A rather meaningful piece of energy news went almost unnoticed in recent weeks. The Abu Dhabi Power Corporation announced the lowest tariff for solar energy in the world. The new record came as the winning bid for the upcoming 2 GW solar power plant, the Al Dhafra Solar PV project, set the world’s most cost-competitive tariff for solar PV energy, at USD 1.35 cents/kWh (AED 4.97 fils/kWh in local currency). This is approximately 44% lower than the tariff set just three years ago for the ‘Noor Abu Dhabi’ project – Abu Dhabi’s first large-scale solar 1.2GW PV project and a world record tariff-setter at the time – which commenced its commercial operation back in April 2019.
The gigantic photovoltaic power plant is scheduled to come online in mid-2022. Expected to cover an area of 20 square kilometers, it will almost triple Abu Dhabi’s solar power generation to 3.2 GW and help the Emirate state achieve its 2030 goal to reduce carbon intensity by 70% compared to 2015. This single addition could on its own supply almost 3% of the entire United Arab Emirates annual electricity demand (~127 TWh in 2018). The Al Dhafra and Noor projects firmly position Abu Dhabi among the leading regions of the world for solar power adoption and price benchmark. To better appreciate the competitiveness of this bid, it’s worth noting that even old and fully depreciated coal power plants have LCOE values around USD 3.3 cents/kWh (see Lazard’s Levelized Cost of Energy 2019).
But why would this piece of news matter? Surely this is a geographical exception, a sunny oasis in a world otherwise dominated by cheap fossil fuels, a result that cannot be replicated worldwide. Well, not really. While the Middle East is naturally bound to become a solar powerhouse in the coming years – its wide desert areas and sunny climate result in typical PV load factors above 1800 kWh/kWp installed – high levels of solar irradiance are actually available throughout the world within a broad range of latitudes. A beautiful map from Global Solar Atlas is worth a thousand words.
As global data show, a vast portion of the planet is in fact ripe for exploitation with ultra-cheap solar power. And the news from the Emirates are indeed echoed by comparable prices set elsewhere over the past year, from Europe to America. The previous solar tariff record belonged to Portugal: the southern European country claimed the spot in July 2019, at about USD 1.64 cents/kWh for a 150 MW project. 211 MW of PV capacity were signed at USD 1.75 cents/kWh in Brazil just weeks before that, while a sub-2 cents/kWh bid was also presented in the same period for the Los Angeles Eland Solar & Storage Center project in Kern County, California (the final version of the project will in fact be a 300 MW / 1.2 GWh energy storage installation – with an aggregate price of USD 3.962 cents/kWh for dispatchable power).
At the levels being reached by utility-scale solar, even northern, rainy countries such as the UK – with half the solar irradiance of the Emirates – could soon see projects achieve LCOEs below USD 3 cents/kWh (if they are not beat by cheaper wind power at those latitudes). We are now at a point where economics alone is the main factor driving the energy transition towards sustainability. With an annual global growth hovering around the 100 GW mark before the coronavirus crisis, solar power is now poised for a long-term additional boost through favourable economic recovery policies planned by most governments around the world. The unfolding economic crisis, likely to push down solar capital costs even further, will only make the PV market even more attractive. Cheap large-scale battery storage, whether coupled to these projects or as stand-alone peaker plants replacement, will be the natural ally.
With the global financial community increasing its focus on fossil fuel divestment and sustainability, we can expect the booming utility-scale solar market to mark its presence in all continents at increasing pace. Investors with deep pockets, looking for stable and predictable returns at a time of increasing uncertainty and change, will safely bet on massive renewable energy developments for reliable returns on their portfolios, while avoiding the volatility and risk involved with projects in the incumbent sources of energy.
The young and educated population of the Gulf countries surfing on a raft of significant infrastructure projects seems to have found its way through this worldwide thin patch in its development ground. The Rising Need for Smart Grids gives a pertinent view of how, in the recent past, new setups are taking shape for a durable and sustainable future. A future where the Middle East moves towards a Smart Cities model of development.
The Middle East moves towards a Smart Cities FutureThe ongoing coronavirus crisis has underscored our deep dependence on digitization and modern technologies. Under the COVID-19 lockdown, smart technologies have enabled us to continue to work, learn and shop from the safety of our home. The coronavirus pandemic changed consumers’ energy profiles overnight and amplified the importance of continuous, uninterrupted electric supply for essential services and for nearly every business sector to keep running.
The utilities sector is still on the periphery of digitization that has disrupted other sectors, such as telecommunications and banking. Utilities have historically under-invested in information technology (IT), focusing instead on the operations technologies that enable their core business of generating, transmitting and distributing power.
The change has been slow in coming, but utilities are now waking up to consumers’ demand for smart, interactive services. Along the way, they are identifying many potential benefits of smart technology, not just to the increasingly sophisticated customer, but to their own business. Enter: the smart grid.
While there is much progress still to be made until smart grids and utilities reach their potential across the MENA region, the opportunity is just as large.
Investment on the up
Investment in smart grids is rising globally, spurred by an increasing acknowledgement amongst utilities of smart grid benefits, along with government mandates for energy efficiency and grid reliability. According to market research and consultancy firm, Navigant Research, smart grid IT software and services are expected to generate US$17.1 billion in revenue in 2024 up from US$8.5 billion a decade earlier. With rising investments in the field, several fundamental smart grid building blocks stand to gain. Here, the key focus areas include transmission upgrades, substation automation, distribution automation, smart metering and utility enterprise IT.
