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C5-105

CIGRE 2012

An Assessment for Mediterranean Solar Plan on Electricity Market in Arab Countries M. M. EL-KHAYAT1, K. YASSO2, & M. ABDL-RAHMAN3
1

New and Renewable Energy Authority, 2Nuclear Power Plants Authority, 3Faculty of Engineering, Ain Shams University, Egypt.

Summary This paper covers current status, key trends, and the potential of renewable energy in the Arab region. The Arab world extends for thousands of miles from the tip-east in the Arabian Gulf to the Atlantic Ocean in tip-west, and from the mountains of Syria and Lebanon until the tropical plateau of Somalia, an area of over 14.2 million km2, accounting for about 10% of inhabited global land and home to more than three hundred million people, representing 5% of the world's population, with around 1472 billion dollars Gross Domestic Product, GDP, representing 3.3% of global GDP. Arab States have made great efforts to develop their energy sectors to meet the continuous increase in the energy demand, as they are still at the stage of growth, expansion in infrastructure construction and industrial applications are still growing. Furthermore, the region is characterized by special nature as it is rich with fossil fuel sources; oil and natural gas, in addition it has a huge potential of renewable energy resources; such as solar, wind and biomass energies. Currently, the main sources of energy supplies are oil and natural gas which together represent around 96% of electricity generated in year 2009 (Arab Union for Electricity, 2010). Meanwhile, renewable energy sources share is about 4% of electricity generation. Current activities of renewable energy in the Arab region include establishment of around 1000 MW of wind energy farms already in operation, three solar thermal power plants are under construction in Algeria, Egypt, and Morocco. Biomass is still used in traditional forms to meet a portion of energy requirements. Moreover, eleven Arabian countries have already announced their future targets of generating energy from renewable energy resources. According to these targets, it is expected to increase the share of renewable energy in the electricity portfolio to around 6% by the year 2020. On the other hand, Arab countries electricity demand has increased rapidly, almost doubling over the last 20 years. It continues to increase by up to 7% annually, which makes it one of the fastest growing power markets in the world. This growth mainly reflects rapid population and economic growth, as well as social development and urbanization. Currently there is a clear political commitment towards a more sustainable energy sector and enhancing the sector's contribution to the achievements of sustainable development in the developing countries in general and in the Arab region. This could be noticed in the steps mohamed.elkhayat@yahoo.com

taken on the national level. The Mediterranean Solar Plan, MSP poses two complementary targets: (i) developing 20 GW of new and renewable energy production capacities, and (ii) achieving significant energy savings around the Mediterranean by 2020, thus addressing both supply and demand. However, there is a need to graduate to a more active regional strategy in the shadow of the economic gains by opening export markets to the European Union, EU, by means of the Mediterranean Solar Plan is an exceptional opportunity to vitalize the Renewable Energy, RE, industry in the Southern Mediterranean Shore. However, there exist four impediments in that way; (i) The existence of the interconnections, (ii) The technological impediment, (iii) The regulatory impediment and (iv) the financing gap impediment. To overcome these challenges the paper proposes the establishment of, (i) Government Support, (ii) Strong regulatory framework, (iii) Select credit worthy off-taker, (iii) Support process transparency, and (iv) Investing in capacity building and technology transfer. 1) INTRODUCTION The Arab States have made great efforts to develop their energy sectors to meet the continuous increase in the energy demand, as they are still at the stage of growth, expansion in infrastructure construction, industrial.. etc. From an energy point of view, it is hard to look at the Arab states as one case, with such disparity and non-uniform distribution of fossil fuel resources. The Gulf region holds more than 58 % of the world reserves in oil and 29% of the world reserves in Gas1. However, those countries which lie on the Mediterranean shores except for Algeria and Libya do not enjoy the same wealth. Therefore, traditionally, the Arab countries but Egypt have always been reliant on fossil fuel not only for electricity generation but, also, for water desalination. Currently, the main source of energy supplies are oil and natural gas which represents around 96% of electricity generated in the year 2009 (Arab Union for Electricity, 2010). Meanwhile, RE sources share is about 4% (including hydro in Egypt) of electricity generation. Notwithstanding the donors role, many Arab countries started to look at Renewable energies as an alternative to fuel their economic growth. Current activities of renewable energy, RE, in the Arab region could be summarized in establishing around 1000 MW of wind energy farms already in operation, two solar thermal power plants are in operation in both Egypt, and Morocco, in addition to another one being under construction in Algeria. Also, biomass is used in traditional forms to meet a portion of energy requirements especially in Morocco. Moreover, eleven Arab countries have already announced their future targets of generating energy from RE resources. According to these targets, it is expected to increase the share of RE in the electricity portfolio for all the Arab states to around 6% by the year 20202. However, provided the apparent availability of fossil fuel, it is hard to motivate utilities to invest in renewable energies, primarily, wind and solar. Issues of subsidies and subsidized fuel always surface. From the perspective of a utility running to meet imminent capacity shortages, it makes sense to rely or exhaust fossil fuel reserves, rather than investing in technologies that do not supply power on-demand. Indeed, reliance on renewables signals a strategic direction to conserve limited fossil resources. Consequently, Egypt, for example, adopted an approach, in nineties dependent on grant money to establish its RE program. 1

