A new study is helping five Middle East countries explore the potential of increasing their energy supply through regional energy integration. The report concludes that Iraq, Jordan, Syria, Lebanon are impacted by electricity supply interruptions and can boost their critically needed energy supply through cross boarder development and trade. It asserts that although Egypt currently meets its energy demand with adequate levels of reliability, it needs to expand energy generation to meet future growth in demand. The new study is funded by the Energy Sector Management Assistance Program- ESMAP and the World Bank Arab World Initiative.
Findings of the study were presented to about 45 World Bank Energy staff on April 8, 2010 in Washington DC by Husam Beides, World Bank’s Senior Energy Specialist. The brainstorming session was chaired by Istvan Dobozi, ESMAP’s Lead Energy Economist, and facilitated by Jonathan Coony, Senior Energy Specialist and leader of ESMAP’s Regional Energy Integration Strategies Program (REISP) a component of ESMAP’s Country Energy Sector Vulnerability Assessments Program (CESVAP).
In his opening remarks, Istvan Dobozi said the study looked at the potential for regional energy integration to address the need for additional energy in this region. “ Regional integration of gas and electricity systems will allow countries who are connected to boost their energy supply and enjoy economies of scale,” he said.
The team leader of the study Husam Beides said, “We undertook a country-by-country analysis of the power and gas sectors. Our aim was to assess opportunities for regional energy integration in the Mashreq and neighboring countries.” “The study also identified specific interconnection projects that may require support from the World Bank and other international financiers.”
The study also outlines challenges facing regional projects and barriers such as inadequate generation supply, lack of adequate commercial and pricing incentives, and lack of harmonization of policy and regulations. The study further cautions that in order to attract private investment, significant policy changes are required to improve the financial performance of the power sector. As well as a proper legal and regulatory framework needs to be instituted to facilitate energy trade across the region.
The report addresses the energy supply gap and estimates a total investment of US$40 billion will be needed by 2010, and an additional US$230 billion by 2030 to expand power generation, transmission and distribution in Mashreq countries – Egypt, Iraq, Jordan, Syria and Lebanon. Although demand for energy in Mashreq countries is on the increase due to sustained high economic growth rates, energy supply is lagging. Between 1990 and 2007, the demand for electricity in this region increased by 135 percent, from 17,166 MW to 40,316 MW. Demand is forecast to increase by more than 68,000 MW in 2030.
The study further identifies the following potential projects to help strengthen and expand Mashreq’s regional electricity and gas networks:
• The expansion of the Transmission Corridor from Egypt to Syria
• The completion of the interconnection between Iraq and Syria
• The completion and expansion of the existing Arab Gas Pipeline
• The construction of gas pipelines between Iraq-Syria and/or Iraq-Jordan
• The construction of new regional gas-based power plants in Syria or Jordan
• The establishment of a regional coordination center for all Mashreq countries
The study will soon be available on this Web site.
Jonathan Coony, Senior Energy Specialist, ESMAP
Presentation by Husam Beides: Potential For Energy Integration in the Mashreq