Mediterranean is the melting pot of Europe, Africa and Asia. The three continents meet here. Today, with 24 countries, diverse people, culture, religion and language, the region accounts for seven percent of the global population, consuming about 8 percent of the world’s primary energy demand.

While the population is set to swell by another 90 million by 2030, all in the south, to about 582 million, its energy demands are on increase. And its geographic location also makes it an important transit corridor for global energy markets.

Indeed not much has been said and reported about the region, and specially its energy outlook.

The region boasts of both — energy-rich Libya, Algeria, Egypt — and energy deficient, OECD economies — France, Spain, Greece and Italy. And the overall energy demand in the region is being spurred by economic and population growth.

The Mediterranean energy mosaic is thus interesting as well as complex.

Observatoire Méditerranéen de l’Energie (OME) is striving to secure and build a more energy-friendly region, attempting to divert global attention to the region, highlighting its energy-related issues and means of solving it, promoting better coordination and cooperation within the region, suggesting and formulating policy measures for the regional governments.

It is endeavoring to ensure the region's energy security as a whole.

Pedro Moraleda, the general director of the OME was recently in the Kingdom, presenting the flagship publication of his organization, the Mediterranean Energy Perspectives 2011 (MEP 2011) — providing analysis, detailed data and a view on what that regional energy future might look like in the period to 2030.   

The outlook presents two possible pathways based on varying assumptions.

The ‘conservative scenario’ takes into account past trends, current policies and ongoing projects, but adopts a cautious approach regarding the implementation of new policy measures and planned projects.

It does not assume large-scale efficiency programs or major efforts towards energy conservation — emphasizing; business as usual is hazardous and no more possible and plausible.

On the other hand, the "proactive scenario" is based on the implementation of strong energy efficiency programs and increasing diversification.

This includes more renewable energy sources and the introduction of nuclear power for some South Mediterranean countries, assuming decline in oil and coal input to electricity generation capacity and favoring clean energy fuels and technologies.

During his almost one-hour presentation, Moraleda emphasized that without strong efficiency measures and increased efforts to deploy renewable energy sources (RES), over the next two decades Mediterranean energy demand could increase by 40 percent, by a factor of 3, increasing the regional import dependence, taxing its emerging economy and exacerbating in the process the environmental concerns too.

This remains an unsustainable and costly path, he underlined.

Hence efficiency measures are inevitable, he argued.

While Mediterranean energy demand is, and will remain, heavily dependent on fossil fuels, efficiency measures and further deployment of renewable sources could bring the import dependence of the region down to a quarter of the energy mix from nearly half today and the south could double its export potential, he underlined.

MEP also emphasizes that the Mediterranean is moving to a gas era.

Natural gas will overtake oil as the dominant fuel in the energy mix by 2020 though oil will remain largely unchallenged in the transport sector.

Coal demand is also set to decline but could gain momentum in the South — especially if renewable energy sources were not sufficiently deployed. Nuclear is also under the hammer — for now.

Renewables are to be the fastest growing, accounting for 11to16 percent of the total primary energy supply by 2030.

Like other parts of the globe, electricity demand in the region is projected to grow rapidly, by almost 5 percent per annum in the energy-deprived south.

The overall average consumption growth however, is to be around 2.8 percent per year.

To sustain the projected demand, the region as a whole would need to add around 380 GW of power generation capacity by 2030 — a herculean task indeed. 

If no remedial steps are taken, and it remains business as usual, over the next twenty years, the region will need around 715 billion euros — more than 35 billion per year — to build this capacity.

Consequent to this consumption growth, energy-related carbon dioxide emissions are also projected to increase across the region.

Yet, interestingly, carbon intensity is projected to decrease in all of the sub-regions over the outlook period to 2030.

While European nations are developing energy resources within their own borders, there is also an increasing interest to import natural gas and oil from Mediterranean producers and to tap into the south’s vast undeveloped solar and wind resource potential.

Today the direct energy links between the South and North shores are for hydrocarbons yet major schemes are under consideration to develop large-scale electricity inter-connections that could lead to a Mediterranean Ring power pool.

There are a number of reasons for this demand growth.

Economy in the Mediterranean is expected to grow by at an average rate of 2.5 percent to 2030.

The per-capita income is also expected to go up by 41percent from current levels. In South, the gross domestic product per capita is forecasted to increase by 75 percent.

The income gap between the north and the south is thus expected to narrow, with income per capita in the south three times less than that of the north by 2030, down from factor of four.

Population is another key determinant of energy demand. Population has been growing at 1.1 percent per annum. The current outlook projects it at 0.8 percent per year, with most of the growth in south. Energy consumption is thus bound to grow — rather rapidly — in the region.

In the meantime, while European nations are developing energy resources within their own borders, an increasing interest to expand the import of natural gas and oil from the Mediterranean producers and to tap into the South’s vast undeveloped solar and wind resource potential seems evident.

Despite the growth in renewable and nuclear sectors, fossil fuel is to remain the cornerstone of energy demand in the region, accounting for 79 percent of Mediterranean primary energy supply in 2030.

In 2030, in the conservative scenario, oil accounts for 34 percent of the region’s primary energy demand, natural gas increases to 36 percent and renewable provide 11 percent.

The share of fossil fuels falls to 73 percent in the proactive scenario as hydropower and other renewables accounting for 16 percent and nuclear for 12 percent of the energy mix.

Encouraged by incentives, policies and technological advances, non-hydro renewables are expected to continue robust annual growth rates of 3.8 percent to 2030.

However, despite the focus on developing alternatives and increasing regional integration, MEP-2011 is not taking into account the solar prospects of the region — especially in the backdrop of Desertec project, conceded Moraleda in response to a question from this correspondent.

Desertec is definitely gaining attention Moraleda. You should be a happy man now!