This approach was adequate for quite some time. Positive results including building capacity and knowledge transfer were obtained. However, there is a need to graduate to a more active regional strategy in the shadow of the economic gains by opening export markets to the EU by means of the Mediterranean Solar Plan, MSP. This plan is an exceptional opportunity to vitalize the RE industry in the Southern Mediterranean Shore. However, there exist four impediments in that way; (i) The existence of the interconnections, (ii) The technological impediment, (iii) The regulatory impediment and (iv) the financing gap impediment. The situation is even more complicated with the Arab spring or the political volatility that is witnessed in the Middle East. The process of setting a new reality in the Middle East is ongoing with numerous forces pushing and pulling the process. It is against that backdrop that this paper is looking at the MSP as a common ground for cooperation between the Southern and Northern shores of the Mediterranean. The MSP is a vision that brings the parties around the sea together to achieve a win-win situation. To that end, this paper is addressing the four impediments earlier mentioned from the perspective of the Southern shore. The paper is organized into eight sections including this introductory section. Section 2 describes the overall energy gap in both shores of the Mediterranean. It further investigates the future generation mix to bridge this gap. Section 3 describes the MSP and the complimentarily that exists between the Southern and Northern Shores of the Mediterranean. Section 4 describes the interconnection projects required to build a Copper plate for energy trade together with its time frame and challenges. Section 5 is dedicated to describe the technological challenges and the roles that can be played by each party. Section 6 describes the market environment and market structures among incumbent Middle Eastern countries. Section 7 presents the complicated financing challenges and proposed tools to create an environment conducive to investment. Section 8 summarizes the conclusions of the paper. A list of references is given in Section 9. 2) ENERGY NEEDS ON THE SHORES OF THE MEDITERRANEAN Figure 1 shows the trend in the total electricity generation in Europe and Eurasia over the past 20 years. The Figure shows a strong link to economic activity where the recession during the mid-nineties results in shrinkage of the electricity generation due to the slow down in the economic activities. An upward trend continues till a sharp dip is faced starting of 2008 that is correlated to the recent economic crisis. However, the upward trend continues. Furthermore, the Figure shows that the electricity generated in Europe and Eurasia is three to four times the electricity generated in both the whole Middle East and Africa. Meanwhile, the electricity generation in both the Middle East and Africa is not that strongly linked to the economic activity which signals a strong correlation to basic human living rather than productive economic activity. On the other hand, Europe is heavily reliant on energy imports from countries located outside its borders. This dependencies caused by a number of factors. As welfare standards and quality of life improve, the demand for energy also increases. Yet Europe suffers a huge disparity between supply and demand, as local fossil fuel supplies can only meet 57% of Europes energy need. Germanys and Switzerlands recent decisions to phase-out their nuclear power plants put further pressure on local energy supplies, and the EU-10 Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia may also face social and political pressure to reduce their levels of nuclear2

generated energy. Add to this the perpetual need to cut CO2 emissions and to move towards a greener economy, which is a rather critical energy situation for Europe3.
6000.0 Electricity Generation in TWH 5000.0 4000.0 3000.0 2000.0 1000.0 90 94 98 02 19 19 19 19 19 20 20 20 20 20 20 10 92 96 00 04 06 08

Total Europe & Eurasia

Total Middle East

Total Africa

Figure 1: Electricity Generation in TWH across the shores of the Mediterranean Source: BP Annual Energy Review (2010-2011) Meanwhile the pressure on fossil fuel is at its highest historical levels whether oil, natural gas or coal. The Middle East, viz., the Gulf area remains the main source of fossil energy exports worldwide with exports covering the globe. However, looking country by country at the Southern Mediterranean shore reveals that apart from Libya and Algeria, the rest of the countries are either net energy importers or heading to become one. Consequently, for the Mediterranean Arab countries, the development of renewable energy resources is mandatory not only for future energy security but for job creation and economic development. Meanwhile, Figure 2 shows that while the renewable energy consumed in Europe and Eurasia has increase by roughly seven folds over the past 20 years, the Middle East and Africa renewable energy consumption is still negligible. This means that the growth rate of RE applications in the southern side of the Mediterranean is not in consistence with the future vision of Europe relying on importing organic electricity4 from them.

