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ASTON UNIVERSITY
BUSINESS PLAN FOR GECOL
BY: AUSAMA MAKHYOUN

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1. Introduction
 The electricity is a source of energy which is important for mankind, and it is provide us
with light and heat and cold and motion ... etc. and this product cannot be stored, and the
demand for it is extremely changing with time.
 Producing electricity using renewable energy sources has recently become familiar, and
there are many countries have developed plans to increase its production of renewable
energy to cover 20% of their consumption by 2020.
Renewable energy is the energy derived from the natural resources wind, water and sun
which called (sustainable energy). The renewable energy sources are significantly different
from fossil fuels because there are no any emissions such as carbon dioxide or harmful gases
arise from renewable energy like what occurs when burning fossil fuels.
At the Kyoto, Japan, most of the country leaders are agreed to reduce the production of
carbon dioxide in the coming years in order to avoid some threats like climate change and
depletion of fossil fuels.
 Although there are many obstacles that prevent the spread of renewable energies broadly
such as high capital costs, in more and more countries, renewable energy has outgrown its
“niche player” status and there are nearly 65 countries are planning to invest in renewable
energies and they developed the necessary policies for that.

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2. Idea basis
 Libya’s electricity market now is a complete monopoly. GECOL (General Electricity
Company of Libya) is the only electricity generation
company in Libya and it is heavily subsidized by the
government. GECOL now produces electricity only by
using fusil fuel (oil and natural gas). Figure No. 1 shows
the percentage of fuel type usage to produce electricity
in Libya.
I work in Power generation department at GECOL which is responsible for managing all
Power generation substations across Libya and this department faces a lot of challenges
which can be stated as following:
1 - Technical challenges:
• The great disparity in loads during the same day.
• The great disparity in power consumption during the year.
• Large financial investment to meet the demand, especially peak loads.
• Loads are spacing from each other because of the large area of Libya.
• The absence of a national plan to rationalize the consumption of electrical
power.
• Extremely increase in demand for electricity in last two years.

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 Libya is an important country in the Mediterranean basin with a coast of around 2000 Km
length. The country area is about 1.76 million square kilometers with about 6 million
inhabitants. Libya is one of the oil & gas producer and exporters and 80% of Libya GDP is
crude oil & gas export.
 In Libya there are mainly available two types of renewable energy which are solar and wind
energy. For solar energy, Libya has the Second-highest solar radiation in the world
reaching the level of the 2,500 kilowatt-hours per square meter annually and for wind
energy, wind speed is available at suitable rates up to 6 meters per second.
 In this respect recent research published by Clean Technica journal showed that Libya could
produce five times as much of the energy produced by oil by using only 0.1% of the
country area. The research pointed out that some specialists have confirmed that, this energy
will be plenty enough for export to Europe and Africa, because Libya possesses large tracts
of open land, and its population density does not exceed six million.
 Although, Libya enjoys important potential of renewable energy especially solar and wind
but the role of these sources in the energy mix is negligible.

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3. Vision
GECOL become a leading company with its achievements and success by having positive
impact on the social and economic development programs of Libya through the optimal use
of renewable energies.
4. Mission
• Establish Renewable Energy Department (RED) at GECOL.
• Work toward integrating the locally available renewable energy resources (Solar &
Wind) in Libya with GECOL power generation System.
• Increase the share of renewable energy in the Libyan energy Mix.
5. Business Objectives
The main objectives of Renewable Energy Department (RED) which will be established are:
 A comprehensive mapping of renewable energy sources in Libya.
 Implement the studies to determine the current and future plan (short, medium and long
term).
 Implement of renewable energy projects in various forms (solar and wind).
 To promote deployment of renewable power generation projects to augment contribution
in total electricity mix.
 Make the contribution of Renewable Energy is 10% in total energy mix for Libya by
2025.
 Encourage and support the industries related to renewable energy.
 Propose the legislation needed to support renewable energy.
Organizational Structure of Renewable Energy Department (RED) as shown in figure No.2

