Tunisia, a north African country, is a lower-middle-income economy that was once a net exporter of oil and gas. Currently, 95 per cent of the country’s generated electricity is from oil and gas-based resources, with a significant share of the gas needed for power generation being imported from Algeria. In recent years, exploration of oil- and gas-based resources has declined, mainly due to the natural drying up of some fields in the country. The unstable political scenario and protests have also disrupted the production and transportation of fuels.
To reduce this dependence on fossil fuels and to promote the use of cleaner energy resources to meet its target of reducing carbon emissions over the next decade, the Government of Tunisia, in 2015, implemented the Renewable Energy (RE) Law, which encourages electricity production from RE-based sources and promotes private sector involvement in the segment. However, since 2015, only 10 MW of solar capacity has been added to the existing RE capacity. The country also plans to decommission 1,807 MW of its thermal capacity by 2030.
Electricity demand in Tunisia is estimated to increase at a compound annual growth rate (CAGR) of 3 per cent between 2020 and 2030. To meet the increasing power demand and reduce reliance on gas imports, the African country aims to almost double its existing capacity by adding around 5.1 GW of new generation capacity by 2030, with the private sector contributing a significant share. Of the total target, around 3.7 GW to 3.8 GW will be RE-based (mainly wind solar).
In line with these targets, Tunisia’s vertically integrated utility—Société Tunisienne de l’Electricité et du Gaz (STEG)—has formulated two national-level power transmission projects, namely, the Energy Sector Improvement Project (ESIP) and Projet d’Aménagement et d’Équipement du Réseau de Transport d’Électricité (PAERTE), entailing a combined investment of USD435 million.
Both projects share the common goal of strengthening and reinforcing the Tunisian transmission network to integrate the upcoming RE capacity and will cumulatively add around 630 km of transmission lines, 16 to 17 new substations and expand various existing substations between 90 kV to 400 kV over the next three to four years.
Tunisia is also planning to execute various cross-border interconnection projects with several African and European countries to undertake regional power exchange for boosting industrial growth and improving energy security without overloading the existing transmission network. One such significant project is the Elmed Project, which will connect Tunisia’s grid network with that of Italy. The project is supported by both the governments due to its potential to increase the interconnection capacity of the Euro-Mediterranean system. In addition, the country is undertaking initiatives to establish a smart grid network across the country.
To execute all its power sector related projects, the country has received financial backing from multilateral donor agencies from across the world.
Formed in 1962, STEG is the state-owned electricity and gas company of Tunisia and holds a near monopoly in the country’s electricity sector. It has the sole responsibility for transmission, distribution and sale of electricity (wholesale and retail) and owns over 88 per cent of generation capacity in the country.
The Ministry of Industry is responsible for developing policies related to the energy sector. The Directorate of Electricity, Gas and Energy Efficiency under the Ministry of Industry is responsible for the coordination and implementation of energy policies. It shares this role with Agence Nationale pour la Maîtrise de l’Energie (ANME) or the National Agency for Energy Conservation, which was set up in 2004 to implement energy-related policies, particularly in the field of energy efficiency and RE.
Tunisia’s existing power infrastructure
At the end of 2019, Tunisia had an installed generation capacity of 5.6 GW, of which 5.2 GW was owned by STEG and the remaining 471 MW was owned by independent power producers (IPPs). Of the total installed capacity, 5.3 GW or 95 per cent is thermal, 250 MW or 4 per cent is RE-based (only wind and solar) and only 1 per cent (62 MW) is hydro-based.
During 2019, the 312 MW Borj El Amri/Mornaguia gas, 282 MW Radès C combined cycle, and 10 MW Tozeur 1 solar photovoltaic (PV) plants were commissioned. Between 2015 and 2019, no new hydro-based power plants were commissioned in the country.
Though the majority of the existing generation capacity is thermal-based, RE-based capacity is now being gradually added to the generation mix.
As of the end of 2019, Tunisia’s transmission network comprised 6,985 km of transmission lines between the 90 kV to 400 kV voltage levels, representing a CAGR of 2 per cent only between 2015 and 2019. Around 42 per cent (2,921 km) of the line length was at the 225 kV level, 34 per cent (2,377 km) at 150 kV, 21 per cent (1,479 km) at 90 kV and the remaining 2 per cent (208 km) at 400 kV.
