Overview of Measures to Promote Renewable Energy and Energy Efficiency (RE/EE) in the Building and Industry (BAT/IND) Sector in MENA

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Overview

Like in the majority of countries worldwide, the building sector in MENA is one of the largest consumers of energy. Energy demand is rising quickly for several reasons: the low quality of most buildings is negatively interacting with increasing climate extremes in the region, which is leading to a constantly growing consumption of electricity, oil, and gas for cooling, heating, and lighting. This not only drains the spending power of private, but also of public households, both directly, and indirectly (due to escalating expenses for fossil fuel subsidies). The weakness of public regulation and oversight, the lack of an energy stress-reducing spatial planning and public transport, the weak purchasing power of most clients, the large number of self-builds, as well as the shortage of qualified companies and professionals further contribute to this trend. At the same time, and as a result of rapid demographic growth and (partially) rising living standards, the construction sector represents a key economic sector in MENA, and employs a considerable percentage of the adult population.

The deployment of energy-efficient techniques in the building sector therefore not only promises to enhance energy productivity and reduce overall energy consumption, but also to create a new market for energy efficient goods and services, which will then lead to new (and more sustainable) value cycles and employment perspectives within the local economy.

The combination of energy efficiency with distributed generation (e.g. via PV and ST roof-top systems) will further lower financial pressures on public and private households, while creating new sources of income for these. At the same time, it will enhance the stability of the system, by reducing reliance on the national power grid and on a few large central producers. In contrast, the extent and structure of the energy consumption of the industry sector varies strongly from one country to the other in MENA (as well as from one sector to the other). Although it still tends to be relatively low in overall terms, it is nevertheless on the rise, reflecting the often prominent role of energy-intensive industries as well as governments’ efforts to develop manufacturing. One common trait of most MENA countries (at least for the large majority of energy importers) is that energy prices for private (and public!) companies are significantly higher than for private households, meaning the former cross-subsidize the latter. This creates strong incentives for company owners to compress their energy expenses.

The implementation of EE measures in the industry sector, however, mostly encounters the same hurdles like those in the building sector: a lack of implementing legislation, financial encouragement, technical support and administrative enforcement; a shortage of qualified professionals able to deliver high quality; and a lack of visibility and awareness among customers and investors, more generally. Contrary to the building sector, however, company owners not only tend to have enough money, but also enough reasons to invest in EE.

The project activities are consequently conceived in a way as to both address the challenges / obstacles, and the opportunities / potentials, in both sectors, knowing that the mobilization of policy support and legislative action is in general beyond the scope of the project. It therefore very much focuses on the issues of visibility / awareness and skill / capacity building. The activities which the project has carried out consist of a wide range of market promotion measures comprising potential or feasibility studies for specific technologies or market segments, pilot and demonstration projects, awareness raising and outreach activities, as well as capacity building and training measures for local suppliers, users, and investors – all of which are linked among themselves and tailored to the specificities of their context. There is thus a close link to the work conducted in the framework of work package 1, 3 and 4.

In Morocco, both work strands are closely interconnected, as most activities have been taking place in the framework of an institutional cooperation with the Cluster EMC, which gathers the most relevant actors of the Moroccan construction sector (incl. the main producers of construction materials). The focus is clearly on EE, which reflects the fact that the framework conditions for EE have considerable improved since the start of the project, especially as a result of the adoption of the new RTCM (Thermal Regulation for Moroccan Buildings) in late 2014 (even though the necessary implementing bylaws still need to be adopted). In contrast, the conditions for the use of decentralized RE remain difficult, since the long-announced opening of the low-voltage grid for small producers has still not materialized. In 2014, the government implemented major energy tariff reforms removing subsidies for gasoline and industrial fuel, with the effect that the Moroccan industrial sector has by far the highest electricity prices in the region. Morocco also has demand side management programs delivered through its utility ONEE. These include time-differentiated electricity tariffs, special tariffs for residential customers, distribution of energy-efficient light bulbs and others.

The potential for EE (and potentially RE) in the building and industry sector is therefore enormous in Morocco, and this is clearly reflected in and by the project activities.

Already in 2015, RE-ACTIVATE implemented a pilot project together with a consortium led by the GreenTIC Research Center of Casablanca’s Hassan II University to develop the concept of a ‘Socially Sustainable Solar Smart City/Smart Village’. The outcome was presented to a large number of senior state officials and civil society representatives in the framework of two events hosted by the ESTC Casablanca and the FST Mohammedia in May and June 2015, respectively. As a result, the project consortium signed an MoU with the Al Khoudoud Association for Human Development in the Rural World (AKDHMR) and the National Human Rights Initiative (INDH) to implement an ‘e-douar pilot project’ (where and what for and to what effect?), with the support of GIZ and the Boell Foundation.

At the same time, another pilot project was launched to help improve the energy performance of the leather industry of Fes (which is partially export-oriented and whose survival is severely threatened by the strong rise of energy costs). This included the implementation of energy audits for a select number of local firms, as a basis for further outreach and training measures addressed at company and industry representatives throughout the year of 2015. The results of this project were communicated more widely among stakeholders with the help of the industry association FEDIC, and are currently in the process of upscaling (correct?).

Furthermore, a handbook was developed in 2016 on EE in the industry, which henceforth served to underpin not only the project’s communication and cooperation with partners and stakeholders, but also the conceptualization and implementation of awareness-raising and capacity building measures, both in Morocco, and in other countries of the region.

At the same time, the handbook presenting the LEEN approach (‘Learning Energy Efficiency Networks’) developed by Germany’s Fraunhofer Institutes was translated into French and presented to a local audience. Replication in Morocco, however, proved difficult, as the approach was generally perceived as too ‘demanding’ by many partners.

Following the development of a joint work plan with the Cluster EMC, a series of trainings have been organized in 2017 on EE in the building and industry sector for technical experts and industry professionals. Similar trainings have also been offered to municipal employees in the framework of the cooperation with the city of Agadir, and will therefore be presented in the sub-national cooperation section of this work package (Link).

► Etat des lieux: les énergies renouvelables et l’efficacité énergétique dans le secteur du bâtiment au Maroc: emploi, valeur locale, qualification et effets économiques, Atelier de restitution, Rabat, 31 mars 2016 (Link)
► Socially Sustainable Solar Smart City/Smart Village Pilot Project, Atelier de restitution à l’ESTC de Mohammedia, le 11 mai 2015, Conférence à la FST de Casablanca, le 16 juin 2015 (Link)
► Pilot project to improve the energy performance of the leather industry of Fes (Link)
► New guidebook in French on energy efficiency measures in the industry (Link)
► French translation of the ‘Learning Energy Efficiency Networks (LEEN)’ (Link)
► Practice-oriented trainings on the new building regulation and Binayate software, on energy-positive buildings and on EE in the industry for technical experts, industry professionals and state officials (Link)

In Tunisia, public policy has since the 1980s been focused on energy conservation, and successive governments have established a framework which provides clear obligations, incentives and support for the improvement of energy performance and the reduction of energy consumption. A key element has been a special institutional body, endowed with a robust mandate, consistent high-level support, meaningful resources, and competent staff.

Since ???, the government has moreover obliged large energy consumers to implement EE measures, and the threshold has systematically been lowered over the years. Like in Morocco, energy prices are generally elevated in Tunisia, especially in regional comparison (even though this still applies less to agricultural and industrial producers than to private households and public institutions). All of this also explains why the country has been able to develop significant experience and knowhow in this domain, and is even able to produce the large majority of EE related goods and services (NB: solar thermal heat is considered an EE measure in Tunisia), although there are still some unresolved quality issues to be tackled.

The project is therefore focusing on the further deepening of EE-related knowhow building, with the help of targeted interventions for quality assurance in the training field. This has also included the implementation of practice-oriented trainings for people working in critical economic sectors threatened by rising energy prices (e.g. the food industry). It also includes the development of a new medium-term intensive post-graduate training program for certified energy experts. The latter will be presented in the framework of work package 3, as it is directly linked to the project work on quality assurance in the training sector (Link).

► Scoping Presentation : Besoins en renforcement des capacités en efficacité énergétique (EE) et en énergies renouvelables (ER) dans le domaine du bâtiment, Séminaire « Défis du secteur du bâtiment et de la construction », Tunis, 19 mai 2016 (Link)
► Practice-oriented trainings on the EE in the industrial sector (the first of a cross-cutting nature, the second focused on the food industry (Link)

In Egypt, the framework conditions are notably less favorable, even though the government is making sustained efforts to improve the policy framework. Egypt already adopted a NEEAP in ??? and is currently preparing the 2nd version. A major item still on the agenda in this respect is, however, the necessary further strengthening of the state’s institutional capacity and of its ability to actually implement and enforce energy saving policies. A major step was the decision of the government in 2014 to implement a gradual reform of energy subsidies, whereby it already substantially decreased subsidies for gasoline, diesel, and natural gas and adopted a five-year plan to phase out subsidies in the electricity sector. For the time being, however, energy prices are still very low, which further increases the importance of policy.

Unlike in Tunisia and Morocco, the project has therefore been engaged in supporting the further development of the policy framework, both as regards the updating of the first NEEAP and the development of a first NREAP. In both cases, it had foreseen to include elements that produce tangible socio-economic benefits to the local population, specifically in terms of jobs (outcome: TBC). Like in the other two cases, however, the project is also focusing on the necessary deepening of EE-related knowhow building. The main element in this respect is the introduction of a new training program for Certified Energy Management Professionals (CEMP) in Egypt and its testing with the help of a pilot to be implemented in the second half of 2017. The latter will be presented in the framework of work package 3, as it is directly linked to the project work on quality assurance in the training sector (Link).

Reference

This article is part of the RE-ACTIVATE project. RE-ACTIVATE “Promoting Employment through Renewable Energy and Energy Efficiency in the MENA Region” is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Ministry for Economic Cooperation and Development (BMZ).