provision of technical support/services for an economical, … · 2016-01-09 · provision of...

A project financed by the Ministry of Foreign Affairs of Denmark

Provision of Technical Support/Services for an

Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives f or

Renewable Energy and Energy Efficiency

Country Report Tunisia

January 2010 revised May 2010

Norsk-Data-Str. 1 61352 Bad Homburg, Germany

Tel: +49-6172-9460-103, Fax. +49-6172-9460-20 eMail: [email protected]

http://www.mvv-decon.com

Döppersberg 19 42103 Wuppertal, Germany

Tel: +49-202-2492-0, Fax: +49-202-2492-108 eMail: [email protected]

http://www.wupperinst.org

Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for RE and EE: Country Report Tunisia

Tunisia.doc

Table of Contents Page

1. Project Synopsis 1

2. Summary of Energy Situation in Tunisia 3

3. Comparison of Tunisian Practice with International Practice in Energy Efficiency 4

3.1 Strategy 4

3.2 Legal Reform 5

3.3 Price Reform 7

3.4 An Agency 8

3.5 Standards and /or Labels 10

3.6 Financial Incentives 12

3.7 Obligations 14

3.8 Audits and the Promotion of ESCOs 16

3.9 Transport and Spatial Planning 17

3.10 Dissemination of Information 18

4. Comparison of Tunisian Practice with International Practice in Renewable Energy 19

4.1 Targets and Strategy 19

4.2 Legal Reform 21

4.3 An Agency 23

4.4 Standards and /or Labels 23

4.5 Financial Incentives (Capital Support) 23

4.6 Feed-in Tariffs and Obligations 26

4.7 CDM Finance 27

4.8 Information 28

4.9 Industrial Policy 29

5. Case Studies 30

5.1 Case Study 1 - Grid-connected PV in Buildings 30

5.1.1 Background and Context 30

5.1.1.1 Programmes for Photovoltaic Electricity Generation in Tunisia 30

5.1.1.2 Scope of the Case Study 30

5.1.2 Evidence-Based Policy Making 30

5.1.2.1 Alternative Forms of Intervention 31

5.1.2.2 Base Case 32

5.1.2.3 Impacts 32

5.1.2.4 Consultation 32

5.1.2.5 Compliance 32

5.1.3 Theory-Based Evaluation 32

5.1.3.1 Methodology 32

5.1.3.2 Indicators 33

5.1.3.3 Behavioural Matrix 33

5.1.4 Cost-Benefit Assessment 36

5.1.4.1 Methodology Applied 36

5.1.4.2 Assumptions for Photovoltaic Use in Tunisia 36

5.1.4.3 Opportunity Costs for Electricity Generation Using Coal 37

5.1.4.4 Economic Assessment 39


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Table of Contents Page

5.1.4.5 Financial Assessment 44

5.1.5 Conclusion 46


5.1.5.2 Promotion Instrument 46

5.2 Case Study 2 - Mandatory Audits for Large Consumers 47

5.2.1 Background and Context 47

5.2.1.1 Scope of the Case Studies 47

5.2.2 Background to Mandatory Audits in Tunisia 47

5.2.2.1 Scope of the Case Study 47

5.2.3 Evidence-based Policy Making 47

5.2.3.1 Step-wise Procedure 47

5.2.3.2 Alternative Forms of Intervention 48

5.2.3.3 Base Case 49

5.2.3.4 Impacts 49

5.2.3.5 Consultation 49

5.2.3.6 Compliance 49

5.2.4 Theory-based Evaluation 50


5.2.4.2 Indicators 50

5.2.4.3 Behavioural matrix 50

5.2.5 Cost-Benefit Assessment 55

5.2.5.1 Methodology Applied 55

5.2.5.2 Assumptions and Data Base 56

5.2.5.3 Programme and Investment Appraisal 57

5.2.6 Conclusion 62


5.2.6.2 Instrument of Mandatory Audits 62

6. Institutional Reform in Tunisia – Some Possibilitie s 63

List of Annexes Annex 1: Mission Report

Annex 2: List of Stakeholders

Annex 3: Seminar Programme

Annex 4: Presentation on Methodology

Annex 5: Energy Situation in Tunisia

List of Figures Figure 1: Historical Trends in Coal Prices

Figure 2: Forecasts of Crude Prices to 2030 (DOE/IEA)

Figure 3: Central Forecast for Coal Prices ($2007/GJ)


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List of Tables

Table 1 High voltage tariffs

Table 2 Schedule of insulation foreseen in PROMO-ISOL (number of buildings)

Table 3 Origin of renewable energy contribution by 2011 (ktoe)

Table 4 Electrical capacity from renewables (entries in MW)

Table 5 Breakdown of CDM project portfolio in energy sector

Table 6: Behavioural Matrix for Instruments to Support Grid-connected PV for Buildings

Table 7: Key-data for PV Electricity Generation

Table 8: Coal Based Electricity Generation

Table 9: Levelised Economic Benefit / Loss for PV Electricity Generation


Table 11: Case 2 - Economic Assessment of PV Electricity Generation -

Table 12: Case 2 - Economic Assessment of PV Electricity Generation

Table 13: Case 3 - Economic Assessment of PV Electricity Generation

Table 14: Promotion of PV Use in Tunisia

Table 15: Financial Assessment - Investment 4,000 USD / kW

Table 16: Behavioural Matrix for Mandatory Audits

Table 17 Behavioural matrix for associated financial incentives

Table 18: Data Base for the Case Study

Table 19: Result of the Programme and Investment Appraisal

Table 20: Result of the Economic Programme and Investment Appraisal

Table 21: Result the Programme Impacts upon the Government Budget

Table 22: Result the Financial Assessment for the EE Investor

List of Acronyms AFD Agence Francaise de Development ANME Agence Nationale pour la Maitrise de l’Energie BRT Bus Rapid Transit CCGT Combined Cycle Gas Turbine CDM Clean Development Mechanism CER Certified Emission Reduction CFL Compact Fluorescent Lamp CNG Compressed Natural Gas CPA CDM Programme Activity CSP Concentrated Solar Power CTF Clean Technology Fund CTMCCV Centre technique des matériaux de construction de la céramique et du

verre DANIDA Danish International Development Agency DSM Demand Side Management DNA Designated National Authority EBPM Evidence Based Policy Making EE Energy Efficiency


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EHV Extra high voltage EIA Energy Information Agency EPC Energy Performance Contract ESCO Energy Service Company ETAP Tunisian National Oil Company EU European Union FNME National Fund for Energy g gram GEF Global Environment Fund GHG Green House Gas GJ Giga Joule GWh Giga Watt hours HV High Voltage IBRD International Bank for Reconstruction and Development (Worldbank) IDA International Development Agency IEA International Energy Agency IISD International Institute for Sustainable Development INNORPI National Institute for Standardisation and Industrial Property IPP Independent Power Producer JICA Japanese International Cooperation Agency kWh kilo Watt hours LEED Leadership in Environmental and Energy Design LNG Liquefied Natural Gas LPG Liquefied Petroleum Gas LRT Light Rail Transit LV Low Voltage MEDD Ministry of Environment and Sustainable Development MED-EMIP Euro-Mediterranean Energy Market Integration Project MED-ENEC Euro-Med Project on Energy Efficiency in the Construction Sector MENA Middle East and North Africa MMBTU Million British Thermal Units MEPS Minimum Energy Performance Standards MIEPME Ministry of Industry, Energy and Small and Medium Enterprises MV Medium Voltage MW Megawatt NET PV Net Present Value NGO Non-Governmental Organisation OCGT open cycle gas turbine OECD Organisation for Economic Cooperation and Development PIN Project Idea Note PoA Programme of Activities PPA Power Purchase Agreement PSA Production Sharing Agreement RCREEE Regional Centre for Renewable Energy and Energy Efficiency RE Renewable Energy SWH Solar Water Heater STEG Société Tunisienne de l'Electricité Energétique STIR Societé Tunisienne des Industries de Raffinage TBE Theory Based Evaluation


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toe tons of oil equivalent UNDP United Nation Development Program USAID United States Agency for International Development

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Economical, Technological and Environmental Impact Assessment of National

Regulations and Incentives for RE and EE: Country Report Tunisia

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1. Project Synopsis The "Regional Centre for Renewable Energies and Energy Efficiency (RCREEE)" was formally estab-lished June 25, 2008 through the signing of the "Cairo Declaration of Intentions on Establishment of a Regional Centre for Renewable Energies and Energy Efficiency (RCREEE)" by representatives of its member states: Algeria, Egypt, Jordan, Lebanon, Libya, Morocco, Palestine, Syria, Tunisia and Yemen. The overall objective of RCREEE is, through its interventions, to achieve: a) rapid implementation of cost-effective policies and instruments for the increased penetration of re-

newable energy (RE) and energy efficiency (EE) technologies and practices in member countries; and

b) increased market shares of companies and plants located in MENA-countries on the markets for technologies and services related to RE and EE in the MENA and EU regions.

For the first five years of operation, RCREEE receives financial support from the Governments of Egypt, Germany and Denmark. The European Commission (EC) supports RCREEE through two re-gional programs: "MED-EMIP" and Phase II of "MED-ENEC". Member countries will contribute finan-cially by increasingly co-financing the costs of the participation of national officials in RCREEE semi-nars and workshops. The present project is the first project support to RCREEE from the Danish Government. It is part of RCREEE's overall effort of providing member state administrations with better information and new planning tools and processes. It supports RECREEE in the development of a website which offers ac-cess to a complete subject-ordered list of member state RE&EE laws and regulations, reviewed policy documents, selected background and evaluation reports deemed to represent state-of-the art high quality analytical work as well as discussion blogs on topics deemed to be of general interest for RCREEE governments. The project has four specific objectives: 1. Policy planners and policy decision makers in RCREEE member states provided with informa-

tion on the economic, technical and environmental impacts of the policies and instruments used for the promotion of RE&EE in RCREEE countries.

2. RE&EE policy planners and consultants from the RCREEE member states strengthened in the application of methodologies for the execution of "evidence based policies", "theory based evaluation", "economic analysis of policy instruments" and the "integration of climate policy benefits in national energy planning".

3. Policy planners and policy makers in RCREEE member states provided with recommendations for how the policy making process in their countries can be adjusted to improve the information basis for decision taking by policy makers.

4. Policy planners and policy makers in RCREEE member states obtain an overview of how their EE&RE technology policies compare with the efforts of other countries in the region.

The project objectives will be achieved through the following activities which are performed in each of the ten RCREEE member countries. Data collection Five day country mission for information gathering and discussions with national stakeholders A half-day seminar on methodology at the end of the country mission A country report on EE and RE policy development An information workshop on policy development for EE and RE

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In parallel and supporting the above activities, the project will gather the pertinent information on EE and RE in each member country and make them available through the RCREEE website in an organ-ised manner. Likewise the methodology on evidence based policy development and theory based pol-icy evaluation will be discussed and extended in each country and their relevance and applicability will be illustrated through case studies. On the basis of the country reports, a regional report will be pre-pared, which will allow policy makers and decision makers in all RCREEE member countries to see the status of their EE and RE policies in a comprehensive regional context. The activities are carried out by the project core team of four international experts assisted in each country by a national specialist. The information workshop will be held by the national specialists at the end of the project using the material and the methodological case studies developed throughout the project. Tunisia was visited by the project team from 9 to 14 November 2009. The following sections in this report reflect the impressions gained by the project team through the discussions held during the course of the mission and all the information that has been available to the team. The main purpose of this country paper is to stimulate new thought on EE and RE policy devel-opment in Tunisia. We give no emphasis to a comprehensive description of the Tunisian energy sec-tor, but Chapter 2 summarises the main characteristics, further details are given in Annex 5. Chapters 3 and 4 compare Tunisian and international practice in the promotion of Energy Efficiency and Re-newable Energies respectively. Chapter 5 gives two practical case studies in the Tunisian context for evidence based policy making and theory based evaluation, one each on a topic related to energy ef-ficiency and renewable energy policy. Chapter 6 finally offers some thought on institutional reform.

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2. Summary of Energy Situation in Tunisia The total primary energy consumption in 2007 was 7.7 Mtoe, of which 14% were imported. In 2007 the two main primary energy sources were petroleum products (54.6%) and natural gas (45.1%). The net electricity demand was 14.6 TWh in 2008, an increase of about 5% compared to 13.8 TWh in 2007. Tunisia’s electricity production is heavily based on natural gas (95%) with a share of below 1% (in 2008) from renewable energy sources (mainly hydro and wind power). The installed generation capacity (without autoproducers) in 2008 totalled 3,313 MW of which 3,232 MW were thermal power plants, 62 MW hydroelectric power stations and 19 MW wind farms. There are several power plants in the planning and building stage, mainly natural gas plants. In order to further expand national renewable energy production, the Tunisian government adopted a policy titled “Plan Solaire Tunisien” in September 2009. The plan encompasses a total of 40 technol-ogy projects. The project portfolio is not limited to solar energy but also includes wind energy projects and energy efficiency initiatives. The Tunisian government plans to increase the share of renewable energies from currently below 1% of the total energy consumption to about 4% in 2011. The share of renewable energies in the electricity sector is planned to increase to 10% of the total capacity in the same time frame. By 2030, seen from the side of natural potentials renewable energies could contribute nearly 20 Mtoe to the nation’s primary energy supply. Wind power is considered the most promising. By 2011, the na-tional government aims to ramp up wind power capacity to 240 MW, currently (end 2009) there are 54 MW of wind turbines operating. The national renewable energy strategy of Tunisia strives for an ex-pansion of wind power to a 10% share of the total installed electric capacity by 2030. Energy efficiency improvements have led to a significant decline of the Tunisian energy intensity since the early nineties. On average, energy intensity was reduced by 2% per year until 2007 with energy demand successively being decoupled from economic growth. The institutional framework for the support of renewable energies and energy efficiency in Tunisia is well developed. Renewable energy is part of the responsibility of the Ministry of Industry, Energy and Small and Medium Enterprises. It is supported by the National Agency for Energy Conservation (ANME), which plays an important role in fostering research and development as well as designing and implementing policies and strategies. In the years 2004 and 2005 some important steps were taken, e.g. the establishment of the National Energy Conservation Fund.

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3. Comparison of Tunisian Practice with Internation al Practice in Energy Ef-ficiency

This section attempts to compare the present status of energy efficiency with international prac-tice.Public policy intervenes to correct market failures, in the case of energy efficiency the most com-mon failures are: distorted energy prices, external costs, poor access to technical information, agent-principal problems, budgetary constraints and excessive risk aversion, poor skills of investment ap-praisal. Policy instruments are intended to correct or compensate for these distortions.The most com-mon among these instruments can be categorised as: Corrective Measures

Price Reform Institutional and legal reform Labelling Dissemination of information Research, development and demonstration Financial incentives Support for energy service companies (ESCOs)

Compensating Measures

Standards Mandatory measures (e.g. compulsory audits and management obligations) Corporate agreements Efficiency obligations Transport and spatial planning

Normally these instruments should be combined within an overall strategy that sets out objectives and targets and defines the combinations of instruments that are expected to achieve the targets. The following discussion reflects this taxonomy. 3.1 Strategy Strategy sets out objectives and targets and defines the combinations of policy instruments that are expected to achieve the targets. An important stimulus to policy for energy efficiency and renewable energy in Tunisia was the transi-tion of the country from energy surplus to net importer. This transition coincided more or less with a secular increase in international oil prices. In 1980 Tunisia had a total primary energy demand of about 3 million toe, but production of energy was more than double the level of demand at around 6.2 million toe. The country first went into energy deficit in 1994 and hovered around a rough balance be-tween domestic supply and demand until 2000, when production declined quite rapidly and the deficit became marked and apparently enduring. Increasing oil prices had a serious impact on the competitivity of the national economy; in 2003 the value of energy required to produce 1,000 DT of GNP was 58 TJ, by 2007 the value had grown to 120 TJ. In parallel the cost of subsidising energy rose dramatically; in 2003, the subsidies from the state budget to energy products were around € 111 million, by 2007 they were € 889 million – an eightfold increase in 4 years.

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Tunisia had already a significant policy in place to manage energy demand. Financial incentives had been in place since 1994 and an agency for energy conservation had been created in 1985. The effort was accelerated in 2004 with a new three year programme managed by the Agence National pour la Maitrise de l’Energie (ANME). An analysis of the impacts of this programme over the period 2005 – 2007 indicated that it had been both successful and very beneficial to the public finances. The evalua-tion estimated that it had saved 800 ktoe over the period and that the investments put in place would eventually save 2,800 ktoe during the time life of the measures. The cost of these savings were esti-mated at around 50 €/toe which is some 10% of the equivalent cost of supply. The contribution to the state to each toe saved was estimated at € 5, which is well below the average subsidy level (€ 92/toe) given to energy products and therefore positive for the state budget. The perceived success of the programme to that date and the supply demand and price conjuncture noted earlier were important in-fluences on the formulation of a more ambitious subsequent programme. The present strategy for energy efficiency is contained within the quadrennial plan for energy effi-ciency and renewable energy running from 2008 to 2011. The quadrennial plan follows the instructions of the 11th Development Plan (2007-2011) that sets the broad directions of national economic policy. In the energy sector it requires a gradual reduction in energy subsidies and calls for a scaling-up of in-vestment in energy efficiency and renewable energy. The policy measures both for energy efficiency and for renewable energy were conceived against a long-term strategy document extending up to 2020 - 2030 (La maîtrise de l'énergie en Tunisie à l'horizon 2030). The quadrennial plan was adopted by the Council of Ministers on January 15, 2008 and presented to the public in a National Conference on Energy Management in February. The overall objective is to reduce the energy intensity of the economy by 3% each year over the period from 2008 – 2011. Com-bined with the impact of the three year programme from 2005-2007 this decrease will accumulate to a 20% reduction in energy use in 2011 as compared to the level which would have been expected if en-ergy intensity had remained at the level recorded in 2004. The decrease is made up of approximately 8% from 2004 to 2007 and a further 12% to 2011. In volumetric terms this is equivalent to a notional saving of 2 million toe / year, i.e. a reduction from the figure of 10.6 mtoe per year that would have been achieved at constant energy intensity to the target of 8.6 mtoe in 2011. The Plan also contains an objective to increase the share of renewable energy to 4% of primary energy supply. The estimated investment costs are € 610 million of which the state will contribute € 80 million. New outline targets have recently been announced for 2014. The intention is:

• To reduce energy intensity to 275 kgoe/ 1 000TD • To reach a capacity of 550 MW electrical generation from cogeneration and renewable ener-

gies, made up of 310 MW of wind, 60 MW of hydro, 10 MW of biogas, 50 MW of CSP and 120 MW of cogeneration

• To create 340,000 square meters of additional solar panels by 2014, thus raising the overall surface of solar panels to 740,000 square meters.

3.2 Legal Reform The proper implementation of energy efficiency requires an energy efficiency law that justifies the pur-pose of the activity, establishes a clear focus in government, assigns the responsibilities of actors, and makes provision for an agency and specific instruments. The following list contains the most frequently occurring provisions in such laws:

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• Recognising energy efficiency as an appropriate subject of legislation and regulation • Identifying and communicating in a policy document or national plan the principles of energy

efficiency policy • Identifying through technical analysis the potential for saving and prioritizing the sectors with

highest potential • Defining policy interventions to promote energy efficiency e.g. fiscal and financial incentives,

tradable certificates, and regulations • Drafting of legislation to implement policy interventions • Setting penalties for default • Creating institutional structures to promote energy efficiency • Assigning staff in proper numbers and with proper qualifications to the institutions and ensur-

ing adequate finance for the institutions • Drafting national programmes for short and long-term management of energy efficiency • Assigning responsibility to promote energy efficiency at national, regional and municipal levels • Monitoring and evaluating progress

Energy efficiency in Tunisia is governed by a complex series of laws and decrees of which the follow-ing are significant:

• The Law 93-120 of (December 1993), regarding financial incentives • Decree 94-537 (March 1994) sets the criteria for financial incentives for energy • efficiency and renewable projects • The Decree 2000-1124 (May 2000) establishes the administrative and financial organisation of

the National Agency for Renewable Energies (ANER) • The Decree n°2002-3232 (December 2002) creates sup port for the development of the co-

generation in Tunisia. • The Decree 2004-795 (March 2004) modifies the administrative and financial organisation of

the National Agency for Renewable Energies (ANER) • The Law 2004-72 (August 2004) establishes energy efficiency as a national concern, estab-

lishes priorities and creates a new agency; some provisions were subsequently modified by the Law 2009-7

• The Law 2005-82 (August 2005) creates the possibility to fund energy efficiency actions by means of revenues from taxes on the first registration of cars and the import or manufacture of air conditioners.

