Findings of the web talk "Energy transition in the Mediterranean Area: new geographies, new alliances" - 16/02/21
The discussion about energy Transition in the Mediterranean area, started by WEC Italy since the World Energy Week Milan 2018, the World Energy Congress Abu Dhabi 2019 and the World Energy Week 2020, continues.Given its geographic position, the Mediterranean region represents a bridge between Europe and Africa and can play a key role in the energy transition process of the Area. Besides, the existing energy interconnections between the countries of the North and South of the Mediterranean represent an important opportunity for the future energy landscape of the region.
The World Energy Council's Mediterranean Energy Trilemma provides the opportunity to compare and contrast the energy policy performance of different countries of the Area. Examining the three dimensions of energy performances – security, equity, and sustainability – enables to assess the development of a country and regional-specific challenges. The aggregated results of the Mediterranean Trilemma illustrate some of the shared themes and issues within this geographic region but there is also scope to group the countries differently, around cultural clusters or international alliances, to explore new insights into comparative energy policy performance and energy transition.
Also the Mediterranean Energy Perspectives (MEP) report produced by OME - Observatoire Méditerranéen de l'Energie provides a comprehensive analysis of the energy sector in the Mediterranean region with insights into the energy situation today and over the next decades to 2050. Presenting updated comprehensive scenarios and analysis of the energy sector in the Mediterranean region, OME delivers strong messages to a broad global audience and helps inflect the future on a virtuous path.
Starting from the results of both the analysis, WEC Italy (the Italian Committee of the World Energy Council) and OME - Observatoire Mediterranéen de l'Energie, in collaboration with the Italian Ministry of Foreign Affairs and International Cooperation, the WEC global Secretariat, WEC Mediterranean Committees and in partnership with Edison, organized a web talk entitled "Energy Transition in the Mediterranean Area: new geographies, new alliances" to strengthen the dialogue between the Mediterranean and European communities on the energy transition process undergoing in the Area.
The web talk represented a further step in the dialogue on the Euro-Mediterranean energy transition started by WEC Italy since the World Energy Week Milan 2018 through meetings and opportunities for debate with main stakeholders involved in the process.
The dynamism and the continuous evolution of the energy situation of the Mediterranean countries, and the relative evolution of the legal framework, make this dialogue still open to new discussions that will continue favorably in the coming months and years.
The web talk was attended by important guests, including Stefano Besseghini (Chairman, ARERA), Stefano Grassi (Head of Cabinet for Energy Commissioner Kadri Simson), Luca Sabbatucci (Director General, Ministry of Foreign Affairs, Italy), Lapo Pistelli (Chairman, OME),Marco Margheri (Chairman, WEC Italy), Angela Wilkinson (Secretary General, WEC), Houda Ben Jannet Allal (Director General, OME), Martin Young (Senior Director, Scenarios and Business Insights, WEC), Rachid Ben Daly (Director General, Ministry of Energy, Tunisia), Sorina Mortada (Technical Consultant, WEC Lebanon), Fabrizio Mattana (Executive Vice President Gas Assets, Edison, Italy), Maria Rita Galli (CEO, DESFA, Greece), and Angelo Ferrante (Secretary General, Med-TSO; Head of European Affairs, Terna, Italy).
FINDINGS
The hosts provided the debate with important insights:
In the last decade, Mediterranean energy dynamics have changed radically. Energy players faced complex circumstances, which concern new geopolitical dynamics, transformed economic situation, and continuous technological evolution;
The impact of Covid-19 strongly affected the economic situation of the area, and in this sense, the opportunity to humanize energy transition emerges as a key to achieve the climate neutrality targets, together with the need to focus on a customer-centric approach, broader innovation, and more inclusive cooperation;
In the upcoming G20, of which Italy will have the presidency, the issue of the energy transition will be central, aimed at the common objective of the fight against climate change and the achievement of an energy economy based on net-zero emissions, in line with the European target;
The Mediterranean region has embarked on an energy transition process, which will lead to significant savings until 2050 compared to the business-as-usual future. If proper policies and measures are implemented, including the recently announced CO2 reduction of 55% by 2030 in the EU, fossil fuels in the energy mix will decrease by more than two-thirds in 2050, as well 2 billion tons of CO2 emissions will be avoided. Additional benefits are assessed under the energy security, sustainability, and equity dimensions. Such efforts although very encouraging and somehow ambitious are yet not enough to achieve full decarbonization of the Mediterranean energy system by 2050. A Euro-Mediterranean Green Deal is needed for a step-change;
Today the Mediterranean is a net energy importer, but have the potential to become a net energy exporter to 2050; South Med countries, in particular, can become net exporters already by 2030 with the implementation of energy transition policies, also developing important environmental and socio-economic benefits for the Mediterranean region;
Northern Mediterranean countries tend to have a higher diversity of primary energy supply and electricity generation, which makes up for their import dependence. On the contrary, Southern Mediterranean countries tend to have larger natural reserves of fossil fuels, thus their greater dependence on them. These countries have greater challenges ensuring access to electricity and clean cooking but perform better in terms of affordability due to policies on fuel subsidies for electricity which is broadly fossil fuels based. They tend to have more fossil-fuelled power generation and less diversity of power generation that leads to lower scores for Sustainability;
Supporting countries in addressing connecting energy challenges have been proved remarkably useful, in particular making it possible to:
create an electricity market that can generate more advantageous prices for all;
better integrate variable renewable energies sources from distributed generation;
increasing the security of supply;
reduce energy dependence;
reinforcing cooperation between states;
developing technology, employment, and competitiveness.