Renewable Energies Consumption in TWH

350.0 300.0 250.0 200.0 150.0 100.0 50.0 -

90

96

92

00

06

02

19

19

20

19

20

19

19

04

20

20

20

08

Total Europe & Eurasia

Total Middle East

Total Africa

Figure 2: Renewable Energy Consumption Europe, Middle East and Africa Source: BP Annual Energy Review (2010-2011)

3) MSP TARGETS AND PROSPECTS The MSP poses two complementary targets: (i) developing 20 GW of new and renewable energy production capacities, and (ii) achieving significant energy savings around the Mediterranean by 2020, thus addressing both supply and demand. a) Developing electricity generation from renewable sources of energy The MSP aims at increasing the use of renewable energy sources for power generation. The key element of the proposal is the setting up of a common framework in terms of legal, regulatory and investment environment for the development, by 2020, of 20 GW of new generation capacity in solar and other renewable energies in the countries around the Mediterranean Sea. To this end, the MSP will build on the enormous potential for solar electricity generation available in the Mediterranean countries, notably through the development of Concentrating Solar Power, CSP, and Photovoltaic, PV, plants, and of other available and mature renewable energy technologies. The MSP will also promote activities in the field of transfer of know-how and technology to support projects to generate electricity from renewable energies, electricity transmission and energy efficiency. Public and private actors from European and Mediterranean countries could elaborate a proposal to develop a Mediterranean technology transfer network, notably on solar and other renewable technologies. Topics to be covered shall include but not be limited to education and training, research and development and local manufacturing capacities. Collaboration with regional and international institutions, in particular the International Renewable Energy Agency, IRENA, in this field should be encouraged. b) Energy efficiency and energy savings 4

20

10

94

98

The MSP aims at saving significant amounts of energy compared to a business as usual scenario, following inter alia the recommendations of the Mediterranean Association of National Energy Agencies, MEDENER, and in close co-operation with key partners and initiatives such as the Mediterranean Energy Observatory, OME, the Regional Centre for Renewable Energies and Energy Efficiency, RCREEE, in Cairo and the Mediterranean Renewable Energy Centre, MEDREC, in Tunis. The MSP supports developing sectoral programs, notably in the building and transport sectors, and regional projects and programs in the field of energy efficiency (such as domestic heating systems, home appliances, efficient lighting,..). The possibility to support the development and/or implementation of National Energy Efficiency Action Plans should be considered. c) Creating favorable framework conditions All Partners cooperating within the framework of the Mediterranean Solar Plan shall actively support all initiatives aiming at creating favorable framework conditions for the large scale deployment of renewable energy sources and in support of energy efficiency, in capacities. particular as regards legislative and regulatory aspects, and electricity transmission d) Regulatory framework The MSP will pay specific attention to the creation of a regulatory framework favorable to investments in the renewable energy sector. This will be based in particular on past and ongoing cooperation and initiatives relating to electricity market reforms, the cooperation among energy regulators and legislative and policy reform in support of Renewable Energy and Energy Efficiency. e) Know-how and technology transfer The MSP will foster and encourage developing the national capacity and transferring the technology to the developing countries in order to strengthen skills in the domain of renewable energy and energy efficiency. f) Electricity transmission The MSP will contribute to identify and promote the electrical interconnections, which are absolutely vital for the power plants to be able to export a part of their production to other countries. Special attention will be given to the improvement of North-South interconnections in order to make possible the export of green electricity from Mediterranean countries to EU countries. This work will be carried out in connection with the Mediterranean Interconnection Plan to be proposed by the European Commission, building upon the EU second strategic energy review that has identified the completion of the Mediterranean energy ring as a priority project. In particular, the following issues need specific attention: i. New interconnections between EU and non EU MSP countries; ii. Investment in new grids and interconnections within and between non EU MSP countries; iii. Reinforcement of existing interconnections; iv. Tariffs and access regime for the transmission of electricity from renewables. Once the cost of solar technology has been brought down, solar power from the sun belt becomes attractive for import purpose by EU countries. Thus the EU countries could save a lot of power cost in two ways, 5

