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Post Conflict Reconstruction Strategy Study for the Electricity and Energy Sector of Yemen

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Post Conflict Reconstruction Strategy Study for the Electricity and Energy Sector of Yemen INTERNATIONAL ENERGY CHARTER Post Conflict Reconstruction Strategy Study for the Electricity and Energy Sector of Yemen Prof. Dr. Towfick Sufian Energy Charter Secretariat Knowledge Centre 2019 DISCLAIMER Information contained in this work has been obtained from sources believed to be reliable. However, neither the Energy Charter Secretariat nor the work’s author guarantees the accuracy or completeness of any information published herein, and neither the Energy Charter Secretariat nor the work’s author shall be responsible for any losses or damages arising from the use of this information or from any errors or omissions therein. This work is published on the understanding that the Energy Charter Secretariat and the work’s author supply the information but do not attempt to render legal or other professional services. This study is published without prejudice to the position of Contracting Parties/Signatories of the Energy Charter Treaty or to their rights or obligations under the Energy Charter Treaty or any other international investment agreement. The contents of this work are the author’s sole responsibility. They do not necessarily represent the views of the Energy Charter Secretariat. © Energy Charter Secretariat 2019 Boulevard de la Woluwe, 46 B-1200, Brussels, Belgium Reproduction of this work, save where otherwise stated, is authorised, provided the source is acknowledged. All rights otherwise reserved. ISSN : 2593-8983 Energy Charter Secretariat Boulevard de la Woluwe, 46 B-1200 Brussels, Belgium Mail: [email protected] Web: www.energycharter.org Phone: +32 2 775 98 00 Fax: +32 2 775 98 01 ACKNOWLEDGEMENTS This report was prepared by Prof. Dr. Towfick Sufian, from the Ministry of Electricity and Energy of Yemen during the period between 1 March 2019 and 31 July 2019 under the guidance of Dr. Urban Rusnák, Secretary General of the Energy Charter Secretariat. The Energy Charter Treaty is a multilateral international treaty concluded in 1994 currently in force among 54 contracting parties from Europe, Central Asia, South Caucasus and East Asia. The Treaty offers a multilateral cooperation platform for the promotion and protection of energy investments. The Energy Charter Secretariat offers technical assistance to Contracting Parties and Observers by means of energy investment country reports, policy recommendations, model agreements, regional cooperation, seminars and training programs, and private sector dialogue. On 21 May 2015, the International Energy Charter was adopted in The Hague by more than 75 countries from Africa, Middle East, Latin America, South and East Asia, besides China and the United States of America to share, among others, the objectives towards development of efficient energy markets,, political and economic co- operation and the promotion of a climate favourable to the operation of enterprises and the flow of investments and technologies in the energy sector, , as well as environmental protection. The author Prof. Dr Towfick Sufian is a senior expert as well as the Technical Advisor to the Minister from the Ministry of Electricity and Energy of the Republic of Yemen and was seconded to the Secretariat following the accession of Yemen as a Contracting Party to the Energy Charter Treaty on January 2019, to prepare this Post Conflict Reconstruction Strategy Study for the Electricity and Energy Sector of Yemen. The author would like to thank his Excellency the Secretary General for facilitating the secondment to carry out this strategy study and also extend thanks to the Secretariat and its employees for their continuous assistance and provision of direction when needed. 1 Content Page Acknowledgement 1 List of Acronyms 5 List of Tables 7 List of Figures 9 Introduction 10 Chapter One: Electricity and Energy Sector of Yemen Prior to the Conflict of 2015 12 1.1 Yemen Demography 12 1.2 Macro-economic Development 12 1.3 Macro-economics in Figures 13 1.3.1 Socio-Economic Context 14 1.3.2 Energy Context 14 1.3.3 Macro Policy Indicators 15 1.3.4 Impact on Environment 15 1.4 Energy Consumption 17 1.5 Oil and Gas Resources 17 1.5.1 Oil Recourses 17 1.5.2 Natural Gas Resources 18 1.6 Electricity Power Generation 19 1.6.1 Electricity Demand Projection 20 1.6.2 Electricity Power Generation Capacity 21 1.6.3 Electricity Supply and Demand Balance Projection 22 1.6.4 Electrical Power Transmission Network 22 1.6.5 Electricity Future Development Plans 23 1.7 Energy Consumption by Sector and Fuel in Yemen 24 1.8 Electricity Consumption by Electrical Energy and Number of Consumers 25 1.9 Electricity and Gas Transmission Future Development Plans as of 2015 26 1.9.1 Electricity 26 1.9.2 Natural