Chapter 11 - Power Market Structure and Renewable Energy Deployment Experiences From the MENA Region

Abstract

In almost all countries in the Middle East and North Africa (MENA) region, power sectors are characterized by a high degree of vertical integration and state control. However, several countries have undertaken reforms in order to open up the power market for private sector involvement particularly in relation to renewable energy (RE) sourced electricity generation. The majority of the MENA countries authorize RE private power generation for utility supplies (i.e., selling electricity to a single buyer). In contrast, very few countries authorize RE power generation for third-party sales, autoproduction, or export. What characterizes the MENA region in general when it comes to the possibility for private actors to produce electricity is a lack of clear signals from governments. Few projects have been established in practice and the RE share of installed capacity remains low. Current power market structure and support schemes require governments in the MENA region to be very active in stimulating private sector participation. In order to reach RE targets under current power market structures and schemes, it is crucial that governments increase the amount of tenders for PPAs and make sure to streamline these processes to become more certain and less lengthy.