• The Decree 2004-2144 (September 2004) establishes the details of the mandatory audits; it fixes the frequency, indicates the scope and determines the thresholds.

• The Decree 2004-2145 concerning the labelling of household electrical appliances • Law 2006-106 of (December 2005) implements Law 2005-82 by creating the energy effi-

ciency fund (FNME) • Decree 2005-2234 (August 2005) fixes the incentive structure to investment in energy effi-

ciency as well as the modalities governing eligibility and procedures. • The Law 2009-7 (February 2009) modifies and extends Law 2004-72; in particular it lowers

the threshold for mandatory energy audits in industry, sets norms and standards for buildings, make urban transport plans mandatory and sets rules for access to network and buy back of excess power from cogeneration units and self-generation from renewables

• The Decree 2009-362 (February 2009) modifies the incentive structure to investment in en-ergy efficiency originally established in Decree 2005-2234.

• The Decree 2009-2773 (September 2009) determining the conditions for transport of electric-ity produced from renewable energy and the sale of excess to STEG

• The Decree 2009-3377 (November 2009) modifying and completing the Decree 2002-3232 re-lating to cogeneration

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Certain Ministerial Orders are also important:

• Order of the Minister of Industry, Energy and Small and Medium Enterprises of 11 June 2007 approving the specifications for the audit plan for energy in the residential and tertiary sectors.

• Joint order of the Minister for Infrastructure, Housing and Planning and the Minister for Industry, Energy and Small and Medium Enterprises of 23 July 2008 laying down minimum technical specifications aimed economy in energy construction projects and extension of buildings used for offices or similar.

• Order of the Ministers of Industry and Energy and Commerce of September 10, 2004, regarding the labelling of refrigerators, freezers and their combinations.

• Order of the Minister of Industry, Energy and Small and Medium Enterprises and the Minister of Trade and Handicraft of April 21, 2009, regarding the labelling of individual air-conditioners with a power consumption below 12 kW.

• Joint Order of the Minister for Infrastructure, Housing and Planning and Minister for Industry, Energy and Small and Medium Enterprises 1 June 2009 laying down minimum technical specifications for economy in the use of energy in the construction and extension of buildings for residential use.

Key provisions of these laws are identified in the later text of this report. The Law 2004-72 marked a critical turning point because it established energy efficiency as a national priority because of its contribution to sustainable development and the vigour of the national economy; it defined priorities and reinforces the position of the National Energy Conservation Agency (ANME). Some specific provisions were later modified by the Law 2009-7. The Law outlines what actions are to be considered as constituting energy efficiency and places especial emphasis on:

• Obligatory periodical audits • Initial consultation over large energy consuming projects • The use of energy service companies (ESCOs) • Cogeneration • Labelling of materials, household appliances and equipment to indicate their energy consump-

tion • Regulation of the thermal performance of buildings • Use of renewable energy in public lighting • Testing of car motors • Transport planning in large agglomerations • Promotion of renewable energy • Energy substitution

Detailed penalties for infringement of the various regulations are set out in the Law. 3.3 Price Reform It is well established that energy demand is price sensitive, especially demand for electricity. The most reliable results come from industrialised countries. Price reform will save large quantities of energy, especially in the long-run and can make a substantial reduction in GHG emissions from countries with distorted prices. Subsidies put a large strain on public accounts and weaken foreign trade balances. They also tend to devastate the state-owned enterprises that are normally a victim of the practice.

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All energy prices in Tunisia are subsidised, but unevenly. The total value of subsidies for petroleum products is estimated at € 889 million in 2007, or around € 92/toe on average. It was certainly more in 2008. The main subsidies are directed to LPG and kerosene that are fuels used in large part by poor communities in rural areas for cooking and water heating. Electricity is also subsidised, but it is hard to assess how much. The subsidies to LPG and to electricity are an obstacle to the penetration of solar water heating as they are competing services. Subsidies to electricity are both direct and indirect. STEG receives two supplies of gas. One is from Algeria that is paid in kind as a transit fee; this is assigned to the company by the government at a nominal price of TD 90.8 / toe. This is an indirect subsidy to electricity that is not detectable in the state budget. The second supply comes from the Tunisian fields in the South operated by British Gas and this is purchased through an arm’s length commercial contract indexed on the price of heavy fuel oil, with take or pay clauses. STEG also receives direct subsidies for its investments and its operating budget. Because of the close integration of the budget of STEG with that of the state, it is hard to asses in a short study such as this how big those subsidies are, but it is clear from retail prices that they must occur (see below). Tariffs for the low voltage sales of electricity are complex and differentiated by use, e.g. special tariffs for water heating and air-conditioning. The smallest residential customers with a consumption less than 50 kWh / month pay a monthly charge of 0.2 TD / kW and a unit charge of 74 millimes. A con-sumer with a supply of 1 kW taking 50 kWh would then pay 3.9 TD or an average of 0.078 TD / kWh (i.e. 3.9 €cents/kWh). The normal tariff for residential sales from 1 to 300 kWh per month has a fixed charge of 0.2 TD / kW and a unit charge of 131 millimes per kWh. For a consumer with a 3 kW supply taking 200 kWh / month this comes out at 0.134 TD / kWh, or about 6.7 €cents. The highest residential tariff is about one third more. The high voltage industrial tariffs are set out in the Table below. The average cost depends on circum-stances, but is generally from 0.1 – 0.12 TD / kWh, or 5-6 €cent/kWh.

Table 1 High voltage tariffs

Tariff Capacity charge (TD/kW/ month)

Unit charge mill/kWh Day Peak Evening Night

Four time periods 3 94 147 119 75 Three periods 3 109 139 NA 75 Emergency 1.25 110 160 131 77 There is an intention to move to cost-reflective pricing by the end of the present Development Plan, i.e. 2011, but this intention does not seem to extend to kerosene and LPG that are the main fuels used by the poor and it is unlikely to be achieved for electricity. 3.4 An Agency Many countries have found it useful to establish a specialised institution to prepare initiatives, draft regulations, monitor progress, ensure compliance, administer funds and perform other administrative

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activities. It will not necessarily be the only institution with powers in the area. If fiscal incentives are adopted then these will be managed through the office responsible for taxation, but there will still be a need to confirm the technical acceptability of the investment. Compliance with standards for equip-ment and boilers will normally be performed by special corps of inspectors already engaged in stan-dards work. The regulator would normally enforce any specific obligation on electricity networks. Despite the need to involve existing institutions, it is often considered useful to create a specialised agency. This agency would typically have the following responsibilities.

• Developing and disseminating targeted information to specific categories of users • Organising training; liaison with universities and professional bodies • Developing energy efficiency standards • Conduct of surveys; analysis of data and maintenance of database • Conducting or managing programmes of certification and labelling • Liaising with other state institutions (e.g. Taxation offices and inspectorates) • Administering energy efficiency funds • Specifying mandatory audits; certifying and/or licensing energy auditors • Designing short-term and long-term energy efficiency programmes • Monitoring, evaluating and reporting on the implementation state activities and private initia-

tives • Designing and proposing new interventions as opportunities are identified

Legislation would probably be needed to establish such an agency and to specify its duties. An Agency for Energy Conservation (AME) was created in 1985, then renamed in 2000 as National Agency for Renewable Energy (ANER) and passed under the control of the Ministry of Environment. Then, it has been again renamed and its responsibilities and powers extended in 2004 under the Law 2004-72. Article 16 of this Law provides for the creation of a financially autonomous legal entity to be known as the Agence Nationale pour la Maitrise de l’Energie (ANME) to be placed under the supervi-sion of the Ministry of Energy. Article 17 assigns certain responsibilities to the ANME, including the obligations:

• To manage the programme of mandatory audits • To support the developers subject to the mandatory energy impact analysis • To propose financial incentives and other interventions that could help promote energy effi-

ciency • To confirm the conformity of equipment for energy efficiency or renewable energy to any

specification contained in a regulation that allows benefits to be given • To promote techniques and technologies that have superior performance • Develop and monitor demonstration projects for energy efficiency • Promote training in energy efficiency in conjunction with appropriate institutions • Promote programmes of education, sensitisation and information about energy efficiency • To contribute to scientific research programmes in the realm of energy efficiency • To evaluate the impact of projects of energy efficiency on the emissions of greenhouse gases • To develop an inventory of GHG from the energy sector and indicators of energy efficiency

The Law attributes to the ANME certain fiscal advantages, including exemption from value added tax on work it performs and services rendered and also an exemption of customs duties and value added tax on materials imported in the framework of its cooperation with international donors. It also requires that entities that wish to take advantage of the various grants made available under the law can only

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do this, if they sign with ANME contractual agreements to programmes of work setting out the techni-cal, economic and financial aspects of the work to be done. ANME plays a key role in both energy efficiency and renewable energy. It implements the quadrennial plan, manages the National Energy Fund and it is the main counterpart of technical cooperation in the field. 3.5 Standards and /or Labels The obligation on manufacturers and importers of equipment to label goods or to meet specified stan-dards is a policy measure introduced to overcome the market failure caused by asymmetric informa-tion. Potential users of equipment, faced with a choice of designs, may not have the skills and informa-tion to understand the consequences of their choice. They may be tempted to choose low-cost equip-ment with high energy consumption in preference to higher price options that perform better. Manufac-turers may not have an incentive to provide this information if they think that their comparative market advantages do not include greater efficiency than competitors. Labelling and standards are not exclu-sive; goods can be obliged to meet a certain minimum standards and then labelled according to their performance when it exceeds the standard. Labelling and standards both require testing facilities and protocols; both require rigorous and competent enforcement. Article 8 of Law 2004-72 obliges manufacturers, importers and retailers of household appliances to conform to the requirements of energy labelling according to the modalities specified in a separate Decree of the Minister of Energy. Article 9 forbids the marketing of devices that infringe a minimum performance to be specified by Decree. On this basis a system of labelling and standards has been put in place and steadily tightened. Refrigeration is estimated to account for 40% of the domestic use of electricity; in 2007 it was as-sessed at 12% of the total national electricity supply. With the assistance of GEF, ANME has imple-mented a programme of labelling of refrigerators since 2001. The basis of the programme is a label that divides appliances into 8 categories according to their performance, with 1 being the best and 8 the worst. Norms were based on European standards adapted to Tunisian circumstances by the work of a committee of experts. Test-beds were installed at the National Institute for Standardisation and Industrial Property (INNORPI). ANME is responsible for managing the logistics of checking regulatory compliance. When new models are introduced a sample must be submitted for testing and the model may only be put on the market after the approval of the Minister of Commerce. The labelling programme is claimed to have radically transformed the market in Tunisia. After the initial introduction of the labels, the categories 7 and 8 were forbidden on the market. Subsequently the categories 5 and 6 were also forbidden, leaving only categories 1 to 4. The labelling scheme will be supplemented by a programme aiming to replace 400,000 less efficient refrigerators and to replace them by class 1 and 2 appliances. An incentive will be offered for the scrapping of the old refrigerator. In April 2009 a similar scheme was launched for air conditioners. Classes 7, 8 and 9 will soon be ex-cluded from the market. Similar arrangements are in preparation for washing machines and other de-vices. The limiting factor is the provision of testing laboratories, without which compliance with the regulations cannot be assured. Standards for buildings are an important special case because:

• The rate of new building in developing countries is far higher than anywhere else in the world

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• Buildings are large consumers of energy • Buildings last for decades and will determine energy use for a very long time • Large improvements in the energy efficiency of buildings can be achieved at low cost • Developers will not normally make those improvements because of various chronic market

failures • The principal-agent dilemma is especially acute.

Buildings constitute the third largest energy consuming sector in Tunisia. Residential buildings repre-sent 17% of final energy consumption. The Quadrennial programme has identified large savings (400,000 toe / year by 2011) to be achieved by better lighting, better thermal performance and stan-dards for appliances. Work on standards in the building sector received significant support from a project of UNDP and the French government executed by ANME with total funds of $10.6 million. The objectives of the pro-gramme were:

• To demonstrate over the whole country through different sorts of construction, the feasibility and performance of buildings conforming to an energy efficiency code

• The promotion of awareness at all levels to gain the support of decision makers • To improve the capacities of relevant professionals such as architects, construction compa-

nies and legislators. The project succeeded in realising 46 demonstration projects on the basis of which ANME was able to develop seven sectoral guides for professional people in the field. Focus was directed to low cost in-terventions that would not add more than 10% to the cost of the building. A label indicating comfort and energy performance of buildings was developed and an extensive communication and awareness programme was launched with television, radio and newspaper advertisements; a dedicated web-site was created for all levels of interest. Four practical guides were elaborated to help practitioners implement the regulation. They deal with:

• Energy efficient buildings • The climate zones of Tunisia • Basic climatic information for sizing heating a and air conditioning • A guide to the regulations concerning thermal insulation in new buildings.

In terms of the legal framework, Article 10 of the Law 2004-72 (modified by the Law 2009-7) makes provision that new buildings and extensions to old buildings should meet a minimum performance standard in energy efficiency as established jointly by the Ministries of Energy and Habitat. The im-plementing regulations are now in preparation. Thermal insulation has been obligatory in new buildings in the public sector according to the Decision of the Council of Ministers of the 28th April 2005. For other sectors labels will be produced to record performance running from levels 1 to 8. Four categories of building will be recognised in the labelling scheme. The first two regulatory texts have been issued for offices and multi-occupancy apartments; they will enter into force in January 2010. Subsequently there will be similar programmes for commu-nity buildings (such as schools and hospitals) and for workshops. The market for thermal insulation is expected to develop rapidly under the joint influence of this legisla-tion and the promotional programme PROMO-ISOL. This programme aims to insulate 20,000 homes and 1,500 buildings in the tertiary sector by 2011, according to the schedule shown in the Table.

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Table 2 Schedule of insulation foreseen in PROMO-IS OL (number of buildings)

Sector 2008 2009 2010 2011 Total Residential 1,000 2,500 5,500 11,000 20,000 Tertiary 50 150 300 1,000 1,500 Testing laboratories have been created at the “Centre technique des matériaux de construction de la céramique et du verre (CTMCCV)” to ensure that materials meet specified norms. The sale of material not conforming to the norms will be prohibited. 3.6 Financial Incentives Financial incentives can be separated into economic and fiscal incentives. Economic incentives are aimed at encouraging investment in energy efficient equipment and processes by reducing the in-vestment cost directly and fiscal incentives are those actions that reduce the cost indirectly through the taxation system. Economic incentives can be further divided into investment subsidies and con-cessional finance. Investment subsidies change the perceived cost of an investment and concessional finance changes the financing conditions. Fiscal incentives differ from other financial incentives in several ways. They do not need to be funded directly; they are funded indirectly in that they represent a loss of revenue to the state budget. Generally they are available to all who qualify according to the terms of the exemption; there is no application and award process. For this reason they are some-times preferred as being less susceptible to corruption and to political manipulation. They can be managed through the normal tax compliance regime. In middle income countries this approach is generally only practical with companies. A last instrument that might be included under this heading is feed-in tariffs for cogeneration. If the feed-in tariff is above the opportunity cost of electricity then the instrument does really constitute an in-centive. The incentive is funded by other consumers of electricity unless a special compensation is paid from the state budget to the network. If the feed-in tariff is above the marginal cost of electricity at subsidised fuel prices, but below the opportunity cost then it is simply a regulation to correct the mo-nopoly purchasing power of the network and the distorted fuel prices. Financial incentives have been in place since 1994, but the present structure and scope of incentives is defined by the Decree 2005-2234 and the Decree 2009-362. The later Decree modifies the incen-tive structure to investment in energy efficiency originally established in Decree 2005-2234. The main provisions pertinent to energy efficiency are the following:

• For energy audits and preliminary consultancy a grant of 70% of the cost is available with a ceiling of 30,000 TD

• For demonstration projects a grant of 50% of the total cost is available with a ceiling of 100,000 TD

• Investments in energy efficiency benefit from a range of interventions that are available only in the framework of a contract between the organisation and the ANME (contrat-programme) and only after the investment has been made.

o A grant of 70% of the preliminary studies of feasibility with a platform of 70,000 TD o A grant of 20% of the material investment cost with a ceiling that varies according to

the size of the consumer. The ceiling is 100,000TD for establishments consuming less than 4,000 toe/year, 200,000 TD for establishments consuming more than 4,000 toe/year and less than 7,000 toe/year, 250,000 TD for establishments consuming

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more than 7,000 toe/year. Rules are indicated for categorising consumers according to these limits.

• For fishing boats and cars there are provisions to improve engine efficiency of which the most

significant is an investment grant of 20%, with a ceiling of 6,000 TD, for the installation of test-ing stations for motor vehicles. The station has to conform to the specifications of the relevant professional organisation.

• The substitution of natural gas in industry and the tertiary sector benefits from a grant of 20% to the necessary physical installations within the organisation up to a ceiling of 400,000 TD. The grant is only payable after the project has been installed and is operating. In the residen-tial sector there are also capital subsidies available amounting to 140TD for each individual house and 20TD for each apartment within a multi-occupancy building. These grants are given only within the framework of an agreement between the ANME and the STEG.

• Cogeneration facilities can benefit from a subsidy of 20% with a ceiling of 500,000 TD The award of these grants is monitored by an interministerial committee (commission technique con-sultative) presided by the Director General of the ANME. Evidently financial incentives have to be financed. This is done by the National Fund for Energy (FNME). The basic legal structure comprises two laws. The Law 2005-82 of the15 August 2005 pro-vides the means to raise finance for investment subsidies for energy efficiency and renewable pro-jects. The scope of the permitted interventions was later extended to feasibility studies, cogeneration and solar water heating. The resources are obtained by taxes specified by law, namely:

• A duty levied on the first registration of private cars in Tunisia at a rate depending on engine size between 250 to 1,000 TND, for petrol-powered cars, and 500 to 2,000 TND, for diesel-powered cars, with a certain number of exemptions stipulated by the Law

• An import duty or local production duty on air-conditioning equipments rates of 10 TND for each 1,000 thermal units.

