By Nouran Ashraf
In the last decades, generating energy from renewable resources might have been seen as a luxury, however, within the volatility in oil prices, increasing energy consumption, and climate change, shifting to a more sustainable source of energy has become a matter of global survival.
Representing a third of the world’s proven crude-oil reserves, and approximately a fifth of global gas reserves, according to the International Renewable Energy Agency (IRENA), the Gulf Cooperation Council (GCC) is known for its oil focused economies, a fact that many deem can halt its journey towards clean renewable energy. However, adding the current slump in oil prices and region’s struggling economy can dramatically alter the renewable equation for the GCC.
Renewables have accelerated its pace in the energy market over the past few years. In 2015, the global investments in renewable energy were estimated at more than double the amount spent on establishing new coal and gas plants, reaching $300 billion by the end of 2015; five times the amount invested in 2004, according to Rawabet Center.
Furthermore, research suggests that the Gulf countries are believed to intensify their investments in renewable energy and are aiming to increase their solar energy capacity by 50 times between 2015 and 2025, as highlighted by a study conducted by consultancy firm Frost and Sullivan.
In 2016, Saudi Arabia, the world’s largest oil exporter launched its Vision 2030, which aims to diversify its economy beyond oil with a great focus on renewable energy. The Kingdom’s vision was driven by the volatility of the oil prices, the rise in domestic oil consumption, and the decreased cost of producing solar panels. It was also inspired by the need to provide more job opportunities for the Saudi youth, according to research conducted by Makio Yamada, Teaching Fellow at the SOAS University entitled Vision 2030 and the Birth of Saudi Solar Energy.
The Vision 2030 has set an essential goal of producing 9.5 gigawhatts (GW) of renewable energy starting with establishing wind and solar plants in its northwestern desert, replacing the equivalent of 80,000 barrels of oil per day (bpd) used for generating power. Through the vision, the Kingdom launched National Transition 2020 program with the aim of producing 3.45GW or 4% of total energy consumption by 2020. The program also plans to employ about 7,774 workers in the renewable and nuclear sectors within the next 3 years. In all, Saudi Arabia is seeking $30 billion to $50 billion worth of investment in renewables, Energy Minister Khalid Al-Falih announced earlier this year.
The Minister announced that the country is working on producing 1,200 megawhatts (MW) through 30 projects in the next seven years. “So the percentage of renewable energy by 2023 will be 10% of the total installed capacity in the Kingdom.” He said during the Saudi Arabia Renewable Energy Investment Forum (SAREIF), earlier in 2017.
During SAREIF, Khalid Al-Falih launched new solar and wind projects to be developed in the OPEC’s biggest member, starting by the 300MW Sakaka solar project that will commence operation by 2019.
The interest of Saudi Arabia in solar energy started with the establishment of the King Abdullah City for Atomic and Renewable Energy in 2010. In its effort to invade the renewable energy market, Saudi Arabia established Al-Falih the National Center for Renewable Energy Data of King Abdullah City for Atomic and Renewable Energy, this year, to offer high-quality data analyzing the Saudi renewable energy sector to investors.
Saudi Arabia is also characterized by great wind capacity of twice the global minimum in many areas in Northern and Northwest regions of the country, which enables it to excel in producing wind generated power. In the beginning of 2017, Saudi Aramco, the national oil giant, has commissioned the Kingdom’s first wind energy turbine, providing electricity to its bulk plant facility in Turaif in northwestern Saudi Arabia. The wind turbine is supplying power to 250 homes, thus replacing 19,000 barrels of oil equivalent. Another wind project was launched during SAREIF, expected to hold a capacity of 400MW in Domat Al-Jandar.
The institutions involved in the renewable energy industry used to suffer from institutional fragmentation. In 2016, the administrative functions of this field were unified in a single ministry, named Ministry of Energy, Industry and Mineral Resources, with the appointment of Khaled al-Falih, former Minister of Health and Chairman of Saudi Aramco, as the new Minister of Energy. Earlier in 2017, Al-Falih announced the establishment of The Renewable Energy Project Development Office (REPDO) within the Ministry which became responsible for the management of the renewable energy projects within the Kingdom aiming at achieving the targets of the Vision 3030.
Although the future of the renewable energy in Saudi Arabia is promising, there are still few obstacles that might challenge the Kingdom, including the lack of the feed-in tariff system which can be discouraging for private investors. The dynamics created by a feed-in tariff system could help Saudi Arabia in paving the way towards energy diversification, a study conducted by conducted by Makbul Ramli, Researcher at the King Abdulaziz University suggested.
Another obstacle is the inadequacy of qualified local professionals. In order to overcome this problem, the National Transition Program has set an ambitious goal of increasing the number of students in technical and vocational training from 104,432 to 950,000 by 2020, Vision 2030’s official website informed.
