Hot News

Dig Gold in the New Photovoltaic Market: North Africa, North Africa!

2023-10-13 15:35:27

Europe is increasing its solar photovoltaic capacity to achieve the goals of the REPowerEU program, and countries in the region are accelerating solar photovoltaic development.

In addition to their own territories, some EU countries are also paying attention to the solar potential of North Africa, as the region has superior solar irradiance and longer sunshine duration. Simon Yuen, editor of PV Tech Power, examined a project that envisioned the transmission of electricity from Egypt to Greece and explored experts' views on the benefits and challenges of Mediterranean networking.

In May 2023, a joint venture between Masdar, a state-owned renewable energy developer in the United Arab Emirates, and Infinity Power, an Egyptian renewable energy supplier, signed a memorandum of understanding with Copelouzos Group, a Greek infrastructure investor, to jointly develop renewable energy projects, providing green energy for the Gregory Elica grid connection project.

According to Infinity Power, the project involves the interconnection of electricity between Egypt and the Greek continent through a submarine cable with a length of approximately 950 kilometers and a capacity of 3GW, exploring the possibility of bidirectional energy transmission. This cable only transmits green energy between Egypt and Greece, making a decisive contribution to addressing climate change and greenhouse effects by significantly reducing carbon dioxide emissions, reducing Europe's dependence on fossil fuel production for energy.

The future of the 9.5GW renewable energy project constructed and operated by Copelouzos Group in Egypt, which will transport 3GW of green energy from Egypt to Greece.

Installation of Benban Solar Power Plant in the Western Desert of Egypt

In addition, Copelouzos Group stated that about one-third of the electricity will be used by Greek households and businesses, while the other one-third will be exported to neighboring European Union countries. The remaining electricity will be used in Greece to produce green hydrogen, with most of the hydrogen exported to neighboring European countries.

Mohamed Ismail Mansour, Chairman of Infinity Power, said, "This project is an excellent opportunity for Egypt to benefit from economic development and income growth. It will also consolidate Egypt's energy security and become an important project for promoting international cooperation. By supplying renewable energy to Europe, we not only enhance the country's economic strength, but also position ourselves as an important participant in the global energy market

North Africa, which is the northern region of the African continent, is traditionally a vast area north of the Sahara Desert, including Egypt, Libya, Tunisia, Algeria, Morocco, Sudan, and other countries. Below, let's take a look at the photovoltaic market potential of major countries.

Egypt's Photovoltaic Market Potential and Major Players

Generally speaking, North African countries have greater potential in the field of solar photovoltaic power generation due to solar irradiance and duration.

For example, according to the "African Photovoltaic Market Report" released by the German Solar Industry Association this year, Egypt's global average annual irradiance is between 2045-2483kWh/m ² This provides ideal conditions for the utilization of solar photovoltaic power generation.

The Egyptian Ministry of Electricity and Renewable Energy previously announced its goal of achieving a 20% share of renewable energy generation in electricity by 2022, with solar photovoltaic power accounting for 2% of the total generation. By 2035, 42% of the planned electricity will come from renewable energy sources, with the importance of solar photovoltaic power generation significantly increasing, accounting for 22% of the energy structure, higher than all other renewable energy sources.

However, Egypt has not achieved the goal of 20% of its electricity coming from renewable energy sources by 2022. To achieve the target of 42% by 2035, Egypt is expected to need to add 31GW of solar power capacity to the grid by 2035.

According to data from the International Renewable Energy Agency, Egypt's solar photovoltaic installed capacity is likely to reach 44GW by 2030, while the Egyptian Ministry of Electricity and Renewable Energy estimates that the potential for solar power generation exceeds 50GW. Extended Reading: Egypt 650GW of Photovoltaics! Changing the rules of the game or an unattainable dream?

The International Renewable Energy Agency says that Egypt's new solar photovoltaic installed capacity will accelerate growth this year. Famous projects include the construction of a 560MW photovoltaic power generation facility, which has received funding support from International Finance Corporation, Dutch Enterprise Development Bank, and Japan International Cooperation Agency. The solar power plant is owned and operated by AMEAPower and is expected to be completed by mid-2024.

