-tender-comes-in-at-0-0244 . pv magazine(2019a), “Lowest bidinTunisia’s 500MWsolartender comes inat $0.0244”, 23July, ONE (Observatoire National del’Energie et desMines) (2018a), National Energy Balance 2016, ONE. efficiency-in-the-building-sector-in-Tunisia_December%202015.pdf March 2016, www.mitigationmomentum.org/downloads/NAMA-proposal-for-renewable-energy-and-energy- Mitigationmomentum (2016), NAMAfor renewable energy andenergy efficiency inthebuildingsector in Tunisia, Energy, Tunis, www.energymines.gov.tn/web/documents/cc-raccordementBT.pdf MEMTE (2016) , “Official Journalofthe Republicof Tunisia”,Article2,Ministry ofEnergy, Minesand Renewable www.energymines.gov.tn/web/autorisation-eo2.htm. of Authorisations –Round One”,Ministry ofIndustry andSmallMediumEnterprises, Tunis, MEMTE (2017b), “Call for projects for theProduction ofElectricity from Renewable Energy withintheFramework Annual Report 2017, Tunisian Company Tunis. of Electricity andGas, Tunisia: Market Readiness Proposal, United Nations Development Programme, New York, www.ndcs.undp.org/content/dam/LECB/docs/factsheets/Tunisia.pdf. Global Solar Atlas, World Washington, Bank, DC, Tunisia GDPAnnual Growth Rate, Tunisia: National SubsidyScheme Prosol Extended to 2020, Solarthermalworld,

63 Annual Report 2018 , Tunisian Company of Electricity and

Renewable Energy Solutions for the The Republic ofTunisia

REFERENCES Renewable Readiness Assessment: Annex 1. Renewable energy institutional roles

Several institutions play a role in the development of renewable energy in Tunisia. Table A1.1 summarises the key actors and their tasks relating to the promotion and development of renewable energy.

Table A1.1. Institutions involved in the development of renewable energy, Tunisia

Institutions Principal missions Research and Technology Centre of Energy (Centre de Recherches et des Technologies de l’energie) • Conduct research on renewable energy; mainly PV, wind Under the Ministry of Higher Education and and solar water heaters Scientific Research (Ministère de l’Enseignement supérieur et de la Recherche scientifique) Tunisian Agency of Vocational Training (Agence Tunisienne de Formation Professionnelle) Under the Ministry of Employment (Ministre • Oversee vocational training de la Formation Professionnelle et de l’Emploi, MFPE) • Manage the 1.5% of tax revenues designated for vocational National Centre of Continuing Vocational training of professionals, include those in renewable Training and Professional Promotion (Centre energy National de Formation Continue et de • Finance the training of professionals in the public and Promotion Professionnelle) private sectors Under MFPE • Provide technical assistance for the development of training plans and strategies for private companies National Centre for Instructor Training and Training Development (Centre National de • Develop training programmes and materials Formation de Formateurs et d’Ingénierie de • Include the provision of training to trainers to disseminate Formation ) necessary knowledge Under MFPE • Address the company’s relevant know-how and address Mechanical and Electrical Industries Technical competency Centre (Centre Technique des Industries • Test products, electrical and mechanical components and Mécaniques et Electriques ) equipment Under MISME • Establish a laboratory to test solar PV modules (not yet functional) Building Materials, Ceramics and Glass Technical • Operate laboratory to test the thermal performance of Centre ( Centre Technique des Matériaux de solar water heaters Construction, de la Céramique et du Verre ) • Aid solar water heater manufacturers to improve their Under MISME products

National Institute of Standardisation and • Develop standards Industrial Property (Institut National de la • Certify compliance with product and service standards Normalisation et de la Propriété Industrielle) • Currently developing the Tunisian national certification Under MISME system for solar heating according to ISO 17065

