Yemen (2012)

Degree of reliance on imported energy: 

<p>
Net Exports (2007): 8789 ktoe</p>
<p>
Yemen&#39;s primary energy source for electricity generation is petroleum products such as diesel, which are entirely imported. Domestic crude oil production is mostly refined and exported.</p>

Main sources of Energy: 

<p>
Total Installed Electricity Capacity (2009): 1,551 MW</p>
<p>
Total Primary Energy Supply (2009): 7,560 ktoe<br />
Crude Oil and Petroleum Products: 97.5%<br />
Biofuels and waste:1.3%<br />
Natural gas: 1.2%</p>
<p>
In 2009, Yemen generated 6,744 GWh of electricity solely from oil and consumed 4,644 GWh.</p>

Country: 

Yemen

Extent of the network: 

<p>
The Yemeni population has the lowest access to electricity in the region, with only 54% having access. Of the 72% of the Yemeni population living in rural areas, only 42% have any access to electricity, compared to 92% of the urban population. The country&rsquo;s main Public Electricity Company (PEC) grid connects mainly urban areas and the cities and until now has entirely excluded the former South Yemen. The remainder is estimated to have some access from other sources, typically a diesel generator, or the use of PEC-managed local mini-grids and of independent neighbourhood mini-grids that supply electricity for a few hours per day.</p>
<p>
The PEC distributes electricity in the national grid through two 132 kV transmission systems, one serving the northern region of Sanaa-Hodeidah-Aden, the other serving Mukalla and Hadramout.</p>

Capacity concerns: 

<p>
Even for those connected to the grid, electricity supply is intermittent, with regular rolling blackouts in most cities. In 2009, power shortages in the country reached 250 MW. Supply disruptions occur many times during the year as a result of old, inefficient generation, and transmission and distribution (T&amp;D) infrastructure, technical failures, and the recurring shortage of fuel, particularly diesel, in power generation plants.</p>
<p>
The main reason for this situation is long term lack of investment in Yemen&rsquo;s utility sector, including in new capacity, the maintenance and repair of old T&amp;D infrastructure, and the expansion of Yemen&rsquo;s electricity grid towards southern and particularly rural communities. Yemen&rsquo;s public utility PEC is severely underfunded, not least due to Yemen&rsquo;s government-regulated pricing system. With electricity prices having been held down artificially for years under an extensive electricity subsidy system, PEC has for many years been unable to recover its costs and has neither the financial nor the physical capacity to make expensive large-scale investments in the extension of its main grid to remote provinces. Furthermore, an estimated one-third of PEC&rsquo;s electricity is thought to be wasted or stolen; and electricity theft and the additional problem of non-payment result in large financial losses to the PEC.</p>
<p>
Yemen&rsquo;s natural energy reserves of oil and gas are expected to run out in 2040. Oil production has been declining steadily since reaching a peak of 440,000 bbl/d in 2001 due to a lack of sufficient new investment in exploration and inadequate maintenance of facilities.</p>
<p>
In 2011, anti-government strikes, attacks on pipelines, and the evacuation of foreign staff combined to reduce annual production to below 200,000 bbl/d. In March, the main crude oil export pipeline from the Marib and Shabwa fields to the Ras Isa terminal was blown up and remained offline until mid-July. In May, oil exports were reported by the Centre for Global Energy Studies as being less than 70% of their normal level. Further attacks on the pipeline occurred and by January 2012, Yemen was reliant on crude and product imports as its main refinery was shut in November.</p>

Potential for Renewable Energy: 

<p>
<b>Solar energy</b><br />
Yemen is one of the regions in the world that has high levels of solar radiation, with an average of 6.8-5.2 kW/m2 per day. In his article, &ldquo;Clearing the Hurdles: Renewable Energy in Yemen,&rdquo; General Electricity Director Abdulmati Al-Junaid confirmed that Yemen has one of the world&rsquo;s highest levels of solar radiation. &ldquo;It is both technically and economically feasible for Yemen to produce 34 gigawatts of electricity&rdquo;.</p>
<p>
<b>Wind energy</b><br />
Yemen has&nbsp; a long coastline and high altitudes&nbsp; with an estimated 4.1 hours of full-load wind per day. According to an assessment of wind potential in Almkhai by Egyptian experts, from this regional alone could produce 1.8 GW of power and the average annual wind speed is 7.4 m/s. In Al-Mokha a wind farm of 60 MW capacity is planned. Total wind power potential is estimated to be 34 GW. The technical potential was estimated at 14,200 MW providing about 42,300 GWh of electricity per year.</p>
<p>
<b>Geothermal energy</b><br />
A study estimated that 2,900 MW of power might be available from geothermal sources. A preliminary survey in the 1980s identified that there is some geothermal potential to the south of Sanaa; the most promising of which is located at Dhamar. This resource is thought be sufficient to support a 50 MW plant and the ultimate resource could be between 250-500 MW.&nbsp; A MoU was signed with an Icelandic company to develop a 10 MW plant on the site, but the company went bankrupt during the financial crisis. Exploratory drilling is now being financed by UNEP.</p>
<p>
<b>Biomass/Biofuels/Hydropwer</b><br />
Yemeni potential for these technologies has not been examined. The fragmentation of land ownership in the country would prove a barrier to biofuel/biomass power generation uptake.</p>
<p>
Around 10 MW of electric power could theoretically be produced from the current rate of municipal solid waste MSW production in the main cities of Yemen. If the restriction is imposed to consider only cities that generate more than 100 thousand tons of solid waste per year the figure falls to around 8 MW. Of this 6 MW could be obtained from landfill sites in the four largest cities of Sana&rsquo;a, Aden, Hodeidah and Taiz and is most likely to be cost-effective.</p>

