By Bernard Yaros | Mar 29 2012cement , ESSTT , inflation , Phosphate , Private Investment ,
Can wind energy be profitable for private companies in Tunisia?
If a local or foreign business has a factory in an area that enjoys robust winds, then it may want to consider the latest plan by the renewable-energies branch of the state-owned Tunisian Electricity and Gas Company (STEG Energies Renouvelables). The strategy looks precisely towards incentivizing private investment in wind energy.
Costs of living are rising for Tunisians, and electricity is no exception.Â Imagine a factory with high-energy consumption and attendant annual electric bills over 10,000 dinars.Â With volatile oil prices that are trending upwards, factoryÂ owners cannot possibly anticipate the energy costs that operations will incur over a period of 20 years.
Likewise, STEG Energies Renouvelables is looking to diversify the energy resources the country taps into to meet the demands of its energy consumption, which is growing by 2% per year. According to Jamel Belhadj, a professor at the College of Sciences and Technologies at Tunis, wind energy accounts for 4% of total electricity consumption, and the goal is to reach 10%.
For Chokri Ben Slimane, chief of wind projects at STEG Energies Renouvelables, wind energy could present an opportunity for the interests of his companyÂ and those of private businesses with high-power operations to intersect.Â If the private sector invests more into wind energy, it would mean more energy diversification for the country as well as capping rising energy prices for factories with high-power operations.
What exactly is the plan that STEG Energies Renouvelables is formulating to capitalize upon this potential area of shared interest?
A business would only need to pay for the construction and maintenance of the number of wind turbines that would be installed to meet the particular energy consumption of its factory. The long-term pay structure that the investor would draw up would depend on the cost of the project itself.
Costs not only depend on the number of the turbines installed but also the power. A 30-kilowatt wind turbine is about 95,000 dinars while around 3 million dinars would have to be footed for a 1320-kilowatt turbine.
STEG Energies RenouvelablesÂ plans to help with the construction, technical assistance, and maintenance of the turbines as well as the provision and transport of necessary materials.
Once the turbines are installed, the factory will not have to pay for the electricity that its operations consume. Usually, wind turbines are guaranteed by their manufacturers to work for 20 years, after which time the investor can renew the project with STEG Energies Renouvelables.
For this scheme to work, several factors must be taken into consideration. The factory must have empty land nearby on which to construct the project. Additionally, it must be isolated, or far away from large population centers that could find the project to be a nuisance, yet at the same time close enough to the national electric grid.Â Finally, the area must have wind.
Cement or phosphate factories, for example, could be beneficiaries of this plan given their high levels of energy consumption, said Ben Slimane. Many of them are located in the countryâ€™s south, which enjoys wind speeds ranging from 5 to 10 meters per second, he explained.
Furthermore, foreign investors would benefit because STEG Energies RenouvelablesÂ would provide land to develop the turbine project.Â This is critical because in Tunisia, foreigners are not allowed to own large areas of land.
In the long run, companies that invest in wind projects will save money with the forgone yearly energy expenses, asserted Ben Slimane. These savings are further compounded by an average annual increase of prices of 4% due to inflation.
For Ben Slimane, the legal framework has to be â€œdeveloped and amendedâ€ so that these projects start to grow in number. In addition, there should be workshops in partnership with the National Agency for Energy Conservation to facilitate the process for investors to establish wind projects, said Ben Slimane. â€œRight now, potential investors donâ€™t know who to go to,â€ he stated.
STEG Energies Renouvelables along with the Ministry of Industry and Technology and the Energy Conservation AgencyÂ is working hard to promote this idea.Â Every six months, they hold meetings with owners of high-power factories to explain the benefits of its plan and encourage the latter to invest in wind energy. However, STEG Energies RenouvelablesÂ is hoping for more action on the part of the government to detail the subsidies it could give to investors in wind energy and eventually pave the way for greater investment in the field.