The finance law 2005-106 of the 19 December 2005 ratified the law 2005-82 and created a National Fund for Energy (FNME). The law extended the range of possible funding options to allow other re-sources such as grants from international donors and other possibilities. The resources of this fund are insufficient to finance all the energy efficiency and renewable energy projects that are envisaged under the Tunisian strategy. To help fill this gap, two concessionary lines of credit have been provided by international banks. A credit line of € 40 million was approved by the AFD in 2006 in favour of three commercial banks with the biggest industrial portfolios to finance energy conservation and environmental projects. A technical assistance component is joined to this line in order to facilitate the indenfication, the instruction and the implementation of such projects; this component is funded by a subsidy of 1.26 million € given by the AFD. The technical assistance program is placed under the responsibility of the Agence pour la mâtrise de l’énergie for the energy conservation projects and the Agence Nationale de Protection de l’Environnement for the environmental projects. The credit line is intended to finance investments that would reduce emissions of GHG and in particular is aimed at improving energy efficiency in industry and stimulating the use of renewable energy. There seems to have been little use of this line. One problem has been administrative delay. Disbursement was initially delayed by a year because the AFD required a sovereign guarantee and required due diligence on the banks. There is still a conven-tion that needs to be signed between the ANME and the Ministry of Finances. The credit line is avail-able for three years so these delays are a serious limitation. The other problem has been that the

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terms are expensive. The loan is at LIBOR - 0.8%, but it is denominated in EURO; to manage the for-eign exchange risk the banks need a 2% margin and after their fees are added the interest rate is little better than what large companies can find on the market. The EU accepted to cover the foreign ex-change risk by subsidizing 2% of the interest rate. The convention between AFD and EU was signed on 16th of November 2009. In July 2009, Tunisia and the World Bank signed an agreement concerning a $ 55 million US Dollars Energy Efficiency Project, to be implemented over four years. The objective is to contribute to the quadrennial plan through the scale up of industrial energy efficiency and cogeneration investments. Under this arrangement a line of credit from the IBRD will be made available to three commercial banks, with a guarantee from the Republic of Tunisia. The banks are responsible for loan repayment and assume all financial risk. The banks concerned are Amen Bank, Banque de l’Habitat and Banque pour le Financement des Petites et Moyennes Entreprises. The project concept was designed to provide an integrated technical and financial analysis of end-use projects to be financed by Participating Financial Intermediaries (PFIs). To avoid lengthy and cumber-some application processes for projects that commercial banks will not be interested in financing, the National Agency for Energy Conservation (ANME) will work closely with PFIs to prescreen projects for financing. This arrangement will also allow a coherent allocation of grants from the Energy Conserva-tion Fund (FNME) and other grants and loans from different sources in the financing plan of each pro-ject. This is intended to prevent projects failing because of gaps in the financing plan. The terms of the loan are somewhat less attractive than the AFD line and it remains to be seen how successful it will be. There is some doubt about the capacity of the energy efficiency market, at the current stage, to absorb these 2 lines. It may be better to concentrate the effort on AFD line, as a pilot financial mechanism that could be extended later, after monitoring and assessment. There are clear legal provisions for cogeneration. Article 7 of Law 2004-72 (modified in Law 2009-7) assigns to any establishment or group of establishments equipped with cogeneration, a right to export surplus power to the national network within limits fixed by Decree. The technical conditions pertaining to these exports are fixed by a standard contact approved by the Ministry of Energy. The Decree 2002-3232 (December 2002) defines the incentive framework for cogeneration. It estab-lishes the technical conditions under which an installation can be authorised. The Decree requires that the overall efficiency of the installation must exceed 60% and that the ratio of recovered heat should be greater than 50%. STEG is obliged to purchase surplus electricity up to a defined limit. For installa-tions above 3 MW the purchase obligation is limited to 30% of production; for smaller installations it can be 50%. The purchase tariff (in millimes per kWh) is linked to the industrial price of gas according to the following formula:

• Normal times: 0,2432 x Price of gas/toe + 19,7 • At peak times: 0,3040 x Price of gas/toe + 46,4 • Off peak: 0,2179 x Price of gas/toe

3.7 Obligations Another approach, which may be combined with incentives, is to oblige companies to undertake en-ergy efficiency by mandatory measures. These can be multiple and include obligations to:

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• To carry out audits at regular intervals • To report to central government database and possibly to communicate audit results to the

public • To report energy consumption, saving measures and implemented measures • To propose action plans to implement the energy savings measures identified in audits • To carry out certain specified measures • To appoint an energy manager • Mandatory certification of auditors • Mandatory comparison of operation and investment to reference values (norms, benchmark-

ing) Some, or all, of these requirements may be confined to large users and made conditional on crossing a defined threshold of energy use. Obligations can be mandatory or voluntary. Two main sets of voluntary agreements have been intro-duced. The first set comprises agreements between government and representative bodies of appli-ance manufacturers to reach specified improvements in the performance of appliances; the approach has also been extended to vehicles. The second set comprises agreements with individual industries to improve their own on-site energy performance. Industry can have various motivations to participate in these agreements. Appliance manufacturers may expect to persuade government to supplement their efforts with instruments aimed at stimulating purchases by consumers. It may in some instances be a mechanism to forestall regulation. This latter reason may also encourage participation in agree-ments to reduce energy use in industrial processes. Such agreements, although voluntary, may also be a condition for financial incentives. Tunisia has adopted a mandatory audit scheme for large consumers. The Laws 2004-72 and 2009-7 makes specific provision for the mandatory audit of large consumers according to limits on energy use to be issued in an accompanying Decree. The Laws also requires that new projects consuming large volumes of energy as well as large extensions of existing projects should be submitted to the ANME for an opinion on the extent to which they observe proper standards of energy efficiency. The Decree 2004-2144 (September 2004) established the details of the mandatory audits; it fixes the frequency, indicates the scope and determines the original thresholds. The thresholds have been steadily reduced; it is now 800 toe / year for industry and for other sectors it is 500 toe / year. The pro-cedures for calculating energy consumption are set out in the Decree. Audits must be performed every five years and have to be done by an auditor accredited by ANME. The scope of the audit must cover

• A description of the establishment and its principle characteristics that pertain to energy use • An evaluation of the energy performance • An evaluation of the management system for energy efficiency • Recommendations to improve performance, accompanied by economic evaluation • An action programme

For companies already audited in the past, a new audit must also contain a description of the changes in energy use since the last audit and an account and evaluation of actions undertaken by the enter-prise with their results. On this basis the audit should make recommendations for redirection of the Ac-tion Programme. Once approved by ANME the audit report serves as a basis for the allocation of benefits foreseen un-

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der the incentive framework. Access to the incentives is only permitted if the company signs a “contrat-programme” with ANME committing to the actions and investments for which the incentives are sought. Somewhat similar conditions apply to the requirement for a preliminary authorisation for new develop-ments with a high energy use. Such a preliminary authorisation is needed for consumers for whom the consumption is greater than 800 toe / year or has an installed electrical capacity greater than 1 MW. For such consumers ANME can issue the preliminary authorisation. For consumers above 7000 toe / year it must come from the Minister in charge of energy. In liberalised markets an alternative to promoting energy efficiency through state financial incentives and funds is to place an obligations placed on suppliers. In this scheme a supplier or distribution net-work manager scheme is placed under an obligation to demonstrate programs that save specified amounts of energy related to their total supply volume. The supplier or network operator then builds the costs into his cost-base; he then has the usual interest of a commercial company in keeping his cost-base as small as possible. The requirement is enforced by the regulator; failure to comply may be penalized in proportion to the deficit between the target savings for the supplier and the amount achieved. Savings do not have to be made within the supplier’s own area; they can be in fuel oil, coal or transport fuels. Such schemes can be complemented by “white certificates”. In this arrangement, suppliers are obliged to demonstrate they either accomplished energy savings directly or have bought certificates from others who can show they have made savings. No such obligations exist or are planned. 3.8 Audits and the Promotion of ESCOs The original idea of an Energy Service Companies or ESCO is that an entity other than the energy supplier should identify, design, finance, supervise and commission projects for a client, to be com-pensated by a share of the energy savings achieved over a defined period. The partition of savings is determined by a special contract known as an energy performance contract (EPC). Actual practice varies widely; some ESCOs will finance the project, others will organise finance. Implementation is not easy and there are relatively few successful examples. The name ESCO is sometimes also given to companies that just provide consulting services, but do not enter into an EPC. It is important to be clear what is meant, as the latter is a much easier exercise than the former. Article 6 of the Law 2004-72 permits energy consuming companies to sign contractual agreements with energy service companies to achieve savings in energy use. The Law defines energy service companies that engage with energy users to make feasibility studies, manage, monitor and finance projects within the facilities of the user and to guarantee performance. The service companies must be approved by the Ministry of Energy. Many companies have since developed skills in energy auditing and in feasibility studies for invest-ment in energy efficiency. There is very little activity in the classic ESCO mode whereby the ESCO supplies funds and the profits are shared through an energy performance contract. The main limiting factor is the capital base of the companies involved. They are mainly small companies and cannot raise the capital to make large investments. Credit lines, whether concessional or not, do help much because collateral is bound up in existing credits. ESCO development in Tunisia was the main objective of a substantial grant ($31.8 million) from the World Bank / GEF for an activity called the called the Energy Efficiency Program and Industrial Sector

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Project. The intention was to overcome institutional and capacity-related barriers to the development of a sustainable market for energy efficiency products and to establish energy services companies (ESCOs) as the main vehicle to guarantee a sustainable energy efficiency market. The project comprised three main components:

• A targeted Global Environment Facility (GEF) pilot phase project for energy efficiency invest-ments

• A GEF Partial Guarantee Fund, aimed at enabling the establishment of ESCOs • Technical assistance for building the capacity of ESCO candidates, and financial institutions,

and, for testing newly introduced energy efficiency products. The project closes in December 2009 and seems so far to have left little immediate impact. 3.9 Transport and Spatial Planning More than half of the global population now live in cities and according to UN Habitat, by 2030, it will be 60 percent. Cities consume enormous amounts of energy and they have great inertia; road sys-tems and land-use decided now will influence energy use for a hundred years. In urban metropolitan areas, transport creates a third at least of total greenhouse gas emissions. Promotion of public trans-port options and careful design of cities is critical for reducing emissions in cities. Transport is a rapidly growing sector in Tunisia and is now the second largest consumer of energy af-ter industry; it depends 99% on petroleum products and is the largest user of these products. Fore-casts indicate that it will be the biggest energy consumer by 2022 and by 2030 will account for 40% of primary energy use. Article 12 of Law 2004-72 requires that municipalities are obliged to elaborate urban transport strate-gies that take into account energy efficiency and protection of the environment. The plans should cover the organisation of transport facilities, the rules governing the movement of traffic and parking and the organisation of public transport. Procedures for the elaboration of such plans and the technical criteria to be used are specified by Decree. An urban travel master plan for the city of Sousse was published in 2006 as the fruit of collaboration with Spain. The plan comprised an analytical study based on a survey on the existing transport means and patterns. On this basis an action plan was elaborated to improve the organisation and infrastruc-ture of the transport in the city. Subsequently, the municipality of Sousse has begun to implement the plan by rehabilitating a major street in the city, as a first phase, to be followed by other actions to im-prove public transport and parking. Article 13 of Law 2004-72 requires that automobiles must be checked during the annual inspection for conformity to the Highway Code as well as to an analysis of the performance of the engine in terms of energy efficiency. The procedures for doing this and the specification of the necessary equipment are to be established jointly by the ministry responsible for transport and the minister responsible for en-ergy; 180 testing stations for vehicles have been installed across the country. Vehicle testing is com-pulsory every second year and includes emission testing. There is a restriction on importing vehicles older than three years. Public transport in Tunisia is limited at present. There is an intention to develop public transport in the major cities; a rapid transit system will be built in Tunis of some 85 km carrying 20,000 passengers an

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hour. The lines will serve five areas of Tunis. Included within the Tunisian programme of energy efficiency are policies to promote the use of natural gas as a fuel in the transport sector. In a first phase, the project will test natural gas powered buses. Two buses were delivered in 2006 and made available to the Tunis Transport Company and are cur-rently undergoing trials. A cooperation programme with the Government of Italy, aims to build capacity in the operation and monitoring of gas powered vehicles, and will train trainers in the specification and procurement of natural gas vehicles. The National Petrol Distribution Company (SNDP) has launched an international tender for the installation of three natural gas supply stations in Tunis and Sfax. There is a small programme to produce 20,000 tonnes per year of biodiesel from waste oil and there is some consideration of improving mobility in cities. 3.10 Dissemination of Information Access to knowledge is costly and may impede an individual or company from undertaking activities in energy efficiency. It is a legitimate role of government to generate and disseminate knowledge as a public good. We interpret the term knowledge in this context very widely to include data, technical guidance, research and demonstration. For all interventions, ANME has prepared and disseminated carefully targeted materials to all relevant groups including final users, equipment suppliers and intermediaries. This can be seen for example in the policies for appliance labelling and for building standards as well as for the mandatory audits and financial incentives.

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4. Comparison of Tunisian Practice with Internation al Practice in Renewable Energy

This section attempts to compare the present status of renewable energy policy in Tunisia with inter-national practice. Public policy intervenes to correct market failures. In the case of renewable energy, the most common failures are somewhat similar to those identified previously for energy efficiency, but with a different emphasis. Distorted energy prices, unrecognised external costs, poor access to technical information all play a part. There is however a significant difference. Many measures of energy efficiency are cost effective, but prevented by distortions of the conventional market. This is also true of some renewable options, such as solar water heating. Many renewable energy technologies are not cost-effective even if the distortions of the conventional market are removed. They are justified by the external costs that they avoid, especially the external costs of GHG emissions. This means that they must be financially subsidised to financial incentives of one sort or another are critical to renewable policy. In addition to these general market failures there can be specific market failures for electricity gener-ated from renewable energy that is fed into a national grid as electricity. Excessive and unjustified costs of connection to the grid, inability to connect, disputes over responsibility for payment – these can impede renewable deployment. Policy instruments are intended to correct or compensate for these various distortions. 4.1 Targets and Strategy Strategy sets out objectives and targets and defines the combinations of policy instruments that are expected to achieve the targets. Tunisia has a clearly stated strategy for renewable energy contained within the quadrennial plan run-ning from 2008 to 2011. The targets of the programme are to increase the share of renewable energy in primary energy consumption (excluding biomass and hydroelectricity) to 4% by 2011; if biomass and hydroelectricity are included then the proportion of total primary energy supply would be 13%. Ex-cluding biomass the origin of the various contributions would be as shown in the following table. Table 3 Origin of renewable energy contribution by 2011 (ktoe) 1

Source 2007 2011

Wind 11 144

Hydro 17 17

Energy from landfill (jebel Chakir)

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Energy from agric waste - 86

Total electrical energy 28 262

SWH 15 44

Total 43 306

1 Les Energies Renouvelables en Tunisie, Abdelkarim Ghezal, www.asenim.org/upload/conf3.pdf

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The target is the equivalent of 10% of installed electricity capacity. Table 4 Electrical capacity from renewables (entrie s in MW) 2

Projects 2007 2011

Wind 20 240

Hydro 60 60

Energy from waste (jebel Chakir) - 10

Total installed capacity 80 310 For SWH the intention is to install 480,000 m2 of solar collectors over the period from 2008-2011 in order to achieve by the end of the period a total installed capacity of 740,000 m2 and an annual instal-lation rate of 155,000 m2 per year. For solar buildings the aim is to provide a total of 3MW peak of photovoltaic systems feeding into the national network. Of this total 2 MW (peak) will be in the residential sector and 1 MW (peak) in the public sector, i.e. administrative buildings, hospitals, schools and universities. A considerable effort is foreseen to develop applications of renewable energy in agriculture and in ru-ral areas. The following specific targets have been set:

• Installation of 63 stations for water pumping and desalination • Installation of 200 stations for water pumping for irrigation with hybrid systems • Off-grid rural electrification

o Electrification of 1,000 rural homes with hybrid systems o Electrification of 1,700 rural homes with photovoltaic systems o Electrification of 100 farms and tourist centres with hybrid systems

• Equipment of 200 farms with biogas units for domestic use • Installation of two industrial grid-connected units for the cogeneration of heat and power from

biogas In order to reinforce the national effort in renewable energy policy beyond the end of the quadrennial plan in 2011 Tunisia has established a Tunisian Solar Plan that integrates the range of renewable technologies with energy efficiency in a single concept that is conceived in the perspective of the Mediterranean solar Plan. The Tunisian solar plan runs from 2010-2016; it comprises 40 individual projects clustered into 5 chap-ters. The estimated cost of the programme is 3369 MD, which it is planned to finance from a mixture of private and public sources, notionally in the following proportions:

• 256 MD for energy efficiency from the budget of FNME • 596 MD from the public sector, mainly STEG (580 TD) • 2479 TD from the private sector of which 1074 MD will be for projects that will export their pro-

duction to Europe • 38 MD from technical cooperation

The impact of the programme on the energy sector when the entire set of projects has been put in op-

2 Énergies renouvelables en Tunisie: Etat et perspectives, Amor Ounalli, Directeur des Energies Renouvelables, ANME, Tunis, le 10 novembre 2009

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eration will be to reduce fossil fuel consumption by 660 ktoe per year equal to 22% reduction in the na-tional consumption of energy in 2016. The impact on the environment will be to reduce the emissions of GHG by 1.3 million tCO2 per year. The revenues from the sale of associated CERs are estimated at $13 million per year (on the fairly modest assumption of a price for carbon of $10 / tonne). Over 10 years this would amount to about 260 million TD equal to about 7 – 8 % of the investment budget. Reflecting the important proportion of funds that will come from the private sector, the main project de-velopers will also be private. The plan envisages that of the 40 projects:

• 5 projects will be realised by the public sector (of which 3 by STEG) • 29 projects will be realised by the private sector • 5 projects supporting the implementation of the plan will be financed by technical cooperation • 1 project will comprise the creation of a new institution called “STEG Renewable Energies”

The five main chapters of the plan are:

• Solar (which is subdivided into thermal and electric applications) – 17 projects • Wind – 3 projects • Energy efficiency – 7 projects • Other projects – 7 projects • Implementation actions – 6 projects

The solar part is an extension of the successful PROSOL project (described later). There are four pro-jects to promote solar heating in various sectors and individual projects concerning solar cooling and solar drying. Under the solar electric part of the Plan there are five projects to install photovoltaic systems in various applications, both stand-alone and grid-connected; there are five projects for centralised power gen-eration from CSP and photovoltaic with a combined capacity of 120 MW plus a CSP of unspecified size. Lastly, one project supports the establishment of a factory to fabricate photovoltaic systems with a capacity of at least 14 MW. The wind component comprises three wind parks with a combined output of 280 MW. For energy efficiency the envisaged actions cover: the replacement of old refrigerators; positive en-ergy buildings; thermal insulation; wider diffusion of efficient lighting; better training of drivers and the monitoring of transport fleets in the public sector. The chapter comprising the other miscellaneous related projects contains a variety of small ecological ventures, but also a large venture to interconnect Italy and Tunisia with a sub-marine cable. The plan is ambitious, but technically could be achieved. What seems to be absent from the public documents is a convincing analysis that the incentives offered to the private sector will be sufficient to stimulate the very large participation that is envisaged from the private sector. 4.2 Legal Reform The main legal elements in a policy to promote renewable technologies are a clear targeted strategy or road map, a specialised agency to implement public activities and a support system specifically

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aimed at allocating the extra costs of the technology. Article 14 of Law 2004-72 defines the content of the national programme for renewable energy, speci-fying in particular that it should comprise:

• The development of wind energy for electricity production • The encouragement of solar energy for water heating • The exploitation of solar energy in rural electrification • Incentives for the recovery of energy from waste, the use of geothermal and small hydro

A critical aspect of the development of grid-connected renewable power is the nature of the terms and conditions under which private developers can connect plant to the grid and sell electricity. The Law 96-27, dated April 1st 1996, permits the establishment of IPPs in Tunisia. The Law authorises the State to grant electricity production licences to independent producers with a view to its exclusive sale to the Tunisian Electricity and Gas Company (STEG) which has a monopoly on the transmission and distribution of electricity. The conditions and modes of granting the licence are stipulated in Decree n° 96-1125, dated 20 June 1996. Tunisia's first IPP was a 471 MW, combined cycle (natural gas and diesel-fired) plant commissioned in 2003 at Rades. It is owned and operated Carthage Power Co.; STEG provides the gas feedstock and buys the electricity. The second IPP was a 27 MW plant that began operation in July 2003. It uses as-sociated gas from the el-Biban, Zarzis oilfield that previously was flared. Delays in commissioning of capacity have led to the construction of short-lead time gas turbines, but future additions should be combined cycle plant. Three new plants are planned at Ghannouch (an ex-tension of the existing facility), Sousse and Bizerte for the domestic use. The proposed 350-500 MW plant at Bizerte will be IPP; it has been tendered on a BOO basis on a 20 year concession. Seventeen expressions of interest have reportedly been received. STEG will supply the natural gas feedstock for the plant. The plant at Sousse is apparently to be owned by STEG. There is also a project to build a 1,200MW power plant in El Haouaria that will partly export power to Italy by an undersea HVDC connection. STEG and Italian grid operator Terna agreed in June 2007 to make a feasibility study. In addition to the power produced by the gas-fired plant, the interconnection could export up to 200MW of electricity generated by renewable energy projects. A joint venture com-pany was formed in November 2009 and the target date for commissioning the project is 2015. Although the principle of IPP has been established, it has not been adapted to the development of re-newable energy. STEG has attempted to keep the development of wind power in house and has re-sisted attempts to develop wind as an IPP project. At present, Tunisia only has one small wind farm at Sidi Daoud near El Haouaria in the north east of the country. By the end of 2010, Tunisia plans an ad-ditional 120 MW of wind power from new plants at Metline and Kchabta near Bizerte, (at a cost of € 273 million). Gamesa is supplying STEG with 91 turbines, worth € 200 million, for Bizerte. The Span-ish Development Aid Fund will finance the project; the plants will all be owned by STEG. The Article 14(2) of the Law 2009-7 (February 2009) creates the possibility for any establishment or group of establishments to produce electricity for its own consumption without any limit on installed capacity. It also confers the right to use the national electricity network to move power from the point of generation to the consumers’ premises. Finally, it imposes on STEG the obligation to buy surplus electricity from the producer according to a standard contract to be approved by the Minister. The de-tailed conditions are to be established by Decree.

