LIBYA Plans to restructure Libya’s electricity sector Oil producing countries such as Libya are increasingly taking the view that these resources are not renewable and represent an asset that can and should be used cautiously and preserved – hence it is looking to move in the direction of renewables. A s Libya makes its transition from decades of dictatorship to a nascent democracy, decision makers within the country have looked at its resources and how these can be used optimally. As Libya’s minister of electricity and renewable energy, Ali Mihirig, puts it, “We have oil and gas, sun, space and a low population count.” Libya’s population comprises some 6.5 million people. The country currently has a generation capacity of about 5,000 MW, made up of heavy fuel oil, light fuel oil and gas fuelled plants. Libya is Africa’s fourth largest oil producer, with production of 1.6 million barrels a day prior to the overthrow of the previous regime, and now producing under a million barrels a day as output has yet to recover due to unrest. The country has proven oil reserves of some 47 billion barrels, the highest of any country in Africa, as well as 52 trillion cubic feet (tcf) of gas reserves. Mihirig takes the view that it does not matter if the country produces its oil now or in ten years, when the prices could well be even higher. “Every barrel sold is one barrel less that we have. We should invest some of the cash from the oil we sell in something that we will have and be able to rely on,” he says. He reminds that prior to the discovery of oil, during the 1940s, Libya was ranked as the second poorest country in the world. “We have water problems and we need to use energy to desalinate.” In Libya, where oil is cheap, water is often seen to be worth more. “We have no choice but to desalinate, but we don’t want to burn our oil to get water or electricity.” At the same time, something Libya does have a lot of, is desert, 1.7 million km 2 of desert, land that is no use for agriculture, or for that matter even tourism. Mihirig says that Libya could interconnect sub-Saharan Africa’s electricity networks with north Africa, and could easily link Africa with Europe. The vision is ultimately of an interlinked Africa, Europe and Middle Eastern region. He has taken cognisance of the European Union’s undertaking to obtain 20% of its energy from renewables by 2020, and very much sees Libya being a key node in the linkages between independent power producer (IPP) suppliers and off-taker markets in these three regions. Libya is thus aggressively looking at renewables, which include photovoltaic (PV), wind and concentrated solar power (CSP) projects. The country has one wind project under construction, a 60 MW facility at Al-Fetaih, near Dernah on the northeast coast, with wind speeds averaging 9.3 m/s. Libya’s total wind potential has been estimated at over 5,000 MW. There are two PV projects currently planned, of 14 MW and 40 MW, and the country is considering a CSP plant. “The 70 Libya’s minister of electricity and renewable energy during its interim government, Ali Mihirig. thinking is that we want to look at blocks of typically 100 MW each for PV,” Mihirig says. The country, where democracy is a new implant after 42 years of autocratic rule by one person, while it deals with numerous issues related to this transition such as finding consensus and disarming various militia groups, is also trying to restructure its electricity sector. State company, the General Electricity Company of Libya (GECOL), owns over 80% of Libya’s generation capacity and is responsible for power distribution down to 220 V. Mihirig sees this as something Libya should restructure and wants to open up this market. It is something he would like to see expedited as soon as possible. GECOL is supported by Libya’s national treasury, and all the projects it undertakes are financed by the government, but Mihirig does not see this as healthy. “It is understood that government should take responsibility for huge projects but the electricity company should be self-sustaining and that is not the case now.” As the country makes its transition, projects that were controlled by GECOL will fall under the control of the electricity and renewable energy minister. “The plan is to split GECOL into generation, transmission and distribution companies. Generation will range from fossil fuel based to renewables based.” Mihirig is trying to put into place the legislative framework that will enable the establishment of IPPs in Libya, as well as an alternative option for investors, which is that of joint ventures with the government owned electricity company. He estimated (in June 2013) that restructuring GECOL would take ESI AFRICA ISSUE 3 2013