Market Status: Tunisia - Strategy to encourage more private investment

No new wind power capacity was added last year to the 54MW already turning in Tunisia. However, work has started on a major installation which will add 120MW to the country's installed capacity around the end of the year.

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It will also mean Tunisia meets its target of sourcing 4% of electricity from wind energy by 2012, up from 2% today, ahead of schedule.

The new installation at Bizerte, in northern Tunisia, is split between two sites: Metline at 61MW and Kchabta at 59MW. Spain's Gamesa was selected to build the plant following an international bidding process. Installation work has now begun on the first of the 91 1.32MW turbines, supplied by Gamesa subsidiary MADE Tecnologias Renovables. The Spanish government's overseas aid agency is providing a concessional loan of almost EUR200 million to help fund the project.

State utility the Tunisian Electricity and Gas Company (STEG) is now extending the project to 190MW by adding another 26 turbines at each site. Again, Gamesa will build and equip the facility and Spain will provide the funding to the tune of around EUR105 million. Construction will begin next year.

Private initiatives

Like many other countries, Tunisia is keen to tap the private sector to drive development. The government set things in motion last year by amending the law to allow big industrial users to produce renewable energy for their own consumption and sell the excess to STEG up to a maximum of 30% of production. STEG is obliged to buy the surplus at a rate of TND 0.092/kWh (EUR0.048) plus a flat fee of TND 0.005/kWh (EUR0.0026) for transporting the output to the point of consumption.

The initiative has so far prompted proposals for wind power projects with a combined capacity of over 60MW from cement factories, iron smelters, phosphate plants, railways and a refinery. The National Agency for Energy Conservation (ANME) is helping carry out wind measurements and feasibility studies, after which there will be a series of tender calls to build the facilities. The aim is to have 60MW up and running in 2011.

The strategy to encourage more private investment is being supported by a $10.5 million (EUR7.3 million) grant from the World Bank's Global Environment Facility (GEF), agreed in 2009. Its aims include removing barriers in the regulatory and institutional environments, and improving technical capacity within both the government and the private sector. The government has pledged to match the GEF funding with up to $18 million (EUR12.5 million) in fiscal incentives and subsidies.

In addition, international development body the German Agency for Technical Cooperation (GTZ) agreed last year to provide EUR1 million in co-financing for technical assistance to help prepare local industries to supply equipment and services for wind installations. The aim is for at least 40% of the finance to be from locally sourced funds.

Italy's Moncada Energy Group is also developing a 500MW private wind power project at El Haouira on the Cape Bon peninsula. At the same time, it has also applied for permission to build a 600MW, 400kV merchant line to exports output to Italy from this and various other power plant it hopes to build. The 223-kilometre undersea line would link the transformer stations in El Haouaria, Tunisia, with Partanna in Sicily. Moncada reports the line has been favoured by Italian grid operator Terna, but is still awaiting authorisation.

Connecting Tunisia and Sicily

The Elmed project is showing more signs of progress. This consists of a 400kV submarine HVDC interconnection between Tunisia and Sicily to be built and operated jointly by STEG and Terna. The line will have a rated capacity of 1000 MW, of which 800MW will be allocated to exporting output from a new 1200MW power station to be built near El Haouaria. The remaining 200MW of capacity on the interconnection will be available to companies generating electricity from renewable sources in Tunisia under terms yet to be decided.

Finally, last year saw the publication of a long-awaited wind atlas, giving the Tunisian authorities and developers detailed information on available wind resources. The atlas was produced by Spain's National Renewable Energy Center (CENER) with Spanish funding. The results confirm that the highest wind speeds, averaging over 7 m/s, are to be found in the Nabeul-Bizerte region of northern Tunisia and in the southern desert.

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