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4.3 An Agency A specialised institution to make research, prepare initiatives, draft regulations, monitor progress, en-sure compliance, administer funds and perform other administrative activities can be useful in promot-ing renewable technologies. There is a long-established Centre for the Development of Renewable Energy (CDER), which was created in 1982 under the supervision of the Ministry of Energy. Its principal functions at the time were the research and promotion of renewable energy. As noted earlier, its responsibilities have since been extended to energy efficiency and it is now in the process of reorganisation as the Agency for the De-velopment of Renewable Energy and Energy Efficiency (ADEREE). The Agence Nationale pour la Maitrise de ‘l’Energie (ANME) has responsibility for renewable energy. Details of its establishment are given in the section on energy efficiency. Specific responsibilities for renewable energy under the law include:

• To propose incentives and procedures to develop energy efficiency or renewable energy • To confirm the conformity of equipment for energy efficiency or renewable energy to any speci-

fication contained in a regulation that allows benefits to be given • To encourage better technological practice • Develop demonstration projects • Promote training • Prepare and execute national programmes of awareness raising • Contribute to scientific research • Furnish expertise in the field of energy efficiency or renewable energy

4.4 Standards and /or Labels Standards would be inappropriate for large developments in renewable energy. Commercial develop-ers are well equipped to decide for themselves on efficient and effective specifications. There is a good case for standards for small appliances such as solar heaters. Standards for SWH are being developed with the assistance of GTZ. A test centre is to be built on the premises of the Centre technique des matériaux de construction de la céramique et du verre (CTMCCV); the testing facility will be accredited by the University of Stuttgart. ANME will organise monitoring through sample surveys and if the performance of the equipment or the installation is below standard then the supplier or installer can have their accreditation rescinded. In due course this re-sponsibility will be transferred to a professional body representing renewable energy. 4.5 Financial Incentives (Capital Support) Many financial incentives have been used in different countries to promote renewable energy. Support can either be offered to investment or to operation. Investment support for renewables is general de-livered through the same type of instruments that are used to support investment in energy efficiency, e.g. capital grants, tax exemptions, soft loans and loan guarantees. In the case of grid connected re-newables it is possible also to offer support to operation either by allowing the electricity to be sold at inflated tariffs or by obliging certain parties to purchase specified volumes. These instruments are to

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some extent exclusive and are discussed together in the next section. The development of solar water heating in Tunisia has been supported by financial incentives. Solar photovoltaic systems have mainly developed in Tunisia as a part of rural electrification financed by the state budget, but are now being promoted with financial incentives. Large grid connected schemes are in the main the prerogative of STEG and are financed by state funds and concessional finance from donors; there is some legal provision for renewable generation by private plants, but it is quite con-strained. These different arrangements are discussed in more detail below. The promotion of solar water heating in Tunisia has a long history and offers an interesting case study of the need for multiple policy instruments working coherently. The first efforts to promote the technol-ogy date back to 1985 when a public company was formed to manufacture and install systems. A small fiscal incentive was offered, the installations were exempted from value added tax, and low in-terest loans were made available through STEG. There was no grant element. The programme initially had some impact, but quickly petered out. The products offered by the state monopoly were of poor quality; they were poorly maintained and the public perception of the technology was very poor. By 1995 the market had all but vanished. In that year a programme was launched using GEF funding to re-establish the image of the technology. The programme offered grants of 35% of the investment cost and trained and supported six selected private suppliers. Very strict quality control was exercised by ANME over the equipment and installation. The market developed well under these arrangements until 2001, when the budget available for subsidies was exhausted and the programme had to be stopped. In that year the installation rate had reached 17,000 m2 per year. Without the investment support the market fell away and by 2005 had more than halved to 7,500 m2 per year. In 2005, the government launched the PROSOL mechanism under which arrangement the investment benefitted from a 20% subsidy plus a credit line from STEG over five years repaid through the electric-ity bill. A small administrative cost was permitted to STEG on the arrangement. The rate of repay-ments and the extent of the credit were calculated so that the repayments were less than the observed savings from alternative heating fuels. This had a very good impact on the market; by 2007 the annual installation rate was 63,000 m2 per year; in 2008 it had reached 63,000 m2 per year and in 2009 it will probably touch 85,000 m2 per year. The arrangement had many benefits. The default rate among the customers of STEG is very low so the repayments were almost guaranteed and this reduced the per-ceived risk for suppliers and installers. The credit facilities for customers meant that they profited from the outset. The benefits to the state in terms of avoided subsidies were large. Accompanying policies were implemented by ANME to strengthen the programme. A quality system was introduced to ensure that all equipment installed under the programme reached an acceptable quality and performance level. The programme makes good use of private industry to bring prices down through competition and to ensure high standards of service. Thirty two suppliers are now ac-credited under the programme. With support from GTZ, ANME is now preparing detailed minimum performance standards for systems to be backed up by testing and monitoring. ANME also accompanied the programme with good publicity campaigns to support the marketing ef-forts of the industry. Consideration has been given to creating an obligation on developers to ensure buildings can be fitted with solar heating, but this has not been done, except for state buildings (e.g. offices, hospitals, schools and barracks). The PROSOL programme is generally agreed to have been very successful and will be followed by programmes with similar structure in photovoltaivcs (PROMOVOLT) and insulation (PROMOISOL).

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Tunisia is now seeking to register PROSOL under the CDM as a programme of activities; it is appar-ently meeting with some technical and administrative difficulties. Whilst recognising the undoubted success of PROSOL it is worth noting that Tunisia still has a much smaller capacity of SWH per head (23 m2/person in 2007) than for example Jordan (100 m2 per person in 2007) where energy prices are almost unsubsidised. The programme for support for solar water heating now in application covers financial incentives, qual-ity and performance of equipment and market development and that is expected to achieve the speci-fied aims of installation of 480,000 m2 of solar collectors over the period from 2008-2011 and an an-nual installation rate of 155,000 m2 per year in 2011. The incentive framework is specified in the De-cree 2009-362 of 9th February 2009.

• For the residential sector and small businesses the Decree provides for a grant of 200 TD for SWH installations with a surface area exceeding 1 m2 and less than 3 m2.

• For larger installations with a collector surface greater than3 m2, but less that 7 m2 the grant is 400 TD.

• In the industrial and tertiary sector the grant is set at 30% of the investment cost with a ceiling of 150 TD per m2.

The grants are paid to the supplier of the equipment after it has been installed. Both the supplier and the equipment have to be approved according to conditions established by the Minister responsible for the energy sector. Solar photovoltaic systems have mainly developed in Tunisia as a part of rural electrification originally paid for by public funds; 12,500 rural houses and 200 schools have been provided with electricity us-ing photovoltaic kits; 200 solar powered water pumping units have been installed; a tourist station has been equipped with a desalination unit using solar power and there are many other sundry applica-tions in remote army installations, frontier posts and communications. Decree 2009-262 offers incentives to a variety of options for introducing renewable energy into rural and agricultural settings. The grants are paid to the supplier of the equipment after it has been in-stalled:

• For the production of electricity in agriculture there is a grant of 40% of the investment cost with a ceiling of 20,000 TD for projects providing lighting and water pumping in rural areas through the use of solar and /or wind energy.

• Financial support to biogas is offered through: o A grant of 40% of the investment cost with a ceiling of 20,000 TD for the production of

biogas in farms o A grant of 20% of the investment cost with a ceiling of 100,000 TD for the cogenera-

tion of heat and power from industrial biogas units • For solar buildings there is a grant of 30% of the investment with a ceiling of 3 000 TD pour one

kilowatt peak and 15 000 TD for a solar building. There are also some operating incentives de-scribed later.

The wind regime in Tunisia is good, but development is rather slow. Good wind conditions with aver-age speeds above 7 metres per second at 60 m elevation can be found:

• on the North and North East coast around Bizerte and Nabeul • In the central part of the country in the vicinity of Kasserine • In the South at Tataouine, Medenine and Gabes

:

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Within these areas the best sites reach average speeds of 8 metres per second. Other resources with wind speeds above 6.5 metres per second, but below 7 metres per second at 60m are to be found:

• In the East around Tozeur and Kebili • On the East coast of Medenine • In the area of Monasir

Wind power development has been largely the prerogative of STEG using state funds, concessional finance and to some extent the CDM. The Sidi Daoud Wind Farm project is the first large wind plant in Tunisia and the first to be connected to the national grid. The project sponsor is Société Tunisienne de l’Electricité et du Gaz (STEG); the equipment is financed by concessional funds from the Spanish Government and the remaining project costs, related mainly to civil works, will be financed from STEG’s own resources. Sidi Daoud is approximately 100 km North-East of Tunis; the location was chosen based on a feasibil-ity study by US Power of the national wind power potential. The station will comprise 26 wind turbines of 1.32 MW each and a substation. A newly built 22.6 km high voltage transmission line will connect to the national electricity grid. The project is expected to generate 95,000 MWh per year (equivalent to a capacity factor of 32%). CERs from the project will be bought by the World Bank on behalf of the Spanish Carbon Fund. STEG is now launching a new mechanism to promote photovoltaic systems on roofs. It has initiated the programme with a pilot project of 3 MW. Recently it launched a bid to procure materials and instal-lation services with a one year guarantee. The installations are to be operated by the supplier for one year and subsequently transferred to STEG. The also requires the supplier to provide finance. The in-tention is that the financial conditions will be very concessional, for example a 40 year loan with a 20 year grace period and 0,5% interest. The private recipient of the installation will pay 2,000 TD per kW, 30% of the remainder will come from the FNME and the remainder from STEGs own resources, i.e. the soft loans 4.6 Feed-in Tariffs and Obligations Grid connected renewable energy is rarely cost-effective in its own right. It must be subsidised if it is to be developed by private industry. There are two main ways of delivering the subsidy. One is by offer-ing higher prices than those available commercially; the other is by creating a second valuable good that represents the value of the fact that the energy is generated from renewables. The second scheme is operated by issuing certificates that certify the renewable origin and then obliging an identi-fied group (normally suppliers) to buy them. This creates a market and therefore a price. The offer of higher tariffs may be created by tendering a concession, it being understood that the con-cession will be granted however the price achieved compares to market prices for electricity. This stands in continuity with traditional processes of tendering large plants to IPPs; it allows secondary cri-teria, such as percentage domestic content, to be added to the evaluation criteria. It has recently been adopted by Denmark for large developments. Higher tariffs made also be operated by a feed-in tariff that is made available to any generator.

Certificate based schemes define a quantity of renewable electricity to be produced and market forces identify a price that is unknown at the outset; feed-in tariffs fix a price to be paid for renewable electric-ity, but it is unknown what volume will be offered.

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Tunisia has introduced a scheme to support investment in renewable energy by industry and large commercial consumers that has some aspects of a feed-in tariff. The Article 14(2) of the Law 2009-7 creates the possibility for an establishment or group of establishments to produce electricity for its own consumption without any limit on installed capacity. The national electricity network is obliged to move power from the point of generation to the consumers’ premises and to buy surplus electricity from the producer according to a standard contract. The detailed conditions are to be established by Decree. We understand that the present arrangements foresee that STEG will receive 0.5 TD / MWh for trans-port, will purchase up to 30% of the power produced and will pay the equivalent of the HV tariff. The developer has the right to the CERs generated by the project. This arrangement has some of the features of a feed-in tariff in that it offers a clear, fixed regulatory framework that does not have to be negotiated on a case-by-case basis. It does not however offere any real financial incentive. The impact of this provision of the Law has yet to be seen. One project of 20 MW has been established and a portfolio of some 70MW is under consideration by the Ministry. All developments have to be approved by the Ministry after the opinion of a consultative technical com-mittee. For grid-connected solar systems, the same law makes provision for all entities producing electrical energy from renewable energy to sell the excess to the network at prices fixed by Decree. Sales are measured by a second meter. At present the prices appear to be the same as the purchase price, so the effect is of reverse metering. 4.7 CDM Finance The Clean Development Mechanism offers operating support to projects through the provision of a market for the certificates of Carbon Emission Reduction. This is a complex project cycle, but can be useful for large projects. Tunisia ratified the United Nations Framework Convention on Climate Change in July 1993. In October 2001 it submitted its initial national communication, and is currently preparing its second communica-tion. The Tunisian DNA was established by Ministerial Decision in 2004 and registered at UNFCCC in early 2005. It is located in the Directorate General for the Environment and Quality of Life at the Tuni-sian Ministry of Environment and Sustainable Development (MEDD). The decision-making body com-prises 15 members including ANME, nine Ministries and other important state bodies, including the Central Bank and the state companies for chemistry, petroleum and electricity and gas. So far the in-stitutional status of the DNA is based only on an administrative act and lacks the legitimacy that would be conferred by a ministerial decree or a vote of parliament. A GTZ unit in MEDD that is supporting the process within the MEDD has proposed a regulation to give the DNA a proper legal status and suffi-cient authority to determine the methods of implementing the CDM and in particular the distribution of CERs in projects involving state enterprises. This appears not yet to have been promulgated. The un-derlying problem appears to be a difficulty in demarcating the responsibilities of the Ministries of En-ergy and the Environment. Tunisia is perceived to offer a good investment climate for the CDM, but despite this it has been rather unsuccessful in developing projects. Two projects done in collaboration with the World Bank have been registered. These are the Djebel Chekir Landfill Gas Recovery and Flaring Project and another landfill gas recovery and flaring project for nine bundled landfills. The executing agency of the two pro-jects is the National Waste Management Agency under MEDD. The World Bank as a trustee for the

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Spanish and Italian Carbon Funds has purchased the certified emission reductions (CERs). The World Bank is now also proceeding with a project to construct a wind farm with an installed capac-ity of 34.32 MW at Sidi Daoud; the wind farm is expected to generate about 50,000 tCO2eq emission reductions annually. The CERs will be bought by the Spanish Carbon Fund of which the World Bank is the trustee and will be contribute to the greenhouse gas emissions reduction obligation of Spain under the Kyoto Protocol. This will be the first wind power CDM project in Tunisia. As noted earlier, the PROSOL programme is in the process of registration and is now being validated by TUV. This project is being developed as a Programme of Activity and has met with some difficulties as it appears that the procedures for validation of PoAs are not entirely clear and seem to lay heavy contingent liabilities on the validating entity. The reason for the paucity of registered projects is not the lack of potential. The latest portfolio, pre-pared in 2008 by the MEDD with the support of the GTZ/CCC project, comprises 139 CDM projects in ten sectors. Their implementation would avoid 244,000 ktoe over the whole crediting period, worth € 2.4 billion at an average price of 10 € per CER. Seventy four projects were identified in the energy sector; their breakdown by topic is shown in the following table.

Table 5 Breakdown of CDM project portfolio in energ y sector

Type of project Number of projects

Mt CO2 avoided In the crediting period

Up to 2012 Average an-nual

Energy efficiency 37 34.7 7.1 1.44 Renewable energy 20 13.7 2.6 0.55 Fuel substitution 3 0.9 0.3 0.09 Others 14 40.3 9.7 1.83 TOTAL 74 89.6 19.7 3.6 It has been noted that public institutions or state-owned enterprises are the main project executing agencies for CDM projects in Tunisia. There is little incentive for these agencies to engage in the cumbersome process of the CDM as financial performance is not a priority in an environment where all budgets are eventually equilibrated by the state. Moreover there is no clear rule for allocating owner-ship of CERs from projects in the state sector and this is also a disincentive. For the private sector, there is some ambiguity in the law, but it is generally agreed that certificates would belong to the developer. So far the private sector has hardly been engaged. In the main the pri-vate sector is constituted by small and medium-sized enterprises, but these are less profitable and of-ten fall below the threshold of practicality for registration. A possible solution proposed by GTZ is bun-dling smaller-scale measures into a PoA or selling reductions into the voluntary market. 4.8 Information It is a legitimate role of government to generate and disseminate knowledge as a public good. The main need in this respect is for data on the renewable resource. It makes no sense for every devel-oper to make their own measurements of solar and wind data. The need is especially acute for wind as the extent of the resource varies locally.

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A wind atlas for Tunisia has been developed by ANME in association with the Spanish Centre of Re-newable Energy. The atlas is based on measurements over one year from 17 sites at 60, 80 and 100 meters. These measurements were combined with statistics collected by the National Weather Insti-tute. 4.9 Industrial Policy It is important that countries develop their own capacity to manufacture and / or assemble renewable technologies in parallel with the investment process. This can be done by targeted research, by grants to appropriate industries and by local manufacturing obligations in tendering. As a form of preliminary support to industrial policy there is a substantial programme of applied scien-tific research in renewable energy. Among the topics supported are:

• Solar air-conditioning • Heating of communal buildings with biomass in the north of the country • Heating of water and the production of electricity from solar ponds in the south of the country • Desalination of water using wind energy • Demonstration of a small rural network using hybrid renewable energies in a small village in the

desert in the South Also, the syndicate of renewable energy plays a major role (mainly for solar) in structuring the profes-sion and maintaining the dialogue with the authority in order to contribute to the RE policy develop-ment. The syndicate was supported by GTZ for its internal organisation and reform.

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5. Case Studies The purpose of this chapter is to demonstrate the processes of evidence-based policy making (EBPM) and theory-based evaluation (TBE). These techniques are well-known in the literature and have been widely applied, but not generally to technical areas of policy such as energy efficiency and renewable energy. There is potential for application in these areas because the methodologies provide a system-atic basis for analysis and debate among stakeholders around a common and clear statement of the policy intervention that can be maintained and improved throughout the project cycle from formulation, through implementation, monitoring and evaluation. The basic expression of this methodology is the behavioural model that underlies our understanding of the reaction of stakeholders to the policy instrument. 5.1 Case Study 1 - Grid-connected PV in Buildings 5.1.1 Background and Context The example that we choose in this case for illustration is the analysis of instruments to support grid-connected photovoltaic generation on a small scale. 5.1.1.1 Programmes for Photovoltaic Electricity Gen eration in Tunisia Solar photovoltaic (PV) systems have mainly developed in Tunisia as a part of rural electrification paid for by public funds; 12,500 rural houses and 200 schools have been provided with electricity using photovoltaic kits; 200 solar powered water pumping units have been installed; a tourist station has been equipped with a desalination unit using solar power and there are many other sundry applica-tions in remote army installations, frontier posts and communications. Following the success of the PROSOL programme in stimulating the adoption of solar water heating there is now interest in developing a similar scheme to encourage private users to install small grid-connected photovoltaic systems on roofs. There are some financial incentives available and some op-erating concessions. At present, for solar buildings there is a grant of 30% of the investment with a ceiling of 3,000 TD for one kilowatt peak and 15,000 TD for a solar building. The electricity that is surplus to the requirement of the user can be sold to the public utility at the same price as the user pays for electricity. 5.1.1.2 Scope of the Case Study The objectives of the case study are to examine the present support system for SWH and to deter-mine what lessons that experience holds for a comparabl instrument to support photovoltaics. The im-plications for the programme and the possible redesign of the support system will be deduced. 5.1.2 Evidence-Based Policy Making The procedure that we have proposed to implement evidence-based policy making comprises the fol-lowing steps.

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1. Alternative forms of intervention need to be reviewed and short-listed. Evidence of the suc-

cess or failure of similar instruments in developed and developing countries needs to be stud-ied with special emphasis on the conditions that created success and failure

2. There must always be a base-case against which alternatives are screened. Alternatives should include all available instruments.

3. All the relevant potential impacts need to be identified and where possible, quantified 4. Impacts should be assessed in consultation with the subjects of policy 5. The cost of compliance needs to be assessed. Consideration should be given to how these

costs can be minimized. It is necessary to consider who pays the compliance costs ; there are generally alternatives with different implications for equity. The procedures for compli-ance need to be worked out as does the procedure for monitoring impacts.

