Presentation at the Middle East Electricity Leaders Forum on 8th February 2011 by Dr. Marianne Osterkorn, Director General of REEEP

1. The Role of Energy Efficiency and Renewable Energy
in a Fossil Fuel Based Electricity System
Middle East Electricity Leaders Forum
Dubai Exhibition Centre
8 February 2011
Dr. Marianne Moscoso-Osterkorn
REEEP Director General

2. Agenda
 International developments
 MENA region’s key role
 Opportunities and barriers
 REEEP’s global activities
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3. World leaders see the need for a paradigm change in our energy systems
Today, the world is faced with serious We have to make changes in our
challenges, including finding scalable lifestyles… and learn to make do with
sources of clean energy, providing a less. In developing countries, poverty
fresh water supply and battling eradication will have to be linked to
climate change. the availability of clean, renewable
His Highness Sheikh Mohammed Bin Rashid and affordable energy. I believe that
Al Maktoum charting these new pathways is not
beyond our collective imagination.
Manmohan Singh
The earlier Europe moves, the greater China has adopted and is
our opportunity to use our skills and implementing its national climate
technology to boost innovation and change program. This includes
growth. Renewable energy mandatory national targets for
technologies already account for a reducing energy intensity … and the
turnover of 20 bn euros and have share of renewable energy for the
already created 300,000 jobs. period of 2005 through 2010.
José Manuel Durão Barroso Hu Jintao
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4. For the next 25 it is estimated that primary energy demand will grow by around
36% - strongest growth increase will take place in China, India and Middle East
In this period, China is expected to add generation capacity that is equivalent to the current
total installed capacity of the US.
Source: IEA World Energy Outlook 2010, p. 85
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5. Transition to low carbon economies is only possible if changes are made both in
the demand and supply side of the current energy systems
 Energy efficiency along the entire value chain
 Efficiency for end consumers
 Optimization of the energy mix
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6. Globally, a decoupling of energy demand from economic growth can be
seen – energy intensity decreases globally
In China, the ratio of energy demand to GDP is currently 1.5 times above the world average, but
with a targeted energy efficiency increase of 3.3% per year, China will achieve the strongest
improvements
Source: IEA World Energy Outlook 2010, p. 85
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7. Today, 80% of primary energy is wasted – huge untapped savings potential in
the power sector and end-use consumption
The greenest and cheapest energy is the energy not generated – every €1 spent on more
efficient energy use avoids €2 spent in energy supply investment
Source: ABB 2007
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8. The energy efficiency potential in the MENA region has not been utilized as
in other growing economies
Buildings, Appliances and Transport contain a energy saving potential of 40%
Source: UNEP
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9. By 2035, the share of renewables will triple and will account for one third of
the primary energy supply
In China, the share of renewables will grow from 17% to 27%. China will then have the largest
hydropower and PV capacity in the world and is since 2010 first in wind power
Source: IEA World Energy Outlook 2010, p. 85
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10. De-carbonizing of the power sector is expected in all regions of the world
Globally nearly USD 30 trillion of investments in new power plants and transmission and
distribution grid will be necessary to meet the future demand by 2035
Source: IEA World Energy Outlook 2010, New Policy Scenario, p. 231
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11. China has become a global leader in renewable energy, in terms both of
investment and manufacturing
 11th five-year plan committed to reducing
GDP energy intensity by 20% and increasing
the share of non-hydro RES to 10% by 2010
and 30% by 2050
 Strong incentives for renewables: Bidding
system - Wind Concession Program, FTs and
other provincial initiatives
 Stringent Energy Conservation measures
 USD 300 billion investment by 2020 –
300GW hydropower, 30GW wind, 30GW
biomass, 1.8GW solar power
Source: IEA WEO 2011  Largest installed capacity of wind - largest
turbine manufacturing industry and 2rd