Potential for Energy Efficiency: 

<p>
With the current state of the electricity network in the country, many have resorted to diesel generators as back-up for when grid power fails. These generators could be made more efficient, by up to 40%.</p>
<p>
In 2009, Yemen consumed 5,338 ktoe. By sector, the transport sector consumed the most at 1,795 ktoe, followed by the residential sector at 1,076 ktoe, industry at 829 ktoe, agriculture and forestry at 996 ktoe, commercial and public services at 82 ktoe. By source, oil products contributed the most at 4,901 ktoe, followed by electricity at 399 ktoe and biofuels and waste at 38 ktoe.</p>

Ownership: 

<p>
<b>Electricity market </b><br />
The electricity sector in Yemen is under the overall control of the <i><b>Ministry of Electricity and Energy</b></i> (<b><i>MEE</i></b>). The territorial rights of tribal sheikhs are recognised, however, in grid extensions.</p>
<p>
The <i><b>Public Electricity Company</b></i> (<b><i>PEC</i></b>, <a href="http://www.pec.com.ye/">www.pec.com.ye/</a>) is the state-owned company responsible for bulk power supplies and urban retail sales. The PEC is 100% owned and funded by the state, and accounts for 80% of Yemen&#39;s generating capacity, the rest being made up of small off-grid suppliers.</p>
<p>
The General Authority for Rural Electrification (GARE) is responsible for rural supplies.</p>
<p>
<b>Oil and gas market</b><br />
The <i><b>General Corporation for Oil, Gas and Mineral Resources</b></i> is a loose affiliation of several state-owned subsidiaries including: Yemen Oil Company (YOC), Yemen Refining Company (YRC), Petroleum Exploration and Production Authority (PEPA), Yemen Gas Company (YGC), Oil Products Distribution Company, General Department of Crude Oil Marketing, and Safer E&amp;P Operations Company (Safer). General Corporation for Oil, Gas and Mineral Resources is responsible for managing industry contracts and relations with operators and partners, as well as the government&#39;s share of crude exports.</p>
<p>
The <i><b>Petroleum Exploration and Production Authority</b></i> (<i><b>PEPA</b></i>) is to manage, construct and develop all oil concession areas under the direct supervision of the Minister.</p>
<p>
<i><b>Yemen LNG Company</b></i> (<a href="http://www.yemenlng.com/">www.yemenlng.com/</a>).</p>

Structure / extent of competition: 

<p>
To date, much of Yemen&#39;s electricity infrastructure improvements have been funded by multilateral development organizations. In 2006, the World Bank approved a $50 million loan to help finance the &ldquo;Power Sector Project&rdquo;. The project&rsquo;s objectives include relieving power constraints, enhancing electricity supply efficiency and strengthening corporate governance in the electricity sector.</p>
<p>
Yemen&#39;s oil, gas and electricity markets are all owned in majority by the state. The PEC is a vertically-integrated company, whereas the General Corporation is unbundled, but still a state-owned entity.</p>
<p>
An IPP project does exist in Yemen, but interest is still being gathered before projects commence.</p>
<p>
The oil sector is open to private company investment on a production-sharing basis with YOC. Contracts with foreign oil companies, however, require parliamentary approval.</p>

Existence of an energy framework and programmes to promote sustainable energy: 