6. Indicators need to be established of what is expected from the policy measures. These indi-cators should cover outputs, outcomes and impacts. Intermediate indicators are important in helping understand how policies work, how measures interact and how they can be improved

7. Quantitative analysis of impacts is essential. The analytical method most commonly used is economic cost-benefit analysis .

8. Cost-benefit analysis should take into account opportunity costs of energy and external en-vironmental costs.

9. Multi-criteria analysis maybe a useful support to decision making; sensitivity analysis is one expression of this idea

The first five steps are discussed in this section; the formulation of indicators is discussed in the sec-tion on theory-based evaluation and the last three steps are demonstrated in the section on economic cost-benefit assessment. 5.1.2.1 Alternative Forms of Intervention One can imagine several possibilities for achieving the specified objective. These include:

1. Offer of a very high feed-in tariff for electricity produced from solar cells, 2. Offer of subsidies to any purchaser of photovoltaic systems, 3. Soft loans to individuals repayable over a period – possibly linked to a revolving fund.

Option 1 suffers from the problem that it will be expensive to the state and it is not a mechanism that easily allows the intervention of international financial institutions with concessionary funding Option 2 is also expensive, but international donors may be open to the idea that they contribute to such subsidies. A grant element is a strong marketing device that attracts attention to the scheme. Option 3 is non-discriminatory; if based on a revolving fund then it may be sustainable and does not require constant additional funds. Suppliers may be prepared to offer concessionary credit. We examine therefore Option 3, but also Option 2, because although it is unsustainable in the long-term it has advantages in the short-term and it is close to the present intentions and therefore the comparison is interesting. The objective of the analysis is to calculate the costs of the alternatives to the state and to the purchaser and to identify what specific conditions in either case might work.

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5.1.2.2 Base Case The base case is that the electricity generated by photovoltaic systems on roofs postpones the need for the next large plant on the inter-connected system. It is not entirely clear in Tunisia what be the al-ternative technology would be for an additional central plant; it might be domestic gas, or imported coal, or imported LNG. We assume for the sake of the analysis that the alternative is imported coal, but recognise that this is an uncertainty, which requires a more careful analysis. 5.1.2.3 Impacts The impacts will be a reduction in CO2 emissions and a reduction in fuel use. This reduction is hard to assess because the system dispatch will respond differently to an increment of photovoltaics or an in-crement of base load coal. For simplicity we make the calculation on the basis of the specific fuel con-sumption of the marginal plant avoided. 5.1.2.4 Consultation Consultation with suppliers of photovoltaic systems is necessary to determine: what prices may be achieved in large scale tenders; whether there are obstacles to procurement or installation and how they can be overcome; whether they are willing to engage in such a programme and on what terms. Consultation is also desirable with other Ministries concerned with housing to ensure that there are no planning restrictions or other impediments. 5.1.2.5 Compliance Compliance should not be an issue in this case. The only concern would be that the grant is used to purchase photovoltaic equipment of the correct dimensions and this should be readily verifiable. 5.1.3 Theory-Based Evaluation 5.1.3.1 Methodology Evaluation of a project depends upon an underlying belief in how actors will be affected by the policy and how they will respond. We call this belief a “behavioural model”. We specify the behavioural model as a causal sequence in which the successive steps of policy implementation are shown in the first column and then in subsequent columns are listed various indicators, risks and assumptions. The successive steps of the policy may or may not specify recognisable behavioural assumptions; it de-pends very much on the type of policy investigated. The behavioural model is a formal description of the process of implementation, the concerns to be raised at each stage and the measures that are to be adopted to make everything is working as ex-pected. It provides a structure for the analytical steps and indicates the evidence that should be sought at each stage to support assertions or on which to found analysis. It allows the issues that might affect implementation to be identified and it allows different stakeholders to debate around a clear and concrete representation of the policy. In later stages it serves as the basis for monitoring and evaluation.

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5.1.3.2 Indicators Indicators need to be established of what is expected from the policy measures. These indicators should cover outputs, outcomes and impacts. Intermediate indicators are important in helping under-stand how policies work, how measures interact and how they can be improved.

• Inputs are the financial, human, technical or organizational resources used in the endeavour, • Outputs are objectively verifiable indicators that demonstrate the progress made in implement-

ing the measures, • Outcomes are the immediate effects on the regulated subject, • Impacts are direct measurements of the improvements that the programme is designed to bring

about. 5.1.3.3 Behavioural Matrix The behavioural matrix of the basic support scheme for grid connected PV is shown in Table 6 below. The example illustrates how the behavioural matrix can be useful in helping identify the indicators that are necessary to ensure that policy is proceeding as planned. The matrix can also be helpful in identifying flanking policies to cope with some of the risks and as-sumptions identified through the detailed breakdown of the expected behaviour and causal sequence. For example the requirement for sustained monitoring and remedy of non-compliance is very clear. The behavioural matrix is also helpful in understanding how the policy may fail and in this instance there are several risks that appear from the analysis that could reduce impact. They are:

• If tariffs are so low that consumers have no reason to invest in photovoltaics then it may be necessary to supplement the policy with financial incentives; these incentives may not be ade-quate

• Performance of first few systems is poor – technology is discredited • Market for equipment and installation is dominated by a few companies; no competitive pres-

sure; prices remain high The behavioural model is a formal description of the process of implementation, the concerns to be raised at each stage and the measures that are to be adopted to make everything is working as ex-pected. It provides a structure for the analytical steps and indicates the evidence that should be sought at each stage to support assertions or on which to found analysis. It allows the issues that might affect implementation to be identified and it allows different stakeholders to debate around a clear and concrete representation of the policy. In later stages it serves as the basis for monitoring and evaluation.

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Table 6: Behavioural Matrix for Instruments to Sup port Grid-connected PV for Buildings

Behavioural model

Indicators

Input Output Outcome Impact Risks Assumptions

Prepare legislation and regulations

Time of officials / consultants ($)

Published offer (Y/N) Potential users are unaware

Secure funding Time of officials / consultants ($)

Credit line secured (#)

A source of funding can be found

Register under CDM as a pro-gramme of ac-tivities

Time, consultancy and registration fees ($)

Registered PoA (Y/N) Delays in registra-tion compro-mise financing

Targeted aware-ness campaign to large domes-tic users


Media time / mate-rials ($)

Potential users ap-praise the op-tion (?)

Offer is not attrac-tive to users

Standard domestic electricity tariff is too low

Users are able to assess a fairly complex invest-ment

Targeted aware-ness campaign to installers


Media time / mate-rials ($)

Installers under-take promotion (?)

First adopters take up offer

Time of STEG offi-cials (%)

User costs $) Financing costs to

state ($)

Systems installed (#)

Loans made (#) Compliance veri-

fied (#)

Investment fore-gone on central system ($)

CO2 avoided (#) CERs received ($)

System reliability and/or per-formance is poor

Quality of installa-tion poor

First adopters con-vince others

Other users are per-suaded of benefits ($)

Systems installed (#)

Enhanced im-pacts, as above

First adopters are negative; tech-nology discred-ited

Experience of first adopters is posi-tive

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Behavioural model

Indicators


Economies of scale reduce costs

Prices fall (#) Systems installed in large vol-umes (#)

Enhanced im-pacts, as above

Lack of competi-tive pressure keeps prices high

Market reaches critical size for manufacture

Investment ($) Transaction costs

($) Materials ($) Operating costs ($)

Plant commissioned (Y/N)

Systems manufac-tured locally (#)

Domestic content increase (#)

Profits retained na-tionally ($)

Normal commer-cial risks of loss / bank-ruptcy

Local manufacture can compete

Market continues to grow

Trained staff avail-able

Note on symbols:

• $ indicates indicator is measured in financial terms • # indicates indicator is measured in numbers • Y/N indicates indicators is a yes or no observation • ? indicates indicator that cannot be quantified, but can be assesses qualitatively

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5.1.4 Cost-Benefit Assessment 5.1.4.1 Methodology Applied To analyse the economic implications of the PV promotion programme we have look at the impact of a PV programme upon the Tunisian economy and then we have to discuss if private households or other users might be interested to participate in the PV programme. The analysis covers two aspects of a cost-benefit analysis:

• The economic analysis considers the required return as a cost for the Tunisian economy, • The financial analysis evaluates the commercial interest considering the point of view of the in-

vestor, which in our case the households or other PV users. But first the key data for the PV investments will be presented and then the cost of alternative electric-ity supply. 5.1.4.2 Assumptions for Photovoltaic Use in Tunisia Experience in Libya has shown that 1 kW peak of installed PV panels will produce 5 kWh/day3. As the solar regime is similar we use this figure in our analysis for Tunisia. Table 7: Key-data for PV Electricity Generation

Note: In the base no cost for back-up capacity are considered.

3 Photovoltaic In Libya Applications and Evaluation, I. M. Saleh Ibrahim Al-Jadi, M. A. EKhlat, N. M. Krema, Proceedings of

the International Conference on Renewable Energy for Developing Countries-20

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The photovoltaic system need not have storage as deficits in supply and surplusses in production are traded on the grid. As a base case we assume a range between 4,000 - 2,000 USD/kW. The price of the PV equipment will depend very much of the negotiation of the Tunisian Government and the PV suppliers - these negotiations will be prepared by a public international call for tender. The residential tariff in Tunisia is in two parts. There is a fixed charge of 0.2 TD/kW/month according to the power for which the consumer subscribes. The photovoltaic system will not provide firm capacity so this will remain unchanged. The unit charge is 131 millisimes (6.5 € cent / kWh) for consumers tak-ing less than 300 kWh per month and 174 millisime (8.7 €cent / kWh) for consumers taking more than 300 kWh per month. We assume that only the largest consumers will be interested and so we adopt the value of 174 millisime as the value of the electricity generated to the consumer. 5.1.4.3 Opportunity Costs for Electricity Generatio n Using Coal Historic Trends Because of the diversity of producers and the more competitive market in coal there is less volatility than for oil. The historical evolution of international coal marker prices compared to heavy fuel oil is shown in the Figure below. The difference in behaviour is quite apparent. Whereas oil prices quadru-pled over the period, coal prices increased by around 50%. Figure 1: Historical Trends in Coal Prices

0

50

100

150

200

250

300

350

400

1985 1990 1995 2000 2005 2010

US

$/

ton

ne

Northwest Europe

marker price

Japan steam coal

import cif price

HFO >1% Sulphur

Price Forecast Based on Crude Oil Prices The US Department of Energy/Energy Information Agency has produced long-term forecasts of crude and petroleum product prices to 2030 (EIA, 2009). This is an authoritative source; it may not be right, but a great deal of effort and analysis has gone into its creation and it is a reasonable source to adopt. The following figure shows their forecast of crude prices in real and nominal terms to 2030.

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Figure 2: Forecasts of Crude Prices to 2030 (DOE/I EA)

0

20

40

60

80

100

120

140

160

180

200

2010 2015 2020 2025 2030

$/

bb

l Crude Oil (weighted

average) 2007 US$/bbl

" nominal prices

It is statistically clear that fuel prices are strongly correlated over the medium term. We use a formula to describe a plausible relationship between coal prices and crude oil prices. The formula we use is:

Price for coal in $/tonne (6000kcal/kg) = 22 + 0.15 * price HFO ($/tonne) The formula has been derived from regression of historic coal prices against those of heavy fuel oil; it has to be treated carefully as the parameters are only correct for the specified choice of fuels and units. This procedure gives a central case for coal prices as shown in the following Figure 3. Figure 3: Central Forecast for Coal Prices ($2007/ GJ)

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Capital cost and performance of coal-fired generati on Based on the IEA publication Projected Costs of Generating Electricity - 2005 Update and adjusting for inflation we estimate the cost of a coal fired plant to be about $1,300 / kW. The cost is linked also to steam conditions and thermal efficiency. Subcritical plants can achieve 36–40% efficiency. Modern supercritical units operating at steam conditions above 269 bar / 593°C have efficiencies in the low t o mid 40% range, with new "ultra critical" designs using pressures of 300 bar and dual stage reheat reaching about 48% efficiency. We adopt a value of 40% as being achievable in Tunisia and in line with our capital cost estimate. Table 8: Coal Based Electricity Generation

At the bottom to the table the cost increases for coal based generation for a range of CER values / carbon credits are given. These values will be used below to evaluate the impacts of the CDM mecha-nism upon the economic feasibility of the wind energy option for Tunisia. 5.1.4.4 Economic Assessment The economic assessment of photovoltaic systems compared to conventional generation obliges us to consider what value to give to the opportunity cost to Tunisia of electricity generated on the central system. This is the benefit of the resources to the national economy if they were not used for this pur-pose. The following table provides a summary of the results. In this table the levelised benefit / cost per PV generated electricity is given. It can be seen that in most cases this value is negative, this means that

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the PV generation is more expensive than the coal based generation. Table 9: Levelised Economic Benefit / Loss for PV E lectricity Generation

The key parameters for the assessment are:

• Case 1 - Base case - high investment costs (4000 USD / kWh) (no assessment table shown) • Higher coal prices - increase of coal prices of the planning period by 30% • Carbon credits - the range from 0 to 50 USD / t CO2 is considered

• Case 2 - Lower investment costs for PV equipment (2000 USD / kW) - see Table 11 • Case 3 - Discount rates of consumers - the base case considers 20% - better financing condi-

tions and the PV programme framework reduces this requirement down to 10% - Table 12 • Case 4 - Increase of the PV generation capacity by 45% from 5 kWh/day to 7.5 kWh/day - Ta-

ble 13 • Consideration of back-up capacity - in these previous cases no cost for back-up capacity is

considered. At the bottom of the table above the situation is shown in the case that these back-up capacity costs are taken into consideration. The assumed back-up capacity costs are shown in the table below.


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Table 11: Case 2 - Economic Assessment of PV Electr icity Generation - - Low PV Cost Scenario 2000 USD/kW -

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Table 12: Case 2 - Economic Assessment of PV Electr icity Generation - Low PV Cost Scenario & Lower Private Return Req uirement (10%) -

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Table 13: Case 3 - Economic Assessment of PV Electr icity Generation - Low PV Cost Scenario & Lower Private Return Req uirement (10%) & Higher PV Electricity Generation -

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5.1.4.5 Financial Assessment The financial assessment assumes the point of view of the individual user. The costs for the PV equipment are compared with the benefit. To simplify the analysis it is assumed that the user uses the electricity for the own purposes and excess electricity generated can be fed into the grid at the con-sumption tariff. As it was stated earlier, we assume that only the largest consumers will be interested and so we adopt the value of 174 millisime as the value of the electricity generated to the consumer. In Table 14 the results for different promotion schemes are shown. In all cases it is assumed that the user can finance the PV investment with a subsidy and a loan. In all cases it is assumed that the dur-ing the repayment period the user should have a slight benefit - as it is shown in Table 15. The promotion scheme can be a combination of:

• Investment costs - Investment costs of 4000 and 2000 USD / kW are considered, • Percentage of subsidy, • With and without interest, • Duration of the repayment period.

Table 14: Promotion of PV Use in Tunisia

Which combination of subsidy / interest / length of the repayment period would be the most appropri-ate would require further investigations, including a survey among potential users.

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Table 15: Financial Assessment - Investment 4,000 U SD / kW

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5.1.5 Conclusion 5.1.5.1 Methodology The case study demonstrates the advantages of developing deconstructed versions of policy prescrip-tions as an aid to analysis and to stimulate focused debate among stakeholders. Such a policy de-scription has to be based on the formulation of a behavioural model, which is the formal description of the process of implementation and the assumed behaviour of the stakeholders. The analysis is formal-ised in form of a behavioural matrix. It demonstrates the approach for the case the electricity supply option with photovoltaic (PV) installa-tions shows how the options can then be analysed in the light of the policy objectives to form the basis for decision. The study then demonstrates the linkage between this deconstructed specification and detailed eco-nomic analysis. There are complementarities between the behavioural matrix and the cost-benefit analysis, because the cost-benefit analysis cannot consider all possible aspects and indicators. 5.1.5.2 Promotion Instrument The cases study presents in addition a cost-benefit for the PV option with an economic and a financial analysis: Economic Analysis The economic assessment of the PV option requires the specification of an alternative electricity sup-ply option, the study considers the use of imported coal. The benefit of the PV option is then the avoided cost for the coal generation plus additional carbon credits. The analysis shows that the PV option is not yet economically feasible. A series of factors is consid-ered (higher coal prices, carbon credits, and lower investment costs). But only in the case of higher PV generation the PV option would be economically feasible. The main issues for a deeper analysis should be the specification of the alternative form of electricity supply, the investment costs and the PV generation. Financial Analysis The case study presents a financial analysis with the point of view of the user. For the valorisation of the electricity generation the value of 174 millisime was used. Different forms of promotion schemes are discussed all based on the assumption that the investor does not have to pay for the installation of the PV equipment. In all cases significant subsidies have to be paid.

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5.2 Case Study 2 - Mandatory Audits for Large Consu mers 5.2.1 Background and Context 5.2.1.1 Scope of the Case Studies The second example that we choose in this case for illustration is the analysis of mandatory audits in large industry. 5.2.2 Background to Mandatory Audits in Tunisia Tunisia has adopted a mandatory audit scheme for large consumers. The thresholds defining large consumers have been steadily reduced since the scheme began; it now encompasses all consumers using more than 800 toe / year for industry and for other sectors it is 500 toe / year. The procedures for calculating energy consumption are set out in the Decree. Audits must be performed every five years and have to be done by an auditor accredited by ANME. The scope of the audit must cover

• A description of the establishment and its principle characteristics that pertain to energy use, • An evaluation of the energy performance, • An evaluation of the management system for energy efficiency, • Recommendations to improve performance, accompanied by economic evaluation, • An action programme.

The main financial incentives for energy efficiency are the following:

• For energy audits a grant of 70% of the cost is available with a ceiling of 30,000 TND • Investments in energy efficiency benefit from a range of interventions that are available only in

the framework of a contract between the organisation and the ANME and only after the invest-ment has been made

• A grant of 70% of the preliminary studies of feasibility with a platform of 70,000 TND, • A grant of 20% of the material investment cost with a ceiling that varies according to the

size of the consumer. The ceiling is 100,000TD for establishments consuming less than 4,000 mtoe/year, 200,000 TND for a threshold of 4,000 mtoe/year, 250,000 TND for still lar-ger consumers.

5.2.2.1 Scope of the Case Study The objective of the case study is to examine in broad terms what the financial and economic per-formance of a scheme might be. We should note that it should not be considered an analysis of the Tunisian scheme for which we do not have the necessary data, but merely as a generic example of how such schemes might work in practice and the factors that will determine their impact. 5.2.3 Evidence-based Policy Making 5.2.3.1 Step-wise Procedure The procedure that we have proposed to implement evidence-based policy making comprises the fol-lowing steps.

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1. Alternative forms of intervention need to be reviewed and short-listed. Evidence of the success

or failure of similar instruments in developed and developing countries needs to be studied with special emphasis on the conditions that created success and failure

2. There must always be a base-case against which alternatives are screened. Alternatives should include all available instruments.

3. All the relevant potential impacts need to be identified and where possible, quantified 4. Impacts should be assessed in consultation with the subjects of policy 5. The cost of compliance needs to be assessed. Consideration should be given to how these

costs can be minimized. It is necessary to consider who pays the compliance costs ; there are generally alternatives with different implications for equity. The procedures for compliance need to be worked out as does the procedure for monitoring impacts.

6. Indicators need to be established of what is expected from the policy measures. These indica-tors should cover outputs, outcomes and impacts. Intermediate indicators are important in help-ing understand how policies work, how measures interact and how they can be improved

7. Quantitative analysis of impacts is essential. The analytical method most commonly used is economic cost-benefit analysis .

