Prospects for energy cooperation between North Africa and Europe are intensifying with the transition to renewable energies.
The ongoing energy transition opens up significant prospects for cooperation between North Africa and Europe in the field of renewable energies. As highlighted during African Energy Week, North African countries have considerable solar and wind potential that is still largely underexploited. Nivedh Das Thaikoottathil, analyst at Rystad Energy, recalls that “Africa holds 40% of the world’s solar potential but currently only exploits 35%”.
Among the main countries involved are Morocco, Egypt, Algeria and Tunisia, which are multiplying large-scale wind and solar photovoltaic projects, often with the support of international donors.
“We are seeing an increase in funding for renewable energy projects and new interconnections between North Africa and Europe, with 24 GW of proposed capacity aimed at connecting the regions,” says Thaikoottathil.
Diversified sources of financing
It must be said that the financing of these projects calls on different sources, whether public investments, loans from multilateral donors such as the European Investment Bank, or even green funds and dedicated mechanisms such as the Green Climate Fund. The private sector is not left out, with the growing involvement of developers and specialist investors attracted by the prospects of attractive returns on investment.
“Egypt is currently a leader in solar manufacturing, but other African governments should work to attract investment and implement policies that incentivize manufacturers to set up operations on the continent,” says James Mackay, chief executive of the Energy Council of South Africa.
However, financing these megaprojects remains a major challenge due to their scale and the complexity of the financial arrangements required. The stability of the regulatory framework and the economic viability of projects are prerequisites to reassure investors.
“The high cost of renewable energy in Africa could be reduced by improving local manufacturing capacity, making vital technologies more accessible to project developers,” argues James Mackay.
North Africa aims to boost the industrialization of the renewable energy sector on its soil in order to capture its added value. Carlos Torres Diaz of Rystad Energy also highlights the “strategic advantage” that the continent’s young workforce constitutes in developing the necessary innovative solutions.
Converging regulatory frameworks
Beyond green production, North Africa-Europe cooperation focuses on strengthening electrical interconnections in order to export part of this carbon-free electricity. In this area, major projects are underway.
“Solutions for converting gas into electricity remain essential for stability alongside renewable energies,” nuance Carlos Torres Diaz, highlighting the technical challenges to be met to guarantee security of supply.
Concretely, the alignment of regulatory frameworks and the harmonization of technical standards constitute essential projects for the success of electrical interconnections between North Africa and Europe.
Indeed, the integration of electricity networks on both sides of the Mediterranean raises numerous technical and regulatory challenges to be resolved. From a technical point of view, the standards applicable to electricity transmission infrastructures (high voltage lines, electrical substations, etc.) must be harmonized to ensure the interoperability of the systems. The network codes defining connection requirements, operating rules and quality of supply criteria must be aligned. Harmonization of cybersecurity standards is also crucial to protect these strategic infrastructures.
Regulatory frameworks must also converge on many aspects: construction codes, environmental standards, rules of ownership and access to transport networks, pricing principles, dispute resolution mechanisms, etc. Alignment is essential to create an integrated and secure regulatory space conducive to cross-border electricity trading.
This harmonization effort represents a major challenge given the current disparities between the energy legislation of the different countries involved. This requires close cooperation between regulators, network operators and competent authorities to define a stable, fair and mutually beneficial legal framework. Regional bodies such as the Association of Mediterranean Energy Regulators (MEDREG) and initiatives such as the European Union (EU) Commission’s regional electricity market project for electricity contribute to this crucial harmonization . But progress remains slow given the complexity of the task.
Economic, environmental and social benefits
For North African countries, these projects promise substantial economic benefits in terms of job creation, industrial investments, technology transfers and export diversification. Their deployment is part of a perspective of sustainable development, security of energy supply and reduction of greenhouse gas emissions.
However, their environmental and social impact must be rigorously assessed and regulated, whether in terms of use of water resources, preservation of biodiversity or land management. Consultation with local populations will be decisive to ensure the social acceptability of these major projects.
The main industrial stakeholders involved are renewable project developers, equipment manufacturers, specialized investment funds as well as engineering and energy services companies. A multitude of bilateral cooperation agreements and dedicated financing mechanisms have been put in place in recent years between the countries concerned to structure these reinforced energy partnerships between the two shores of the Mediterranean.
Bilal Cherraji / ECO Inspirations
