RES4Africa Foundation and AFRY says Tunisia could achieve its decentralised renewable energy sector development by opening its market to private investors and improving the energy off-taking conditions by increasing the attractiveness of its self-consumption regime.
This is according to a new study examining the barriers to unleashing the development of decentralised routes to market for renewable energy sources in Tunisia. Think tank RES4Africa Foundation and Swiss-Finnish EPC AFRY collaborated on the study within the framework of the Foundation’s strategic programme, RES4MED.
That framework sets up a benchmark comparison with other states such as Egypt, Chile and India, featuring similar conditions in the renewable energy market.
Tunisia is one of the most dynamic and fast-paced renewable energy markets in the MENA region, according to the study’s introduction. The country aims to reach 30% renewables penetration on domestic generation by 2030.
Tunisia’s power sector is centralised and controlled by national utility company by Société Tunisienne de l’Electricité et du Gaz (STEG). The utility owns and operates the transmission and distribution system while owning most of the domestic generation capacity and maintaining control over its development.
The report reads: “The Tunisian energy sector is still subsidised, with direct subsidies on electricity prices and indirect subsidies on oil and gas prices, both used to cover the difference in price between supply costs and selling prices. In 2014, the increasing weight of energy subsidies on the State budget forced the Government to develop a plan aiming to progressively increase the electricity price by reducing the subsidies.”