The country’s transformer capacity increased from 9,450 MVA in 2015 to an estimated 10,500 MVA in 2019, representing a CAGR of 3 per cent during the period.
Some of the key transmission projects operationalised by STEG in 2019 were two 225 kV substations, one in Sousse and another in Radès; a 225/33 kV substation in Ghannouch; the extension of the 225 kV Mornaguia substation for the evacuation of power from the Borj El Amri/Mornaguia gas power plant; the 225 kV Msaken–Bouficha, Bouficha–Bouargoub and Grombalia–Jebel Rssass/Bouargoub lines; and the 90 kV Jendouba–Béja line. During the 2015–19 five-year period, no new 400 kV line was added to the national grid network.
Currently, the Tunisian network is interconnected with the Algerian grid via five lines. These include two 90 kV lines, a 150 kV line, a 225 kV line and a 400 kV line. Two 225 kV interconnections with the Libyan network also exist but are currently not functional.
Future plans and investment
As electricity demand and reliance on imported hydrocarbons continues to increase, the country’s power sector tends to weaken. Tunisia was once a net exporter of oil and gas and is now heavily dependent on imports to meet its energy needs, especially for electricity generation.
Hence, to reduce both its carbon footprint and its dependence on imports, Tunisia is focusing on diversifying its generation mix by adding cleaner energy resources. The north African country has significant potential for growth in wind and solar power generation, which will help meet the growing domestic electricity demand.
In 2016, the government launched the Tunisian Renewable Programme (TRP), under which the country aims to produce 30 per cent of its electricity from RE-based resources (mainly wind and solar) by 2030.
Targets under the TRP are planned to be achieved in three phases. Under Phase 1, 1.28 GW of wind and solar capacity was expected to be commissioned by 2020. An additional 1.25 GW will be added between 2021 and 2025, which forms the second phase, and 1.25 GW was anticipated to be added between 2026 and 2030, under Phase 3. Since the targets under Phase 1 have not been met, the government decided to update these targets. As per the revised targets, over the next decade, around 3.7 GW to 3.8 GW of RE capacity will be added, of which 1,860 MW will be added by 2022.
In 2020, Tunisia’s biggest gas field is expected to begin operations. The Nawara field will produce around 2.7 million cubic metres of gas daily, in addition to around 7,000 barrels of petroleum and 3,200 barrels of liquid gas. Given the expected increase in oil and gas production, the Tunisian government plans to develop two new gas-fired combined cycle power plants (Skhira 1 and 2) with a capacity of approximately 500 MW each. The first one will be set up by 2022, and the second will be developed as an IPP in subsequent years. There are also plans to add the 400 MW Melah Amont pumped storage hydropower plant (HPP) by 2026.
To promote collaboration with the private sector in the generation segment, the majority of the upcoming capacity will be through IPPs.
To integrate the planned RE capacity, the Tunisian government, in collaboration with STEG, formulated the Energy Sector Improvement Project (ESIP).
The USD151 million project, which is being financially supported by the World Bank, aims to support two key parameters for energy sector transformation in Tunisia. The first is diversifying sources of electricity and further integrating them into the grid, while the second is improving STEG’s financial health by strengthening its commercial performance.
The first component of the project focuses on strengthening the electricity transmission network. Valued at USD131 million, it entails the construction of approximately 384 km of transmission lines to evacuate power from the proposed RE power plants, and the construction and extension of 400/225 kV and 225 kV substations by 2024. The table below lists the transmission projects under Component 1 of ESIP.
The second component of the project will focus on improving the power utility’s commercial performance and entails an investment of around USD20 million. It will provide financing for payments under the Eligible Expenditure Programme, which broadly involves monitoring and metering the consumption of high voltage (HV) and medium voltage (MV) electricity customers in real time, securing revenues from low voltage (LV) consumers with large consumption, and improving the collection rate from private customers.
