Government promoting renewables in Tunisian energy sector

Renewable energies, especially solar, have significant potential in Tunisia. The country boasts annual irradiation rates of approximately 1800 to 2600 KWh per square metre, over 20% more than the most irradiated sites in Europe. Today, around 97% of electricity is still generated through fossil fuels. Renewable energy, most of which is currently produced by Tunisia’s two wind farms, accounts for just 3% of the country’s grid-connected generation capacity, according to 2015 figures from the Ministry of Energy.

Renewables Plan

The majority of current solar generation was installed under the aegis of the Tunisian Solar Programme (PROSOL), originally formulated in 2005. In 2009 the government relaunched PROSOL as the Tunisia Solar Plan (TSP) and, in 2012, it announced that, under the TSP, it would target a total renewable energy penetration rate of 30% by 2030. According to the UN Development Programme, reaching this goal would require significant levels of investment. In addition, the projected timescale could present a significant challenge for the authorities, given the current limited role of renewables in Tunisia’s energy mix and the existing barriers to private investment.

First Steps

Tunisia has taken some positive actions toward increasing energy autonomy and promoting renewable energies. In May 2015 Parliament passed Law No. 12, known as the New Law, concerning electricity production from renewable sources. This legislation updates Tunisia’s prior regulatory framework governing renewable producers’ network access, which dated from 2009. The New Law aims to boost private sector investments and liberalise regulations to facilitate the production, network access and export of electricity generated by renewables. It also aims to help Tunisia achieve the core goals of the TSP, including the creation of 10,000 green jobs, reduction of the debt incurred by the state-owned Société tunisienne de l’é lectricité et du gaz (STEG), and the reduction of emissions. In 2015 another positive development got under way for the renewables sector, with the beginning of tendering for the TuNur project, which promises to create Tunisia’s first large-scale photovoltaic (PV) farm. The 10-MW concentrated solar power plant is pegged to come online in 2018.

Regulatory Issues

Despite these developments, barriers to the growth of renewables’ share of the energy mix remain. While the New Law allows independent producers to inject low- to medium-voltage PV production through the STEG grid, existing regulations inhibit the sale of renewables-produced electricity to STEG. The state utility firm will continue to be the only one licensed to make final sales of energy to domestic consumers. However, the Tunisian authorities are taking a step in the right direction. Operators believe that the New Law, for example, will help energise Tunisia’s nascent market for renewables, especially solar. “Parliament has been slow in passing the law and working out its details, but I think when it’s all completed, the market will explode,” Khaled Nasraoui, deputy CEO of Aurasol, a Tunisian company manufacturing solar panels, told OBG.

However, solar operators say that to more effectively promote the development of the solar energy industry in Tunisia, the government needs to further clarify and stabilise the institutional framework in order to reassure investors of likely returns. This is especially important for solar power projects, which require heavy investments of up-front capital. “In general there is great appetite for and interest in promoting renewables,“ Kristina Laarman, director of the Tunisia bureau of KfW, told OBG. “But, until now, the projects for us to finance are not that big – renewables are still really at the beginning stages in Tunisia, but there is significant potential.”