largest global producer of solar PV
 China is the global leader in solar water
heating – 40 million systems covering 10
million households
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12. India is strongly committed to deploying renewable energy throughout its
states
 Action Plan for Climate Change and Solar Mission
aims to increase the nation’s installed capacity to
20GW by 2022
 Energy Conservation Act 2001: Comprehensive
legislation laying roadmap for improvement in
energy efficiency
 Preferential tariffs, RES purchase obligations for
utilities (up to 10% of power), tax incentives
 Market has been estimated to be worth around
USD 1 billion with future investment of up to USD 3
billion
Source: Central Electricity Authority India  Huge estimated potential: 15000 MW small hydro,
45000 MW wind, 17000 MW biomass all grid
connected
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13. The EU was an early driver of ambitious clean energy policies - achieving the
20-20-20 target
 EU Energy and Climate Change Package
towards the 20-20-20 target with a number of
policy measures including:
 the revised EU ETS;
 a new directive on renewable energy;
 a number of measures on energy
efficiency, including a new building
directive;
 Directive on CCS and Environmental state
Source: IEA WEO 2011
aid guidelines
 Set plan for infrastructure
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14. Shared responsibilities among European Member States reflect the
differing RE potential in each country
Source: European Commission
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15. Feed-in tariffs are the main regulatory acceleration force for RE in EU –
Prices range from 40ct to 15 ct
Feed-In tariffs Quota obligation
AT, BG, CY, CZ, DE, DK,
EE, ES, FR, GR, HU BG
IT, IE, LT, LU, PT
UK, SI, SK BE, IT, SE,
NL RO, PL, UK
Certificate systems
UK
DK, FR, IE BG, FI, SI, MT
Tenders Fiscal incentives
Source: OPTRES
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16. Thanks to FIT, Germany overachieved its 2010 RES target (12.5%)
 German Feed-in Law (EEG) is
 Purchase price guarantee
 Grid access guarantee
 Purchase obligation, priority for
feed-in
 Grid operator buys at predefined rates
 National equalization fund
 Every power customer pays
 Law is reviewed every four years
 Federal law
 Annual decrease incentivizes early action
During 2010, the current government has  Guaranteed for 20 years
reduced the feed-in tariffs for solar by 16%
The FT has raised electricity end consumer prices
by around 3%
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17. Future transmission and distribution grid are challenged and significant
investment is needed to empower them for the future
Need for balancing highly fragmented, less New services for customers offer real time
predictable generation and loading from pricing, local energy storage and smart charging
dislocated generation sources Smart buildings optimize their internal energy
flow and become power producers
Grid integration of renewables has to be a profitable business model also for grid operators
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18. Markets will be increasingly interconnected – generates advantages and
challenges
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19. Untapped renewable resources: by 2008, just 3% of the MENA region’s
electricity were produced from renewables
Despite water scarcity in the region, hydroelectricity is the only well-developed, non fossil fuel
form of electricity generation in North Africa and the Middle East Source: PwC - 100% renewable electricity
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20. Huge solar and wind potentials make MENA a prime region for harvesting
these clean energy sources
Source: 3Tier
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21. Solar energy – MENA’s geographic advantage: each square kilometer of land
receives the solar energy equivalence of 1.5 barrels of crude oil every year
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22. The region has incident solar irradiance and land sites allowing for large scale
CSP – producing electricity and offering its synergies for water desalination
Average daily sunlight hours
The average direct normal irradiance (DNI) of 2,334 kWh/m2/y, suits most parts of the region for
CSP , PV systems and SWH. 1 km2 of CSP can generate 165,000 m3 of desalinated water
Source: weather2travel.com
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23. Some countries in the Middle East appear as the largest per capita CO2
emitters globally
CO2 emissions per capita (tons CO2 per capita)
Qatar, Kuwait and the UAE emit more CO2 per capita than the US.
