Electricity Markets in the Resource-Rich Countries of the MENA: Adapting for the Transition Era

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Main author: Fattouh, Bassam
Other authors: Sen, Anupama
Poudineh, Rahmatallah
Format: Journal Article           
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id eprints-32789
recordtype eprints
institution SOAS, University of London
collection SOAS Research Online
language English
language_search English
description The Middle East and North Africa’s (MENA) resource-rich economies are pursuing two parallel strategies in their electricity sectors: (i) increasing and integrating renewables into their power generation mix to mitigate the impact of rising domestic oil and gas demand on their economies and boost hydrocarbon export capacities; and (ii) undertaking power sector reforms to attract investment in generation capacity and networks, remove subsidies, and improve operational efficiency. These goals imply that the design of reforms (including regulations governing wholesale and retail markets and networks) needs to be carried out with a view to a rising share of non-dispatchable resources. The lack of an integrated approach to simultaneously address these two strategies is likely to lead to several misalignments between renewables and various components of future electricity markets, as the share of intermittent resources increases in the generation mix. The key challenge is that the ‘ultimate model’ capable of reconciling these two goals is as yet unknown, and is still evolving, due to uncertainties around the development of technologies, institutions, and consumer preferences. We argue that resource-rich MENA countries can, however, move towards adopting a transition model of electricity markets, the individual elements of which can be adapted to suit either centralized or decentralized future electricity sector outcomes. We outline the key components of this model for the wholesale market, retail market, and network regulation, considering governments’ objectives and the specific contexts of the countries in the region.
format Journal Article
author Fattouh, Bassam
author_facet Fattouh, Bassam
Sen, Anupama
Poudineh, Rahmatallah
authorStr Fattouh, Bassam
author_letter Fattouh, Bassam
author2 Sen, Anupama
Poudineh, Rahmatallah
author2Str Sen, Anupama
Poudineh, Rahmatallah
title Electricity Markets in the Resource-Rich Countries of the MENA: Adapting for the Transition Era
publisher IAEE
publishDate 2021
url https://eprints.soas.ac.uk/32789/

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