i. By accelerating the solar cost reduction process through early investments in solar plants in and for the MENA region (phase 1), and ii. By importing reliable and economical solar and wind power from the MENA region (phase 2). For MENA countries production and export of clean power is a long-term source of income, and the local production of solar technology a driving force for scientific development and for industrialization. 4) THE INTERCONNECTION IMPEDIMENTS The Euro-Mediterranean electric power systems of today comprise a variety of different supply systems: regional, national and international. Some of these systems are forming in reality a single, densely meshed system. Other systems are weakly interconnected by one or more long AC lines. Some others have to be operated as isolated systems due to geographical borders. In a short to long-term horizon, all electrical systems located around the Mediterranean Sea will be interconnected as a result of bilateral agreements, thus forming one unique synchronous system, in the shape of a RING. This will connect - in a clockwise pattern Western Europe to Eastern Europe, Turkey, Eastern Mediterranean countries and finally, through Egypt, South-Western Mediterranean countries and again Europe (Spain). The envisaged steps to arrive to the closure of the Ring are as follows: Open ring configuration The electric power system of Libya - operated as a separate isolated system up to a few years ago - was synchronously connected to Egypt in 1998 and should be connected to Tunisia (one single circuit and one double circuit 220kV line have been already installed). When this connection is closed, the two blocks "Morocco- Algeria- Tunisia" and "Libya to Syria" will constitute one long (more than 5000 km) synchronous system, connected to the European grid via Spain. Closed ring configuration The closure of the "Mediterranean ring" on the Eastern side will occur when the Syrian system is connected to the Turkish one, which then itself also synchronously interconnected to Europe through Greece and Bulgaria. The MEDRING can be as seen as composed of four blocks. Those blocks are: the European Block, the Turkish Block, the Mashreq Block, and the Maghreb Block. Bottlenecks and Constraints The first bottleneck is in the Mashreq Block due to the weak connections. Efforts are already underway to devise the best solution for this problem. It is worth mentioning that the strongest interconnected systems have always started as weak ones. However an overall interconnection Master Plan for the whole Mediterranean region may unify the vision of the Mediterranean countries in that respect. One challenging aspect of the reinforcements is furnishing the required investments whether governmental, inter-governmental or private. The other point of concern is the Turkish block, which has always been at cross roads for many goods and trades. The energization of the Turkish interconnections whether with Europe or its other many neighbours will constitute a huge step towards the establishment the MEDRING as the physical medium for the Mediterranean electricity market.

Furthermore, drawing from the report entitled, Regulatory Status and Market Implementation, still the non-consistent approach to internal market regulation is a hurdle towards the free trade in electricity. Consequently, it is only natural to perceive harmonized internal market regulation as the first step towards the establishment of a regional market. Indeed, the interconnection projects in the Mediterranean World (implemented or planned), cover a huge geographical area from East to West and from North to South. In such a system, power flow patterns will change from time to time. Consequently, it will include power flow conditions which have to be monitored and carefully controlled in both normal and emergency states. The Mediterranean Interconnection and Security of Supply Supposing the implementation of the MSP, it is expected that many positive outcomes could be gained, one of them is securing energy supply for both sides of the Mediterranean. It exists from installing more RE capacities and electricity produced from other sources. As key elements for making a renewable Mediterranean free trade operational, securing energy supply and successful considers: i. A set of agreements stimulating production and ensuring free trade for RE. ii. A mechanism to secure investments, at least in the early stage. iii. An EU-MENA board to set and to ensure the necessary pace for achieving the common goals. The Vision of EU-MENA Electricity Highways The physical medium for the flow of energy around the Mediterranean is the MEDRING, however, this ring needs reinforcements. High Voltage DC, HVDC, is a competitive option. HVDC technology is becoming increasingly important for the stabilisation of large electricity grids, especially if more and more fluctuating resources are incorporated to that grid. HVDC over long distances contributes considerably to increase the compensational effects between distant and different renewable energy sources like wind and solar energy, makes possible the use of Norwegian hydropower storage for compensation of power demand in Germany, and allows to compensate blackouts of large power stations through distant backup capacity. HVDC electricity highways will considerably increase the redundancy and stability of the future Trans-European power grid. As a spin-off effect of this development, the import of renewable electricity from MENA will become an attractive diversification of the European power generation portfolio. Solar and wind energy, hydropower, geothermal power and biomass will be generated in the regions of best performance and abundance, distributed all over Europe through a highly efficient HVDC grid on the upper voltage level, and finally delivered to the consumers by the conventional interconnected AC grid on the lower level. Analogue to the network of interstate highways, a future HVDC grid will have a low number of inlets and outlets to the conventional AC system, as it will primarily serve long distance transfer, while the AC grid will have a function analogue to country roads and city streets. 5) THE TECHNOLOGICAL IMPEDIMENTS Renewable technology together with submarine transmission technology are still in the growth phase. For renewable energy generation, still the intermittency of renewable resources 7

