In its first Renewable energy country attractiveness indices of the year, Ernst & Young stresses that while 2011 saw "record levels" of clean energy investments, the 2012 market is not secure, thanks to continuing demand stagnation in Europe and damaging changes to solar incentive programs, such as those in Italy, Germany, Spain, France and the U.K. Furthermore, it says that increased competition from Asia will continue to put pressure on Western market players. "It seems inevitable that increased market share will flow to Asia, although these manufacturers are increasingly likely to set up partial assembly in the West using the financial firepower of their banks and infrastructure funds to assist; as seen by recent Chinese investments in the U.S. and Europe," states the company in its indices.
The abovementioned facts, it goes on to say, points to "almost inevitable" consolidation in both the solar and wind sectors something that was reported on last year.
However, as was also reported at the end of 2011, emerging markets are helping to fill the gap left by flat demand in Europe. Specifically, says Ernst & Young, the MENA region holds much promise when it comes to solar.
The company believes that a "significant" amount of investment will flow into the region once political stability is in place. Despite this potential though, it does say there is a "lack of international investment, and currently an apparent lack of willingness by policy setters to implement the necessary support."
With an abundance of sunshine, solar is said to be where the greatest potential lies in Algeria for renewable energy investment. Currently, the country is targeting 20 percent of energy supply from renewables by 2030, and has announced that it will invest US$120 billion in renewable energy projects. According to Ernst & Young, the government has unveiled plans to install 500 megawatts (MW) of solar in the country. Already a 25 MW concentrated solar power (CSP) project is underway there.
Last April, centrotherm photovoltaics and Kinetics Germany signed an agreement with the Algerian state utility Société Nationale de l’Electricité et du Gaz (Sonelgaz) for the development of an almost fully integrated solar module factory in Algeria. At the time, it was said that the first modules are expected to be produced at the integrated plant by 2014 and will supply the domestic market.
In Egypt, the plan is to obtain 20 percent of energy from renewables by 2020. Of this, photovoltaics is expected to account for eight percent. Commenting, Ernst & Young writes, "Electricity sector reform, a modern grid infrastructure, proposed FITs and a renewable energy fund would lay a significant foundation for further growth in the renewable energy sector." To date, a 150 MW hybrid CSP and gas plant has been installed in Kuraymat by Solar Millennium.
As has been recently reported, solar activity in Israel is hotting up, despite the fact that tariffs were reduced for small to medium-sized projects. Overall, says Ernst & Young, 60 MW of photovoltaics and wind are set to be installed there this year. Meanwhile, a 240 MW CSP plant is said to have been approved for implementation in 2014.
In launching a photovoltaic module specifically for the Israeli solar market, Suntechs James Hu remarked that "Israel’s excellent solar resources make solar power a viable and highly cost competitive energy solution that can help the country move towards energy independence." Meanwhile, Solenergy announced in February that it had installed photovoltaics on 26 residential and agricultural roofs in the Israeli settlement of Ram-On, and on January 8, 2012, Energy and Water Minister, Uzi Landau, signed 19 new licenses for photovoltaic facilities. These are expected to add around 27 MW of energy to the total of 515.5 MW in a country almost entirely reliant on imported fossil fuels.
Jordan may have a low solar profile compared to many of its MENA siblings, however, Ernst & Young states that because of its limited oil and gas reserves 96 percent of its energy is imported the Jordanian government is looking to develop 600 MW of solar over the next ten years. Furthermore, it will implement 1.8 gigawatts (GW) of renewable energy by 2020. "Sixty-five proposals were received, and the government is currently reviewing and determining the investment incentive mechanism that it will implement to support the development and construction of these projects," explains the company.
Specifically, plans are still underway for the $400 million 100 MW Shams Maan project, set to be located in the south of the country. Ernst & Young says that this year and next will be "defining years" for Jordan, due to this project, and the Fujeij wind project. Domestic firm Kawar Energy is also said to be conducting a feasibility study for a 100 MW CSP plant, which has the potential to scale up to 500 MW. The company is scheduled to present a final proposal for the photovoltaic project in the first part of 2012. Meanwhile, Petra Solar opened up an R&D office in the country last January, in order to support its efforts in deploying its smart grid interactive solar system in the Middle East.
"The growing global demand for sustainable energy and jobs provides a tremendous opportunity for Petra Solar throughout the Middle East and the world. Jordan is one of the most technologically advanced countries in the Middle East. Tapping into the region’s research and development talent will facilitate the international expansion of our products and will take our utility based solutions to a higher level," commented the companys Shihab Kuran at the time.
With targets to generate 42 percent of its electricity from renewables by 2020, Morocco is said to be actively pursuing renewable energy alternatives. "Despite no FIT or subsidies, the Moroccan Government has privatized the energy sector, which has encouraged private and foreign investment in renewable energy. Further reforms are planned with the breakup of the former monopoly enjoyed by the state utility, Office National de lElectricite (ONE)," writes Ernst & Young.
The country has an EnergiPro initiative, which encourages industrial entities to invest in renewable energy projects smaller than 50 MW, in order for them to meet their own energy needs. Guaranteed grid access and incentive tariffs for excess electricity produced are offered in return.
Furthermore, being the only outside country connected to the European grid, Ernst & Young highlight the potential for Morocco to become a net energy exporter, particularly in light of its "excellent" solar resources. In 2009, the government announced a 6.4 billion solar plan, which would see the development and construction of two GW worth of solar projects by 2020. Currently, plans to install Desertecs first solar reference project are underway.
In Oman, solar resources are said to be among the highest in the world, "with the potential to supply all of Omans current energy demand." Overall, CSP is said to be the technology best suited to take advantage of this.
Oil-rich Saudi Arabia has a target of achieving 10 percent renewables by 2020. In 2011, the country announced that it would invest $100 billion in both nuclear and renewable energies. Ernst & Young state that the government is planning to adopt a solar feed-in tariff, similar to those in Europe. While it has not developed its industry, Saudi Arabia has "exceptionally strong" solar resources. To date, the biggest photovoltaic project is said to be the 10 MW plant, underway by Belectric and Sun & Life, in Dhahran. The Kingdom’s first photovoltaic project, meanwhile, was a 500 kilowatt system on Farasan Island.
Tunisia is beginning to develop its solar activities, however Ernst & Young observes that the country must expand its grid and interconnect with other countries. In 2009, the government launched a 2 billion PPP Tunisian Solar Plan. In December, NR-Sol announced the opening of its 25 MW solar panel factory in the country, while in January, Nur Energie and the Desertec Foundation unveiled their plans to install two GW worth of CSP in the Saharan deserts.
Finally, in Abu Dhabi $15 billion has been committed to meet the target of seven percent energy produced from renewables by 2020. Again, due to the high irradiation, CSP is the solar technology of choice. Masdar Power is said to be constructing a 100 MW CSP plant there at the moment. The Dubai Electricity
& Water Authority is also planning to install a one GW solar park in the emirate by 2030. Around $3.27 billion is said to be earmarked for the Sheikh Mohammed bin Rashid Al Maktoum Solar Park.