| 


GANPublications


Service Menu


We have 2091 guests and no members online


 Saudi Travel Services
Economics & Development | Global Arab Network
Immediate need for alternative energy in Gulf region
Monday, 25 May 2015 18:41

 483 36

All Gulf Coopera­tion Council countries will have to embrace industrial-scale alternative energy if they were to continue profiting from their oil and natural gas resources.


Saudi Arabia’s decision to postpone its renewable en­ergy strategy by eight years shook investor confidence as intensely as it raised hopes when first announced. Ku­wait, too, has been slow to move with its Shagaya Renewable En­ergy Park and in the United Arab Emirates clean-tech companies are urging regulators for solar feed-in-tariffs.

Soon though, all Gulf Coopera­tion Council (GCC) countries will have to embrace industrial-scale alternative energy if they were to continue profiting from their oil and natural gas resources.

“In every case the GCC’s interest in alternative energy comes from economics and desires to preserve oil and gas for export, rather than environmental reasons,” said Robin Mills, head of consulting at Dubai-based Manaar Energy. “Especially with recent falls in the price of solar and wind power, they have become very cost-competitive versus gen­eration from gas — particularly im­ported LNG [liquefied natural gas] — and oil.”

By not burning their own fossil fuels for domestic consumption, GCC economies would be free­ing up a valuable resource for the more profitable export and for use in downstream industries, where there is better utilisation of hydro­carbons and thus a higher return on investment.

The situation is most critical in Saudi Arabia, the largest oil-con­suming nation in the Middle East and one of a handful of countries that burns crude oil directly for power generation, according to the Joint Organisations Data Initiative.

“Saudi Arabia is consuming a large portion of its oil wealth through power generation and water desalination. And, as power demand increases annually, the country’s position as the global oil swing producer will be under seri­ous threat,” Justin Dargin, global energy expert at the University of Oxford told The Arab Weekly.

In Kuwait, an oil-dependent na­tion facing rising electricity de­mand, power cuts that used to occur in summer months have ex­tended to winter, as witnessed in February’s widespread blackout. “Saudi Arabia and Kuwait use large amounts of oil for power — very ex­pensive at current prices — while the others do not,” remarked Mills.

The UAE faces a different sce­nario. Although the country has the seventh largest proved reserves of natural gas, it has been a net importer since 2008 due to heavy dependence on natural gas-fired facilities.

“The position of the UAE is quite different as the majority of its power generation is derived from natural gas, not oil,” said Dargin. “Therefore, what drives the Saudi focus on renewable energy genera­tion is primarily to preserve its po­sition as a dominant oil producer. Whereas, what drives the UAE is to continue producing enough natu­ral gas to meet its domestic power demand as well as demand from its extensive downstream gas indus­tries.”

Dubai, with modest oil reserves, is especially vulnerable to fluctuat­ing fuel prices. Of the UAE’s proven oil reserves of nearly 98 billion bar­rels, the emirate holds just 4 billion barrels and thus imports most of its petroleum requirements.

Despite its vast oil reserves, the UAE is by far leading the region’s alternative energy drive. This is evident from achievements as early as Masdar’s 10-megawatt (MW) so­lar photovoltaic (PV) plant and the 100MW Shams 1, to the more re­cent, Dubai Electricity and Water Authority (DEWA)-managed Mo­hammed bin Rashid Al Maktoum Solar Park. The 1-gigawatt (GW) project has already seen the com­pletion of a 13MW PV plant and ten­dering of a 200MW PV plant.

“The UAE is the frontrunner in renewable energy development. It has funnelled billions of dollars in development of both alternative (nuclear) and renewable energy projects across the country. Other Gulf countries have developed plans to do so, however, the UAE has a significant lead ahead of its neighbours,” Dargin said.

Meanwhile, Saudi Arabia’s origi­nal strategy that envisioned 54GW of renewable energy by 2032 was scaled down earlier this year to 30GW by 2040. But the market is not at a standstill. Saudi Aramco has been preparing tenders for 300MW of solar-diesel projects and Saudi Electricity Company is inte­grating concentrated solar power in its Duba 1 and Waad Al Shamal power plants.

Many of the projects completed benefited from the support of expe­rienced foreign developers. Spain-based Abengoa, for example, par­ticipated in building Shams 1 and is helping develop Saudi Arabia’s first solar-powered desalination plant.

Spanish engineering firm TSK has also been active in the region with its bid for Kuwait’s Shagaya project and construction of DEWA’s 200MW PV plant in partnership with ACWA Power. Similarly, US developer First Solar, which built Dubai’s 13MW PV plant, is supply­ing DEWA’s 200MW project.

On the nuclear energy front, the UAE is also ahead of Saudi Arabia, having completed 61% of the first of its four reactors and more than 50% of the second. Together, the four units of the Barakah nuclear power plant will supply a quarter of the country’s electricity needs.

“The different GCC countries have moved on to different extents in alternative energy, with the UAE well ahead — in both renewables and nuclear power, Saudi Arabia having big plans but not having done much yet, Kuwait now mov­ing ahead, Oman thinking about it, and Qatar and Bahrain having done little,” Mills concluded.

“The UAE in particular has been ready to take credit for the environ­mental benefits.”

The Arab Weekly
By: Heba Hashem is an Arab Weekly contributor in Dubai.
 

Newsletter Subscription

Newsletter & events update

Follow Global_Arab_Net on Twitter


© 2006-2014 Global Arab Network | Privacy Policy | Terms and Conditions