The increased investment in smart technologies is enabling the smart grid to evolve and advance. Emerging innovations are promising to benefit consumers, utilities and countries world-wide. Some of these innovations include micro grids, energy storage devices such as Li-Ion batteries, smart homes that adjust consumption according to utility rates, Demand Response (DR) Management Systems that predict peak usage times and mitigate outages and Electric Vehicle (EV) Charging Stations. These technological innovations are just one sign that commitment to the smart grid is growing stronger, as its role in satisfying and engaging customers becomes more apparent.
While the true impact of emerging smart grid trends remains to be seen, existing innovations are already delivering tangible and wide-ranging benefits, not just to consumers and companies, but to entire nations, too.
Smart grids provide a wide range of automation features, differentiating them from traditional grids; these features are vital for business continuity.
In view of social distancing requirements currently in place to protect public health, Remote Firmware Upgrade allows a utility company to push firmware patches and revisions to clients without the need to mobilize Operation and Maintenance (O&M) personnel. Remote reading, connection and disconnection can all be conducted with an Advanced Metering Infrastructure (AMI) minimizing the need for field personnel to be deployed.
Moreover, AMI can be easily integrated with other Customer Relationship Management (CRM) and billing solutions to streamline entire meter-to-cash processes and reduce client visits to a service centre. When customers change their daily routines, to work from home for instance, they can evaluate the impact of their new behaviour on their utility bills and make appropriate changes. The smart grid arms today’s consumers with a wealth of information, allowing them to stay informed of their consumption and to explore and compare pricing plans and options to buy and sell. Furthermore, a utility company’s Meter Data Management (MDM) solution provides the company with analytical tools to analyse these evolving patterns and to improve network planning in response.
Smart grids’ Demand Response techniques such as real-time pricing can enable utilities to limit/manage customers’ consumption to account for distribution shortages or emergencies. As consumers’ energy profiles change leading to a shift in demand patterns geographically (e.g., closure of an industrial zone, shutdown of a shopping area), Distribution Automation technologies allow a utility company to monitor and analyse these demand variations and devise and execute appropriate distribution changes in response.
The unparalleled integration provided by the smart grid facilitates critical connectivity between intelligence and asset management applications, increasing operational efficiency across the grid. Meanwhile, integration provides different power generation types, both continuous and intermittent. The smart grid also introduces new storage options, such as fuel cells, and paves the way for greater integration of alternative and intermittent energy sources, including wind and solar energy. Distributed generation enabled by the smart grid benefits existing, mature electricity markets, while also developing new ones.
While there are challenges associated with smart grid design, implementation and deployment, the paradigm shift that is underway also heralds the arrival of complex technical challenges, with cybersecurity prime amongst them. Deploying a smart grid without adequate security could result in serious consequences such as utility fraud, loss of user information and grid instability. The smart grid’s complexity and multiple entry points—from smart meters to distributed energy resources (DER)—create significant vulnerabilities that leave the grid open to breaches and attacks that can target customer data and inflict damage. The implementation of system-wide cyber security that stretches to end-user devices, is a crucial first step in combating the challenge.
Big data and analytics also have a critical role to play in enabling the value of smart grids, yet they, too, present new and growing challenges to utilities with smart grid ambitions. The sheer size of the smart grid means that handling and processing the vast amount of data generated is problematic.
Converting this deluge of information into meaningful intelligence requires a complete overhaul of IT and analytics infrastructure. The information now at utilities’ fingertips poses a challenge not just for data management, but for communications systems, too. Where different vendors and service providers work independently, it is crucial that utilities develop interoperable systems with capacity to exchange large amounts of data between multiple systems.
The Way Forward
Large utilities across the MENA region can build on existing global knowledge and experience to accelerate their own smart grid initiatives, for the benefit of all stakeholders. At the regional level, particularly for the GCC countries, the smart grid is in sync with national missions to increase energy generation from renewable sources such as solar and provides the opportunity to diversify economies away from non-renewables.
Smart grids are the future of utilities. Indeed, it is no longer a matter of if, but when, they begin to roll out smart grid infrastructure, irreversibly changing the utilities landscape as they go. To reap the rewards, each utility must draw up its own path and carefully consider objectives, situation, capabilities and risk appetite, recognizing that there is no one-size-fits-all approach. While needs and circumstances may vary, utilities face one common reality: the smart grid rewards are bigger than ever for those who plan diligently and who stay plugged-in and switched-on to the smart evolution now shaping our world.
An article by Engidashet Bunare & Shiferaw Lulu dated May 19, 2020, carrying a title such as The Crocodile Tear of Egypt and The Grand Ethiopian Renaissance Dam (GERD) should be taken seriously for it is a point of view of an adjoining neighbour to one of the most prominent countries south of the MENA region. We all know that Egypt’s options were not that clear at the Nile talks some time ago. The first three sections are republished here for their obvious content.
The media and Egyptian professionals are trying to influence with one sided view and deceive the international community. The purpose of the propaganda and lies that are taking place internationally by the Egyptian politicians and professionals is to mislead the international community and countries about the GERD for getting biased support and to pressurize Ethiopia to sign an agreement that only satisfies Egypt’s interest at the expense of over 100 million people of Ethiopia. In addition Egypt is trying to use the GERD issue to shadow and divert political and diplomatic efforts from the CFA (Cooperative Framework Agreement) that requests reasonable and equitable share of the Nile water among the basin states.
In addition to its hoodwink, Egypt has been and is supporting political opponents, religious radicals and ethnic radicals to destabilize upstream countries in order not to have peace in their countries to develop their nation, which inevitably consider using of their water.
