Tunisia Tops Arab Energy Efficiency Rankings

Al Monitor -

The 2013 Arab Future Energy Index (AFEX) assesses the progress made by countries in energy efficiency, according to four evaluation axes, namely: energy pricing, policy framework, institutional capacity and electricity utilities. AFEX uses 24 quantitative and qualitative indicators to evaluate the countries in question.

According to AFEX, Tunisia, out of 13 assessed countries, proved to be characterized by a comprehensive policy framework aimed at improving energy efficiency. This framework consists of a wide range of measures that include regulatory, tax and financial instruments. These cover electricity and other forms of energy, and affect all economic sectors: residential, service, industrial, electricity, lighting, buildings and home appliances.

Tunisia has demonstrated a clear commitment to continuous improvement through regular monitoring, reviewing and amending, as well as through laying emphasis on energy efficiency requirements. AFEX stressed that the key to Tunisia’s success is the presence of a body with a strong institutional leadership strategy. It also attributed this success to the allocation of the required resources in conjunction with a competent staff.

Morocco and Jordan ranked second

Morocco and Jordan came in second place, but Morocco’s performance proved to be better due to its market-based electricity prices. These successes enable Morocco to focus on increasingly applying energy efficiency policies. For its part, Jordan has made ​​great progress in the past year due to its improved regulatory framework. In fact, Jordan has adopted renewable energy and energy efficiency laws. Also, it has implemented regulations and has required new buildings to install solar water heaters. Moreover, the first national action plan for energy efficiency has been finalized. Jordan is making efforts to strengthen the operational capacities to properly take advantage of the newly introduced energy efficiency policies.

Palestine ranked third according to AFEX, having the highest electricity prices in the region, as well as the highest amount of solar water heaters. Palestine needs to adopt energy efficiency measures amid a number of challenges plaguing the country, which got off to a good start by adopting its first national plan for energy efficiency and creating a revolving fund to finance energy efficiency projects. Palestine ought to continue developing its regulatory framework and continue exploring options to overcome the challenges of financing energy efficiency projects.

Lebanon ranks in the middle

Algeria, Lebanon, Egypt, Syria and Bahrain ranked in the middle, since these countries have similar frameworks for energy efficiency policies and are characterized by heavily subsidized electricity prices. Also, they face great challenges in enforcement and compliance. Therefore, AFEX recommends focusing on the reform of the smart energy pricing plans and the introduction of further taxes that reveal the true cost.

AFEX points to the existence of an active center, the Lebanese Center for Energy Conservation (LCEC), specialized in energy efficiency for Lebanon. This center has developed financial plans that proved effective, knowing that the Lebanese government has approved the National Action Plan for Energy Efficiency.

Yet, AFEX indicated that there was uncoordinated action between the various stakeholders on the one hand, and the government-backed structure of energy pricing on the other. These factors constitute challenges for further progressive development in energy efficiency, even though pricing and taxes are not among the work axes of LCEC because Lebanon backs the taxes, i.e., adopts a “social tax.” Therefore, any tax increase would directly contribute to urging consumers toward rationalizing consumption and limiting waste.

Sudan was one of the first countries to adopt the National Action Plan for Energy Efficiency, which includes a number of important energy efficiency measures in the electricity sector. AFEX suggests that focus should be on the application of these measures and the establishment of follow-up and appropriate assessment base.

According to AFEX, the three remaining countries, Yemen, Libya and Iraq, have no energy efficiency policy framework. They are proved to be characterized by weak institutional capabilities, and wastage in the electricity production, transmission and distribution systems. These countries need to focus on particular priorities, such as energy planning and mobilization of efforts, since they have begun to adopt energy-efficiency measures.

Energy pricing

Despite the varying roles the obstacles play in this context, decision-makers should give particular attention to energy subsidies, given that the latter represent a major obstacle to energy efficiency. Subsidies undermine and hinder the effective efforts to improve energy efficiency. AFEX recommends that governments deploy resources that promote energy efficiency when they subsidize energy.

Policy framework

AFEX Energy Efficiency consists of countries that have an advanced energy efficiency policy framework and others with an almost absent policy framework. The assessment reveals that there is inconsistency among the different policies. For instance, almost all countries have a policy to distribute energy-saving devices at low prices, while customs taxes on these devices are still high. Based on that, these two policies are not complementary, and in general, these countries need to consider the overall results of their policies.

The industrial sector in the region seems to be the less organized, as only three out of the 13 involved countries have legislation aimed at promoting energy efficiency in the industrial sector. One of these three countries have an effective regulatory framework for energy efficiency. The industrial sector offers abundant opportunities to increase energy efficiency, as the industrial sector relatively consists of a small number of consumers, while it represents a significant part of the economy. It would be wise to bring additional attention to this sector.

Institutional capabilities

Institutional capabilities in the region as a whole are somewhat weak, with the exception of Tunisia, and almost all countries lack the implementation experience, which seriously harms the energy efficiency policies. Tunisia is implementing energy efficiency measures in a relatively successful way, which is attributed to the presence of a specialized agency for the promotion of energy efficiency.

Nearly half of the involved countries have developed a National Action Plan for Energy Efficiency, and Lebanon was the first Arab country to adopt this plan. These countries have set specific objectives within these plans, yet they do not have enough resources to achieve them. They also need to allocate sufficient resources to ensure that the implementation is effective, and to build strong institutional capabilities.

Electric utilities

All of the assessed countries have large scale energy efficiency potentials in the electricity sector, yet they are not being employed. The electricity production, transmission and distribution efficiency remains relatively low compared to the average efficiency in the European Union. Moreover, the countries of the region do not use the available resources for renewable energy, which can result in the improvement of energy security and environmental performance, if optimally exploited. The countries need to follow the example of both Palestine and Sudan by setting clear goals to improve energy efficiency in regards to electric utilities.