Egypt, Pakistan and Morocco: Three Countries and Their Solar Process Heat Potential

LogosSurface treatment, food, chemical, textile and leather are the five industry sectors with the greatest potential for utilising solar thermal systems in Pakistan. Solar heat below 100 °C can contribute 5.6 million MWh per year to these five industries if 7.1 million m2 of collector area is installed in the country, although with long payback periods of between 10 and 20 years. These are some of the results of a market study which looks at Solar Thermal Energy for Industrial / Commercial Use in Pakistan, Egypt and Morocco and was commissioned by the International Finance Cooperation (IFC). Two Austrian companies, CES clean energy solutions (CES) and S.O.L.I.D., won the tender to carry out the study, which was completed in March 2014. A summary of the results can be found in the attached PDF. 
 
“Egypt and Pakistan were chosen for the study because their population sizes and poverty levels made them focus countries for the IFC in the Middle East and North African region. Morocco was included because solar process heat technology could be relevant to a number of IFC investees in this nation,” Alasdair Miller, an IFC Senior Clean Energy Specialist based in Cairo, Egypt, explains.
 
“To identify the top five industries with the greatest potential, the authors used a method developed by CES, which allocates points across six categories relevant to estimating solar process heat potential,” Robert Söll, Project Developer at S.O.L.I.D and one of the authors of the study, adds. The six categories are:
  • Temperature level per industry
  • Daily and seasonal variations 
  • Expected maximum share of solar energy below 100 °C
  • GDP share 
  • Energy consumption per sector 
  • Investment potential 
The potential for solar process heat in the three countries is enormous, adding up to 2.3 million m² of collector area in Morocco, 4.6 million m² in Egypt and 7.1 million m² in Pakistan (see the following table).
 
 

Top five industries with greatest potential

Maximum solar contribution to low-temperature heat generation in the five selected industries [MWh]

Collector area potential to achieve maximum solar yield [m²]

Solar yield per m²,
averaged out across
different applications
and sites in a country

Morocco

Surface treatment, food, chemical, textile and leather

1,714,650

2,300,000

746

Egypt

Tourism, chemical, food, textile and agriculture

4,571,139

4,600,000

994

Pakistan

Textile, surface treatment, food, chemical and leather

5,622,501

7,100,000

792

Solar process heat potential in the three countries under current market conditions resulting in payback periods of up to 20 years
Source: IFC
 
Results, however, differ significantly when looking at the investment potential under current market conditions, divided into payback periods of below and above 10 years. Because of the currently low energy prices in Egypt, the country has no short-term investment potential with payback periods of fewer than 10 years. But in Morocco and Pakistan, payback periods of 10 years or fewer can be achieved in 26 % and 35 % of all cases, respectively.
 
 

Investment potential payback period below 10 years

[million USD]

Investment potential payback period between 10 and 20 years [million USD]

Share of short-term investment potential with payback below 10 years

Egypt

0

  497.2

  0 %

Morocco

570.5

1651.4

26 %

Pakistan

2383.9

4427.1

35 %

Investment potential in the three countries 
Source: IFC
 
“The major limiting factor for the installation of solar thermal applications are the low prices of conventional energy sources, which are still heavily subsidised, a lack of human resources and the lack of strong political will to implement reforms in the energy sector,” the authors emphasised in their summary. Because of the long payback periods of more than 10 years, “the economics seem, in most cases, unlikely to lead to significant private sector interest in the short term,” Miller concluded. Hence, the IFC has decided “not to progress any further” with a market development programme for solar process heat until energy subsidies are removed, for example, as has been announced in Egypt. 
 
Given the removal of subsidies for conventional energy supplies, the authors of the study estimate the investment potential in Egypt with payback periods below 10 years at USD 3.587 million, and the investment potential with payback periods of more than 10 years at an additional USD 827 million. 
 
More information:
ifc_study_executive_summary.pdf 129.4 Kb [352 download(s)]
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