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6. Business plan analysis
It is essential to analysing the macro, meso and micro business environment of GECOL with
renewable energy investment. Strategic evaluation tools such as PESTEL, Porter’s Five Forces
and SWOT will be used in order to achieve this aim.
Strategic Analysis will include PESTEL, which is used for the analysis of the macro and the
environment. This tool spots on business opportunities, and gives advanced warning of threats.
The model Porters Five Forces will be used to identify competitive density, and therefore
attractive, for renewable energy industry. After that, SWOT analysis will used in reference to the
strengths and weaknesses of GECOL, and reveal the threats and opportunities in the
surroundings.

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6.1 Macro analysis
 PESTEL
Here there is a question should be answered: what changes do we exactly look for in
politics, economic, society, technology, environment and legal regarding renewable energy
sector?
Political:
 Current situation is a transitional stage between two stages the February 17th
revolution
and the establishment of the modern new Libya.
 Preparation for writing the Constitution of Libya and issue statutory laws.
 All new politicians in Libya supporting foreign and private investment.
 Environmental issues become more important for the government in Libya.
Economical:
 Increasing price of oil.
 Increasing energy demand-supply gap.
 There is a reduction in costs of renewable energy technologies.
 Continuation of subsidies for fuel and its products by the government.

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 Economy recovery after the revolution and Libyan government has increased
the annual budget for all ministries.
Social
 There will be some potential of employability.
 There could be a resistance from citizens / end-users towards use of renewable
energy technologies.
Technological:
 Energy technologies and its sources have fast growing and development.
 Libya has a poor infrastructure for this kind of technology.
 There is no R&D support for renewable energy.
Environmental:
 No attitudes in Libya toward and support for renewable energy.
 Worldwide awareness of climate change concerns.
 Libya has the second-highest solar radiation in the world (around 1% of Libyan
land mass dedicated to solar could potentially satisfy Europe demand).
 Libya must play a role toward the implementation of the proposed international
initiatives about environment.
Legal:
 Investment laws in the renewable energy sector do not exist.

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 There is no national action plan on climate change.
 Results from PESTEL analysis
Results or the summary of the external factors that will impact the renewable energy sector
which had been provided through a PESTEL is shown in table 1 as opportunities and threats:
Opportunities Threats
 Environmental issues become more
important in Libya.
 Reduction in costs of renewable
energy technologies.
 Around 1% of Libyan land mass
dedicated to solar could potentially
satisfy Europe demand
 Continuation of subsidies for fuel.
 Libya has a poor infrastructure for
this kind of technology.
 Resistance from citizens / end-users
towards use of renewable energy
technologies.
6.2 Meso analysis
 Porter's five forces
Five Forces analysis evaluates the five factors that determine renewable energy
industry competition.

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1. Competitors:
There are no any competitors at present in Libya in renewable energy industry.
2. Suppliers:
There are many suppliers for renewable energy technology around the world with
limited bargaining power.
3. Customers:
As GECOL is the only company provide electricity in Libya, so customers do not have
the choice and this is will be the key element for success of the project.
4. Substitutes:
There are no substitutes because the only electricity provider in Libya is GECOL
(total monopoly).
5. New entrants:
Renewable energy Industry requires a big capital investment and high skill
knowledge in electricity generation field. GECOL has these advantages and any
new entrants will have to spend a lot of time trying to overcome these issues.
 Results from Porter's five forces analysis:
The following points was concluded after analyse the competitive environment of
renewable energy industry by using Porter’s five forces analysis
 The threat of substitutes in this industry is considerably very low.