It has to be clear that the population of the basin countries is increasing and the demand for water supply, irrigation and power generation will definitely amplify. Whatever lies and deceptions are implemented, no one can stop the people and the countries that originate the Nile water from using the water from their backyard. It has to be clear that these countries will not continue under poverty and see their people starve while Egypt is enjoying prosperity.
We Ethiopians need to bring the facts to the light and try to stop Egyptian professionals, scientists, journalists and politicians from deceiving the international community.
II. The Nile Water and the GERD
It has to be clear to all the international community and the Ethiopians at large that there is no any significant contribution to the Nile water either from Egypt or the Sudan. However, these two countries have shared 100% of the water among themselves. Ethiopia is contributing 84.1% of the Nile water and has zero shares and the rest of the countries contribute 15.9% and have zero shares from the Nile water.
Egypt wants to keep this unreasonable share of water and keep the upstream countries to support Egypt’s prosperity, while living in poverty. Egypt has been using the World Bank and the other developed nations not to provide loans or grants towards development of the water from the Nile basin. As a result of this, the upstream countries obliged to live under poverty and famine.
Ethiopia contributes 84.1 % percent of the waters for the Nile river system (94.5 Bm3). The Blue Nile 57.1 % percent (54 Bm3), Baro-Akobo (Sobat) 14.3 % percent (13.5 Bm3), Tekezze (Atbara) 12.7 % percent (12 Bm3) – while the contribution from the Equatorial Lakes region is only 15.9 % percent (15 Bm3), but contribution from Ethiopia other than Blue Nile is a total of 27 % percent from Baro-Akobo (Sobat) 14.3 % and Tekezze (Atbara) 12.7 % respectively which is almost double of the contribution from White Nile or the Equatorial Lakes region.
The main water resources problem in Ethiopia is that the major rivers of the country have trans-boundary nature. 70% of Ethiopia’s water resources that are contributing to the 84.1% of the Nile River flow are found in the three sub-basins of the Ethiopian side of the Nile Basin namely; Abay (Blue Nile), Tekeze- Mereb and Baro-Akobo and whereas the population is no more than 40 percent of the country. On the other hand, the water resource available in the east and central river basins is only 30 percent whereas the population in these basins is over 60 percent.
Out of the total 84.1% Nile water contribution of Ethiopia, the GERD is being constructed on Blue Nile (Abbay) river which is contributing 57.1% of the Nile River flow. This Abbay River Basin covers 44% of the surface water source and 26% of the population of Ethiopia.
According to the 1959 agreement between Sudan and Egypt, the Nile water is divided as follows: 55.5 billion cubic meters to Egypt, 18.5 billion cubic meters to Sudan, and 10 billion cubic meters to account for evaporation and seepage. The Al-Jazeera documentary (The GERD, under the title “How big is Ethiopia’s new dam”?) clearly showed that based on the Colonial treaties the Nile’s water shared by Egypt 66%, by Sudan 22%, by Ethiopia 0%, and 12% lost to evaporation. We would like to make clear that the volume of High Aswan Dam 162 billion m3 is more than double of the GERD volume of 75 billion m3. Toshka and El-Salam huge projects of Egypt that have significant effect on the water rights of the upstream countries have estimated investment of about 100 Billion USD in 2017 which is about 20 times the estimated construction cost of the GERD. It has to be noted that Egypt has not consulted any of the upstream countries while developing these projects. In addition to the Nile water, Egypt has groundwater resources in the Nile Valley and Delta, the western desert, and Sinai. The largest groundwater deposit is the giant Nubian sandstone aquifer underneath the eastern part of the African Sahara, which is shared between Egypt and four other countries. It contains over 200,000 billion m3 of non- renewable water in total that can serve for thousands of years. The aquifer underlying the Nile Valley and Delta has a total capacity of 500 billion m3 (200 and 300 billion m3 respectively). Egypt has to learn a lesson from “The Libyan Great Man-made River (GMMR) Project, eighth wonder of the world” embarked by Muammar Qadhafi in 1983” which supplies 6,500,000 m3 of freshwater per day to the cities of Tripoli, Benghazi, Sirte and others.
In addition, Egypt because of its unique location has sea outlet both on Mediterranean and the Red-Sea that makes desalinated water available both from the east and north of Egypt. Egypt is well aware of the recent technological advances that have significantly decreased the production costs of desalinated water.
The GERD is located in Ethiopia; on the Blue Nile River about 20 Km upstream from the Ethiopia-Sudan Border. The GERD is for hydropower which is non-consumptive use and does not stop the flow of the river. The Dam is currently under construction; where totally about 73 % of the project both civil and electro- mechanical work is completed. The GERD has two power plants with capacities of 3750 MW and 2250 MW or total installed capacity of 6000 MW that could generate average energy of 15,692 GWh per year.
GERD is an additional storage dam both for Egypt and Sudan, and also that save water that is lost by evaporation in the desert from Aswan High Dam and the reservoirs in Sudan. It also serves as a silt trap for the dams in Sudan and Egypt. The GERD specifically saves Sudan from the annual flooding of thousands of irrigable area and help to reclaim its irrigable lands that optimize irrigation in Sudan. The GERD also helps to increase the rainfall in the Ethiopian highland as a result of the evaporation from the reservoir that will contribute to the Nile flow. Based on these facts, to build a dam on the Blue Nile in Ethiopia is not a new issue at all. It was already considered as an option in the 19th century by the British, mainly because of the lower levels of evaporation, sediment control, and regulated flow.