<p>
The aim of government policy on renewable energy is to optimize the use of energy from domestic sources; increase the share of renewable energy in electricity generation to 15&ndash;20 per cent by 2025; and promote sustainable development of the electricity sector.</p>
<p>
To this end, the Yemeni government and private sector investors plan to set up a wind power plant in Yemen at a total cost of $320 million to generate 182 megawatts of electricity. Work on the project is expected to start in 2011, and will take five years to be completed.</p>
<p>
A nationwide rural electrification programme has been committed through the Power Sector Development Strategy Note of 1997, updated in 2006. Based on preparatory market assessment studies conducted through a GEF-funded <i><b>Rural Electrification and Renewable Energy Development Project</b></i> (<i><b>REREDP</b></i>), the Cabinet approved a <i><b>Rural Electrification Policy Statement </b></i>(<i><b>REPS</b></i>) in July 2008. The <i><b>National Rural Electrification Strategy</b></i> will result in increased access for over 520,000 new rural households that will increase access from the current level of about 20% to about 46% of rural households and benefit more than 3.5 million people.</p>
<p>
The <i><b>Rural Energy Access Project</b></i> is funded by the World Bank from 2006 to 2015 in order to improve electricity access of rural populations in the selected project areas and to demonstrate the feasibility of increasing the access to electricity of Rural Households (RHH) in off-grid areas through implementation of Solar Home Systems (SHS).</p>
<p>
In June 2009, the government approved the National Strategy for Renewable Energy and Energy Efficiency which targets a 15% increase of energy efficiency in the power sector by 2025. However, the target is yet to be framed with policy measures for efficiency improvements.</p>
<p>
In March 2009, a new <i><b>Electricity Law</b></i>, which sets out to improve the management of the power sector and to facilitate investment by private capital, was issued. One of the stated objectives of the law is to encourage environmentally friendly power production including renewable energy and relying on it as a sustainable source of energy. It tasks the Ministry of Electricity and Energy to encourage and develop the use of renewable energy resources in the generation of electrical power. In addition, the law creates a regulatory office to be known as the electricity Sector Regulatory Board as well as a new authority called the Rural Electrification Authority.</p>
<p>
ESMAP (Energy Sector Management Assistance Program by the UNDP and the World Bank) conducted a <i><b>Yemen Renewable Energy Framework </b></i>in 2011 to assist the government to develop and implement a policy and contractual framework to support the large scale, commercial wind development by both the public and private sectors.</p>
<p>
Yemen is a founding member of the <i><b>Regional Center for Renewable Energy and Energy Efficiency</b></i> (<i><b>RECREEE</b></i>, <a href="http://www.recreee.org/">www.recreee.org/</a>), a Cairo-based think tank to promote renewable energies and energy efficiency, established in 2008.&nbsp;</p>

Current energy debates or legislation: 

<p>
US authorities have stressed the need for development in conjunction with security in Yemen. The hope is that a vigorous and sustainable plan of development aid to Yemen will in the long term lay the foundation for stability in a country so close to world energy sources.</p>

Major energy studies: 

<p>
<i>Experimental Study of Using Renewable Energy in Yemen</i><br />
National University of Malaysia (UKM)-Selangor, Malaysia<br />
University Malaysia Pahang (UMP)-Pahang, Malaysia<br />
<a href="http://www.insipub.com/ajbas/2009/4170-4174.pdf">http://www.insipub.com/...
<p>
<i>The Energy Research &amp; Development Program (SERD)</i><br />
<a href="http://shebacss.com/docs/other/rnd-26-6-2010.pdf">http://shebacss.com/do...

Role of government: 

<p>
The <i><b>Ministry of Electricity and Energy</b></i> is responsible for the electricity sector, as well as electricity policy, the issue and licences and almost all decisions of consequence except tariffs. The main institution involved in the development of renewable energy policy in Yemen at present is the <b><i>General Department for Renewable Energy</i></b> of the Ministry of Electricity and Energy. The main responsibility for implementation comes under the Public Electricity Corporation (PEC) and is discharged through the <i><b>Public Authority of Rural Electrification</b></i> (<i><b>PARE</b></i>) and the Renewable Energy Department that comes under it. The PARE is responsible for rural electrification in general (mainly grid extension) and its agency, the Renewable Energy Department covers off-grid renewable rural electrification.</p>
<p>
The <i><b>Rural Electrification Authority</b></i>, established under the supervision of Minister, is to implement the national plan for rural electrification. It enjoys financial and administrative independence and be legally competent to make agreements and enter into loans.</p>
<p>
The <i><b>Ministry of Oil and Mineral Resources</b></i> (<i><b>MOM</b></i>, <a href="http://www.mom.gov.ye/">www.mom.gov.ye/</a>) is responsible for oil policy.</p>

Government agencies in sustainable energy: 

<p>
No dedicated government agencies currently exist to promote sustainable energy in the country.</p>

Energy planning procedures: 

<p>
The Ministry of Electricity and Energy are currently reviewing plans to distribute nearly 1,000 photovoltaic panels to distributed communities in the country as a step to rural electrification. The project is to be financed by the government, the World Bank and the Islamic Bank for Development. The Ministry has also prepared a study over constructing a wind electric station with output of 60 megawatt in Bab al-Mandab and Mocha area.</p>

Energy regulator Date of creation: 