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 The threat of entry of new competitors into this industry is negligible.
 The bargaining power of suppliers is fairly low.
6.3 Micro analysis
 SWOT analysis
It is important for GECOL to map their own internal strengths and weaknesses of its
functions with opportunities and threats of renewable energy sector. By this analysis
will create lists of all of the internal and external strengths, weaknesses, opportunities
and threats of GECOL to inform the decision regarding this business plan. SWOT will
help GECOL double down on strengths, eliminate weaknesses, pursue opportunities and
avoid or prepare for threats.
 Strengths
 GECOL is completely subsidies from the government.
 GECOL has a strong relationship with the biggest international companies in the
field of electrical power generation such as Siemens, ABB and EDF.
 GECOL has strong transmission and distribution electrical network covers whole
Libya.
 Weaknesses
 No experience and knowledge for renewable energy industry.
 GECOL's board of directors may not concern much about renewable energy.
 GECOL needs more expertise in finance, economics and evaluation studies.
 GECOL does not have adequately skilled, technical manpower for renewable
energy industry.

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 Opportunities
 Electricity demand- supply gap continues increasing in Libya.
 Libya has an average solar radiation is around 2,470 KWh/m2/day. (The
Second-highest solar radiation in the world)
 Reduction in costs of renewable energy technologies.
 Threats:
 High subsidy on conventional energy in Libya which provides low oil and
gas prices for GECOL.
 Transitional political situation in Libya.
 Results from Porter's five forces analysis:
Based on the above key points, the result from SWOT analysis for GECOL can be
summarized in the following illustration:

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6.4Operation Strategy:
Renewable Energy Department (RED) at GECOL will be carrying out the work from planning
up to implementation and will face some challenges such as:
 Finance mechanism.
 Infrastructure.
 Operation and maintenance.
 Policy and lows.
At the beginning Renewable Energy Department should start with:
• Review the worldwide practices of renewable energy and come up with the best
practices and what, how, when can be implemented in Libya.
• Propose the necessary laws, regulations, incentives and get it approved by the
Government.
By that time until the laws, regulations and policies will be approved by the Government
Renewable Energy Department should concentrate on the following points:
 A close coordination and cooperation between the technology owners and GECOL is
required.
 Training & capacity building programs for the manpower required. (Human resource
development in renewable energy sector).
 The different available technology should be tested and verified.

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6.5 Implementation Strategy:
Renewable Energy Department should prepare a plan to implement with three phases in order to
achieve its desired objectives. This plan could be illustrated in Figure 3.
 Short-term stage (2015 – 2016)
Short-term stage will be only for preparing the engineering and Design Documents with also
contracting with technology owners companies. This early stage is Characterized the following:
 Do not constitute a significant burden on GECOL.
 GECOL would invest with the aim of transferring knowledge and technology localization
and building national technical staff.

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 mid-term stage (2017 – 2020)
Site selection will be conducted based on the results of technical and economical
feasibility studies and by the end of this stage GECOL will have 5% renewable energy
contribution in its total electrical power produced as shown in table 2
Field
Method of
financing
Total capacity
(MW)
Contributed
percentage
Projects of wind
power
GECOL budget 140
1 %
Country budget 100
Projects of solar
power
GECOL budget 500
4 %
Country budget 220
 long-term stage (2021 – 2025)
This stage is a continuation of work such as the second phase and reaches to 10%
renewable energy contribution in the energy mix of Libya but the finance support from
the government would be more in this stage as shown in table 2
Field
Method of
financing
Total capacity
(MW)
Contributed
percentage
Projects of wind
power
GECOL budget 100
2 %
Country budget 300
Projects of solar
power
GECOL budget 200
8 %
Country budget 600
.

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6.6 Benefits
There are a lot of benefits that GECOL could achieved from the implementation of this business
plan and by the end of 2025 Libya will be at place the forefront on the regional scale in
renewable energy. Some of these benefits could be stated as follows:
 Saving 2.9 million barrels of oil per year.
 Avoid about one million tons of carbon dioxide annually.
 Financial returns from the sale of certificates reduction in carbon emissions valued at
about (6 – 8 million US Dollars annually)
 Contribute to cover part of the demand for electric power.
 Gain experience and transfer of knowledge and technology localization.
 Sustainable spatial development and job creation.
 Will pave the way toward having Libya as a clean energy exporter.
6.7Financial study:
The financial cost for the implementation of the three stages (2015-2025) is capital costs and
operation costs. The following table shows these costs in detail