and the need for a cost effective energy storage means are a deadlock waiting for a break through. The concepts of smart grids, mini grids and micro grids are still far from mature. The HVDC interconnections across the Mediterranean are challenged by the 3000 m depth of the Mediterranean sea. The long experience of the Danish wind industry shows that about 75% of cost reductions in the past were due to design improvements and more efficient manufacturing and about 25% was due to improved sitting. Hence, the R&D in wind technology can achieve cost reduction ranges of 15% to 20%. For Concentrator Solar Plant, CSP, more effort in R&D and technology innovation has to be done for the tower and dish technologies in order to reduce the investment costs. The reduction in costs can be mainly achieved via increasing the plant sizes, consequently increasing in production volume and cost cutting for investment, and improving the plant performance by increasing the efficiency and coupling with other generation systems in hybrid mode. The human capital and capacity development are high on the Agenda. Definitely, qualified labour force to engage in the R&D, engineering, and installation require a great effort to enable technology transfer. Lack of the human capacity able to bridge the gap and see eye to eye with potential investors is a fundamental problem facing Renewable Energy development. Capacity impediments include the lack of skills among public officials to manage Public Private Partnership, PPPs, most local judicial systems do not have the capacity to handle complex contracts or disputes; and regional and sub-national regulatory frameworks are not harmonized, which poses problems for projects that cross borders. Capacity risks consist of bureaucratic procedures that effectively halt or delay a project; change in administrations and consequently different rules for investors; uneven policies in different countries; and nationalization or expropriation. Some initiatives involve streamlining public agencies to minimize bureaucracy; hiring and developing individuals who have experience in PPPs; and strengthening regional PPP capacity and cooperation. 6) THE REGULATORY IMPEDIMENTS Levelled playground is a necessity to bring private capital to participate in infrastructure activities. Establishment of strong market regulations for infrastructure is the key for investment mobilization to participate in the infrastructure activities. Most of Mediterranean countries have set up independent regulatory authorities to make objective, and consistent regulatory decisions. Still regulators meet some reluctance limiting the effectiveness of sector regulation. One way forward is through benchmarking. Developing credible, effective regulation takes time and many iterations. All the Southern Mediterranean countries still in the process of the establishment of the legislative framework for liberalized electricity markets. However, all the countries in the Southern Mediterranean still facing the challenge of making the electricity industry financially viable. The industry unbundling question is still on the table for those countries. for those countries, market access is still an issue. They have not fully defined their market arrangements. Most of the countries are in the process of preparing a crisp plan for market implementation. However, all countries have fulfilled their requirements to establish a

regulatory regime. Moreover, all countries are in different stages on route to set their codes and technical agreements. Speaking about regulatory impediments seems unusual or strange with around 50% of Arab states already announced their RE future targets. The case of feed-in tariff, FiT, may explain this contradiction. Notwithstanding FiT is already applied in two countries, Algeria since 2004 and Syria since 2011, no RE project had been implemented under this policy. This means that the current RE regulations and policies are not capable to convert Arabian wishes regarding RE future targets into real projects. So, regulatory impediments involve the lack of independent or impartial regulators in some countries; lack of competition or open access to transmission and distribution networks; oneoff power purchase agreements, PPA, rather than standard PPAs; weak procurement laws; inefficient or non-transparent tendering processes that result in cancelled, postponed or disputed tenders; poor contract laws; and tariffs that are set by the government with no provision for inflation or changes in cost. The regulatory risks are the breach of contracts, the impartiality of regulators, and the inability to raise tariffs to cover costs. Some initiatives include setting multi-year tariffs with automatic adjustment clauses; unbundling utilities into different components to open up competition; setting renegotiation clauses in original contracts; and outlining performance targets for public authorities and private concessionaires. From the above discussion, it can be drawn that all countries are working towards the establishment of free electricity markets at different paces determined by internal factors. However, the core question that is standing against that transform is the financial viability of the industry. 7) FINANCING IMPEDIMENTS The characteristics of electricity investment are: 1- Long term investment. Investment period ranges from 15 to 40 years 2- Asset specific. Assets once built cannot be used for any other purpose that was first intended, i.e., if investor or government applies leverage in the operation phase to change the contractual conditions the other party does not have that much space to manoeuvre. 3- Capital intensive. The ratio of the fixed cost to variable cost is very high especially for hydro and wind generation, this makes this investment a very risky operation. Infrastructure investment is capital intensive. Governments have traditionally financed infrastructure works by public money. However, due to locked-in effect governments might be resistant to direct limited public money to renewable energy. The other option is mobilizing private capital for infrastructure investment. This is a very hard task. Infrastructure investment is the hardest and the riskiest mode of international business from a private sector perspective. Due to risk factors, investors usually prefer investment in generation rather than transmission, since transmission projects are subject to entanglement with many stakeholders during the construction phase. Furthermore, transmission lines are subject to theft and sabotage later on. 9