It is clear that GERD has no significant effect as compared to its remarkable benefits both for Egypt and Sudan. It has to be clear that the GERD is being constructed under zero percent water share of Ethiopia. Now what Ethiopia should negotiate is not about the GERD, it has to raise the issue of sharing the Nile water equitably among all the basin states.
III. Cooperation Efforts of the Basin Countries on Equitable Use of Nile Water
Based on the initiative of Ethiopia, a series of the ‘Nile 2002 conferences’ that started in 1993 continued up to 2002. This cooperation effort paved the way for the Nile Basin Initiative (NBI) established in 1999. A Shared Vision Programme (SVP) supported cooperation through promoting collaborative action, and trust intended to build a strong foundation for regional cooperation, of which the goal was the creation of an enabling environment for investments and action on the ground (NBI, 1999).
The NBI established a secretariat in Uganda and two subsidiary action programmes (SAPs) in the Eastern Nile (based in Addis Ababa) ENSAP (The Eastern Nile Subsidiary Action Program) currently includes Egypt, Ethiopia, and Sudan and the Nile Equatorial Lakes region (in Kigali). NELSAP (The Nile Equatorial Lakes Subsidiary Action Program): The Nile Equatorial Lakes region includes the six countries in the southern portion of the Nile Basin: Burundi, Democratic Republic of Congo, Kenya, Rwanda, Tanzania and Uganda, as well as the downstream riparian states Egypt and Sudan.
The Nile Basin Initiative (NBI) 1995-2011 resulted in the development of the Cooperative Framework (CFA) and the establishment of the UNDP D3 project which started the negotiations for a River Nile Cooperative Framework Agreement in 1997; The D3 project had main activities of which was major for the development of the Cooperative framework agreement (CFA). Accordingly, the Panel of Experts (POE) formulated cooperative framework and approved by Council of Ministers (COM). The CFA (2009) adopts the seven most relevant factors for determining equitable and reasonable utilization from Article 6(1) of the 1997 United Nations Watercourses Convention.
The Nile-COM with the exception of Egypt and Sudan absent, agreed and resolved that the CFA is a clean text ready for presentation to the riparian states for signature.
The CFA signing / “Entebbe Agreement”:- Ethiopia, Rwanda, Tanzania and Uganda signed the Entebbe Agreement on the day it was opened for signature on the May 14, 2010. Kenya signed on the May 19, 2010; Burundi signed on the February 28, 2011. After signing the Entebbe Agreement the four countries Ethiopia; Rwanda; Tanzania and Uganda have ratified the agreement.
Egypt has become stumbling block not to sign the CFA and yet without reached agreement on water allocation, it considers any reduction of the Nile water quantity level as a national security issue. Egypt did not want to sign the CFA which would have been a spring board for all basin states to reach to an agreement on how to share and manage the Nile water. It has to be clear that Egypt’s rigid position will let the Nile basin state countries to take their own unilateral action, which will ultimately be a nightmare for Egypt.
After four years Egypt’s position not to sign the CFA and the tensions between Cairo and Addis Ababa over the GERD project, the three Eastern Nile countries acceded to a Declaration of Principles on 6 March 2015 that lead them to agree on the guidelines of the filling and operation of the GERD. “Ethiopia as the owner of the GERD will commence first filling of the GERD in parallel with the construction of the Dam in accordance with the principles of equitable and reasonable utilization and the causing of no significant harm as provided on the Declaration of Principles (DoP).” In spite of the deception of Egypt, that is what Ethiopia is doing currently- “first filling of the GERD in parallel with the construction of the Dam”. Basically Egypt’s treachery is to use the DoP as scapegoat to gain time Ethiopia not to capitalize on the CFA and its diplomatic efforts to bring back Egypt and Sudan to the table of negotiation to sign the CFA.
The MENA’s Sahara region is increasingly being looked at for purposes stemming from power generation to food production. Here is how Danny Kane in this write up brings in to everyone’s attention the hot topic on Extreme Environments: farming in the Sahara Desert.
Every year, an area of fertile land roughly half the size of Britain becomes desert. This process, known as desertification, isn’t usually caused by one single factor, but the usual suspects make an appearance every time: climate change, deforestation, and poor agricultural practices. 1/5th of the world’s arable land is under threat from desertification.
With desertification likely to become an even greater issue in the future, it is time to start looking at possible ways to combat it. Reclaiming the desert is often a costly action few countries immediately affected by it can afford to pursue. The alternative, while also expensive, may be the best chance many of these countries, and in future the world, has to thrive. So, what if you could grow food in the desert?
Firstly, let’s dispel a myth — you can’t grow anything in sand. Numerous forms of plants will grow in sand, as long as they can source water and are able to tolerate the extreme heat, wind, sandstorms and occasional torrential rains found in deserts (particularly the Sahara), plants will grow. Unfortunately for us, a few wild plants cannot sustain a population, so for all intents and purposes, deserts appear to us to be barren.
Much of the problem comes from the sand itself. We’re not used to thinking about sand as a kind of soil, but it’s simply on the extreme end of the spectrum. The main issues come from two things. Sand isn’t very good at holding water, the particles are simply too big, so the water just runs off and isn’t absorbed as it is with soil, thus starving the plants of water. The second issue with sand is its lack of organic matter. Most sand is less than 1% organic matter, which is defined as organic material (plants and animal residues) in different stages of decomposition. This organic material feeds micro-organisms, which in turn create nutrients that are then utilised by the plants in their survival.
All this combined with the high temperatures, the weak structure of sand at holding roots and the high winds constantly trying to rip away the plants, make desert farming a huge challenge — but perhaps not an impossible one though.