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Stage Item Cost type Cost in US dollar Total Investment source
Short term
stage
(2015-
2016)
Engineering
and
contracting
Capital cost
0peration
cost
Projects of
wind power
Capital cost
0peration
cost
Projects of
solar power
Capital cost
0peration
cost
Bay back period
Happy returns? Few companies lose money embracing renewable energy, but they
don’t make much either, according to an Environmental Leader survey of nearly 400
companies that have adopted solar, wind, and other renewable power sources.
Credit: Mark McKie

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The answer is still no. After all, many companies have pretty high standards for what is
considered “good.” In the world of corporate finance, it generally means a 20 to 25
percent annual return.
Developing strategy
1. Study the possibility of using silicon available in Libya in the solar cell industry.
2. Planning to establish an industrial base for renewable energy equipment in Libya
3. Study the possibilities available to the local entry in the industrial partnerships
4. Reload National Atlas of the Solar and Wind Energy.
5. Study and evaluate the performance of renewable energy systems installed
Barriers facing renewable energy in Libya

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3. Conclusion
 Regarding the implementation and evaluation, I can say after four years, my decision is
successful because of several evidences happened including:
 Communication between Field Maintenance Engineers was increased.
 The committees provided an exchange of information and experiences between
power stations which was effectiveness in solving problems.(the time and the
number of outages was decreased in 2010 comparing with 2009 by 4.8% in
Eastern region and by 5.6% in western region ).
 Regarding the decision traps I will always take in my account this paragraph: that the
decisions they make are sound and that the recommendations proposed by subordinates
or associates are reliable.''(Hammond, Keeney and Raiffa, 2003 p 3).
 According to the change kaleidoscope the option 2 which was my decision is the best
option and it does not have any contextual constraint.
 I did a self-assessment questionnaire called How Good Are Your Decision-Making
Skills? I found it in this website http://www.mindtools.com (see appendix 1) and my
score was 61 and the Interpretation for this mark is:
''Your decision-making process is OK. You have a good understanding of the basics, but
now you need to improve your process and be more proactive. Concentrate on finding

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lots of options and discovering as many risks and consequences as you can. The better
your analysis, the better your decision will be in the long term. Focus specifically on the
areas where you lost points, and develop a system that will work for you across a wide
variety of situations .done

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References
Balogun, Julia, (2008) "Analysing the change context: how context affects change" from
Balogun, Julia, Exploring strategic change pp.63-105, Harlow: Financial Times Prentice Hall ©
Butler, M., Bezant-Niblett, K. and Caine, K, (2011) "Decision-making" from Butler, Michael
and Rose,Ed, Introduction to Organisational Behaviour pp.237-267, London: CIPD ©
GECOL, Dispatch Center Annual Report, 2010.
Gunther, Robert E. (2008). The truth about making smart decisions. New jersey: Pearson
Education, Inc.. p44.
James Manktelow . (1996). How Good Is Your Decision-Making?. Available:
http://www.mindtools.com/pages/article/newTED_79.htm#Explanation. Last accessed 7th Dec
2010.
John S. Hammond, Ralph L. Keeney, (2003). Thinking about....The Hidden Traps in Decision
Making. USA: harvard business school. p3-11.
Neil Russell-Jones (2000). The decision making pocketbook. UK: Management Pocketbooks
Ltd.
Robbins, Stephen P; Judge, Timothy; and Campbell, Timothy, (2010) "Perception and individual
decision making" from Robbins, Stephen P; Judge, Timothy; and Campbell, Timothy,
Organizational Behavior pp.109-137, Harlow: Financial Times /Prentice Hall ©
Sutton Silver . (2007). Rational Decision Making Model. Available: http://www.the-happy-
manager.com/articles/rational-decision-making-model/. Last accessed 7th Dec 2010.
Veronica Hope Hailey, Julia Balogun (2002). Devising Context Sensitive. london: Elsevier
Science Ltd.. p167.

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Appendix 1

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My score is 61 and the Interpretation in the following table: