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. read more

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 tend to be 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 straightforward 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 and on connecting institutions and decision makers, both private and public.

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.

Morocco

In Morocco, the government implemented in 2014 major tariff reforms removing subsidies for gasoline and industrial fuel, which led to a marked incease of energy prices. 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. read more

Morocco has actually the highest energy prices among all Arab countries, and is forced to import ca. 96% of its energy needs from abroad (incl. electricity from the Iberian peninsula).

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.

The bulk of project activities in this area 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 building materials).

Based on a sector assessment carried out in early 2015, a joint work plan was developed with the Cluster EMC in 2016, which formed the basis for a series of promotion measures (mainly trainings) for EE in the building and industry sector organized throughout the year of 2017 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).

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 2015, a 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 threatened the rising 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. The results have been communicated more widely among stakeholders with the help of the industry association FEDIC, and are currently in the process of upscaling. 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.

►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
► Cooperation agreement for the building sector with the Cluster EMC
► Practice-oriented trainings on the new building regulation and Binayate software, on energy-positive buildings, on EE in the industry, and on certifying trainings (IRCA) for energy auditors (Link) (in the process of completion)
► Pilot project to improve the energy performance of the leather industry of Fes
► New guidebook in French on energy efficiency measures in the industry
► French translation of the ‘Learning Energy Efficiency Networks (LEEN)’

Tunisia

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 was the creation of the National Agency for Energy Conservation ANME as a special institutional body, endowed with a robust mandate, consistent high-level political support, meaningful resources, and competent staff.

Since the early 1990s, the government has moreover obliged large energy consumers to implement EE measures, and the threshold has systematically been lowered over the years. Since 2005, financial incentives are moreover offered through a new national fund for energy conservation. Although still subsidized, energy prices are also generally elevated in Tunisia, especially in regional comparison. 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. read more

Since 2001, Tunisia is a net energy importer, and the deficit continues to grow every year, which increases the pressure on the country to further rationalize its energy expenses.es.

The project is therefore focusing on the further deepening of EE-related knowhow building, with the help of targeted interventions to increase capacities and quality 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
► Practice-oriented trainings on the EE in the industrial sector (the first of a cross-cutting nature, the second focused on the food industry, with follow-up diagnoses)

Egypt

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 for the electricity sector in 2013 and is currently preparing the 2nd version which will be much more comprehensive and implementation-oriented. A major item still on the agenda in this respect is the necessary further strengthening of the state’s institutional capacity and of its ability to actually carry through 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, even though Egypt is effectively a net energy importer since the mid-2000s. read more

Unlike in Tunisia and Morocco, the project has therefore been engaged in supporting the further development of the policy framework, especially as regards the updating of the NEEAP. It helped to launch the process in 2016, provided conceptual input, and pledged to help highlight the socio-economic dimension in the final text (Link), specifically in terms of jobs. At the same time, and like in the other two cases, 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).

► Kick-off Workshop for the 2nd NEEAP, Ain Sukhna, 14-15 April 2016 
► Progress Workshop for the 2nd NEEAP, Cairo, 8 August 2016

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).