Algeria is the largest country in Africa at 2,381,740 square kilometres (919,590 square miles). Unfortunately for Algeria, around 80% of that land is in the Sahara Desert and essentially uninhabited.
Instability in the region following the Western Saharan War from 1975–1976 led to the creation of the Sahrawi Refugee camps, which today house between 90,000 and 165,000 (the exact number remains disputed by all parties involved, but the UN today recognises 90,000 individuals).
For decades, the refugees were dependent on the United Nations World Food Programme for food aid and to a large part they still are, but steps are being taken to reduce that dependence in the camps.
Here, growing plants in sand is possible thanks to hydroponics — a type of farming that grows plants in ‘inert mediums’ like packing peanuts, gravel and sand. Put simply, it is plants being farmed using nothing but water and a mineral nutrient solution. It vastly reduces the amount of water required to farm, which often has to be brought in by the literal truck load and at a high price.
The refugee camps and UNWFE have been successful in growing a strain of local barley in greenhouses, which is used as fodder to feed to the animals in the camp, noticeably increasing their dairy output, as well as the quality of the meat, and thus supplementing the diets of the refugees.
Though steps are being taken to reduce the cost, this remains relatively expensive and is far from providing enough food to support the camps. It is certainly a step in the right direction, but it’s still in its infancy.
For a country that dared to try and tame the Sahara though, we need look no further than Egypt. At approximately 90% desert, Egyptians have always stayed close to the Nile, the life blood of the country. Evidence of agriculture in the Nile Delta has been dated to as far back as 8000 BC, so it would seem the Egyptians have already mastered the desert sands, but unfortunately the Egypt of today is very different than the Egypt of 10,000 years ago.
The population today has swelled to nearly 90 million, four times as many as in 1945. Egypt simply does not have the enough agricultural land to feed its people, and so the country that was once the breadbasket of the Roman Empire now imports 50% of its food from abroad.
The New Valley Project aimed to change that. It was one of the most ambitious construction projects ever created and has its roots in the dictatorship of Hosni Mubarak in the 1990s. It aimed to add approximately 1.5 million acres of farmland to Egypt. Following his deposition in the 2011 Arab Spring, the project was frozen, but recently it has been revived.
The project aims to deal with arguably the most difficult part of growing plants in the desert — the lack of water. The New Valley Project and other desert reclamation projects undertaken by the Egyptian government solved this by either creating an elaborate system of canals and pumping systems to syphon water from the Nile River and Lake Nasser, or by pumping up ground water from below the surface.
So, did it work? Well, not really, no. Numerous factors plagued the projects. Firstly, a vast amount of work was needed to get the shoddily constructed canals up to standard, which increased the costs of the project exponentially. Next was the issue of pumping up ground water. The vast quantities required expected to have a drastic impact on the Nubian Sandstone Aquifer, the source of the water. Essentially, it was theorised that the farming would drain the aquifer, and thus the farmland would only be productive for a limited period of time.
This coupled with the fact that despite incentives, few people want to move to one of the hottest parts of the world to work on a potentially unsustainable farm has basically rendered the project a failure. A few companies have managed to stick it out at on the New Valley Project, but these companies are few and far between. It simply isn’t possible to make a profit or produce any notable amount of food in the area.
Details remain scare, but it appears the New Valley Project has been set back once more, and the term Toshka (the Egyptian name for the New Valley Project) has become a joke and a byword for failure to everyday Egyptians, seem as little more than another political stunt by the government.
Away from the Sahara in the UAE a more novel solution has been found — Liquid Clay. At 80% desert, the UAE faces the reality of ‘learn to grow food in the desert of rely on buying from abroad.’
However, an experimental farm working in conjunction with a Norwegian scientist has managed to half the water needed to farm by using the excitingly named Liquid Nano Clay. In essence, this clay and water solution is pumped a few metres below ground where it binds with the sand, creating fertile soil. It needs to be re-done every 5 years or so, depending on how the soil is being used, but it has been proven to reduce the water required to make the desert bloom.
Unfortunately, this seemingly miracle product comes at a very high cost, up to $9,500 (£6,900) per hectare. Desert Control, the company behind it, intends to sell their products to municipal governments and commercial growers but hopes to make it affordable to all growers in the future. The issue with this is that many of the countries within the Sahara Desert are incredibly poor, some of the poorest in the world. Even a low price may prove unattainable on the large scale needed to move these countries toward self-sustainability.
No easy answers
The problem of the Sahara Desert has stubbornly refused to give way for much of human history. It has acted as a natural barrier to numerous empires like the Romans and the Carthaginians.
While you can farm in the Sahara and, in isolated cases, peoples and companies are, it remains a colossal challenge. Bringing water to the desert seems to be the greatest limiting factor to growing in the Sahara. Pumping seawater and desalinating it has been done successful in Jordan on the small scale and could potentially be re-created in the Sahara, but the scale required is nothing short of daunting and de-salination technology remains prohibitively expensive for many countries today, especially those most affected by the Sahara.
In addition, in a future where food is grown in the Sahara, it will likely be the private sector, not the governments of these places that develops the scalable technology needed for the project. Naturally, those companies are going to want a payoff for their investment and so may turn to exclusively farming cash crops. This has been seen in the New Valley Project, where one of the few companies that remains appears to exclusively grow Medjool Dates, a notable cash crop.
While obviously investments in these countries should be encouraged, farming in the Sahara should ultimately make these countries less dependent on foreign investment. If companies paid for the use of the Sahara, the governments of these countries would still be forced to use that money to buy food from aboard. If the desert can be turned into an oasis, let oasis be used for the independence of those countries, not to further a cycle of dependence that leads to nothing but instability.