8. Cost-benefit analysis should take into account opportunity costs of energy and external envi-ronmental costs.

9. Multi-criteria analysis maybe a useful support to decision making; sensitivity analysis is one expression of this idea

The first five steps are discussed in this section; the formulation of indicators is discussed in the sec-tion on theory-based evaluation and the last three steps are demonstrated in the section on economic cost-benefit assessment. 5.2.3.2 Alternative Forms of Intervention The purpose of the mandatory audit scheme is to make consumers aware of the potential for them to save money by improving the performance of their equipment. The market failure that the scheme is intended to overcome is the unwillingness to acquire that infor-mation in the absence of compulsion. Companies may be unwilling for several reasons. They may not have the skills to undertake such work themselves; they may not know where to go; they may be sceptical that the benefits will justify the time and money spent on the audit. A mandatory audit over-comes all these issues by the simple expedient of creating a legal obligation. One can imagine several possibilities for achieving the specified objective. These include: 1. The mandatory audit as described above. 2. The offer of free but voluntary audits. 3. The distribution of promotional material designed to persuade users of the benefits of audits and

to cause them to pay the cost for themselves The government can take comfort in a mandatory scheme from a great deal of international experi-ence that shows that almost all large energy users can make substantial cost-effective savings of en-ergy and that therefore the audited subject is likely to gain from the exercise. There is also of course a social gain that may in itself justify the action (c.f. environmental audits that generally from no benefit to the audited subject, but rely on a social benefit for their justification).

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Free, but voluntary audits are likely to exclude the subjects that least aware of the benefits; these are likely also to be the subjects that are most wasteful of energy and therefore the most important to cap-ture by the instrument. The simple distribution of advice and promotional material may well be useful in its own right, but it is unlikely to lead to a rapid take up of auditing and suffers from the disadvantage of free voluntary audits that it is likely to miss the worst offending users. Mandatory audits appear then to have some advantages and it is the instrument analysed here. 5.2.3.3 Base Case The base case for the analysis is a situation where most users would not make audits for themselves. It is probably unwise to assume that no user would make audits for themselves, because some users will be sufficiently concerned by their payments for energy to make their own investigations. The base case should therefore make some assumption about the proportion of users that would anyway re-spond. 5.2.3.4 Impacts The impacts will be a reduction in the use of energy and electricity and therefore a reduction in the costs of the user, in the costs of energy supply to the state and in the emissions of greenhouse gases. To calculate these impacts we will need to make assumptions about the type of fuel saved in each case in order to know its price, its opportunity cost to the state and its carbon content. 5.2.3.5 Consultation Even though the scheme is mandatory it is still necessary to consult. It is necessary to ensure that suf-ficient trained people are available to make the audits and it is necessary to define the content of au-dits that is both desirable and feasible, what broadly is the current state of energy among large users and what impacts might be expected. Representative groups of large users, consultants, equipment suppliers will have many insights. Technical assistance agencies will have much experience from other countries to offer. The consultative process also helps to prepare the regulated subjects for the regulation and to foster understanding of why it is needed. These factors can cause the regulated subjects to react more pre-dictably and positively when the regulation is issued. 5.2.3.6 Compliance Compliance will be a significant factor for such a programme. There will need to be a register of regu-lated subjects and a record in each case of the actions taken and the status of compliance. This re-quirement is not demanding. More difficult will be the control of the scope and quality of audits. A company that complies unwillingly and with no intention of following up regulations will be perfectly content with a poor quality, low cost audit. There will need therefore to be independent review of the quality of audits either by the agency responsible for administering the scheme or by independent ex-perts contracted for that purpose.

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In the event that a mandatory audit scheme is run in parallel with a system of incentives to investment there will need to be still more review of compliance and the costs and complexity will rise. The most cost-effective procedure for ensuring regulatory compliance in such circumstances is through some process of regulatory risk analysis. With this procedure subjects are responsible for certifying their own compliance, but random inspections and checks are made and penalties exacted for non-compliance. Over time it is possible to construct risk profiles of the areas where poor compliance i most likely and to focus regulatory activity mainly, but never exclusively, on those areas. 5.2.4 Theory-based Evaluation 5.2.4.1 Methodology Evaluation of a project depends upon an underlying belief in how actors will be affected by the policy and how they will respond. We call this belief a “behavioural model”. We specify the behavioural model as a causal sequence in which the successive steps of policy implementation are shown in the first column and then in subsequent columns are listed various indicators, risks and assumptions. The successive steps of the policy may or may not specify recognisable behavioural assumptions; it de-pends very much on the type of policy investigated. The behavioural model is a formal description of the process of implementation, the concerns to be raised at each stage and the measures that are to be adopted to make everything is working as ex-pected. It provides a structure for the analytical steps and indicates the evidence that should be sought at each stage to support assertions or on which to found analysis. It allows the issues that might affect implementation to be identified and it allows different stakeholders to debate around a clear and concrete representation of the policy. In later stages it serves as the basis for monitoring and evaluation. 5.2.4.2 Indicators Indicators need to be established of what is expected from the policy measures. These indicators should cover outputs, outcomes and impacts. Intermediate indicators are important in helping under-stand how policies work, how measures interact and how they can be improved.

• Inputs are the financial, human, technical or organizational resources used in the endeavour, • Outputs are objectively verifiable indicators that demonstrate the progress made in implement-

ing the measures, • Outcomes are the immediate effects on the regulated subject, • Impacts are direct measurements of the improvements that the programme is designed to bring

about. 5.2.4.3 Behavioural matrix The behavioural matrix for the basic scheme of mandatory audits is shown in Table 16. The example illustrates how the behavioural matrix can be useful in helping identify the indicators that are neces-sary to ensure that policy is proceeding as planned.

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The behavioural model is a formal description of the process of implementation, the concerns to be raised at each stage and the measures that are to be adopted to make everything is working as ex-pected. It provides a structure for the analytical steps and indicates the evidence that should be sought at each stage to support assertions or on which to found analysis. It allows the issues that might affect implementation to be identified and it allows different stakeholders to debate around a clear and concrete representation of the policy. In later stages it serves as the basis for monitoring and evaluation. The matrix can also be helpful in identifying flanking policies to cope with some of the risks and as-sumptions identified through the detailed breakdown of the expected behaviour and causal sequence. For example the requirement for sustained monitoring and remedy of non-compliance is very clear. In this instance there are several risks that appear from the analysis that could reduce impact. They are:

• If tariffs are so low that consumers have no reason to invest in better energy efficiency, then it may be necessary to supplement the policy with financial incentives.

• If banks are unwilling to lend for identified projects, then it may be advantageous to create dedicated credit lines placed through selected banks.

• The absence of credit for carbon saved may impinge on finance of audits. Flanking policies might be helpful to provide financial incentives, sensitise banks, provide credit lines, and arrange for registration under the CDM as a programme of action. The same approach can be adopted for these flanking policies and Table 17 shows a behavioural matrix for an associated policy of financial incentives.

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Table 16: Behavioural Matrix for Mandatory Audits

Behavioural model

Indicators


Prepare legislation and regulations


Published regulation (Y/N)

There are trained auditors to admin-ister scheme

Develop accredita-tion scheme for auditors


Training ($)

Trained and ac-credited audi-tors (#)

Not enough ac-credited audi-tors

Regulated subjects prepare audits

Staff time / con-sultants ($)

Contract with audi-tor (Y/N)

Audit prepared Staff time and au-dit fees ($)

Compliant audit (Y/N)

Quality of audits is poor

Verification of compliance


Compliance report (Y/N)

Audits approved or returned (#)

Penalties ($)

Time delays ac-cumulate

User reviews au-dits

Staff time / con-sultants ($)

Feasibility studies (#)

Action Plan (#)

Retail prices of energy too low to justify in-vestment

Finance reviewed Staff time / con-sultants ($)

Financial closure (#)

Banks remain sceptical

Investments made Value of invest-ments ($)

Savings to user and state ($)

CO2 avoided (#)

No financial credit for CO2

Note on symbols:


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Table 17 Behavioural matrix for associated financia l incentives

Behavioural model

Indicators


Government pre-pares law de-tailing objec-tives, incentive structure, cost

Administrative and parliamentary time ($)

Law and regulations (Y/N)

Interministerial disputes may delay process

Political process recognises the importance of the subject

Finance secured, staff appointed and trained

Administrative time ($)

Staff salaries ($) Training costs ($)

Volume of funds ($) Numbers of staff (#) Qualifications (#)

Funds are not available

Foreign donors find option at-tractive

Incentives publi-cised to target audience


Awareness among stakeholders (?)

Large users pre-pare requests (#)

Awareness raised (?)

Low priority of en-ergy efficiency in stakeholders

Requests submit-ted

Staff time / consul-tancy ($)

Completed appli-cations (#)

Conditions are not attractive

Administrative complexity de-ters partici-pants

Requests evalu-ated and granted


Number of requests (#)

Volume of funds sanctioned ($)

Incentives given to free-riders or poor projects

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Behavioural model

Indicators


Investment pro-posals exe-cuted and monitored

Investment cost ($) Engineering time

($) Time for M&E ($)

Demonstrated cost savings ($)

Measured and in-ferred energy savings (#)

CO2 reduction (#) Costs to state

budget avoided ($)

Impacts of activity can be reliably separated

Monies are re-turned in part to state budget through corpo-ration tax

Extra tax aid can be inferred from cost savings ($)

Net costs of policy reduced ($)

Consolidated an-nual and multi-annual reports made


Number of proposals (#)

Number of awards (#) Volume of incentives

dispensed ($)

Effectiveness of incentives iden-tified and pro-posals for con-tinuation made (Y/N)

Funding sources are willing to continue

Note on symbols:


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5.2.5 Cost-Benefit Assessment 5.2.5.1 Methodology Applied The case study is based on a "constructed" set of data, which do not refer to a real case of on audit programme. But nonetheless the example can be illustrative to discuss the economic and financial im-plications of an audit programme, because the quantitative analysis of impacts is essential. The analytical method most commonly used is economic cost-benefit analysis , taking into account the following levels of discussion:

• Impacts upon the national economy - this would be the standard economic analysis, • Impacts upon the Government budget, • Impacts at the level of the investor - this would be the standard financial analysis.

The following numerical example will show that for an assumed case of energy efficiency investment a real win - win - win situation can be achieved. We evaluate here the combined impact of the mandatory audits and financial incentives. It is legiti-mate to examine these instruments together because the investments will not be made without the audits that identify the potential and probably many of them would not be made without the incentives. The economic and financial assessment of intervention obliges us to consider the opportunity cost to Tunisia of the energy saved. The opportunity cost of traded goods is aligned to the international value and the opportunity cost of non-traded goods is the long run marginal cost assessed using the opportunity costs of traded goods as inputs. This is hard to assess as we do not know exactly what will be the proportions of different fuels and electricity in the saved energy. For the purpose of our simple case study we assume that the energy has a bundled opportunity cost of $600 / toe. The key parameters for the assessment are:

• Cost of audits and feasibility studies. • Performance of the investments in energy efficiency: We assume that the audits identified vari-

ous measures with a total investment volume of 1 million EURO, leading to a total reduction in fuel costs of 250,000 Euro, which would imply that the EE measures would have in average a simple pay-back period of 4 years.

• This pay-back period is quite long considering the fact that in many cases investors stated that acceptable pay-back period for EE investments should be lower than two years.

• Investors' minimal acceptable rate of return / discount rates of industrial investments 20%, • Discount rates of the state (10%), • Financial incentives made available (subsidies for pre-investment and investment expendi-

tures, access to loan financing 70% of investment / 8% interest / 10 years repayment period), • Corporate tax rate (30%)

The numerical example does not take into account free-riders (programme participants which would have done the investment even without the special EE promotion programme. Another aspect not taken into account is the revenue tax collection efficiency.

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5.2.5.2 Assumptions and Data Base Our assumptions about the associated costs with each € 1 million of investment made are shown in the table below. Table 18: Data Base for the Case Study

With these assumptions we proceed as follows.

• The 1 million Euro investments by the industrial energy users identified by the mandatory audit cost them 1,080,000 Euro, considering 40,000 Euro for audits and 40,000 Euro for the feasibil-ity studies

• But the investors are reimbursed 70% of the audits and feasibility studies and 20% of the in-vestment, i.e. 256,000 Euro. In fact for a single user the contribution to the investment is capped at 125,000 Euro, but we are interpreting the 1 million investments to cover a set of in-vestments by different industrial investors, so we credit the full 20%.

• The net investment costs to be financed by the investors are therefore 824,000 Euro.

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• It is assumed that about 600 toe of fuel are saved, at an economic value of 600 USD / toe. These fuel savings account therefore for an economic value of 250,000 Euro.

• The subsidies on fuel are assumed to be about 20%, which implies that the market value of the fuel savings are 200,800 Euro, the Government subsidies amount to 50,000 Euro.

• The estimated fuel savings would reduce emissions by around 2,100 t CO2. It assumed that the value of the CERs is 10 USD / t CO2.

5.2.5.3 Programme and Investment Appraisal The result of the investment appraisal is shown in the following Table 19. The projections of the cash flows are given in Table 20 to Table 21. Table 19: Result of the Programme and Investment A ppraisal

The results can be explained in the following way: Economy - this is the point of view of the Tunisian economy. The projection of costs and benefits is given in Table 20. The costs are the direct costs for the investor and for the programme. The benefits are the fuel savings and the transfer to Tunisia the CER values.

• The audit programme is highly beneficial for Tunisia. The return on investment (IRR) of 12% is higher than the assumed threshold for the economic assessment of 10%. But with higher CERs values the economic return would increase.

Government budget - this is the view of the whole public sector. The projection of outlays and re-

ceipts (avoided outlays) is given in Table 21. The benefit side are the tax revenues, the CER trans-fers and the avoided fuel subsidies. The costs are the programme subsidies and the programme costs. There would be a net gain for the government budget / governmental institutions. • The audit programme results in net benefits for the government budget.

Investor level - this is the point of view of the investing industrial company. The projection of costs

and benefits are given in Table 22. The financial analysis is done in the following steps:

• Direct project assessment - this analysis considers only the EE investment without the pre-investment costs, the subsidies and taxes.

• The investment alone would have an IRR of 12%, below the investors' required return on investment of 20%, this would imply that the investors would be reluctant to realise these investments.

• Programme sponsored programme - taking into account the pre-investment costs and the subsidies offered by the EE programme. In addition, the income taxes are considered.

• The investment under the audit programme (with the additional pre-investment costs and the subsidies would offer a slightly better IRR of 15%, but sill below the 20% threshold of the investors.

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Return on equity - it is assumed that 70% of the investment can be financed with a loan with an in-terest rate of 8% and a repayment period of 10 years.

• The resulting return on investment is then 92%! This means, if the investors can finance the in-vestments with loans, their return on equity would be very attractive and their 20% return re-quirements would be easily satisfied.

The analysis shows that the direct subsidy scheme is of importance to generate the projects and to improve the general environment for industrial EE investments. But the real impact can be achieved only if the EE investors will have access to loans to finance their identified investments.

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Table 20: Result of the Economic Programme and Inv estment Appraisal

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Table 21: Result the Programme Impacts upon the Go vernment Budget

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Table 22: Result the Financial Assessment for the EE Investor

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5.2.6 Conclusion 5.2.6.1 Methodology This case study demonstrates the advantages of developing deconstructed versions of policy prescrip-tions as an aid to analysis and to stimulate focused debate among stakeholders, in this case study the stakeholders are the Tunisian economy, the Government budget and the industrial EE investors. Such a policy description has to be based on the formulation of a behavioural model, which is the for-mal description of the process of implementation and the assumed behaviour of the stakeholders. The analysis is formalised in form of a behavioural matrix. It demonstrates the approach for the case of the Tunisian mandatory audit programme and shows how the options can then be analysed in the light of the policy objectives to form the basis for decision. The study then demonstrates the linkage between this deconstructed specification and detailed eco-nomic analysis. There are complementarities between the behavioural matrix and the cost-benefit analysis, because the cost-benefit analysis cannot consider all possible aspects and indicators. For example, two aspects are not taken into consideration in this case study, but they require major atten-tion in preparing the programme: Free-riders: A number of investors might take the subsidies of the audit schemes, but they would have realised the investments even without the Government programme. These free-riders might re-duce the positive programme impact. Efficiency of tax collection: The favourable impacts upon the Government budget might be reduced by a low tax collection efficiency. 5.2.6.2 Instrument of Mandatory Audits The cost-benefit analysis showed that a mandatory audit scheme can have real positive impacts upon the Tunisian economy, upon the Government budget and for the investors. EE investment could result in real win - win - win situations. Even in the situation when the simple pay-back periods (total invest-ment divided by annual energy savings) might result in too long a pay-back period. Another major pre-condition that was demonstrated requires that the investors will have the possibility to finance the identified investments with loans. Then the necessary levels of minimal acceptable re-turn on equity can be realised and the recovery time of the investors' own outlays can be reduced sig-nificantly. An audit programme can provide assistance in identifying the investments and in preparing the in-vestments in form of bankable documents; but the investors will remain reluctant to realise the invest-ments if the pay-back periods are too long and the return requirements on the investors' funds are not met. If the audit scheme is also accompanied by an EE loan programme - and the investors have the pos-sibility to finance the EE investments with loans - the above mentioned "triple win situation" can really be achieved.

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Tunisia.doc

6. Institutional Reform in Tunisia – Some Possibili ties Improvement of framework for renewable energies The current political framework for the introduction of renewable energies needs further development. The status of renewable energies in the Tunisian energy system (share in total generation, imple-mented projects, policies and targets) was mentioned above. Some measures have been taken al-ready, but they are not working in Tunisia, mainly because formal procedures are too complex and time consuming. Electricity from renewable energies can be generated to mainly cover the producer’s own demand and not more than 30% of the total electricity production can be supplied to the grid without the specification of a consuming body (i.e. of 100 units of electricity produced at least 70 units have to be consumed by the producer and a maximum of 30 units can be fed into the grid without a specified consumer). The autoproduction is subtracted from the total electricity consumption of the producing entity, which represents „negative metering“. This scheme prevents independent power producers from entering the Tunisian renewable electricity market. The large share of own consump-tion of the electricity production makes it impossible for independent power producers to enter the market without searching for companies to form a groupement d’interet as they would never be able to consume large amounts of electricity themselves. The relatively small size of projects (<50 MW) can be an obstacle for power producers preferring larger projects, e.g. offshore wind farms. Reduction of subsidies Energy prices were subsidised for many years in Tunisia and still are to some degree. However, gov-ernment recognised subsidies as a problem for the economy and the state as a whole. Domestic prices are pegged with a formula to international prices: they follow international prices but on a lower level. The difference between domestic and international prices will be gradually reduced in the com-ing years. This path should be followed under all circumstances as it will create a more favourable en-vironment for the introduction of energy efficiency measures and renewable energies. The government is recommended to provide a mid-term financial plan for the reduction of subsidies for fossil fuels. Make energy efficiency fund a major element of an e fficiency strategy Tunisia created an energy efficiency fund (see above) that was supplied with € 16 million from the European Union and is constantly replenished by three sources (see above). The total size of the fund is in the range of € 15 million per year. It is recommended to enlarge the fund considerably, as firstly the current financial volume seems to be insufficient and secondly investments into efficiency repay for the state/government (which is the funder and in the mid term the beneficiary of the fund). For this purpose the government should provide a concise financial plan. By making the fund a very strong in-strument Tunisia could make further large steps toward an energy efficiency pioneer in North Africa. Strengthen financial advisory and improve administr ative procedures Consumers need to get information on possible credit lines easily to facilitate investments in renew-able energies and energy efficiency. Currently there is a certain lack of transparency in this field. This partly results in insecurity of potential investors. It is therefore recommended to simplify and to improve administrative procedures and to strengthen the financial advisory level of existing credit lines. Share experiences with other countries Tunisia is on a good way to become more energy efficient and the country is experienced in the for-mulation and introduction of efficiency measures. It might create various benefits in other North African countries if Tunisia shared its experiences in this field. However, sharing experiences would also benefit Tunisia as it could establish itself as a driver of developments on the one side and on the other side it could also gain a prominent role as a centre of industrial development in the efficiency field.