In this framework, financing and permitting issues represent important challenges for the Euro-Mediterranean area, with several differences still existing within the two shores. These challenges must be faced urgently closing the gap between countries also with the support of EU Commission Programs.
Rules harmonization appears crucial in that process, once again achievable also through the reinforcement of multilateral cooperation;
dialogue and cooperation between policy and industry stakeholders is necessary to ensure a just and fair transition, and even if the European Green Deal represents a reference model, the necessity of a Euro-Mediterranean Green Deal could be the key for the needed and effective change;
some pillars appear as fundamental to reach the mid and long terms objectives: base the future policies on renewable energy sources, reduce CO2 emission, implementa positive agenda for gas resources helping to phase out or avoid more polluting fuels, develop sustainable mobility, and work on interconnection systems.
Furthermore, the region shall work together on accelerating the development of energies of the future, such as hydrogen.
In this direction we can mention some specific situations that have been discussed, which although concern a single institution, company or country, precisely for the principle of interconnection and cooperation, are indispensable for all actors in this scenario:
Tunisia, the second closest country to the European Union from a geographical point of view, sets the target to achieve 30% of its energy production by using renewable energy, and is also implementing a major green energy programme, which will see hydrogen at the centre of this programme, but also wind and solar energy, of which the country can abundantly dispose;
Edison has decided to base its approach to the energy transition, in the Mediterranean area and beyond, on three main pillars: the low carbon energy generation is central, for 2030 the company wants its energy mix to be based on 40% on renewable energies; sustainable mobility is another area of vital importance, considering not only urban mobility, but also heavy road and maritime transport sectors and the use of ssLNG would facilitate the road to decarbonisation; energy efficiency is the ultimate focus;
There is certainly a disparity between countries of Northern and Southern of Europe, (France, Spain and neighbouring countries and Israel, Greece, Malta, Morocco, and others), mainly in terms of security and sustainability; talking about Greece, DESFA announces great progress in terms of interconnections, but more has to be done yet. Regarding gas grids in fact there are areas of the country, such as west Macedonia, that are not supplied with natural gas and investments are moving in this direction.
Lebanon wants to base its policies to facilitate the energy transition on renewable energy and natural gas, used in place of fossil fuels. Their commitments are on the same line as the European ones and the country, especially thanks to the policies adopted in the last decade by the Ministry of Energy and Water, is making a lot of progress: it is possible to mention the agreement signed in 2018 on wind energy, which estimated the use of this source at 226 MW. By 2030 the country wants to meet 30% of its energy needs through renewable energy, and on the basis of these sources wants to achieve a production of 5000MW.
Terna focuses on multilateral cooperation to define a common vision and seek global response to the Mediterranean situation. The collaboration with the European Union is certainly vital, for example Terna has adopted the master plan, which provides a contribution to investors, which is developed every two years, has the objective to evaluate the benefits at regional level and to estimate the costs for the future policies of action; the 2020 version of the plan that includes 15 Interconnection projects according to 3 energy scenarios has been recently drawn up. The plan provides for 6000 kilometres of interconnections, partly based on HVDC technology, a project that will require 12 billion dollars of cost.
Transition usually implies change and it is important to invest in the energies of today to create those of tomorrow, in this direction Eni collaborates with Egypt and Libya since the ’50 with the objective to reduce emissions, working with oil companies to find solutions to address the energy transition and moving away from traditional energy sources to promote renewable energies. The company is also working in those countries to develop new technologies useful transport sector. The company is also active in Tunisia, in order to favour the poorest areas of the country. In this framework it is necessary to change the "one-way" relationship that dominates the exchange of energy between the African countries and those of the northern Mediterranean area, achieving “two ways” exchange, not only regarding energy but also concerning technologies, to empower self-production, create jobs and make proper use of the strategic role of renewable energies and natural gas.
Building a sustainable energy development plan is what Europe is working on, producing new jobs as a result, developing new industries and helping climate ambitions. A seven-year agenda is under way, mobilizing up to 30 billion € investments in southern countries, including 12 concrete flagships initiatives build up under five priorities: human capital development, economy, peace and security, migration and certainly the energy transition. Renewable energies are once again central to achieve this goal and multilateral cooperation will be the engine for the activities of energy companies and industries in the area.
It is evident that the rhythm at which the energy world moves in the countries of the Mediterranean area is different from that of other European countries, and that there are substantial differences even between the same countries of the area; breaking down the barriers that divide the countries is crucial, and cooperation is at the base of the road to the energy transition, that the countries of the Mediterranean area should walk jointly.
From the European Union “new challenges old alliances”
The European Commission already invested important financial resources to promote the objectives of the 2030 agenda and to help the sectors affected by the pandemic, but the real challenge is to move in the same direction at the same time; In this direction is moving the UE seven-year agenda, making the energy issue the glue between countries of the Mediterranean area, moving this theme from the edge to the centre of the scene.
In conclusion, the interconnection of the objectives to be achieved and the cooperation to achieve them, seem to be the key to facilitate the Mediterranean area in its path towards the energy transition, but to make the dialogue between the Mediterranean countries fruitful and useful, certain measures must be taken: the different projects promoted by industries and institutions must be implemented according to a programmatic approach that also looks at the long term and focuses on innovation; substantial investments must be made; long-term policies from the European Union and the organization of a real green recovery are necessary, such as the exchange of technologies, to bring all the countries of the area closer to the green model.
