Dii creating a market for renewable energy from the deserts in Europe, North Africa and the Middle East

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1 Dii creating a market for renewable energy from the deserts in Europe, North Africa and the Middle East Munich, Paul van Son, CEO, Dii GmbH

2 Solar and wind resources in EUMENA more than sufficient for 1,2 bn people in coming decades Dii GmbH 24 January

3 Dii s mission is to enable an integrated market place in EUMENA in which desert renewable energy will be competitive Vision Benefits for EUMENA from desert energy (solar and wind) and integrated markets + + Reliable Energy security + Job creation effects + Sustainable + Cost effective Dii GmbH 24 January

4 Large amounts of cheap RE energy to be expected from the deserts based on cost differences EUMENA Solar and Wind potentials compared to electricity demand (2050 cost) /MWh EUMENA demand Europe demand MENA demand Europe MENA EUMENA 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Generation potential in TWh/a Dii GmbH 24 January

5 Cook the elephant in pieces Mission and Strategy Dii s mission to be implemented at different levels System Strategy Dii Study Desert Power 2050 shows that an integrated EUMENA power system based on renewable energy is a highly valuable perspective for the entire region. In report Getting Started, Dii demonstrates how this can be implemented, by formulating recommendations on the appropriate policy choices that need to be made now. Country Strategy Studies on MENA countries present analyses of sites, grids, regulation, markets and socio-economic aspects. They form the basis for concrete projects. Project Enabling Dii together with MENA partners currently works on identifying a portfolio of projects in MENA with ideal conditions using a range of self developed tools. This will create a stream of business opportunities for a range of stakeholders. Dii GmbH 24 January

6 Already today, PV, Wind and perhaps Concentrated Solar Power are economically viable options for MENA countries Renewable energy cost Expected cost of RE installations in North Africa and the Middle East today and in 2020 [ t/kwh] CSP with 8h storage PV Wind Conven -tional CSP with 8h storage PV Wind Conven -tional PV and wind viable options in all MENA countries Due to extensive use of oil fired generation in Libya, Egypt, Saudi Jordan and Syria, sometimes CSP viable option today Spread is result of different finance and resource conditions in the countries Cost reduction potential until 2020 Higher cost (mid/peak load) Morocco, Tunisia, Algeria Libya, Egypt, Jordan, Saudi Arabia Lower cost (base/mid load) Note: RE LCOE calculated based on identified sites and country-specific cost of capital estimates; Conventional generation has been estimated with 40 /MWh for Coal, 60 /MWh for CCGT, 90 /MWh OCGT for and up to 200 /MWh for oil-fired power plants. Source: Dii Dii GmbH 24 January

7 An accelerated built up of renewables would require financial support, however setting free fossil energy subsidies!! Renewable energy cost RE support expenditures in EUMENA beyond 2020 with well-designed support [ bn] Annual energy/fossil fuel subsidies worldwide: ~ 405bn p.a. PV CSP Wind off-shore Wind on-shore Cumulative RE subsidies in EUMENA over 30 years: ~ 390bn ( 13bn p.a.) Annual energy/fossil fuel subsidies in Saudi Arabia: ~ 45bn p.a Note: Real values in 2013, no discounting. Cost of RE installations are partially site and country specific; here an average EUMENA site has been assumed Source: Dii Dii GmbH 24 January

8 Comparing RE incentives in Europe with subsidies for fossil fuels in MENA: transition may not be easy, but highly rewarding RE incentives in Europe [% of GDP] Non-RE subsidies in MENA [% of GDP] Electricity Fossil fuel 10.7% 10.6% 2.4% 2.6% NA 7.1% 1.1% NA 5.0% 6.0% 6.2% 8.3% 8.0% 0.77% 0.49% 0.45% 0.27% Germany Italy Spain EU-27 Morocco Algeria Tunisia Egypt Saudi Arabia Reducing subsidies on fossil fueis in MENA countries will lead to more realistic market prices and hence to earlier competitiveness of renewables!! Source: Germany (BMU 2013), Italy (UPI 2012), Spain (Reuters 2012), EU-27 (RE-Shaping 2012 BAU high demand scenario 11-15), Algeria, Egypt, Saudi Arabia (IEA WEO 2012), Morocco (Reuters 2011), Tunisia (IMF 2012) Dii GmbH 24 January

9 Industrial cooperation: Dii is backed by a unique international industry network Network On the one hand competitors, on the other hand partners in shaping a market Dii Shareholders Dii Associated Partners Source: Dii as of August 2013 Dii GmbH 24 January

10 Co-ordinated actions among key stakeholders Political Stakeholders (MENA, EU) Media (Press, TV, Online, Social Media) Dii Industries, Associations Civil Society (NGOs) Scientific community General Public Dii GmbH 24 January

11 Dii identified highly attractive sites in MENA with a RE potential of 800GW close to demand centers and existing infrastructure Renewable energy potential MENA Dii GmbH 24 January