Egyptian solar market leader, source: Mordor

In Egypt, we have also seen the presence of several internationally renowned companies, including Artes and Jingke from China, as well as international players such as ACWA and Masder, who have become the main participants in this market.

In the past few years, Egypt has connected a large amount of solar energy to the power grid. Most of the capacity comes from large-scale ground installation projects, such as the 1.4 gigawatts Benban Solar Park. However, many small-scale solar system projects that are connected to the grid are also connected to the grid at the same time, increasing the capacity of connected solar energy.

Morocco's Solar Photovoltaic Market and Potential

Most of Morocco's territory is covered by deserts and has abundant solar energy resources. Morocco has approximately 3000 hours of sunshine per year, and the global average annual irradiance in desert areas is 1753-2264kWh/m ²。

In terms of renewable energy policies, Morocco raised its official target in 2015. By 2030, more than half of its energy, namely 4.5GW of solar energy, will come from renewable energy sources.

According to Morocco's official goal, by 2050, renewable energy will account for 80% of Morocco's electricity structure. In 2022, the total installed capacity is expected to reach 318MW, thanks to several large ground power plant projects constructed in previous years, mainly including solar photovoltaic power generation and concentrated photothermal power generation in the 580MW Noor solar power generation complex.

In July 2023, the Moroccan renewable energy agency Masen announced that six consortia had passed the pre qualification for the construction of the 400MW Noor Midelt II solar photovoltaic power plant project. The project includes the construction of a solar photovoltaic power plant that can store electricity for two hours.

Morocco is not a newcomer to supplying energy to Europe. It has two energy interconnection projects with Spain, and in 2019, Morocco and Spain signed a memorandum of understanding for the construction of a third power interconnection project.

A more prominent example of Morocco supplying energy to Europe is a 10.5GW solar wind project in the Guelmim Oued Noun region of Morocco, of which 3.6GW will be exported to the UK through 3800 kilometers of submarine cables.

According to Xlinks, the company behind the Moroccan UK power project, the project utilizes the high solar irradiance and continuous desert convective winds in southern Morocco to generate an average of 20 hours of electricity per day, providing a zero carbon alternative source of electricity for the UK. Xlinks claims that the project can meet 8% of the UK's electricity demand.

The solar photovoltaic market and potential in Tunisia

Tunisia's global average annual irradiance is 1607-2191kWh/m ²。 However, as of 2021, the proportion of renewable energy generation, especially solar photovoltaic power generation, is only about 3%.

It is expected that the installed capacity of solar photovoltaic will remain at 197MW by the end of 2022.

Although renewable energy accounts for only a small portion of Tunisia's electricity generation, the Tunisian Ministry of Industry, Mines, and Energy set a target of 35% of national energy production for renewable energy by 2030 in 2022. The government has also introduced more measures to encourage the use of solar energy. For example, in 2017, Tunisia introduced a feed-in tariff policy for solar projects below 10MW, including the use of net metering and net billing methods within selected grids.

Since the beginning of 2020, a new net metering regulation has allowed renewable energy companies to produce excess electricity and sell it to the national electricity company Tunisian Electricity and Natural Gas Company or private third parties through power purchase agreements.

Tunisia has also explored the potential of offshore solar systems. Last year, the first floating photovoltaic power plant in North Africa was built by French independent power producer Qair in Tunisia, with a total power generation capacity of 200kW. In January 2023, Tunisia announced plans to build a 100MW solar photovoltaic system in the El Metbassta area north of Kairouan city.

Looking ahead, Tunisia will increase its solar photovoltaic capacity. In January 2023, Tunisia tendered for 1GW of solar photovoltaic capacity in accordance with the current authorization system and announced that it would tender for a 200MW solar photovoltaic project in the near future.