Source: Al Masah Capital Limited

24. With an average global growth rate of more than 20%, SWHs have proven
to be another key technology to ease power systems in hot countries
Growth rate 2006-2008
Main driver:
Building codes and
incentive schemes
Newly installed capacity in 2008
Eskom/SA have saved 6.4GWh through SWH since 2008 and expect a saving equivalent of
578MW from the 925 000 SWH they are aiming for 2013
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25. MENA governments have increasingly seized upon the recognized benefits of using
renewables for power generation and its synergies for water desalination
 UAE: 7% renewables by 2020, Masdar City in Abu Dhabi
(USD 22 billion investment), where all stages of renewables
and energy efficiency development are applied from
research to commercialization; establishment of IRENA
 Saudi Arabia: recently passed a decree establishing the King
Abdullah bin Abdulaziz City for Atomic and Renewable
Energy in Riyadh
 Qatar: Green transport initiative and Lusail City, a green real
estate development
 Egypt: 20% non-hydro renewables; 3% electricity by 2020
(wind, CSP, PV); tender, FT, investment tax credits for SWH
Source: Al Masah Capital Limited  Algeria: 6% renewables by 2015 (wind, CSP, PV); 10% by
2027: FT, investment tax credits for SWH
 Tunisia: 10% renewables in 2011; 40 projects by 2016 (PV,
CSP); tax exemptions, investment tax credits
 Morocco: 10% renewables of primary energy by 2012 and
20% of electricity (wind, SWH, CSP); VAT exemption for
equipment, FT, investment credits for SWH
 Other initiatives: MSP, Desertec
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26. The costs gap between renewables and conventional power is significantly
decreasing, due to reduced manufacturing costs and economies of scale
The retail prices of PV panels fell to about USD 2/W in 2010, from nearly USD 30/W in the 1990s.
The costs of wind energy decreased from USD 3,000/kW in the 1980s to USD 2,200/kW in 2010.
Source: PricewaterhouseCoopers
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27. Already in the near future, CSP can become profitable at different times of day and
year, providing peak load electricity
Large-scale CSP development in the MENA region could entail exports to neighboring
countries, as well as to Europe.
Source: www.dlr.de/tt/csp-finance
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28. The removal of distorted fossil fuel subsidies is critical to allowing
renewables to fairly compete in a hydrocarbon-based power system
Globally, fossil fuel consumption subsidies amounted to USD 312 billion in 2009, with oil
products accounting for almost half of the total.
Source: IEA World Energy Outlook 2010, p. 581
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29. Conclusion
Advantages to utilizing the potential for renewables in the MENA region:
 Growing demand for electricity and water require more generation capacities
 Depletion of fossil fuel reserves leads to higher fossil fuel prices, resulting in higher value to
divert hydrocarbon to export
 Attract high technology into the region and create new jobs
 Strong utility structure
Barriers to develop the market:
 High subsidies on fossil fuel – price transparency
 Challenge for the existing power grid – positive business model for generator and grid
operator required
 Need for further research and capacity building
 Enabling policies and regulations required
Importance the visionary support of the political leaders
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30. REEEP’s mission aims to accelerate market development for renewable
energy and energy efficiency in developing and emerging economies
 REEEP’s 350 partners comprise of key governments and private sector entities
 REEEP supports one of the largest global networks of stakeholders in renewables
and energy efficiency, interconnecting 3,000 “Friends of REEEP” and working with
150 top experts throughout the world
 REEEP runs the world’s most effective, dedicated sustainable energy information
platform, with 100,000 users per month: www.reegle.info
 Over the last 7 years, REEEP supported governments, communities and the
private sector in 130 projects to accelerate renewables and/or energy efficiency
 The regional presence in major emerging markets, such as India, China, Brazil
south Africa but also LDCs guarantees strong local ownership and delivery of best
fits for local needs
 REEEP is unique in combining the symbiotic benefits of renewables and energy
efficiency
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31. REEEP is currently implementing 65 projects in 29 countries – 8 in the MENA
region
Projects covering more than one country are listed in all covered regions
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32. Its project activities have made REEEP a successful change agent for
sustainable energy systems
Policy - China Energy Efficiency - Brazil
Conducted research to underpin a possible 30% Integrated 40,000 solar water heating systems
renewable energy target in China by 2030 into low-income housing loans
Regulation - Mexico Standards & Labeling - Ghana
Developing regulatory instruments to attract Funded public awareness campaign surrounding
investment in geothermal energy introduction of appliance efficiency labeling
Business - India Finance - Mozambique and Uganda
Designed the mechanisms for tradable renewable Coached clean energy entrepreneurs and facilitated
energy certificate system, enabling inter-state trade investor matchmaking
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33. Lead Time
Average time for planning and construction of power systems
Source: Wuppertal Institute
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34. ‫ / شكرا‬Thank you
REEEP International Secretariat
Vienna International Centre
Room D1738
Vienna, Austria
info@reeep.org
+43 1 26026 3425
www.reeep.org
www.reegle.info
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