Power Networking

Tunisia focuses on grid expansion for integrating renewables

Tunisia, a north African country, is a lower-middle-income economy that was once a net exporter of oil and gas. Currently, 95 per cent of the country’s generated electricity is from oil- and gas-based resources, with a significant share of the gas needed for power generation being imported from Algeria. In recent years, the exploration of oil- and gas-based resources has declined, mainly due to the natural drying up of some oil and gas fields in the country. The unstable political scenario and protests have also disrupted the production and transportation of fuels. To reduce this dependence on fossil fuels and to promote the use of cleaner energy resources to meet its target of reducing carbon emissions over the next decade, the Government of Tunisia, in 2015, implemented the Renewable Energy Law, which encourages electricity production from renewable sources and promotes private sector involvement in the segment. However, since 2015, only 10 MW of solar capacity has been added to the existing capacity. The country also plans to decommission 1,807 MW of its thermal capacity by 2030.

Electricity demand in Tunisia is estimated to increase at a compound annual growth rate of 3 per cent between 2020 and 2030. To meet the increasing power demand and reduce reliance on gas imports, it aims to almost double its existing capacity by adding around 5.1 GW of new generation capacity by 2030, with the private sector contributing a significant share. Of the total target, 3.7 GW-3.8 GW will be based on renewables (mainly wind and solar). In line with these targets, Tunisia’s vertically integrated utility Société Tunisienne de l’Electricite et du Gaz (STEG) has planned two national-level power transmission projects – the Energy Sector Improvement Project (ESIP) and Projet d’Aménagement et d’Équipement du Réseau de Transport d’Électricité (PAERTE), – entailing a combined investment of $435 million. Both projects share the common goal of strengthening and reinforcing the Tunisian transmission network to integrate the upcoming renewable energy capacity and will cumulatively add around 630 km of transmission lines and around 17 new substations. The projects will also involve the expansion of various existing substations between 90 kV and 400 kV over the next three to four years.

Tunisia is planning to execute cross-border interconnection projects with several African and European countries to undertake regional power exchange for boosting industrial growth and improving energy security without overloading the existing transmission network. One such project is the Elmed Project, which will connect Tunisia’s grid network with that of Italy. The project is supported by both the governments due to its potential to increase the interconnection capacity of the Euro-Mediterranean system. In addition, it is undertaking initiatives to establish a countrywide smart grid network. To execute all its power sector-related projects, the country  has received financial backing from multilateral donor agencies from across the world.

Industry structure and existing power capacity

Formed in 1962, STEG is the state-owned electricity and gas company of Tunisia and holds a near monopoly in the electricity sector. It has the sole responsibility for transmission, distribution and sale of electricity (wholesale and retail) and owns over 88 per cent of generation capacity in the country. The Ministry of Industry is responsible for developing policies related to the energy sector. The Directorate of Electricity, Gas and Energy Efficiency under the ministry is responsible for the coordination and implementation of energy policies. It shares this role with Agence Nationale pour la Maîtrise de l’Energie (ANME),  which was set up in 2004 to implement energy-related policies, particularly in the field of energy efficiency and renewables.

At the end of 2019, Tunisia had an installed power generation capacity of 5.6 GW, of which 5.2 GW was owned by STEG and the remaining 471 MW was owned by independent power producers (IPPs). Of the total installed capacity, 5.3 GW or 95 per cent is thermal, 250 MW or 4 per cent is renewable energy based (only wind and solar) and just 1 per cent (62 MW) is hydropower based. During 2019, the 312 MW Borj El Amri/Mornaguia gas, 282 MW Radès C combined cycle, and 10 MW Tozeur 1 solar photovoltaic (PV) plants were commissioned. Between 2015 and 2019, no new hydropower-based plants were commissioned. Although the majority of the existing generation capacity is thermal power based, renewable energy capacity is gradually being added.

Future plans and investment


As electricity demand and reliance on imported hydrocarbons increases, the power sector of a country tends to weaken. Tunisia was once a net exporter of oil and gas and is now heavily dependent on imports to meet its energy needs, especially for electricity generation. Hence, to reduce both its carbon footprint and its reliance on imports, Tunisia is focusing on diversifying its generation mix by adding cleaner energy resources. The country has significant potential for growth in wind and solar power generation, which will help meet the growing domestic electricity demand.