African market

According to the report "Renewable Energy Planning and Prospects for North Africa" released by the International Renewable Energy Agency, as of 2020, North Africa's solar installed capacity (including solar photovoltaic and thermal power generation) has exceeded 3GW. However, these installed capacities only account for 2.7% of the total installed capacity in the region (approximately 116GW).

However, the downward cost of solar photovoltaic installed capacity makes it an option for fossil fuel alternative power generation. The report points out that the average total installation cost of solar photovoltaic power generation in North Africa decreased from $2000 per kilowatt in 2015 to $1306 per kilowatt in 2019, a decrease of 34.7%.

Mohamed Alaoui, General Manager of Africa Climate Solutions, an energy consulting company, stated that developing renewable energy in North Africa can bring many benefits to the region's economy and contribute to sustainable development, including attracting foreign investment, developing supportive policies and regulations, promoting cooperation between North African and European countries, and strengthening technology transfer and skills development.

For example, Copelouzos Group stated that it will allocate a total budget of 4.2 billion euros (4.6 billion US dollars) for the Gregory Elica grid connection project.

In addition, according to a Moroccan news media, the budget for the Xlinks project may reach $21.9 billion. The project will create 10000 jobs in Morocco, including 2000 long-term jobs. By 2024, the project will also create 1350 new long-term jobs in the UK and an additional 1000 jobs in the supply chain.

Challenges in Developing Solar Photovoltaics in North Africa

Nivedh Thaikootathil, a renewable energy and electricity analyst at Rystad Energy, stated that Africa only accounts for a small portion of global renewable energy investment, with the majority of investment concentrated in North Africa and South Africa.

This background provides opportunities for renewable energy companies planning to develop and explore business opportunities on the African continent.

However, there are several issues that need to be addressed before realizing the potential of the region.

A common problem for African or North African countries is the high upfront costs, "Thaikootathil said." Although funding typically comes from the private sector, attracting investment and incentivizing the power sector has always been a challenge in the past

Aerial view of Benban solar power plant in Egypt

Egypt and Morocco have responded to the challenge by launching electricity purchase agreements or grid prices. For example, Masen, a Moroccan solar energy agency, signed a power purchase agreement with ACWA Power to develop a 170MW solar energy project in 2016. Egypt launched a grid price support system for solar photovoltaic and wind energy projects with a power generation capacity of less than 50MW in 2014.

As for the operation of solar power plants, although deserts are suitable for building solar photovoltaic power plants, Thaikootathil stated that the accumulation of sand particles and high temperatures may reduce the efficiency of these power plants.

The supply chain is also another major issue in building solar photovoltaic power plants in North Africa, as the region lacks manufacturing capacity, which increases the difficulty of building solar photovoltaic power plants.

However, this situation may change in the near future. The African Renewable Energy Manufacturing Initiative, launched in early 2023, aims to enhance Africa's renewable energy manufacturing capacity. The initiative focuses on capacity building, knowledge transfer, policy dialogue and advocacy, as well as promoting pilot projects for low-carbon development and carbon neutrality in Africa.

The initiative suggests that solar photovoltaic manufacturing in Africa can start with battery manufacturing and module assembly, as these tasks have lower requirements for technical and chemical complexity, available labor, and existing solar module assembly.

Another reason that hinders North African countries from choosing more renewable energy sources is the cost of changing their energy structure.

Fabian R ø nningen, Senior Analyst for Renewable Energy and Electricity Research at Rystad Energy, stated that North African countries heavily rely on fossil fuels and natural gas for power generation, and these countries can allocate capital expenditures to natural gas power stations instead of renewable energy.

For them, maintaining the existing energy structure rather than building renewable energy projects may be cheaper

The difficulty of delivering electricity to Europe

When it comes to the construction of submarine cables between North Africa and Europe, Thaikootathil highlighted three major challenges, namely manufacturing capabilities, the location of cable manufacturers, and maintenance work.

Currently, each ship can only carry approximately 200 kilometers of cable. In contrast, the cable connecting Greece and Egypt may be as long as 1000 kilometers, which means that the construction of the cable requires at least five trips between the manufacturing site and the project location.