Demand analysis of emerging PV markets: Tunisia of Africa
May 29, 2020 PV InfoLink
Tunisia has an estimated population of 11.5 million. Its economic activity has slowed since 2007. Although Tunisia began a series of uprisings known as Jasmine Revolution in 2011 that eventually overthrew Ben Ali, the newly-formed government fell short of addressing issues such as economic slumps and diminished public services. The country had maintained an annual GDP growth rate of 1%–3% during 2012–2018. Fitch, an international rating agency, has assigned Tunisia a B+ rating, which indicates a negative economic outlook.
Geographically, Tunisia lies in Northern Africa, bordering Algeria in the west and Libya in the southeast. Its southern regions are dominated by deserts and central ones by high flat land. Tunisia has a subtropical Mediterranean climate in the north and a hot desert climate in the south. August is the hottest month in Tunisia, with the temperature averaging 21–33 °C and reaching as high as 40 °C in the south. January is the coldest month, with an average temperature of 6–14 °C. Tunisia receives a daily solar radiation of 1,800 kWh/m2.
Renewable energy development in the Tunisia
Having sworn in after the revolution, the new Tunisian government launched the Tunisian Solar Plan (PST) in 2012 to embark on renewable energy development in the country. Under the PST, the Tunisian government seeks to achieve 3.815 GW of cumulative installed renewable energy capacity by 2030—of which 1.755 GW will come from wind power and 1.51 GW from PV. The remaining 550 MW is expected to come from concentrated PV and biomass.
Even though the PST was launched in 2012, investors did not give much thought about investing in Tunisia as the country was transitioning towards a democratic political order and rebuilding economy after the revolution and the North African countries were still engulfed by political turmoil. The renewable energy development has been in the doldrums until 2017, when Tunisia started investing and prioritizing solar and wind power in the hope to ease power shortage.
To date, Tunisia has installed 373 MW of renewable capacity. Wind power contributed the most, or 66% of the capacity, followed by 18% hydropower and 16% solar. There is still a long way to travel toward the 2030 goal of 3.8 GW.
Solar policies and outcomes in Tunisia
As Tunisia has been in a democratic transition amid North Africa’s political and economic turmoil, foreign investors share a conservative view on the prospects for the development of Tunisia’s renewable industry and they have cut down on investment in the industry. As a result, there is hardly any pickup in Tunisian demand for solar and other renewable energy sources.
Tunisia’s PV policy used to depend mainly on net-metering scheme. Since 2017, the government has been attracting business and investment, with a renewed focus on the development of renewables. The Tunisian solar sector has since started to fare well.
Having completed its first 70 MW solar auction in 2017, the government went on to finish a second 70 MW auction. Through the two auctions, 134 MW of projects were allocated. Its third 70 MW auction is still receiving bids. Meanwhile. Tunisia completed the country’s first 500 MW utility-scale auction in December 2019.
Some projects awarded through the auctions have began construction, so these projects will constitute most of Tunisia’s module demand over the short term. As Tunisia still has some way to go before it can hit its 2030 goal of installed PV capacity, more auctions are likely to be launched.
Tunisia-China trade: module import and export
The Chinese module shipment to Tunisia grew each year over 2017 to 2019, reaching 54 MW last year, a modest but record-high figure. Most of the Chinese modules shipped to Tunisia were probably used in projects auctioned in recent years. The shipment may hit another record high this year on rising demand from utility-scale projects.
Tunisia entered a new era after its revolution marked the start of the Arab Spring. However, the renewable energy development was making slow progress with little foreign investment inflows, because the country was rebuilding itself and reeling from economic and political instability.
In 2017, the Tunisian government ramped up renewable investment, especially in PV and wind power, to ease power shortage. On the solar side, the government began by launching a 70 MW auction in 2017 and held a second one of the same scale. A third auction is in the invitation-to-bid phase. Moreover, a 500 MW utility-scale auction was completed last year.
Driven by demand from projects auctioned off, the module shipment to Tunisia has been growing in recent years. The shipment volume is expected to hit a record high this year with more auctions to come.
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