In 2016, the government launched the Tunisian Renewable Programme (TRP), under which the country aims to produce 30 per cent of its electricity from renewable resources (mainly wind and solar) by 2030. Targets under the TRP are planned to be achieved in three phases. Under Phase I, 1.28 GW of wind and solar capacity was originally expected to be commissioned by 2020, following which an additional 1.25 GW would be added between 2021 and 2025, under Phase II, and 1.25 GW between 2026 and 2030, under Phase III. Since the targets under Phase I have not been met, the government has decided to update these targets. As per the revised targets, over the next decade, around 3.7 GW to 3.8 GW of renewable capacity will be added, of which 1,860 MW will be added by 2022. There are also plans to set up the 400 MW Melah Amont pumped storage hydropower plant by 2026. To promote collaboration with the private sector in the generation segment, the majority of the upcoming capacity will be through IPPs.


To integrate the planned renewable energy capacity, the Tunisian government, in collaboration with STEG, formulated the ESIP. The $151 million project, which is being financially supported by the World Bank, aims to support two key parameters for energy sector transformation in Tunisia. The first is diversifying sources of electricity and further integrating them into the grid, while the second is improving STEG’s financial health by strengthening its commercial performance.

The first component of the project focuses on enhancing the electricity transmission network. Valued at $131 million, it entails the construction of approximately 384 km of transmission lines to evacuate power from the proposed renewable energy plants, and the construction and extension of 400/225 kV and 225 kV substations by 2024. The second component will focus on improving the power utility’s commercial performance and involves an investment of around $20 million. Another key ongoing project is the PAERTE, or the Transmission Network Development and Equipment Project, which aims to strengthen the transmission network and improve electricity supply, particularly in the Bizerte, Ben Arous, Sousse, Sfax and Gabes governorates. The project shares with ESIP the common goal of expanding and reinforcing the national gird for integration of the upcoming renewable energy capacity. The multi-donor-funded project will cost EUR 290 million, of which EUR 108 million will be loaned by the African Development Bank (AfDB), EUR 30 million will be sourced from AfDB’s Africa Growing Together Fund (AGTF) in the form of a loan, EUR 121 million will be provided by the Islamic Development Bank (IsDB) and the remaining EUR 31 million will provided by the implementing agency, STEG. The project will be implemented during 2020-23.


With the addition of the planned renewable energy capacity, the country will have surplus power for export. Hence, STEG plans to develop new interconnections with Italy, Algeria, Libya and Egypt for creating power corridors to support industrial development and improve energy security. The Tunisia– Italy interconnection or the Elmed Project involves the construction of a merchant transmission line between the two countries with a capacity 600 MW. The project entails the construction of a 192 km long subsea cable connecting Partanna in Sicily (Italy) and El Haouaria in Tunisia. As per the latest information, both governments have given the green signal  for the interconnector. The project is part of the European Commission’s (EC) Projects of Common Interest list 2017, which means that it is eligible for funding from the European Union. It is expected to be fully operational by 2025.

STEG is planning another interconnection with Algeria. The Algeria-Tunisia project will entail the construction of a second 400 kV overhead line from the Jendouba substation in Tunisia to the Chefia substation in Algeria. Yet another proposed interconnection is the Tunisia-Libya-Egypt project. Both projects have been included in the Mediterranean Transmission System Operators report issued in 2018, which lists power interconnections in the Mediterranean region. Since then, no major developments have taken place. STEG also plans to develop a smart grid network to provide reliable electricity supply across the country. In line, Agence Française de Développement loaned STEG $132 million for the implementation of the first phase of the smart grid project.

Going forward

To meet the country’s increasing power demand and reduce gas imports, the Tunisian government has set ambitious renewable energy targets. In line with this, STEG is focusing on establishing a robust grid network in order to evacuate power from the planned generation capacity. Tunisia is also planning to develop grid interconnections with Mediterranean and European countries to facilitate power trade with the aim of boosting economic growth and development in the country. In order to develop a robust power sector in the country, STEG must achieve all its planned targets in a timely manner.


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