There are some problems we never seem able to solve. The shortage of electrical power is one of them. Ever since President Carter proclaimed an energy crisis in the 1970s, people have been talking about all kinds of weird and wonderful solutions to the issue of energy and – thus far – no one has come up with one single answer.
While solar power is now providing as much as 4 per cent of British electricity, few people appreciate just how quickly electricity production will have to increase. If the internal combustion engine is on its way out then the western world will need to double its electrical supply just to recharge its battery-powered vehicles.
Progress on this scale demands a fundamental rethink of our entire energy supply industry. The beginning of the 21st century saw a group of German engineers doing just that. They developed a plan to harvest solar power in the Sahara desert and transmit the stuff across the Mediterranean using very high-voltage, direct-current cables.
Just as Carter had been influenced by the oil shock of 1973, the Germans had been influenced by the disaster in Chernobyl and a mounting recognition that all technology is associated with risk. At that stage, large scale solar power plants still sounded like science fiction but the potential of solar power had long been recognised.
One German engineer calculated that the amount of solar energy absorbed by the world’s deserts exceeds the total amount of energy consumed by man in an entire year. We’d only need to harness a small proportion of this energy to provide us with all the electricity we are likely to need without any of the usual headaches surrounding pollution or fuel supply.
The Sahara is a vast area of land, larger, even, than the continental United States and extending over several national boundaries. It would take only one or two per cent of the land here to provide the whole of Europe with electrical power. There isn’t a lot of wildlife to destroy in the desert and since the population density is close to zero, we can probably avoid the nimbyists too.
At first sight, though, the Sahara isn’t quite as perfect since much of the land here is still some distance north of the equator. As we approach the equatorial regions of the world, it seems logical to assume that the intensity of sunlight ought to go up. However, the equatorial region of the planet is associated with a much higher level of cloud cover than the Sahara and on balance, about 20 to 30 degrees north of the equator turns out to be the ideal location for a large scale solar power plant.
Plenty of land, plenty of sun, not a lot of cloud and not that far from the nearest major market for electrical power, western Europe.
Some manufacturers are now producing photovoltaic panels that are cosmetically indistinguishable from traditional roofing tiles. It’s easy to envisage a future where it becomes compulsory
Many of the nation states in the region are quite poor with little or nothing in the way of oil or gas reserves. Ever since the 1970s, countries with significant oil reserves have been able to cash in on the oil boom and increase its standard of living overnight, whereas a nation that lacks oil reserves is forced to import at potentially enormous cost. Thus far, this kind of prosperity has been based on geological accident, but solar power is different. Soon, relatively poor countries might have access to a major energy resource of their own, enabling them to generate their own power at home and to export anything left over to western Europe.
So why isn’t it happening?
Part of the appeal of large-scale solar power generation is the opportunity it provides for a secure energy supply. Ever since the early 1970s, western governments have been living in fear of another Opec crisis or – at the very least – some sort of military and political confrontation that might interrupt the supply of energy. When we try to calculate how many lives might be lost or damaged by one source of energy or another, we really ought to factor in how many lives we’d be likely to lose by fighting another war for oil. Politicians who are too young to remember the Yom Kippur War are old enough to understand Putin and the fear that he might try to suddenly cut off the supply of natural gas to western Europe as part of some alternative economic warfare. What will Nato actually do if that happens?
But our friction with the Middle East goes back even further than Yom Kippur. A generation older than my own has not forgotten the Suez Crisis. During the 1950s, the Egyptian president Gamal Abdel Nasser decided to seize the Suez Canal and nationalise the entire project. The countries, companies and investors who had paid for its construction were far from pleased. Attempts at recapturing the canal ended in fiasco. The Egyptians came out of the 1950s quite well.
Against this is the relentless march of progress and the emergence of new tech that has thrown the whole equation into disarray. Just 10 years ago, the environmental movement was obsessed with the idea that western governments should continue to subsidise solar power. In those dim and distant days, solar power was so costly that people had to be bribed to actually use it. This is no longer the case and governments believe that it is entirely reasonable to phase out their solar power subsidies. Whilst this decision may be premature, it’s hard to ignore just how quickly the price of a photovoltaic panel has fallen. Part of the reason for this is mass production and part is the Chinese desire to subsidise their own industry, effectively destroying their competitors.
Panels are falling in cost so rapidly that it is not unreasonable to suggest that we should delay buying them just to wait for the next major price fall. Some manufacturers are now producing photovoltaic panels that are cosmetically indistinguishable from traditional roofing tiles. It’s easy to envisage a future where it becomes compulsory for all new housing to be built with a photovoltaic roof. Given that Britain turns over about 1 per cent of our housing stock every year, it also isn’t difficult to envisage a future where the majority of homes in the country are self-sufficient in energy.
But if the vogue towards a cheap and efficient energy-powered future continues, people are bound to look at the Sahara again. A vision of the desert practically covered in solar power panels is now a reality with a number of projects already having been established in North America and north Africa.
There are already accusations that North African Solar Power represents a rebirth of colonialism with European powers attempting to snatch resources from Africa and seize it for themselves
Engineers in Morocco have built one of the most ambitious solar energy projects on the planet. Using Spanish technology, they have built a system of mirrors designed to reflect the sun’s rays onto a large box that has been placed on a pedestal in the centre of the solar farm. This kind of energy generation is different from photovoltaic panels. It requires moving parts and a different attitude, but it has advantages too.