United Arab Emirates
The United Arab Emirates (UAE) has the largest capacity of solar power between the Gulf countries giving it a huge solar generation potential. The current energy policy of the GCC member is focusing on generating energy from renewable resources specifically solar energy and reducing the dependence on the use of fossil fuels.
In January 2017, the country announced that it will invest $163 billion in renewable projects in order to satisfy half of the Gulf state power needs from renewable resources. It is hoping to reach this goal by 2050 in order to create a balance between the country’s economic needs and environmental goals, CNN reported.
Additionally, 44% of the country’s energy needs are expected to be provided by renewables by 2050, with 38% from gas, 12% from cleaner fossil fuel, and 6% from nuclear energy, UAE Prime Minister, Sheikh Mohammed bin Rashid Al Maktoum, told the BBC.
“He who does not think of energy is not thinking about the future. The UAE government has made an achievement in drawing up a unified energy strategy for the country,” the Prime Minister wrote on Twitter, as reported on BBC in January 10th, 2017.
Dubai and Abu Dhabi, the two Emirati cities, are leading the country’s renewable energy goals. In 2012, the UAE started establishing the Mohammed bin Rashid Al Maktoum Solar Park in Seih Al-Daha, which is considered to be one of the world’s largest renewable projects based on an independent power producer (IPP) model, according to Dubai Electricity & Water Authority (DEWA).
While in 2013, Abu Dhabi launched the commission of $600 million worth Shams Solar Power Station in the Western Region of the city, with capacity of 100MW; the grid connected power plant will produce enough energy to supply power to 20,000 homes in the Gulf nation and is capable of replacing about 175,000 tons of carbon dioxide per year, WIKIPEDIA informed.
In 2015, Sheikh Mohammed bin Rashid al-Maktoum launched the Dubai Clean Energy Strategy 2050, which intends to appoint Dubai as a global center of clean energy and green economy. The Dubai Clean Energy Strategy plans to generate 7% of Dubai’s energy from clean energy sources by 2020. It will boost this target to 25% by 2030 and 75 % by 2050, Gulf News reported.
In 2016, The Dubai Water and Electricity Authority (DEWA) launched the establishment of the world’s largest concentrated solar power (CSP) project within Mohammed Bin Rashid Al Maktoum Solar Park. The first phase of the project is expected to be finalized by 2020, with estimated generation power of 1,000MW. By 2030, the plant is expected to produce 5,000MW, increasing the emirate’s total power output by 25%, Ventures Onsite informed.
The country’s Energy Plan 2050 aims to reduce carbon dioxide emissions by 70% since the Organization of Petroleum Exporting Countries (OPEC) member is ranked the eighth on the World Bank’s worldwide list of CO2 emissions per capita, The National said.
The oil-rich Gulf country of Kuwait similarly plans to rely on energy produced from renewable resources in the near future. The GCC member has set an ambitious goal of supplying 15% of its energy needs, estimated at 2,000MW from renewable resources by 2030.
Kuwait’s renewable energy potential is high due to the availability of solar and wind resources. The Gulf state holds one of the highest solar irradiation levels globally, with maximum annual sun hours of around 9.2 hours daily, the country has the potential of being a solar energy hub. Meanwhile, the wind speed is estimated at around 5 meters per second (m/s) in regions like Al-Wafra and Al-Taweel, which is relatively good, enabling Kuwait to focus on wind projects, EcoMENA stated.
Kuwait started working on its 2030 goals by launching the construction of the 2GW Shagaya Renewable Energy Park in 2015 that includes solar thermal, solar photovoltaic (PV) and wind power systems, located in a desert zone near Kuwait’s border with Saudi Arabia and Iraq. The first phase of the project provided 10MW of wind power, 10MW of solar PV, and 50MW of solar thermal systems. The state additionally launched the Al-Abdaliyah integrated solar project which is expected to hold a total capacity of 280MW by the end of 2017, according to EcoMENA.
When it comes to wind power, Kuwait has finalized the establishment of the 2.4MW Salmi Mini-wind farm, in 2013, which mostly supplies telecommunication towers in remote areas and the fire brigade station in Salmi, EcoMENA added.
The availability of unused land and solar energy resources gives Sultanate Oman a great potential for solar energy development. In 2008, the Authority for Electricity Regulation conducted a study about the potential of renewable resources in Oman that suggested that the solar density of the GCC member was among the highest in the world and.
Despite the focus on solar energy, significant wind energy potential was discovered in the southern parts of Oman with wind speeds comparable to inland sites in Europe that sustain large numbers of wind turbines, REVE informed.
