Is Tunisia Serious About Transitioning to Renewable Energies?

Tunisia has consistently pushed to adopt progressive legal and institutional frameworks to expand renewable energy usage and energy efficiency programs. The North African nation must develop a clear plan to further reduce its dependence on oil and gas to stay on track to generate its targeted amount of renewable electricity.
Is Tunisia Serious About Transitioning to Renewable Energies?

Tunisia has undergone a promising democratic transition accompanied by political reforms over the last seven years, albeit marred by frequent unrest and demonstrations, especially in the marginalized regions in the southern part of the country. The protests have been sparked by suspicion of mismanagement and corruption of Tunisia’s oil and gas companies, as well as the government’s alleged involvement in illegal activities that have cost the country millions of dollars.  In the midst of this tumult, late last year, Tunisia adopted the Tunisian Renewable Energy Action Plan 2030.

Tunisians tie the lack of economic opportunities and development in the southern regions to the country’s monopoly on the energy sector and lack of diversity in energy resources. The citizens have resorted to extreme measures to put pressure on the government to manage these resources more equitably, alleviate poverty, and create a sustainable economy.

Protests initially began in April 2017, when local citizens staged a sit-in near the Governorate of Tataouine. They demanded employment opportunities in the oil facilities operating in their region, and called for the nationalization of Tunisian oil and gas as well as for the international companies that had been “looting” the country to be expelled. In May 2017, protesters closed two oil pumping stations in the southern region of Tunisia and demanded their fair share of the profits from extraction of the state-owned oil and gas resources.

The socio-economic fabric of Tunisia, like many other countries in the Middle East and North Africa, has been principally centered around subsidies in the main productive sectors such as tourism, agriculture, and energy. However, subsidies were at about 4.7 percent of Tunisia’s GDP in 2013, increasing each year since 2010, “reflecting the partial (rather than the full) pass-through of international oil prices to domestic prices sought by the government,” according to a 2014 report by the World Bank.

This subsidy of 4.7 percent has had immediate effects on public expenditures on social welfare assistance, health, education, and programs for youth and women. In addition, Tunisia has extensive energy subsidies in the form of cheap electricity, natural gas, and gasoline. Since the state has a monopoly on the production and provision of energy, energy subsidies take the form of price controls set by the state, with prices significantly below the level of prices set by the world market.

As the procedures for setting subsidies are not transparent, the continual rise in subsidies is not sustainable for the state and has several negative impacts on public spending, including decreasing the budget for public investments. Tunisia may, however, have an exit strategy by focusing on the renewable energy investments necessary to meet its 30 percent target by 2030.  However, Tunis is still in early stages of the process and has only introduced 40 individual projects to promote wind and solar energy, according to the NAMA plan. Indeed, Tunisia has taken the initiative to develop mitigation measures related to the reduction of greenhouse gas (GHG) emissions. These measures are appropriate at the national level (measures referred to as NAMA plan).

Presently, renewable energy plays a minor role in Tunisia’s overall national energy mix, although there is some limited deployment of renewable energy sources in the residential sector. Despite initial progressive programs introduced by the government, the legal and institutional framework faces financial, technical, and regulatory barriers hindering the advancement of these national programs. The uncertain political landscape is one of the factors causing delay in implementation, specifically the lack of support from government officials and changes in international stakeholders.

One key stakeholder is Europe. TuNur, a joint venture between a group of Tunisian and Maltese investors and U.K.-based solar developer Nur Energie, was the biggest announced development of 2015. TuNur’s goal is to build a 4.5 gigawatt solar plant in the southern region of Tunisia to supply electricity across the Mediterranean and export electricity to power two million homes in Italy, France, and Malta.

For Tunisia to follow in the steps of other continental solar players such as South Africa, Uganda, and Morocco, there should be a clear strategy and future plan to engage government institutions and the private sector to raise the funds needed for these projects and to establish the regulatory framework to develop and scale up these resources.

“As I see it, to establish a sustainable transition into renewable energy, the country should start working on building infrastructure, investing in research and development, and putting in place the regulatory, operational, and technical frameworks for the development of renewable energy,” said Hamed El Materi, a petroleum engineer and founding member of the Tunisian Association for Transparency in Energy and Mines.

Renewable energy offers real opportunities to increase human capital and create jobs in Tunisia. Now it is time to show the country’s ambitious engagement and sustainable commitment towards renewable energy by removing the barriers and implementing support measures to allow for its development.