Tunisia.doc

Annex 1

Mission Report



Tunisia.doc

Mission Report The country mission was successfully completed in the time span of November 9 to 14, 2009. The mission programme had been prepared with very good support from the Tunisian representative in RCREEE's Board of Trustees. The mission programme was as follows: Date Programme Item 9 Nov Travel to Tunis 10 Nov Internal project team meeting with local consultant and RCREEE representative 10 Nov Meeting with Chambre Synclinale Nationale des Energies Renoubelables 10 Nov Meeting with GTZ, EE and RE programme 10 Nov Meeting with CRA2E, Etude, Controle & Pilotage 11 Nov Meetng with SES 11 Nov Meetings at Ministry of Environment 12 Nov Meeting at ANME 12 Nov Meeting with STEG, Most of the organisations visited were represented at the half day seminar. Other organisations that could not be visited sent participants to the half day seminar. A list of stakeholders is attached in the following Annex 2. Some 15 persons attended the seminar and engaged in lively discussions. The seminar was held at the Mechtel Hotel in Tunis. The seminar was opened by Eng. Hamdi Har-rouch, who is the Director for International Cooperation at ANME. The seminar also had the priviledge of the presence of Mrs. Ingerlise Ennabli, the Danish Consul General in Tunis. She welcomed the par-ticipants and informed them, how this project fit into the context of the Danish cooperation. RCREEE was represented by Mrs. Amel Bida, who gave a presentation on RCREEE, its (young) history, its structure, its activities and its vision. She emphasised that RCREEE was a regional initiative and that it supports regional activities emenating from the member countries. The seminar had three main objectives (1) to promote RCREEE in Tunisia, (2) to discuss with stake-holders the findings of the mission and (3) to introduce the participants to the ideas of Evidence Based Policy Making and Theory Based Policy Evaluation by giving a detailed presentation on that topic (An-nex 4) and by presenting case studies illuminating the methodology (Chapter 5 above). Finally the seminar was used to give a preview on the national information workshop on EE and RE policy devel-opment.



Tunisia.doc

Annex 2

List of Stakeholders



Tunisia.doc

List of Stakeholders Organisation Contact Per-

son Position email

Société Tuni-sienne e l'Electri-cité et du Gaz (STEG)

Moheddine Mejri

Directeur Energie Re-nouvelable

[email protected]


Samir Cherif Chef de Division Effica-cité Electrique

[email protected]


Ibrahim Ab-deljelil

Chef de Service [email protected]


Mourad Ayed Chef Service en Envi-ronnement

[email protected]

Agence National pour la Maitrise de l'Energie (ANME)

Hamdi Har-rouch

Directeur de la Coope-raiton International

[email protected]


Amor Ounalli Directeur des Energies Renouvelable

[email protected]


Ahri Mounir Directeur de l'Utilisation Rationnelle de l'Energie

[email protected]


Moncef Njeimi

Directuer de l'Unité de Gestion Prosol

[email protected]

Chambre Syncli-nale Nationale des Energie Re-nouvelables

Achour Tahar President [email protected]

Solar Energy Systems SES

Ali Kanzari Directeur Général [email protected] www.ses.com.tn

CRA2E Etude, Controle & Pilo-tage

Sayah Ha-madi

Directeur Général [email protected]

ALCOR Rafik Mis-saoui

Consultant [email protected] www.alcor.com.tn

Consultat Gen. de Danemark

Ingerlise En-nabli

Consul General [email protected]

GTZ Hansjoerg Chef de Mission [email protected]



Tunisia.doc

Mueller GTZ Sami Mar-

rouki Operation Manager CDM-JI-Initiative

[email protected]

GTZ Valeria Troudi

Expert national Méca-nisme du Développe-ment Propre

[email protected]



Tunisia.doc

Annex 3

Seminar Programme

Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency

A project financed by the Ministry of Foreign Affai rs of Denmark

Méthodes et politiques de mise en place de

l’efficacité énergétique et de l’énergie renouvelab le

Séminaire d’une demi-journée – Tunis, Mechtel Hotel 13 novembre 2009, 9.00 h. – 13.00 h.

Objectif du séminaire: Le séminaire contribue à la réalisation de l'objectif du projet, qui consiste à soutenir l'effort global du RCREEE afin de garantir un meilleur flux d’informations, de même que des outils et méthodes de planification auprès des administrations des Etats membres. Le séminaire fournira une introduction aux politiques fondées sur des données probantes et à l’évaluation de politiques à fondement théorique, de manière à assurer la mise en place de l'efficacité énergétique et de l'énergie renouvelable. De plus, le séminaire permettra de débattre certaines obser-vations préliminaires recueillies en Tunisie. Le séminaire sera structuré comme suit:

1. Accueil des participants par le Représentant de la Ministère de l'Industrie, l'Energie et des Pe-tites et Moyennes Entreprises

2. Introduction au RCREEE par Mme. Bida Amel 3. Introduction au projet ainsi qu’au séminaire, effectuée par le Chef de Mission, Monsieur Flo-

rian Sauter-Servaes 4. Méthodologie : Formulation de politiques fondées sur des données probantes et évaluation de

politiques à fondement théorique, présentée par Monsieur Nigel Lucas 5. Situation des politiques d’efficacité énergétique et d’énergie renouvelable, de même que leurs

développements en Tunisie, exposé de Messieurs Rafik Missaoui et Nikolaus Supersberger 6. Présentation du programme de l'atelier national, qui aura lieu au mois de décembre 2009,

sous la tutelle de Monsieur Martin Ehrlich 7. Discussion générale - dejeuner

Annex 4

Presentation on Methodology

Evaluation des impacts économiques, technologiques et environnementaux des réglementations etmesures d’encouragement nationales pour l’énergie renouvelable et l’efficacité énergétique

Projet financé par le Ministère des Affaires Etrangères du Danemark

Tunis: Séminaire sur les méthodes etpolitiques, 13 Novembre 2009

Page 1

Formulation de politiques fondéessur des données probantes et

évaluation de politiques àfondement théorique

Nigel Lucas




• Formulation de politiques fondées sur des donnéesprobantes

• Evaluation de politiques à fondement théorique

• Les interdépendances

– théorie

– indicateurs

• Comment procéder à une adaptation?

Page 2

Sommaire




Page 3

• Qu’est-ce que formuler des politiques sur des donnéesprobantes ?

• Quelle en est l’utilité? Qu’a-t-on utiliser jusqu’à présentpour formuler une politique?

• Qu’est-ce qu’une donnée probante?

Que signifie formuler une politique sur des données probantes ?




Page 4

Il existe de nombreuses définitions, cependant le terme signifie simplement:

« Une méthode de formulation et de mise en œuvre de politiques au travers detechniques rigoureuses afin de développer et de maintenir une base solide dedonnées probantes qui permettra d’élaborer des variantes de politiques ».

Etant donné que toutes les politiques sont basées sur des données probantes -les questions suivantes se posent:

• les données probantes sont-elles fiables ?

• le procédé qui consiste à transposer les données probantes en politiques est-iladapté au besoin ?

Que signifie formuler une politique sur des données probantes ?




Page 5

• Une politique est souvent sujette à des préjudices ou à des pressionspolitiques à court terme

• Une politique est formulée par de petits groupes – elle reflète lespréférences et les perceptions de ce groupe – ce qui varie lorsque legroupe change – ceci est inacceptable pour les « stakeholders »– carcela signifie partialité et instabilité

• Les Consultants et les agences internationales prescrivent souvent desremèdes fait maison, qui ne sont pas absolument appropriés. Lemimétisme n'est pas une politique.

• Les agences ont leurs propres calendriers et visions, lesquels peuvententrer en conflit avec eux-mêmes ou avec les visions du gouvernement

• Les pays ont besoin de capacités internes solides afin d’analyser etd’évaluer des politiques et des procédés plus transparents

• Le besoin perçu est une politique plus stable et plus solide avec uneplus grande acceptance.

Quelle en est l’utilité?




Page 6

• Une approche sur la base de données probantes devrait montrer lacontinuité entre la prévision, la stratégie, la politique et la mise enœuvre

• Des données probantes ne signifient pas nécessairement des faitssolides tels que des informations scientifiques, bien qu’ils sontimportants

• Une donnée probante est n'importe quelle information pouvant êtreutilisée pour transposer des objectifs politiques en instruments politiqueréalisables et efficaces

• On peut distinguer trois composantes principales:- données solides (faits, tendances, informations collectées)- raisonnement analytique qui traite ces données de processus pour

cerner les problèmes- avis des « stakeholders »

• La recherche, l'analyse de l'opinion des « stakeholders », la sensibilitéet l’opinion publique, les analyses coûts/bénéfices, la modélisationéconomique et statistique sont des sources probantes importantes

Qu’est-ce qu’une donnée probante?




On nécessite doncdes données probantes et des

processus

Page 7

Le fait de disposer de bonnes données probantes n’est pas suffisant

Il ya des processus politiques qui:

Bonne utilisation Faible utilisation

Utiliser de bonnesinformations

Utiliser de faiblesinformations




Page 8

• Des formes alternatives d'intervention doivent être passées en revue etretenues. Le succès ou l'échec obtenu par des instruments similaires dans despays développés ou en voie de développement doit être étudié, en tenantcompte particulièrement des conditions qui ont mené au succès ou à l'échec.

• Il doit toujours y avoir un scénario de base qui sera confronté à des solutionsalternatives afin de les examiner. Les solutions alternatives doivent tenir comptede tous les instruments disponibles.

• Tous les impacts potentiels importants doivent être identifiés et dans la mesuredu possible, quantifiés.

• Des indicateurs doivent être définis afin de traduire les attentes des mesurespolitiques. Ces indicateurs devront couvrir les rendements, les résultats et lesimpacts.

• Les indicateurs intermédiaires sont importants car ils permettent d’aider àcomprendre le fonctionnement des politiques, l’interaction des mesures et lamanière de les améliorer.

Processus de formulation d’une politique sur des données probantes(I)




Page 9

• Les impacts devront être évalués en consultation avec les sujets de lapolitique

• Le coût de la conformité doit être évalué. Il faudra voir comment réduireces coûts au minimum.

• Il est nécessaire d’examiner qui paye les coûts de conformité ; il y agénéralement des solutions alternatives avec différents effets sur l’équité.

• Les procédures de conformité doivent être établies pour examiner lesimpacts de la surveillance.

• L'analyse quantitative des impacts est essentielle. La méthode analytiquegénéralement la plus utilisée est l’analyse économique des coûts-bénéfices. L'analyse coûts-bénéfices devra considérer les coûtsd'opportunité de l'énergie ainsi que les coûts environnementauxexternes.

• L'analyse multicritère est un appui utile dans la prise de décision.

Procédé de formulation d’une politique sur des données probantes (II)




Page 10

Que signifie évaluer une politique à fondement théorique?

Introduction desnormes derendementénergétique minimal(« MEPS »)

Le consommateur esten mesure d’émettreun meilleur jugementet modifie soncomportement

Les fabricants sontincités à fournir desmodèles plusefficients

Modification dumarché: disparitiondu matérielinefficient

La consommationénergétique et lesémissions CO2régressent ;augmentation desfabrications locales/nationales

• L’évaluation d’une politique à fondement théorique se concentre surl’analyse d’une séquence théorique ou logique, par laquelle uneintervention politique est susceptible de conduire aux effets souhaités.

• Par extension, une évaluation une politique à fondement théorique peutsupposer les étapes implicites entre l’initiation d’une politique (par ex.introduction de normes de rendement énergétique minimal) et la finalisationd’une politique (pour la réduction de la consommation énergétique et desGES). Le schéma ci-dessous décrit la théorie implicite de la formulationd’une politique:




Page 11

• Les indicateurs d'impact indiquent si les résultats visés ont été obtenus

• Dans la plupart des cas, ils ne sont pas suffisants à eux seuls

• Les indicateurs intermédiaires sont utiles et réellement nécessairespour vérifier la théorie de fondement.

Indicateurs intermédiaires




Page 12

Des indicateurs devront être déterminés afin de définir les attentes deces mesures politiques. Ceci est essentiel pour réaliser une évaluation.

Les indicateurs devront couvrir :

• les entrées c-à-d. les ressources financières, humaines, techniques ouorganisationnelles utilisées pour l'effort

• les rendements (indicateurs objectivement vérifiables qui démontrent leprogrès accompli en mettant en application les mesures, par exemple lacréation d'une norme de rendement énergétique minimal),

• les résultats (effets immédiats sur le sujet résolu, par exemple l'offre denouveaux produits et le rééquipement des chaînes de production)

• les impacts (évaluation directe des améliorations apportées par leprogramme conçu, par exemple des produits plus efficaces ou uneconsommation énergétique inférieure).

Indicateurs




Page 13

Indicateurs et modèles théorétiques (labels et normes)

Causal sequence

Indicators

Risks Assumptions

Input Output Outcome Impact

Development of

standards and

supporting

measures

Administrative

time and effort

Standards

published and

supporting

measures in

place

Consumer

surveys show

consumers and

manufacturers

change

expectations

Inadequate

accompanying

measures;

consumers

unaware or

unaffected

Manufacturers

have confidence in

regulatory system

Manufacturers

incentivised to

make more

efficient models

New investment

and production

measures ($)

Strengthened

manufacturing

capacity -

inspection

Range of new

products

determined by

survey

Consumers choose

better devices; do

not seek non-

compliant cheaper

goods

Administrative

time and effort

in ensuring

compliance ($)

More

discriminating

purchases

Consumers

purchase better

quality products

– consumer and

market surveys

Low cost non-

compliant goods

excluded from

market

Electricity

consumption

lowered

Consumer

normally pays

more ($)

Better capital

stock in

households –

household

surveys; market

studies

Lifetime cost

decreases

Electricity

consumption

decreases

CO2 emissions

decrease

Manufacturing

base

strengthened




Théories alternatives

Page 14

Introduction desnormes derendementénergétique minimal(« MEPS »)

Le consommateur estindifférent à la questionde consommationd’énergie, c’estuniquement le prix quil’intéresse

Les fabricants sontobligés de fournir desmodèles plusefficients

Le marché est ruinéen raison de lamauvaise qualité dumatériel fraudé

La consommationénergétique et lesémissions CO2augmentent ;diminution desfabrications locales/nationales

• Si l’on ne peut pas cerner les défaillances des séquences causales selonlaquelle une politique devrait fonctionner, les résultats seront mauvais oumême contradictoires.

• Une politique à fondement théorique ne constitue pas une préventioncontre les modèles inadéquats, mais elle détermine les indicateurs àprendre en considération pour assurer un bon déroulement.




Page 15

Théorie et cycle politique

formulate

Implement

monitorevaluate

reformulate Theory

Model

Indicators

Foresight EvidencePrévisions

Reformuler

FormulerDonnéesprobantes

Evaluer Surveiller

Implémenter

Théorie

Modèle

Indicateurs




Page 16

• 0$/tonne

• 2$/tonne

• 10$/tonne

• 50$/tonne

• 0$/tonne $0 / kW

• 2$/tonne $34 / kW

• 10$/tonne $170 / kW

• 50$/tonne $850 /kW

Prix du carbone




Page 17

• L'efficacité énergétique est donnant-donnant pour les deux parties.S’il n’y a aucun aboutissement - c'est une question sensiblementd‘intervention d’ordre public. Si les coûts sont moindres : bénéficespour l’Etat et pour les entreprises

• L’énergie renouvelable ; ici, ce n'est pas aussi clair. Dans la plupartdes cas, elle est certainement plus coûteuse que les autres solutionsalternatives.

• Pourquoi la Tunesie devrait-il payer cette différence ?

• Si pas la Tunesie, alors qui et comment ? Le CDM ? Les politiques etles mesures (PAMs)

• Si l’on ne sait pas clairement qui doit ou est disposé à prendre encharge les coûts additionnels, il est difficile d’assurer une politiquecohérente pour l’énergie renouvelable.

Qui paye et comment?




Page 18

1. Introduction2. Objectifs et exigences des mécanismes de soutien ER & EE3. Enumération des outils

a) Formulation de politiques fondées sur des données probantesb) Evaluation de politiques à fondement théoriquec) Analyse coûts-bénéfices

4. Etudes de casa) Introductionb) Cadre réglementaire ERc) Mesures d’encouragement pour les chauffe-eau photovoltaïquesd) Financement par le CDM (cf. décharges)e) Stratégie de transformation de marché pour ER (pv)f) Obligations d’EEg) Fonds d’EEh) Audits énergétiquesi) Sociétés de services énergétiquesj) Labels et normesk) Campagnes de sensibilisation publique?

5. Instruments combinésa) Législationb) Agencec) Stratégie nationale

6. Assistance technique

Outils de formulation politique




Merci pour

votre attention

Page 19

Annex 5

Energy Situation in Tunisia



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Energy Situation in Tunisia

1. Tunisia’s Energy Mix and Energy Demand

The country was a net energy exporter until the year 2000. The total primary energy consumption in 2007 was 7.7 Mtoe, of which 14% were imported. The royalties of the Trans-Mediterranean gas pipe-line accounted for more than 1 Mtoe of the energy imports. The Tunisian National Oil Company (ETAP) regards these royalties as part of the national resources of primary energy. In 2009 the total primary energy consumption is expected to exceed 8 Mtoe. Tunisia has some domestic oil and gas reserves. In 2007 the national output of crude oil and conden-sates was 34.6 million barrels and of natural gas about 2.2 billion cubic meters. Compared to the pre-vious year the share of imported energy in 2007 (in addition to the pipeline royalties) decreased by more than 90% due to a significant increase of national primary energy production (+17%), see also chapter two. Tab. 1 General Information Tunisia Population (million)1

GDP (billion US$2009)

1

GDP (PPP) (billion US$2009)

1

Energy prod. (Mtoe)3

Net en-ergy im-ports incl. royalties (Mtoe)3

Total Pri-mary Energy Supply (TPES)

(Mtoe) 3

Elec. demand (TWh)3

CO2

emiss. (Mt of CO2)

4

10.4 39.6 86.4 6.6 1.1 7.7 14.6 20.4

1 IMF (2009)

2 ETAP (2007)

3 STEG (2008)

4 CO2 emissions from fuel combustion only, IEA (2009)

In 2007 the two main primary energy sources were petroleum products (54.6%) and natural gas (45.1%). The net electricity demand was 14.6 TWh in 2008, an increase of about 5% compared to 13.8 TWh in 2007. Tunisia’s electricity production is heavily based on natural gas (95%) with a share of below 1% (in 2008) from renewable energy sources (mainly hydro and wind power). Tunisia has seen a steady increase in energy and electricity demand: between 2003 and 2008 the electricity demand rose on average by 5% per year and it is expected to grow by 6% in 2009. The Tu-nisian government plans to increase the share of renewable energies from currently below 1% of the total energy consumption to about 4% in 2011. The share of renewable energies in the electricity sec-tor is planned to increase to 10% of the total capacity in the same time frame. 2. Crude Oil Tunisia’s remaining oil reserves are estimated at 400 million barrels as of January 1st 2009. The peak



Tunisia.doc

in oil and gas production was reached in the 1980s with about 120,000 bbl/day. After 20 years of de-cline, the national oil and condensate production increased significantly in 2007 by about 40% com-pared to 2006. The increase may be attributed to a number of new wells that became operational that year. In 2007, 68% of the national production came from concessions where ETAP held at least a 50% share. The remaining 32% of production comes from concessions that are held by around 45 na-tional and international oil companies. ETAP recorded for 2007 a production of 23.3 million barrels of condensate and crude oil; the non-ETAP concessions yielded a production of 11.3 million barrels. Tunisia’s oil and gas sector is controlled by ETAP, the Tunisian National Oil Company, a state-owned company founded in 1972. It manages the country’s hydrocarbon exploration and production on behalf of the Tunisian government. The country is still investing heavily into reconnaissance and exploration and has simplified access to its oil and gas concessions for international companies. Since 2000 a new hydrocarbon law has been in place, which provides financial and fiscal incentives and more legal flexibility. In 2007 ETAP reported 50 valid exploration and prospecting permits (17 offshore, 33 on-shore) that extend over a total surface of nearly 180,000 square kilometres. The investments in explo-ration activities amounted to US$ 343 million in 2007, an increase of 67% compared to the five year annual average. Tunisia’s downstream oil capacities are not well developed. The country’s only oil refinery at Bizerte has a total refining capacity of 35,000 barrels per day and is operated by the state-owned Societé Tu-nisienne des Industries de Raffinage (STIR). Products refined at Bizerte are gasoline, gasoil, fuel oil, LPG, NGL, naphtha and paraffin. There are plans to modernize the facility and increase its capacity by 25%; a feasibility study was completed in 2008. In 2007 STIR signed a memorandum of understand-ing with Qatar Petroleum International to build a new 120,000 to 160,000 bbl/day refinery at the La Skhira oil terminal. Project costs are estimated at US$ 4 billion and the facility is expected to be com-pleted by 2011. The new refinery will most probably be supplied mainly with Algerian crude oil, as do-mestic oil production will not be sufficient to satisfy the refinery’s oil demand. In 2008 Tunisia’s national oil consumption was 90,000 bbl/day; consumption in excess of the Bizerte refinery production was imported by STIR. Currently Tunisia exports crude oil and condensates and imports higher quality crude oil, oil products and natural gas. According to ETAP, the import and ex-port quantities in 2007 were almost identical, each totalling about 2 million tonnes. The national oil product demand has remained relatively stable over the past five years. This may be attributed to the increased use of natural gas for electricity generation.