Distribution networks are localized within a certain geographic area with a relatively lowtech, and low investment equipment. Electricity network assets are state strategic assets even if were built and run by the private sector. Any state has the power to step-in and to take over the whole operation. Therefore, investors are anxious to obtain guarantees for this specific case that ensures cost recovery with the agreed upon rate of return. Financial impediments include the high costs inherent to the energy sector, including project preparation, tenders and importing commodities and equipment. Limited access to funding with the present global competition on finance is also a problem. Many countries need to enhance their sovereign credit ratings, which is suffering because of the turmoil in the Middle East, limiting their access to international credit markets. Third party guarantees might become a necessity for undertaking infrastructure projects in the Southern Mediterranean region for several years to come. Furthermore, domestic capital markets are narrow. Potentially valuable financial instruments like project bonds are generally not available. Financial risks comprise insufficient cost recovery, elastic demand, non-payment or inability to pay for services, and foreign exchange risk. Some initiatives to overcome these difficulties entail investing in cost-reducing technology; using syndicated loans; expanding pension funds and project bonds; increasing partial risk guarantees; using indexing for foreign currency risk; and investing in prepayment meters. 8) CONCLUSIONS AND RECOMMENDATIONS This paper discussed the MSP as a venue for mutual cooperation between the North and South across the Mediterranean. The MSP with its declared goals represents a mutual opportunity for both North and South for Security of Energy Supply to the North together with an opportunity for the South to develop its resources. There are four impediments, viz., Interconnections, Technology, Regulatory frame work and financing. The interconnections, and generation projects require resource mobilization. The prerequisites for resource mobilization to the Renewable Energy Sector require addressing the four impediments earlier mentioned. The recommendations to tackle those obstacles are: 1- Government Support The support takes many forms starting with sovereign guarantees against off-taker default, change in law, building an attractive investment environment able to attract national and international investors, launching competitive and public tenders, applying feed-in tariff policy, etc. 2- Strong regulatory framework A strong regulatory framework to ensure a levelled playfield for the energy project is mandatory to ensure that there is no foul playing. Still many countries in the Southern Mediterranean are still in the liberalization process of their electricity sectors. In addition to ensure that the game basis were built on win-win situation. 3- Credit worthiness of the off-taker A credit worthy off-taker with good governance and books in shape is a prerequisite to ensure non-default on payment of bills. The presence of interconnections will result in a larger and thus more liquid market that will enable renewable to flourish, 4- Process transparency

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The tendering, selection, and contract award process must be transparent and in compliance with the energy market guidelines to avoid any future problems with governments. Taking into considerations that there is no real definition to "Energy Market" term, but in this paper it refers to the basis able to attract investors and fulfill the national targets. 5- Capacity Building and Technology Transfer To address the technology challenge it is recommended to fast track the technology transfer process with the involvement of incumbent parties in the technology development. An indigenization effort of the renewable industry in all its stages of the value added chain will result in a genuine interst in reneables in all countries. 9) REFERENCES
1 2

Organization of Arab Petroleum Exporting Countries, OAPEC, "Annual Statistical Report 2010". League of Arab States (2010), "Strategy of Renewable Energy Utilization in the Arab Countries", Draft Version. 3 Mohammed Mostafa El-Khayat (Dec. 2011), "Energy imports from MENA countries? Think again, Europe", Europes Worlds Magazine, Autumn 2011 issue. 4 Organic electricity refers to electricity generated from renewable energy sources.

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