64 Photovoltaïque) Association (Chambre Syndicale du Renouvelables /Tunisian SolarInstallers’ (Chambre Syndicale Nationale desEnergies of National UnionofRenewable Energies Renewable energy associations (Chamber Ministry ofFinance (Ministère desFinances) National Agency for Energy Conservation) Technical Advisory Committee (chaired by partir desEnergies Renouvelables) (Commission Technique deproduction privée à Technical Commission for Renewable Energy (Société Tunisienne del’Electricité et duGaz) Tunisian Company ofElectricity andGas (Agence Nationale pourlaMaîtrisedel’Energie) National Agency for Energy Conservation Manufacturières) Industries (Direction Générale desIndustries Directorate-General for Manufacturing Moyennes Entreprises Ministère del’Industrie et desPetites et l’Electricité et desEnergies Renouvelables) Renewable Energy (Direction Générale de Directorate-General for Electricity and Transition Energitique,MEMTE) (Ministère del’Energie, desMineset dela Ministry ofEnergy, MinesandEnergy Transition • • • • • • • • • • • • • • • • • • • • • • • • Continue dialogue withpublicinstitutions and photovoltaic (PV) installers) Conduct training ofprofessionals (e.g. solarwater heater professionals Oversee administrative practices ofrenewable energy Collect fundsfor FTE Take decisionsto grant taxbenefits Approve FTEgrant applications located onstate land Verify the appropriateness ofrenewable energy projects renewable sources subject to theauthorisation regime Issue opinionsonpower generation projects from programmes (e.g Prosol, Prosol électrique) Contribute to theimplementation ofrenewable energy Implement andoperate renewable energy projects Adjust current technical conditions ontheelectricity grid Promote awareness andtraining Conduct studies onthedevelopment ofrenewable energy Prosol, Prosol électrique) Manage specific renewable energy programmes (e.g Manage theFTE Propose regulations governing renewable energy energy efficiency and renewable energy Implement policies developed by MEMTE in the fields of relating to industry Develop andimplement government policy inareas following theirexecution consumption ofelectricity from renewable energy Examine therequests for private production andself- and regulations Participate inthedevelopment ofrenewable energy laws Fund (FTE) Decision for granting funding from the Energy Transition electricity produced by self-producers Set purchase price andtransmission tariff ofsurplus Determine energy tariffs Define strategic guidelines for theenergy sector 65 The Republic ofTunisia

ANNEXES Renewable Readiness Assessment: Annex 2. Sector coupling and the electrification of end-use sectors

The current energy diversification strategy in Tunisia 2016. Despite being in the early phases of deployment, has set a target to meet 30% of its electricity generation the International Renewable Energy Agency has found from renewables. To achieve such ambitious targets, that EVs have significant potential, its analysis indicating several enabling initiatives have been established. As that there likely will be 157 million vehicles in 2030. EVs solar and wind power gain momentum, they will occupy can assist in providing valuable system services, thus a larger share of power generation. To accommodate increasing the value of VRE by ensuring that energy is such a large share of electricity, therefore, a stable and consumed at times of high VRE production. flexible grid is essential to maintain reliability and avoid production being curtailed. In the Tunisian context, the In addition, electricity can replace fossil fuels in industry current grid is unable to accommodate the ambitious and help reduce its energy-related – and, in some cases, 2030 targets, and additional grid reinforcement process-related – greenhouse gas emissions, while measures should be taken. providing enhanced flexibility to the system. Additional sector coupling can be achieved by using renewables Grid reinforcement measures require significant to produce hydrogen or hydrogen-rich chemicals to investment. The report, Renewable Energy Policies in serve as feedstock, process agents or fuels. Power-to- a Time of Transition, by the International Renewable gas or power-to-liquids (commonly named Power-to-X Energy Agency, International Energy Agency and (P2X)) technologies combine hydrogen with carbon REN21 (2018) concluded that policy makers in charge or nitrogen to produce fuels for end-use sectors. of energy sector planning must explore different Producing storable energy carriers, such as hydrogen cost-efficient methods to address curtailment. In or synthetic fuels, can increase the long-term value of turn, cost-efficient sector coupling may better align VRE. electricity demand with variable renewable energy (VRE) production profiles. This is achievable if For Tunisia to meet its renewable energy targets, it proper strategies for shaping the demand profile are needs to establish direct policies for the various end- adopted. Several options are available, including the use sectors within the overall energy planning process. electrification of heating and cooling, stationary As presented in Figure A2.1, several opportunities are long- and short-term energy storage, and key sector- available, including the electrification of the heating coupling applications, such as electric vehicles (EVs) and cooling sectors, the transport sector and industrial (Figure A2.1). processes, coupled with the use of synthetic fuels. These provide ample opportunities to address flexibility Global sales of electric vehicles (EV) hit a record high in concerns and increase renewable energy deployment (IRENA, IEA and REN21, 2018). Figure A2.1. Project proposal procedure for energy-selling projects under Concession scheme, Tunisia

Electicity supply system Thermal power plants Renewable energy plants Co-generation plants Fuel

supply P2X Electricity storage Transmission and Fossil distribution grid fuels

Biomass Individual or collective Synthetic heating/cooling fuels Electricity storage distribution system

Heat boilers Geothermal and solar heat Heat pumps/AC Electric boilers Heating/cooling generation P2X = Power to X Existing technology New technology Fuel Electricity Heat

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