Table 1: Transmission projects under Component 1 of ESIP
|Project description||Technical parameters||Cost (USD million)|
|225 kV line to connect the Borj Bourguiba PV plant and an additional 225 kV line bay to the Tataouine substation||100 km||15.5|
|225 kV line connecting the Skhira plant to the existing Thyna substation||85 km||18.6|
|400 kV double-circuit line connecting the Skhira power plant to the new Kondar substation||192 km||53.8|
|Line-in-line-out (LILO) on the existing 225 kV Bouficha–Sousse line to connect it to the new Kondar substation||6.5 km||1.8|
|400/225 kV substation at Kondar||1,200 MVA (3×400 MVA); 80 (2×40 MVAr)||27.0|
|Extension of the existing Thyna substation by adding 225/150 kV auto-transformers and a 225 kV line bay||200 MVA||6.0|
|Unallocated funding (accommodating price and technical contingencies that may affect investments)||NA||8.3|
Source: World Bank’s Project Appraisal Document on Energy Sector Improvement Project, June 2019; Global Transmission Research
Another key ongoing project is the Projet d’Aménagement et d’Équipement du Réseau de Transport d’Électricité (PAERTE), or the Transmission Network Development and Equipment Project, which aims to strengthen the transmission network and improve electricity supply, particularly in the Bizerte, Ben Arous, Sousse, Sfax and Gabes governorates of the country. The project also shares the common goal with ESIP of expanding and reinforcing the national gird for the integration of upcoming RE capacity.
The multi-donor funded project will cost EUR290 million, of which EUR108 million will be loaned by the African Development Bank (AfDB), EUR30 million will be acquired from AfDB’s Africa Growing Together Fund (AGTF) in the form of a loan, EUR121 million will be provided by the Islamic Development Bank (IsDB) and the remaining EUR31 million will provided by the implementing agency, STEG. The project will be implemented during 2020-23.
The national-level project will add around 246 km of lines at the 90 kV, 150 kV and 225 kV levels; six new 225 kV air-insulated switchgear (AIS) substations, one new 150 kV AIS substation, five new 225-150/33 kV mobile stations, and five new 225 kV gas-insulated switchgear (GIS) substations. It also involves the installation of 1,920 MVA, including three autotransformers (aggregating 600 MVA). PAERTE will also refurbish and reinforce various HV and MV substations across the country.
With the addition of the planned RE capacity, the country will have surplus power for export. Hence, STEG plans to develop new interconnections with Italy, Algeria, Libya and Egypt to create new power corridors to support industrial development and improve energy security.
The Tunisia–Italy interconnection or the Elmed Project, involves the construction of a merchant transmission line between the two countries with a capacity 600 MW. Both the governments are in favour of the project due to its potential to increase the interconnection capacity of the Euro-Mediterranean system. The project entails the construction of a 192-km-long subsea cable connecting Partanna in Sicily (Italy) and El Haouaria, Tunisia. Of the total line length, 32 km will be laid underground in Sicily and 5 km in Tunisia. As per the latest update available, both governments have given the green light to the interconnector. The project is part of the European Commission’s (EC) Projects of Common Interest (PCI) list 2017, which means that it is eligible for funding from the European Union (EU). The project is expected to be fully operational by 2025.
In addition, STEG is planning another interconnection with Algeria. The Algeria–Tunisia (DZTN) project will entail the construction of a second 400 kV overhead line from the Jendouba substation in Tunisia to the Chefia substation in Algeria. Another proposed interconnection is the Tunisia–Libya–Egypt (TNLYEY) project. Both projects have been included in the Mediterranean Transmission System Operators (Med-TSO) report issued in 2018, which lists power interconnections in the Mediterranean region. Since then, no major developments have taken place.
STEG also plans to develop a smart grid network to provide reliable electricity supply across the country. In line, Agence Française de Développement (AFD) loaned STEG USD132 million for the implementation of the first phase of the smart grid project. The funding will be allocated for the development of control and communication stations and the improvement of infrastructure through the installation of 430,000 intelligent meters over three years in the Sfax governorate in southern Tunisia. The second phase of the project will extend the programme to the rest of the country.
To meet the country’s increasing power demand and reduce gas imports, the Tunisian government has set some ambitious RE targets, and in line, STEG is focusing on establishing a robust grid network in order to evacuate power from the planned generation capacity. Tunisia is also planning to develop various grid interconnections with Mediterranean and European countries to facilitate power trade with the aim of boosting economic growth and development in the country. To ensure a robust power sector in the country, STEG must achieve all its planned targets in a timely manner. Projects to achieve this are being supported by some of the major donor agencies from across the globe.