The mirrors are placed on rotating platforms so they can move throughout the day to follow the sun. By synchronising the position of each mirror to the day-night cycle, the maximum possible energy can be directed at one point. That point is a box containing salt. The salt soon melts into a sort of man-made lava and can be moved as a fluid along pipes where it is used to heat water, which in turn generates steam. The steam can then drive turbines creating electricity. This kind of installation involves multiple moving components and would require more maintenance than a standard PV panel. However, the molten salt can remain hot well after sundown and continue to generate electricity for up to seven hours into the night. Given that a country like Morocco would typically experience about 12 hours of daylight, this still leaves the problem of the energy gap in the early hours of the morning while the system waits for the new dawn, but it’s much more comprehensive than PV. This kind of technology uses a lot of water for cooling purposes and this might restrict its use. But it’s already quite popular and a number of such systems have been built in the United States.
This kind of vision requires us to believe that it might be possible to transmit energy over vast distances. Electricity is pretty ephemeral stuff; it doesn’t lend itself to long-distance transportation. In complete contrast, crude oil is a liquid that can be pumped on and off a cargo ship quite easily. They say that if you stand on the bridge of an oil tanker sailing to Japan you can see the smoke from the funnel of the tanker ahead of you and the tanker behind you. Such is the hunger of the Japanese economy for the dark black liquid.
We still don’t know how to bottle electricity and the problems associated with battery storage remain formidable but progress has been made. There have been major electrical cables under the North Sea and the English Channel for many years now. In the southern hemisphere, the Australian government has also built a cable linking Tasmania with the Australian mainland so the idea of using high-energy, direct-current transmission from north Africa to Europe isn’t quite as far-fetched as it sounds. In these circumstances about 12 per cent of the power generated in the Sahara would be lost during transmission. Most authorities believe that the advantages of increased sunlight intensity associated with the north African environment outweigh the problems associated with this power loss.
And if the north African power plant succeeds? What then? Many of the countries involved have a clear memory of their days as European colonies and for some African politicians this is a difficult memory to forget. There are already accusations that north African solar power represents a rebirth of colonialism with European powers attempting to seize resources from Africa for themselves. Some of the optimists for solar power in the Sahara have suggested that most of our power could be generated in the desert but while this kind of political friction still exists, it’s hard to imagine European governments allowing more than 10 per cent of their grid to be supplied from overseas.
University of Southampton gives us an idea of the current situation through this article on Solar and wind energy sites mapped globally for the first time.
Researchers at the University of Southampton have mapped the global locations of major renewable energy sites, providing a valuable resource to help assess their potential environmental impact.
Their study, published in the Nature journal Scientific Data, shows where solar and wind farms are based around the world—demonstrating both their infrastructure density in different regions and approximate power output. It is the first ever global, open-access dataset of wind and solar power generating sites.
The estimated share of renewable energy in global electricity generation was more than 26 per cent by the end of 2018 and solar panels and wind turbines are by far the biggest drivers of a rapid increase in renewables. Despite this, until now, little has been known about the geographic spread of wind and solar farms and very little accessible data exists.
Lead researcher and Southampton Ph.D. student Sebastian Dunnett explains: “While global land planners are promising more of the planet’s limited space to wind and solar energy, governments are struggling to maintain geospatial information on the rapid expansion of renewables. Most existing studies use land suitability and socioeconomic data to estimate the geographical spread of such technologies, but we hope our study will provide more robust publicly available data.”
While bringing many environmental benefits, solar and wind energy can also have an adverse effect locally on ecology and wildlife. The researchers hope that by accurately mapping the development of farms they can provide an insight into the footprint of renewable energy on vulnerable ecosystems and help planners assess such effects.
The study authors used data from OpenStreetMap (OSM), an open-access, collaborative global mapping project. They extracted grouped data records tagged ‘solar’ or ‘wind’ and then cross-referenced these with select national datasets in order to get a best estimate of power capacity and create their own maps of solar and wind energy sites. The data show Europe, North America and East Asia’s dominance of the renewable energy sector, and results correlate extremely well with official independent statistics of the renewable energy capacity of countries.
Study supervisor, Professor Felix Eigenbrod of Geography and Environmental Science at the Southampton comments: “This study represents a real milestone in our understanding of where the global green energy revolution is occurring. It should be an invaluable resource for researchers for years to come, as we have designed it so it can be updated with the latest information at any point to allow for changes in what is a quickly expanding industry.”
Renewable electricity may be only source to withstand biggest shock in 70 years because as reported by Jillian Ambrose Energy correspondent of The Guardian of April 30, 2020, Covid-19 crisis will wipe out demand for fossil fuels, says IEA.
Renewable electricity will be the only source resilient to the biggest global energy shock in 70 years triggered by the coronavirus pandemic, according to the world’s energy watchdog.
The International Energy Agency said the outbreak of Covid-19 would wipe out demand for fossil fuels by prompting a collapse in energy demand seven times greater than the slump caused by the global financial crisis.
The steady rise of renewable energy combined with the collapse in demand for fossil fuels means clean electricity will play its largest ever role in the global energy system this year, and help erase a decade’s growth of global carbon emissions.
Fatih Birol, the IEA’s executive director, said: “The plunge in demand for nearly all major fuels is staggering, especially for coal, oil and gas. Only renewables are holding up during the previously unheard of slump in electricity use.”
Demand for gas is expected to fall by 5%, after a decade of uninterrupted growth. It is the steepest drop since gas became widely used as an energy source in the second half of the previous century.
Coal demand is forecast to fall by 8% compared with 2019, its largest decline since the end of the second world war.
The Paris-based energy authority used data from every country and across each energy sector to analyse the impact of the pandemic on the global system.
