Tunisia Looks to Green Solutions for Economic Ills
Personal Notes: This is another insightful article from Christopher Coats, whose earlier work has been featured on this blog before. The dilemma facing Tunisians — whether to kickstart development with projects oriented towards exporting green energy to Europe, or building a renewable energy infrastructure that will ensure domestic energy independence first — is one which is being echoed in the boardrooms, ministry offices, university lecture halls, street-corners and cafes all across the MENA region. Where some see a lucrative opportunity for increased trans-Mediterranean trade and a solution to unemployment woes at home, others see a rapacious colonialism seeking to exploit resources now wrapped in an unassuming flag of environmentalism. Whatever form renewable energy development takes in the MENA region in the next few years, we can be sure that this debate will continue, and that its conclusions and ramifications will be felt not only around the Mediterranean, but across the world.
by Christopher Coats (Forbes Magazine) — April 26, 2012
In the months since public protests brought an end to the government of Zine el-Abidine Ben Ali, Tunisia has raced and struggled to find ways to remedy the very situation that spurred demonstrations in the first place, namely a culture of political corruption, higher consumer prices and a lack of real jobs for the country’s young workers.
Leaving aside the corruption issue, which was certainly helped by the swift exit of Ben Ali and his family from the capital last year, Tunisia has sought out a host of investment and funding agreements with everyone from the US to India, all in hopes of creating jobs and stability – quick. According to a Bloomberg report this week, the country’s unemployment has steadily climbed to reach 19 percent this month, amounting to 750,000 without work out of a population of 10 million, 250,000 of which have college degrees.
Already set in motion long before the first rumblings of discontent drove Tunisians to the street last January, the country’s green potential has emerged as a vital and profitable building block in this effort. In the eyes of many local investors and government officials, solar and wind projects could help ease energy costs for the import-heavy and oil-light country, add thousands of jobs to the rolls and even set up an extremely profitable trade relationship with the European market. For consumers, the government and those in search of jobs – skilled or not – it’s a no-brainer.
This is not to say that there is no environmental momentum behind Tunisia’s green potential, but given the country’s recent economic and political challenges, it would be difficult not to consider its impact outside of sustainability goals. Despite the obvious and understandable enthusiasm, a small rift is emerging about just how this is all going to happen; a disagreement that boils down to who gets what, when. Should Tunisia’s green economy be built on a foundation of exports or domestic energy independence?
What Comes First?
For outside investors eager to establish export lines of solar and wind to the European market, Tunisia’s green economy should begin with projects that can prove to be viable sources for the European market, making the most of the higher prices consumers in Italy and Spain would be willing to pay.
“The export market could be the wedge that opens up the domestic market,” said Till Stenzel, CEO of TuNur, a partnership between solar developer UK-based NurEnergie and Tunisian investors aimed at developing local solar efforts.
The TuNur project is a planned 2 GW TuNur Concentrating Solar-thermal power plant scheduled to come online by 2016. The plant is being completed with the support of the Desertec effort, a campaign aimed at developing a renewable network across North Africa and the Middle East. Stenzel explained that while 60 percent of the content and services in the construction and operation of the solar plant can be generated locally, creating a massive injection in the local Tunisian economy, proving that exports could work would be the key to getting things active in the first place.
Meanwhile, Tunisian stakeholders have signaled that any new efforts should begin with addressing local concerns before the idea of exportation is even considered, even while accepting the deep need for foreign investment to get projects moving.
“There is no suspicion and hostility towards outside investment if the projects are beneficial for local economy,” said the country’s Deputy Director for Energy Efficiency, Abdelhamid Khalfallah. “It’s the role of the partners to demonstrate and convince local authorities about project interest especially in the fields of employability and technology transfer.”
Khalfallah went on to explain that while large-scale efforts for exportation were certainly in the cards for Tunisia, for now smaller, “pilot projects are necessary to demonstrate” their feasibility.
The government’s approach reflects a broader confidence in the region, seen in both Morocco and Egypt among green energy actors who see North Africa’s vast renewable potential and the eager European market as a recipe for greater authority over investment planning and profit-sharing. Holding up past experiences with oil and gas partnerships as cautionary tales, these green energy advocates see solar and wind in North Africa as a political bargaining chips as much as potential products.
However, the true strength of this new found confidence will only be seen in how long it stands up in the face of the Mediterranean’s new political and financial realities.
“The main problem now is how to persuade investors and main political actors to bet on a region with uncertain political and economic transition,” said one scholar close to energy issues in the region. With the wealth of technical and structural deficits in the country and Europe’s economic crisis only deepening, he explained, finding investors willing to take such a risk will be all the more difficult.