Gas 27 1.10 Electricity, Oil and Gas Pricing 29 1.10.1 Petrol Product Pricing 29 1.10.2 Electricity Pricing 29 1.11 Division of Responsibility and Coordination of electricity and energy sector 30 1.12 Renewable Energy Resources 30 1.12.1 Wind Energy Resources 32 1.12.2 Solar Energy Resources 32 2 1.12.3 Geothermal Energy Resources 33 1.12.4 Small Hydropower Energy Resources 1.12.5 Biomass Energy Resources 34 1.13 The Electricity and Energy Sector Basic Targets as of the Year 2015 35 1.13.1 Grid Electricity (Large Scale Electricity Generation) 35 1.13.2 Off-Grid Electrification 35 1.13.3 Energy Efficiency 36 1.13.4 Solar Water Heaters 36 Chapter Two: Present Situation of Yemen Electricity and Energy Sector 37 2.1 Introduction 37 2.2 Damage Assessment of the Electricity Sector 38 2.3 Damage Quantification 40 2.4 Ministry of Electricity and Energy Yearly Report for the Year 2018 41 2.4.1 MOEE Report of 2018 Recommendations of the Immediate Actions to be Taken for Restorations 42 2.4.2 The Existing and Predicted Distribution & Transmission Networks up to the Year 2030 43 2.4.3 The Electrical Power Generation Capacity as of the Year 2018 44 2.4.4 Cost of the Consumed Fuels and Estimated Funds Needed for Recovery 46 Chapter Three: Proposed Strategy to Electrify the Yemeni Urban and Rural Population Projected to the Year 2050 47 3.1 Introduction 47 3.2 Demographic Map of the Republic of Yemen Up to the Year 2050 48 3.3 The Electricity Needs for the Yemeni Population Projected to the Year 2050 49 3.4 Strategy Scenarios Proposed Based on Electrical Energy Requirement 50 3.5 Expected Electrical Power and Energy Consumption Growth for Strategy Scenarios 1, 2 and 3 Projected to the Year 2050 50 3.6 Electrical Power and Energy Requirement Projected to the Year 2050 for the Population of Yemen that Can be Connected to the National Grid 55 3.7 Electrical Power and Energy Requirement Projected to the Year 2050 for the Rural Population of Yemen that Cannot be Connected to the National Grid 59 Chapter Four: Primary Fuel Resources Available in Yemen that Can Be Used to Generate Electricity 62 4.1 Fuel Resources Available 62 4.2 Electrical Power Generation in Yemen from Renewable Energy Resources Projected to the Year 2050 63 4.3 Generating Electricity from Wind and Solar Energies 64 3 Chapter Five: Electrical Power and Energy Generation for the Yemeni Population Strategically Proposed as a First Phase for the Years 2020 – 2040 66 5.1 Electrical Power Requirement for the Island of Socotra Population Projected for the Years 2020 – 2040 66 5.2 Proposed Electrical Power Generation to Fulfil the Power Requirement of the Mainland Yemeni Population for the Strategic Period 2020 to 2040 68 5.3 Socotra and the Mainland Rural Population that Can’t be connected to the National grid 70 5.3.1 Socotra Island 70 5.3.2 Mainland Rural Population who cannot be connected to the National Grid 71 Chapter Six: Investment in the Electrical Power Generation, Transmission and Distribution Sectors 73 6.1 Introduction 73 6.2 The Power Generation Sector 73 6.3 Government’s Returns from the Private Investments and Partnerships 74 6.4 Electrical Power Transmission Sector 75 6.5 Electrical Power Distribution Sector 75 Chapter Seven: Conclusions and Recommendations 77 7.1 Conclusions 77 7.2 Recommendations 79 List of Acronyms Units of measurement Bbl/d Barrels/day BCM Billion cubic meters Bcf Billion cubic feet GWh Gigawatt-hour Kg Kilogram Kgoe Kilogram of oil equivalent Km Kilometer Ktoe Kiloton of oil equivalent KWh Kilowatt-hour Mtoe Million ton of oil equivalent MW Megawatt m2 Square meter toe Ton of oil equivalent tcf Trillion cubic feet tCO2e Ton of CO2 equivalent TWh Terawatt-hour 4 General Abbreviations CCGT Combined Cycle Gas Turbine CO2 Carbon Dioxide CSP Concentrated Solar Power DSM Demand Side Management EE Energy Efficiency GARE General Authority for Rural Electrification GCOGMR General Corporation for Oil, Gas and Mineral Resources GDP Gross Domestic Product GHG Greenhouse Gas GOY Government of Yemen GNI Gross National Income HVDC High Voltage Direct Current IEA International Energy Agency IMF International Monetary Fund IPP Independent Power Producer IPCC Intergovernmental Panel on Climate Change LNG Liquefied Natural Gas LNGC Liquefied natural gas Company LPG Liquefied Petroleum Gas MOEE Ministry of Electricity and Energy MOM Ministry of Oil and Minerals NEEAP National Energy Efficiency Action Plan NG Natural gas OCGT One Cycle Gas Turbine PEC Public Electricity Corporation PEPA Petroleum Exploration and Production Authority PPP Power Purchasing Parity PV Photo Voltaic RCREEE Regional Center for Renewable Energy and Energy Efficiency RE Renewable Energy SWH Solar Water Heater UN United Nations UNFCCC United Nations Framework Convention on Climate Change WB World Bank YGC Yemen Gas Company YOC Yemen Oil Company YRC Yemen refining Company 5 List of Tables Page
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