Oman’s National Energy Strategy 2040 issued in 2015 suggests that around 10% of Oman’s energy mix should be created from renewable resources, mostly onshore wind and solar, by 2025. A mix of CSP and PV technologies are planned to be implemented for the development in Dakhiliyah Governorate which is one of the largest solar energy projects in Oman, according to the strategy.
The increase in population along with the industrialization of cities like Duqm, Sohar, and Salalah and the total reliance on fuel puts Oman’s power infrastructure and hydrocarbon reserves in a challenging situation, thus investing in more renewable projects will help the country by decreasing its dependence on fossil fuels and providing it with cleaner and more sustainable sources of energy, EcoMENA stated.
In 2015, Oman launched the Wind Atlas project, where four sites within the country, Sadah, Shalim, Duqm, and Jalan, were selected for the establishment of wind power projects, according to Oman’s Authority for Electricity Regulation Oman (AER).
In 2017, Oman launched the solar rooftop initiative where PV systems will be installed on residential buildings in the Sultanate providing an estimated 1.4GW of electricity. It is expected that Muscat Governorate alone could produce 450MW; the same amount of energy produced by a medium-sized gas-based power plant, AER informed.
Oman is encouraging private investments in renewable resources by offering them Power Purchase Agreements. However, the government doesn’t involve stakeholders in regulating policies and in the decision-making process within. In addition, the country doesn’t have a feed-in tariffs system. Accordingly, private investors might be discouraged from entering the renewable field, EcoMena added.
Considered the world’s leader when it comes to exporting Liquefied Natural Gas (LNG), Qatar, despite the fact that the Gulf nation was capable of developing enough power to enable it to invest in projects abroad and even though the diversification of energy might not be as crucial in Qatar like other GCC members, still the country has a growing interest in pursuing alternative and sustainable sources of energy like solar and wind.
The country has launched its national vision 2030 back in 2008, focusing on providing energy from sustainable resources. The Qatari government aims to generate 20% of its electricity from solar energy by 2030, targeting 1,800MW.
One of the state’s reasons for joining the renewable movement is population growth, as explained by the Qatar Foundation. The foundation is responsible for generating 85% of Qatar’s total solar energy, and, in 2014, it announced the launch of one of the Gulf region’s first Energy Monitoring Centre (EMC) to manage its smart grid and monitor solar power production within its campus.
Qatar’s renewable energy policy is focused on appointing it as regional research and development R&D hub. The country is investing in research centers, universities, utilities and pilot projects specialized in the renewable energy studies, EcoMENA highlighted.
The state electricity and water utility Kahramaa launched the operation of the first solar power facility, to be placed in Duhail, in 2016 with a generation capacity of 15MW. Kahramaa is expected to provide a capacity of 200MW solar power at 60 sites by 2020.
Qatar is also emphasizing the use of solar energy in the urban environment. Newly planned projects will be using rooftop solar installations as part of their energy infrastructure. Mshereib Downtown Doha, a sustainable downtown regeneration project along with Lusail City, which is planned to be established on the coast north of Doha and Energy City, an integrated energy hub being built between Lusail City and the capital are all going to use solar rooftop installations, according to Oxford Business Group.
Considered to be the smallest country among the GCC members, Bahrain, holds a limited amount of energy resources and is expected to run out of oil in the next 10 to 15 years. Furthermore, by 2030, Bahrain’s energy demand is expected to more than double to 37.6 terawatt hours (TWh) from 15.4 TWh. Accordingly, Bahrain’s reliance on hydrocarbon resources is not sustainable, based upon data revealed by Bahrain’s Ministry of Electricity.
Like all the GCC members, Bahrain enjoys some of the highest solar energy levels in the world rendering it a viable source of solar and wind energy. Bahrain’s investment in renewable energy sources will aid it in decreasing its carbon emissions and fuel input costs, Solar GCC alliance stated.
In Bahrain’s Vision 2030, the government promises to generate 5% of its energy from renewable resources by 2020, with expectations of adding another 105 by 2030, 300MW out of a 6,000MW.
In 2016, the state announced its plan to launch its first solar panel production plant in the Kingdom with a capacity of 60,000 solar panels, in addition to small-scale hybrid power plants using solar and wind, a move that would boost the country’s renewable energy position.
Paving the Way towards Renewables
With the abundance of solar energy specifically, the future of the renewables in the region is promising, but still, there is a long way to go before the renewable sources dominate the energy mix in the Gulf countries.
It is clear that investing in renewable energy will help the GCC members move closer towards stabilizing their economies, addressing rising unemployment, and tackling any environmental challenges on the horizon.
Furthermore, the need for a luring investment environment in the sector is worth highlighting. It is one of the major obstacles in the region’s growth, alongside heavy oil subsidies, which render a grass-root movement in the renewable sector unbeneficial to locals.