Tunisia is one of the few countries in North Africa that is not a major energy producer, but a series of new projects is set to recharge the electricity sector.
The plans include a variety of strategies, such as natural gas production facilities, the traditional suppliers of electricity, being supplemented by renewable ones. Although the state’s electricity company maintains strong control over distribution, private companies are increasingly able to participate in the development and production phases.
The Abu Dhabi National Energy Company (TAQA) recently joined the ranks of the Tunisian Electricity and Gas Company’s(STEG) as new private competitors. National production of electricity in 2008 was just under 14 billion kilowatts per hour, of which STEG produced 10.25 billion kilowatts per hour and the local private power generator, Carthage Power Company (CPC), was responsible for most of the rest. With demand for electricity rising at around six percent annually, there is potential for other private sector contributors.
“If foreign investors are allowed to invest, they have a guaranteed sale for the electricity,” said Constantin Haddad, general manager of Carthage Power Company. “Demand is rising impressively in Tunisia, thanks to rapid population growth and the increase in industrial activities.”
In early April, TAQA announced it will allocate part of a $2.5 billion investment in Maghreb energy infrastructure to a combined gas power plant in Bizeerte. The plant will generate between 350 and 500 megawatts. Construction is expected to begin this year under the build-own-operate-transfer model, whereby TAQA will design, finance, construct and maintain the property. Commercial operations will begin in 2012 or 2013, with production sold exclusively to STEG.
The TAQA project is only the most recent of a number of new plants. Work is set to begin on a 400 megawatt combined-cycle plant at Ghannouch, near Gabes, at an estimated cost of around $600 million. The development is due to start operations in 2011. France’s Alstom group will build, operate and maintain the installation for 12 years. Ghannouch will be the third power plant constructed by Alstom for STEG in Tunisia, after the combined-cycle power plants of Sousse and Rades, which went online in 1994 and 2001, respectively.
STEG also has a list of projects it is developing independently, such as an extension to the Fernana plant due to be ready by end-2009, and an extension to the Thyna plant at Sfax, scheduled to be in production by 2010.
Even more ambitious programs are already in the works for the country’s 12th development plan, which will last from 2012 to 2016. According to the head of administrative affairs at STEG, Mohamed Ben Ftima, two combined-cycle plants are to be built at Sousse and Bizeerte, in addition to a plant at El Haouaria, which will deliver power to the Tunisian grid.
A joint company set up between STEG and the Italian grid operator, Terna, will carry out this project. Interconnection with Italy will be via a cable between Cap Bon and Sicily.
Many of these projects are natural gas-based plants but the government is also leading the charge on renewable energy production, especially wind power. Efforts so far have allowed Tunisia to cut its energy bill by 10 per cent annually for the past three years and launch an international tender to sell unused carbon credits — and there is potential for more growth.
Renewable energy
Studies indicate that Tunisia could eventually generate 1,000 megawatts from wind. By end-2010, 120 megawatts of wind energy will come online from the Sidi Daoud site, at a cost of around $80 million. Together with the three new wind plants at Metline and Kchabta in the Bizeerte region, this source will eventually supply up to five percent of the nation’s energy requirements.
Renewable energy projects have become an important target of foreign direct investment, particularly from Spanish firms. Gamesa, the wind turbine manufacturer, is supplying STEG with 91 turbines for Bizeerte. The Spanish Development Aid Fund will finance the project, which is set to become Tunisia’s largest wind-power facility. Spain, it should be noted, is one of the global leaders in wind technology.
Tunisian legislators are also encouraging the use of alternative energy at the most basic level, with legal provisions for companies and individuals to produce electricity from renewable sources for their own consumption. Any excess electricity can be sold to STEG and used in the national grid. With this entrepreneurial approach, it seems likely that the government will be able to meet its goal of a 20 percent reduction in consumption, while also sustaining Tunisia’s steady growth.