<p>
Through the 2009 Electricity Law, the <i><b>Electricity Sector Regulatory Board </b></i>was created.</p>
<p>
&nbsp;</p>

Degree of independence: 

<p>
The <b><i>Electricity Sector Regulatory Board</i></b> is chaired by the Minister and has four full-time members.</p>

Regulatory framework for sustainable energy: 

<p>
Yemeni government policy on renewable energy is to optimize the use of energy from domestic sources, increase renewable energy in electricity generation to 15 to 20 percent by 2025, and promote sustainable development within the electricity sector.</p>
<p>
The 2009 Electricity Law encourages environmentally friendly power production including renewable energy and relying on it as a sustainable source of energy.</p>

Regulatory roles: 

<p>
The <i><b>Electricity Sector Regulatory Board</b></i> sets the tariffs for businesses across the electric system and monitors the compliance of the industry with regulations.</p>

Role of government department in energy regulation: 

<p>
The <i><b>Ministry of Electricity and Energy </b></i>is responsible for the electricity sector, as well as electricity policy, the issue and licences and almost all decisions of consequence except tariffs.</p>
<p>
The <i><b>Ministry of Oil and Mineral Resources </b></i>(<i><b>MOM</b></i>) is the over-arching governmental body in the oil and natural gas sector. The MOM is responsible for directing all investment in the sector, as well as regulation for the sector.</p>

Regulatory barriers: 

<p>
Yemen is actively seeking to increase foreign investment in its energy sector, but concerns about piracy in the Gulf of Aden, which it shares with Somalia, may be limiting prospects. Declining oil revenues are weakening the government&#39;s ability to provide basic services.</p>
<p>
The obstacles that impede the spread of RE projects in Yemen in a nutshell are financial constraints, a legislative and institutional lack of information or data, a lack of qualified personnel, and a lack of awareness about RE.</p>
<p>
According to the UNDP, because Yemen is considered one of the poorest countries in the Middle East region, with approximately 45 percent of its population living on less than $2 per day, the high up-front costs of renewable energy technologies may prevent the nation&rsquo;s poor from receiving electrical services.</p>
<p>
The study also revealed that there is lack of coordination among concerned stakeholders, such as government agencies, donors, NGOs, the private sector and the financial sector. The Energy Ministry also lacks staff to implement suggested strategies.</p>

References: 

El-Katiri, L. and Fattouh, B. (2011) &lsquo;Energy Poverty in the Arab World: The Case of Yemen&rsquo;, August 2011, Oxford Institute for Energy Studies, available from: <a href="http://www.oxfordenergy.org/wpcms/wp-content/uploads/2011/08/MEP_1.pdf">... [Accessed 28 July 2013].<br />
<br />
EIA (2012) &lsquo;Country Analysis Briefs: Yemen&rsquo; Last updated February 2012, available from: <a href="http://www.eia.gov/countries/country-data.cfm?fips=YM">http://www.eia.go... [Accessed 28 July 2013].<br />
<br />
ESMAP (2010) &lsquo;ESMAP Renewable Energy Activities (FY2006 through FY2011)&rsquo;, UNDP Program Energy Sector Management Assistance Program, available from: <a href="http://www.esmap.org/esmap/sites/esmap.org/files/ESMAP%20RE%20Activities... [Accessed 28 July 2013].<br />
<br />
IEA (2012) Country Information. Available at:&nbsp;<a href="http://www.iea.org/stats/countryresults.asp?COUNTRY_CODE=YE&amp;Submit=S... 28 July 2013].<br />
<br />
PEi Power Engineering International (2007) &lsquo;Renewables - Clearing the hurdles: renewable energy in Yemen&rsquo; 01/12/2007, available from: <a href="http://www.powerengineeringint.com/articles/mee/print/volume-4/issue-3/f... [Accessed 28 July 2013].<br />
<br />
RECREEE (2010) &lsquo;Provision of Technical Support/Services for an Economical, Technical and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency: Country Report Yemen&rsquo; January 2010, revised April 2010<br />
<br />
World Bank (2009) &lsquo;RY-Rural Energy Access: Republic of Yemen&rsquo;, available from: <a href="http://web.worldbank.org/external/projects/main?pagePK=64283627&amp;piPK... [Accessed 30 July 2013].<br />
<br />
Wind Energy and Electric Vehicle Review: &quot;Yemen to build first wind power&quot;, 15th March 2010.&nbsp;<a href="http://www.evwind.es/2010/06/15/yemen-to-build-first-wind-power/6055">ht... 30 July 2013].<br />
<br />
Inter Press Service North America: &quot;Yemen: development recognized as crucial for sustainability&quot;, 6th February 2010.&nbsp;<a href="http://ipsnorthamerica.net/news.php?idnews=2837">http://ipsnorthamerica.... 30 July 2013].