3. Natural Gas

Tunisia’s proven reserves of natural gas are estimated at 65 billion cubic meters as of January 1st 2009. The country has successfully developed new domestic gas reserves since the early 1990s, mainly from the Miskar gas field, but it remains a net natural gas importer. In 2007 the total domestic natural gas production was 2.2 billion cubic meters, another 1.2 billion cubic meters were received as royalties from the Trans-Mediterranean gas pipeline; see Fig. 1 for an overview of the historical devel-opment. The 2007 domestic natural gas demand amounted to 4.3 billion cubic meters; the demand beyond the national production was satisfied with imports from Algeria. In 2008 the national gas de-mand rose to 4.8 billion cubic meters. Domestic production at the Miskar field slowed down by 7% but production at the other gas fields increased by 10%. The additional domestic demand was met by a 22% increase of gas imports from Algeria (including royalties of the TransMed pipeline). The Trans-Med pipeline connects the gas fields of Algeria with Sicily. Tunisia as a transit country is entitled to royalties of 5.3 to 6.8% of the value of the natural gas transported through the pipeline (in cash or in kind).



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Fig. 1 Evolution of Tunisia’s Natural Gas Productio n (incl. Trans-Med Royalty). Tunisia’s electricity production is heavily based on natural gas: in 2008 the Société Tunisienne de l’Electricité et du Gaz (STEG) was responsible for 74% of the national natural gas demand, which is equivalent to 3.6 billion cubic meters. Compared to 2007 STEG’s natural gas consumption increased by 12%. The remaining share of 26% of the national gas consumption is split between the industrial (18%) and the residential and tertiary sector (8%). According to the Ministry of Industry, Energy and Small and Medium Enterprises (MIEPME) more than 500,000 clients were connected to STEG’s dis-tribution network in 2009, up from 190,000 in 2004. The total natural gas distribution network in-creased to more than 11,000 km in 2009. The massive use of natural gas for electricity generation and in the industrial and residential sector is a key element of the country’s national energy strategy. Tunisia strives to become more independent of energy imports and the international energy markets using its domestic natural gas (and oil) re-serves and the natural gas royalties from the Trans-Med pipeline. Furthermore the use of natural gas has a strong economic motivation: STEG puts the potential of financial savings through the use of natural gas instead of diesel fuel at 40% for residential customers and up to 78% for industrial cus-tomers. 4. Electricity The Tunisian electricity transmission and distribution grid is exclusively operated by STEG, the state-owned electricity company. In 1996 STEG’s monopoly on power generation was abolished by law. Private companies are allowed to generate electricity as long as they accept STEG as the single buyer. Electricity generation, however, has remained largely in the hands of STEG: in 2008 independ-ent power producers (IPPs) contributed 24% of the total electricity generation, autoproducers had a share of 6%. Tunisia is part of the Maghreb electricity system, which connects the country via Algeria



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and Morocco to Spain. In 2003 Tunisia, Morocco, Algeria and the European Union signed a declara-tion constituting a joint electricity market. There are also plans for a direct 200 km submarine connec-tion between Tunisia and Italy; the project is due to commence in 2015. Tunisia’s electricity demand in 2008 was 14.6 TWh, 70% was produced by STEG power plants, the remaining 30% by IPPs (24%) and autoproducers (6%). The installed generation capacity (without autoproducers) in 2008 totalled 3,313 MW of which 3,232 MW were thermal power plants, 62 MW hy-droelectric power stations and 19 MW wind farms; see Fig. 2 for an overview of the electricity produc-tion. The share of renewable energies has increased since 2008 with the extension of the wind farm at Sidi Daoud in 2009 (additional capacity: 35 MW). In 2008 the primary fuel used for power generation was natural gas with a share of 95%. The peak demand in 2008 was 2,467 MW, which is equivalent to an increase of 2% to the highest recorded peak in 2007.

Fig. 1 Electricity Production in Tunisia (without a uto-producers). STEG (2008) The largest independent power producer in Tunisia is the 471 MW Rades facility near Tunis. The combined cycle gas power plant was the first Tunisian IPP project set up on a build-operate-own (BOO) basis and began operation in 2002. It is run by Carthage Power Co., a private investor consor-tium, which sells the produced electricity to STEG under a 20-year purchase agreement. The second IPP project located near Zarzis became operational in 2003 and is considerably smaller. The 30 MW gas power plant uses natural gas from the Ezzazouia and El Bibane gas fields. In 2008 the two IPP plants represented 15% of Tunisia’s total installed capacity but satisfied 24% of country’s electricity demand. In 2009 the Ministry of Industry, Energy and Small and Medium Enterprises issued a call for the expression of interest for the construction of a third IPP plant in Bizerte, a city in the North of Tuni-sia. The combined cycle gas power plant will also be set up on a BOO basis. It is expected to have a capacity of 350 to 500 MW and is planned to be connected to the grid by the end of 2014.



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Fig. 2 Electricity Consumption Tunisia. EIA (2009) , STEG (2008) Tunisia’s electricity demand rose on average by 5% per year and it is expected to grow by 6% in 2009. In order to meet the rising demand existing plants are upgraded and new facilities are in various stages of planning. In recent years STEG has almost completely shifted its production to natural gas fuelled facilities. The measure is part of Tunisia’s national energy strategy (see also section three). For an overview of Tunisia’s plans for the construction and upgrade of conventional power plants refer to Tab. 2. Tab. 2 New conventional power plants in Tunisia, st atus 2008. STEG (2008)

Under Construction Planned

252 MW max. 2,516 MW

126 MW – Fériana extension (natural gas) 416 MW – Ghannouch (natural gas, com-bined cycle)

126 MW – Thyna extension (natural gas) 350 - 500 MW – IPP Bizerte (natural gas, combined cycle)

400 MW – Sousse (natural gas, combined cycle)

1,2000 MW – El Hawaria (natural gas)

In 2008 STEG reported overall system loss of 12.7% for its electricity grid. The country continues to invest into its distribution network, replacing equipment and reinforcing connections. There are plans to install new 400 kV interconnects in order to efficiently connect new power plants (see Tab. 2) to the grid. The rate of rural electrification in Tunisia is very high: as of 2009 more than 99% of rural households have access to electricity. Tunisia’s rural electrification program was already launched in the mid-1970s. At the time only 6% of rural households were electrified with half of the population living in rural



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areas. STEG is the primary implementer of the program, which is based mainly on installing and strengthening rural electricity connections; about 3% of the households have individual photovoltaic kits. In 2008 STEG and the World Bank signed a cooperation agreement with the government of Rwanda to assist in the country’s rural electrification program. As a first step STEG will provide indi-vidual photovoltaic kits for 4,000 households.

5. Renewable Energy

Renewable energy is part of the responsibility of the Ministry of Industry, Energy and Small and Me-dium Enterprises. It is supported by the National Agency for Energy Conservation (ANME), which plays an important role in fostering research and development as well as designing and implementing policies and strategies. Besides renewable energy, ANME is responsible for energy conservation as can be seen in the following section. Tunisia’s policy strategy for renewable energy and energy effi-ciency is mainly defined in the “Loi sur la Maîtrise de l’Energie” which was adopted in August 2004 and amended in February 2009. The amendment opened the power sector for independent power producers generating electricity from renewable resources. In 2008, renewable energy contributed about 1.2% to Tunisia’s total primary energy consumption. In the power sector, the share of renewable energy was 0.6% with the net contribution equally divided between hydro and wind power. In 2008, installed capacities for power generation from wind turbines and hydro power plants cumulated to 79 MW. Photovoltaic (PV) power generation is mainly used in individual photovoltaic kits; there are a few small PV power stations providing electricity for remote rural villages. The installed capacity for solar water heating (SWH) systems totalled 320,000 m2. By 2011, the government intends to raise the share of renewables in the total energy consumption to 4%. Fig. 3 illustrates the projected potential of different renewable energy resources in Tunisia as pub-lished by the National Agency for Energy Conservation. It shows that wind energy covers about 84% of the national renewable energy potential, followed by solar thermal technologies and photovoltaic (13%) and biogas (3%). By 2030, renewables are projected to contribute nearly 20 Mtoe to the na-tion’s primary energy supply. Wind power is considered the most promising renewable pathway as some areas, especially near the coast, offer high wind velocities. By 2011, the national government aims to ramp up wind power capacity to 240 MW, currently there are 54 MW of wind turbines operat-ing. The national renewable energy strategy of Tunisia strives for an expansion of wind power to a 10% share within total electric installed capacity by 2030. A 120 MW wind farm is under construction in Bizerte in North Tunisia.



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Fig. 3 Estimated potential of different renewable e nergy resources in Tunisia until 2030. Oun-alli (2009)

With regard to solar energy, the Tunisian government puts a strong focus on solar water heaters. The government is about to adopt a programme, which shall expand the installed capacity of SWH sys-tems to 740,000 by 2011. PV is mainly promoted for rural electrification. PV modules have been in-stalled in 12,500 households and 200 schools in rural areas. Furthermore, photovoltaic pumping appli-cations are relatively developed in Tunisia with a total existing capacity of 255 MWp. There is a sce-nario to use solar pumping in 76,000 water wells in 2010 and 83,000 water wells until 2030. In the field of biomass energy, 50 households in the North-West of Tunisia were equipped with small-scale units for biogas production. Moreover, the installation of an industrial biogas production facility was completed. Biogas operations are stimulated by incentives in the 2009 energy law. It provides in-vestment subsidies of about 40% with a maximum of TND 20,000 ($ 15,600) for biogas production in the agricultural sector and a 20% investment subsidy (up to TND 100,000/$78,000) for industrial bio-gas production. In order to further expand national renewable energy production, the Tunisian government adopted a policy titled “Plan Solaire Tunisien” in September 2009. The plan aims at reducing energy use by 22% by 2016 through an expansion of renewable energy production. However, we understand these 22% as cumulated annual savings between 2011 and 2016: within this time period annual average savings are about 4 to 5%, and these values add up to the number of 22% of national energy consumption in the year 2016. Energy saving in the year 2016 will be only about 5% compared to a baseline The creation of the plan was driven by Tunisia’s increasing energy demand and escalating energy imports. Energy imports have grown by 64% in 2009 compared to 2008, translating to expenses of TND 4.9 bil-lion (US$ 3.8 billion). The solar plan shall alleviate the country’s import dependence and, moreover, generate Clean Development Mechanism (CDM) income of TND 240 million (US$ 187 million) in a pe-riod of ten years. It is supported by several international donating organizations, such as the United Nations Development Programme (UNDP) and the World Bank. The solar plan encompasses a total of 40 technology projects. The project portfolio is not limited to so-lar energy but also includes wind energy projects and energy efficiency initiatives. In the field of solar energy, both projects for solar thermal applications and decentralized and centralized power genera-tion are being pursued. Projects for centralised power generation add up to a capacity of approxi-mately 100 MW for concentrated solar power plants and 20 MW for photovoltaic operations. Further-



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more, the government aims at establishing manufacturing capacities for photovoltaic modules with a total capacity of 14 MW per year. The capacities of all planned wind power projects cumulate to 280 MW.

6. Energy Efficiency

The Tunisian government estimates the country’s energy saving potential at a cummulated 80 Mtoe until 2030. In recent years, the Tunisian government has made considerable efforts to reap this poten-tial. These efforts were stimulated by a growing energy bill which currently covers 14% of the GDP compared to 10% in 2004 and less than 7% in 2000. Escalating expenditures for energy are mainly due to a rapid growth of energy demand. In 2007 industry (36%) and transportation (31%) were the largest national energy consumers whereas the tertiary (10%) and the residential sector (16%) as well as agriculture (7%) accounted for smaller shares. Energy efficiency improvements have led to a significant decline of Tunisian energy intensity since the early nineties. On average, energy intensity was reduced by 2% per year until 2007 with energy de-mand successively being decoupled from economic growth (see Fig. 4). At present, Tunisian energy intensity is at a level of 0.33 toe/$ 1000 compared to 0.84 toe/$1000 in Africa and a global average of 0.29 toe/$ 1000.

Fig. 4 Trend of Tunisian Primary Energy Demand. AN ME (2009a) The Tunisian government has taken the following measures to improve energy efficiency:

• National Agency for Energy Conservation: In 1985, the government established the National Agency for Energy Conservation (ANME). ANME is a public entity under the auspices of the Ministry of Industry, Energy and Small and Medium Enterprises with a staff of about 130 em-ployees. It is involved in the development and implementation of national policies for energy conservation as well as studies and research and development projects in the fields of energy efficiency, renewable energy and energy substitution.

• Task Force on Large Energy Consuming Industries (IGCE): In 2005, MIEPME set up a task force to identify energy saving potentials of energy intensive industries and to deploy meas-ures for a rapid realisation of these potentials. Besides MIEPME, the task force comprises representatives of the National Electricity and Gas Distribution Utility (STEG), ANME and na-



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tional and international experts.

• National Energy Conservation Fund: In December 2005, the national government set up a “Na-tional Fund for Energy Conservation” (FNME) for financing energy efficiency measures. FNME shall contribute to a 20% reduction of energy demand by 2011; however, the baseline used for this reduction goal is not clear. In order to meet this objective, the fund subsidises 20% of all energy efficiency investments undertaken by corporations, 50% of energy audit costs, 20% of all solar energy investments and 50% of investments in renewable and efficient energy dem-onstration initiatives. The Fund is financed by two types of levies: First, a levy imposed on the first registration of private cars; TND 250-1,000 ($ 195-780) for petroleum-fuelled cars and TND 500-2,000 ($ 390-1,560) for diesel-fuelled cars. Second, an import or local production duty at custom duty rates of 1,000 TND ($ 780) for each 1,000 thermal units.

• Periodic energy audits and performance contracts: Large energy consumers in the transporta-tion and tertiary/residential sectors consuming more than 500 toe per year and industrial com-panies consuming more than 800 toe per year are mandated to conduct periodic energy au-dits. The government provides financial support for this purpose and, furthermore, induces performance contracts to reap energy efficiency potentials. For the period from 2007-2011, the government’s objective is to realise 200 energy audits and 300 performance contracts in order to achieve energy savings of 943 ktoe.

• Energy Performance Standards: The government is supporting the establishment of energy per-formance standards both for buildings and household appliances. Several projects were com-pleted or are ongoing. For example, ANME in cooperation with the Global Environment Facil-ity and several further partners have developed a labelling scheme for refrigerators.

• Cogeneration: In 2004, the government adopted a law to foster cogeneration in Tunisia includ-ing a subsidized selling price of electricity from cogeneration operations. ANME is conducting a programme, which aims at removing barriers for cogeneration by evaluating the national co-generation potential, conducting feasibility studies in the tertiary and residential sector and im-proving the legal framework conditions. From 2007 to 2011, the government plans to install 110 MW of cogeneration capacity, achieving energy savings of 85,000 toe.

• Promotion of solar water heating (SWH) systems: Since the early 1980s, the national govern-ment and international donors have made several attempts to promote the deployment of so-lar water heating systems in Tunisia. However, these programmes did not result in a sustain-able market deployment due to uncertain qualities of Tunisian SWH systems and sudden breakups of subsidies. In 2005, a new programme named PROSOL (partnership between the UN Environment Programme, STEG and Ademe) was initiated to boost SWH capacity in Tu-nisia. The programme includes two financial mechanisms: A direct subsidy of 20% of the in-vestment costs with a maximum of € 70; loans over five years with a reimbursement of the loan through the electricity bill. PROSOL has led to a major recovery of the national SWH market and attracted new industrial operators and installer networks.

• Capacity building and awareness campaigns: Besides the incentive schemes or regulations mentioned above, the government is conducting capacity building initiatives in the public and private sector and campaigns to raise the public awareness of the benefits of energy effi-ciency gains. Furthermore, the government aims to set up an energy information system, in-cluding the definition of relevant energy indicators, greenhouse gas emissions indicators etc.

References:

Abdessalem (2008) , “Renewable Energy and Energy Efficiency in Tunisia: Situation and Prospects”, Tahar Abdessalem and Etidel Labidi. Presentation, January 28-29th, 2008, Cairo.



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Amous (2007) , “Energy Efficiency and Renewable Energies. Tunisia – National Study Summary”, M. Samir Amous, 2007.

ANME (2009a), “Outline on the Policies and the Strategies on the Energy Efficiency“, Walid Fguiri (ANME). Presentation, June 29th 2009, Addis Abeba.

ANME (2009b) , “National Fund for Energy Conservation”, National Agency for Energy Conservation, www.anme.nat.tn/index.asp?pId=125, last access on November 25th 2009.

APS Review (2008) , “Tunisia’s Oil Refining Sector is Expanding”, APS Review Downstream Trends, April 2008.

CIA (2009), “The World Fact Book”, Central Intelligence Agency, 2009. Available online: https://www.cia.gov/library/publications/the-world-factbook/geos/ts.html, accessed: November 24th 2009.

EIA (2009), Morocco Energy Profile, Energy Information Administration, http://tonto.eia.doe.gov/country/country_energy_data.cfm?fips=TS, last access on November 25th 2009.

ETAP (2007), “Annual Report 2007”, Tunisian National Oil Company, 2007. Available online: www.etap.com.tn, accessed: November 24th 2009.

Gelil (2007) , “Framework Conditions for Solar Thermal Energy Use in the Southern Mediterranean Countries. Solarterm Project Report”, Ibrahim Abdel Gelil, 2007.

IAEA (2009) , Country Profile Tunisia, International Atomic Energy Agency, www-pub.iaea.org/MTCD/publications/PDF/cnpp2009/countryprofiles/Tunisia/Tunisia2009.html, last access on November 25th 2009.

IEA (2009), “CO2 emissions from fuel combustion – Highlights”, International Energy Agency, Oct. 2009. Available online: http://www.iea.org/publications/index.asp, accessed: November 16th 2009.

IMF (2009), “World Economic and Financial Surveys – World Economic Outlook Database, www.imf.org/external/pubs/ft/weo/2009/02/weodata/index.aspx, last access on November 24th 2009.

Menanteau (2007) , “Policy Measures to Support Solar Water Heating: Information, Incentives and Regulations”, Philippe Menanteau, 2007.

MIEPME (2009a), “Appel à candidature de Pré-qualification pour la réalisation en concession d’une centrale à cycle combiné de 350 à 500 MW”, Ministère de l’Industrie, de l’Energie et des PME, 2009.

MIEPME (2009b), “Les Réalisations des secteurs de l’Industrie et de l’Energie (1987-2009)”, Ministère de l’Industrie, de l’Energie et des PME, 2009.

Missaoui (2009) , “Changements Climatiques et Energies Renouvelables dans la Méditerranée. Ener-gies Renouvelables et Efficacité Energétique, Cas de la Tunisie”, Raffik Missaoui. Prensentation, Oc-tober 27th 2009, Palamas.

Ounalli (2009) , “Energies Renouvelables en Tunisie: Etat et Perspectives”, Amor Ounalli. Presenta-tion, November 10th 2009, Tunis.

Santiago (2009) , “Tunisia drafts National Solar Plan”, Sunshine T. Santiago,



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www.ecoseed.org/en/general-green-news/green-politics/green-policies/africa-a-the-middle-east/4795-tunisia-drafts-national-solar-plan-, last access on November 25th 2009.

STEG, “Programme de Développement du Gaz Naturel”, Société de l’Electricité et du Gaz, www.steg.com.tn/dwl/Gaz_Naturel.pdf, accessed: November 24th 2009.

STEG (2008), “Rapport Annuel 2008”, Société Tunisienne de l’Electricité et du Gaz, 2008. Available online: www.steg.com.tn/fr/institutionnel/publications.html, accessed: November 24th 2009.

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World Bank (2005), “Rural Electrification in Tunisia: National Commitment, Efficient Implementation and Sound Finances”, World Bank – ESMAP Report, 2005.

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