Energy challenges facing Tunisia
Published : Tuesday 25 July 2017 - Mariem BRAHIM, Nidhal OUERFELLI, Kelly ROBIN
This analysis was carried out by Mariem BRAHIM, Economist at IPEMED, Nidhal OUERFELLI, former Minister in charge of Economic Affairs and former Secretary of State in charge of Energy and Mines in Tunisia, and Kelly ROBIN, Project Manager at IPEMED. It was published as an article (see attachment) in the Economiste Maghrébin in July 2017.
At the beginning of 2017, Tunisia reached a new milestone in its 2016-2020 national programme for the production of electricity from renewable resources. Indeed, the country launched a call for bids for the construction of several wind and photovoltaic power stations with a global capacity of 210 MW. In a country with great potential, diversifying the energy mix is a strategy to solve the national energy deficit.
Since 2000, Tunisia has been energy-deficient because of an increase in energy demand that exceeded that of national production. According to the Ministry of Energy, Mines and Renewable Energies, over the last few years primary energy resources decreased by about 6% per year (from 7.8 Mtoe in 2010 to 5.4 Mtoe in 2016). This loss is mostly due to the natural decline of resources, the slowing down of exploration and research activities (shutting down of oil exploration and development activities in Southern Tunisia and on the Isle of Kerkennah) and to the decrease in Algerian royalties for natural gas. Besides, Tunisian needs in primary energy increased by over 2% per year (from 8.3 Mtoe in 2010 to 9.2 Mtoe in 2015). Tunisia must now face the continuous growth of its energy importations over the period 2000-2015, which are mostly driven by the importations of refined petroleum products and natural gas. For instance, the energy deficit was multiplied by 6 between 2010 and 2015.
Even if energy dependency decreased from 93% in 2010 to 59% in 2016, Tunisia’s energy dependency must also be understood at another level. Indeed, its external supplies consist of natural gas coming from Algeria through pipelines, which is imported or collected as royalties on the gas intended to Italy. Moreover, in 2015, Algeria was Tunisia’s 1st supplier (for all products) before Italy, Russia, Azerbaijan and France.
This situation shows that Tunisia’s current energy system lies at the heart of global issues, and that its evolution is linked to complex challenges: strategic challenges, with the necessary securing and diversification of its supplies; economic challenges, given the significance of energy subsidies in the global bill and the growing dependency of the Tunisian industrial sector to imported natural gas, and finally, social and environmental challenges.
The energy transition, an opportunity for the Tunisian economy
Tunisia’s commitment to the energy transition could have a positive impact on the country’s economy. Indeed, in its Intended Nationally Determined Contribution (INDC) handed in at the COP21, the country announced “the reinforcement of energy efficiency promotion in all energy-consuming industries and for all energy uses [that should] lead to a decrease of 30% in primary energy demand in 2030 in relation to the baseline” as well as an increase in the “share of renewable energies in electricity production reaching 14% in 2020 and 30% in 2030, while they only accounted for 4% in 2015”. However, the originality of Tunisia, as compared to other Mediterranean countries, is that it anticipated the connection between energy transition, digital transition and job creation, thus planning, in its INDC, the creation “of about 58,000 equivalent jobs from 2015 to 2030, 75% of which will come from energy efficiency measures in the construction industry”. Besides, although a recent ADB report also highlights opportunities in terms of creation of high-added value sectors and new jobs, the BAD explains that for this ecological transition to be successful in North African countries, it is necessary to anticipate the workforce needs for each sector. It insists on the necessity to invest in trainings “targeting young entrepreneurs in RE (renewable energies) and RE organisations” and to promote “professionalisation projects for young RE businesses and civil society organisations interested in RE in the fields of energy, the environment and job creation”.
The challenge of reforming
In order to take advantage of its full potential, Tunisia is willing to act both on the offer (improvement of infrastructures of transport, distribution, petroleum products refining and storage, revival of gas national production, of exploration activities, development of interconnections, massive investments in solar and wind powers to meet the needs of the local market, etc.) and on the demand (implementation of its energy mastering national strategy by 2030, etc.).
Yet, in order to reach these objectives, it will be necessary to take into account transversal issues, such as the redefinition of the State’s role, the improvement of energy governance and of the regulatory framework (especially to facilitate the STEG network connection), the simplification of taxation and administrative procedures, the improvement of initial and professional training, etc. All these reforms are necessary to attract foreign investors according to a “coproduction” logic.
It will also be necessary to support the local integration of energy policies and the role of non-State actors. In 2012 already, the ANME had anticipated this by placing at the core of the Plan Solaire Tunisien [Tunisian Solar Plan] the development of territories, especially the most unprivileged ones, and the involvement of local communities and citizens. The decentralised cooperation between Northern and Southern Mediterranean actors can support this dynamic, as shows the recent signature of a partnership agreement between two Norman and Tunisian SMBs for the development of the green economy in Tunisia.
Thus, Tunisia’s commitment to the energy transition appears as a real economic opportunity and a forward strategy. However, the entanglement of fossil energy use and availability with the economic activity is a real challenge, not only for businesses, but also for individuals and economic actors. Therefore, for Tunisia, the “energy transition” is above all an industrial and social transition that goes with a “paradigm transition”. The energy transition is a major political, social and economic challenge, that requires a deep analysis of the options that we formulate today for the territories and societies of tomorrow.