Support mechanisms for the renewable energy sector in the Middle East and North Africa

Support for renewable energy development in OECD countries most often takes the form of feed-in tariffs and net metering as these are measures which address the issue of cash flow during a project’s life cycle. To help decision makers attract private investment and limit public expenses, an optimal mix of support mechanisms must be selected to guide private investment to the renewable energy sector, ensuring profitability for the investor and minimum cost for the government. These measures are specific to renewable energy projects and have been developed specifically to attract investors to renewable energy power generation. In the MENA region, a number of countries are implementing some support measures, but they vary in consistency across the region. A perfect incentives scheme as such does not exist. The optimal incentives scheme for a country needs to take into account national circumstances such as a country’s renewable energy potential, its energy policy framework, the existence of non-economic barriers, the degree of market liberalisation and its energy system infrastructure. These exogenous features are all likely to influence the effectiveness of any national incentive scheme.