12 Visit our website for more insights: Disclaimer Dii online Visit our Website available in Arabic, English and French: Or our page on Facebook: Disclaimer The following terms and conditions govern any release of information by Dii GmbH and its Affiliates (verbundene Unternehmen within the meaning of Section 15 et seqq. German Stock Corporation Act; "Affiliates"). Any information is provided to you at our sole discretion. No representation or warranty is made by us or any of our directors, employees, advisors and/or other agents and representatives ("Representatives") as to the accuracy, reliability and completeness of the information. The disclosure of the information does not constitute or create any contractual relationship between you and Dii GmbH or any duty of care by Dii GmbH towards you and/or any other third party to whom the information is disclosed or into whose hands it may come. We accept no obligation to provide you with any updates and/or any further explanation on the information made available to you. Furthermore, we do not accept any obligation to correct any inaccuracies in the information made available to you. Any information was collected or prepared by us or on our behalf solely for our purposes and not with regard to possible interests of you or any third parties. Any use you make of the information is entirely at your own risk. To the extent it is legally permissible, we shall not be liable to you in any manner and on any legal grounds in connection with the information and any such liability is hereby excluded and waived. You will not, and you will ensure that neither your Affiliates, nor your or their Representatives will bring, or otherwise initiate, any claim, action, suit or proceeding against us or any of our Representatives with respect to any matter contained in, omitted from or otherwise arising in connection with, the information. Any claims by you for fraud or wilful misconduct (Vorsatz) as well as claims for injury of life, body or health shall not be affected by the foregoing. You acknowledge and agree that you will treat all information strictly confidentially. You must not disclose any information to third parties without our prior written consent other than your Affiliates and your and their professional advisors, provided that any such disclosure is permitted only if the recipient acknowledges and agrees in advance in writing (including fax and ) for the benefit of Dii GmbH to accept and be bound by these terms and conditions. Any amendments to these terms and conditions must be made in writing. This applies also to any agreement which amends the foregoing requirement that all amendments must be made in writing. These terms and conditions shall be governed by and construed in accordance with the laws of the Federal Republic of Germany, excluding international private law (Internationales Privatrecht). The venue shall be Munich. 17 January 2012 Dii GmbH 24 January

13 Thank you for your attention Dii GmbH 24 January

14 MENA countries have recognized their potential: 50 GW renewable energy capacity targeted by 2020 Status Quo RE Project Pipeline and RE Targets Renewable energy project pipeline vs. renewable targets in 2020 [GW] Algeria Libya Saudi Arabia Morocco Tunisia Egypt Jordan Syria Project pipeline RE targets 2020 Planned 1 Under construction Operating CSP PV Solar (tbd) Wind Biomass Geothermal Note: 1) Planned RE projects includes all projects that are either announced, in the tendering process or already awarded Source: Dii analysis and individual country RE targets Dii GmbH 24 January

15 Dii partners are taking part in the energy transition that is shaping up in the MENA region Project Involvement of Dii Partners Company Projects Capacity [MW] Project Role(s) Company Projects Capacity [MW] Project Role(s) Abengoa Solar 21, 67, Supplier ACWA Power 19, Owner, Developer, Operator Flagsol Supplier Flabeg 42, Supplier First Solar 65, Supplier ILF Consulting Supplier Italgen 10, 13 8 Owner, Developer, Operator Lahmeyer Int. 15, 16, 18, 19, 21, 39, 68, 70, 73 1,094 Developer, Consultant Nareva Holding 11, 14, 15, Owner, Developer, Operator Schott Solar 09, 21, 42, Supplier Soitec 62 1 Supplier PV CSP Wind Capacity of all RE projects in MENA with Dii partner involvement [MW] Capacity of operating RE projects in MENA with Dii partner involvement [MW] Capacity of non-operating RE projects in MENA with Dii partner involvement [MW] 1, ,176 Dii partners in the project value chain of RE projects in MENA Consultants Financiers Owners Suppliers Developers Operators Notes: The boundaries shown on this map do not imply official endorsement or acceptance by Dii GmbH. Listed RE projects are non-off-grid projects with a capacity equal or above 1MW. Projects are only included when they are operational, under construction and/or if they have already been awarded and suppliers were chosen. COD = Commercial Operation Date Dii GmbH 24 January

16 In the long run, system cost for renewable energy technologies are coming down even further Renewable energy cost Renewable energy technologies System cost development [ /kw] 5,000-60% CSP with 8h storage PV 3,300 2,500 2,250 2,000 1, % Wind on-shore Wind off-shore 3,000-55% 1,200 1,100-25% 1, ,000 1,650 1,500 1, Note: Real values in 2013, no discounting. Cost of RE installations are partially site and country specific; here an average EUMENA site has been assumed Source: Dii Dii GmbH 24 January