It found that global energy demand was likely to plummet by 6% this year, the equivalent of losing the entire energy demand of India – the world’s third largest energy consumer – or the combined energy demand of France, Germany, Italy and the UK.
The impact of the pandemic on energy use will be more keenly felt in advanced economies where demand is expected to fall by 11% across the EU and 9% across the US.
The collapse of fossil fuel demand could lead global emissions to fall by 8% compared with 2019, a drop six times larger than the record fall after the financial crisis in 2009 to lows not seen in the past decade.
Put simply, Asia is the main source of solar technology and demand for it seems to be however tumbling everywhere as confined resistance to the pandemic is hampering its dynamics. It remains that all renewables account for something like 26 percent of all capacity expansion in the Middle East region. As an exception amongst the most engaged would be Egypt. This emerging economy bets big on Solar as elaborated on by Oxford Business Group could be indicative of all that is happening nowadays.
This Emerging Economy Bets Big On Solar
April 06, 2020
Egypt’s total of 1173 recorded Covid-19 cases and 78 deaths, as of April 5, places Africa’s third-most populous country significantly below the global per capita averages for both counts as the pandemic continues to disrupt the global economy.
However, as a result of the sharp growth in international cases and the gradual closing of national borders, in mid-March the government decided to implement travel restrictions.
Egyptian airports were closed to international flights on March 19 for an initial period of two weeks. This shutdown has since been extended to internal flights and will last until at least April 15.
Additionally, on March 25 the government announced a two-week curfew from 7pm to 6am, while pharmacies and food shops will be the only retail establishments allowed to open on weekends and past 5pm on weekdays. Restaurants may only open for deliveries.
Pre-emptive economic stimulus
As the potential economic fallout of the pandemic began to become clear, on March 22 President Abdel Fattah El Sisi announced a comprehensive LE100bn ($6.4bn) package of measures. This included a LE22bn ($1.4bn) stimulus to support the Egyptian Exchange, which should also benefit from a 50% reduction in taxes on the dividends of listed companies.
In addition, the Central Bank of Egypt announced a 3% interest rate cut in what it described as a “pre-emptive move” to support the wider economy.
In a further bid to mitigate the impact of Covid-19 restrictions on key sectors, the government has committed to support exporters by allocating LE1bn ($63.5m) for export subsidies during March and April, and will furthermore postpone tax payments for three months on facilities and properties occupied by tourism companies.
Energy prices cut
Following the country’s IMF-backed reforms beginning in 2016, energy subsidies have been gradually removed, resulting in a projected price rise for both households and businesses into 2020.
However, in a bid to offset the impact of the pandemic on industrial output, on March 17 the government announced that the price of gas for industrial providers would be reduced from $5.50 to $4.50 per 1m British thermal units.
As part of the same package of measures, the government also announced that the price of electricity would be reduced for heavy industry consumption, from LE1.10 ($0.07) to LE0.10 ($0.006) per KWh. For other industries, the price is to be kept stable for between three and five years.
Boosting solar capacity
Against the current backdrop of challenging economic circumstances, on April 1 it was announced that the World Bank’s Multilateral Investment Guarantee Agency (MIGA) would provide funding for six new solar power plants at Benban Solar Park in the Aswan Governorate in Upper Egypt, one of the largest such installations in Africa.
The amount is guaranteed against the risk of currency inconvertibility and transfer restriction for up to 15 years. It is part of Egypt’s solar feed-in-tariff programme, which provides long-term contracts to private energy companies with a view to generating investment in renewable sources.
“In the face of uncertainty arising from the Covid-19 pandemic, MIGA remains committed to helping drive foreign direct investment (FDI) by supporting investors who are helping Egypt achieve its long-term goals of diversifying its energy mix,” Hiroshi Matano, executive vice-president of MIGA, said in a statement.
While the pandemic has caused a number of delays for the renewables segment, notably the postponement of the construction of four solar plants by domestic firm Inter Solar Egypt, the future bodes well for the expansion of the industry.
“In the current uncertain economic environment, solar energy has become popular, as it can be produced up to 80% more cheaply than other sources,” Yaseen Abdel-Ghaffar, Managing Director of SolarizEgypt and board member of The Solar Company, told OBG. “Although it was initially difficult to secure FDI for projects, banks are becoming increasingly receptive to renewables and a growth in financing is expected after regular economic conditions are re-established.”
We all know that the world is undergoing an energy transformation, from a system based on fossil fuels to a system based on renewable energy,in order to reduce global greenhouse gas emissions and avoid the most serious impacts of a changing climate. This article however realistic it appears, could be understood as some sort of justification of the ineluctable surrender of the fossil fuel to its time penalty.
Jarand Rystad Jan 25, 2020
Existing fossil fuel power plants will play a pivotal role in enabling the full transition to a near-zero-carbon electricity system in many countries. How can such a surprising and perhaps counterintuitive conclusion be reached? The key word is intermittency, in reference to the wide fluctuations of energy supply associated with solar and wind. Even if these two sources are, to some degree, complementary (with more wind at night and during winter, complemented by more sun at daytime and during the summer), the combination still carries a high degree of intermittency.
In this analysis, we have used data from Germany from 2012 to 2019, and scaled this up to a near 100% renewable system – assuming that the total capacity will be 160 GW, or three times the average consumption. In this system, there will still be 28 days where solar and wind combined produce less than 30% of the consumption. This happens typically during high-pressure weather systems during the winter months from November to February.
Moreover, there will on average be two extreme periods per year, with up to three days in a row when sun and wind will deliver less than 10% of Germany’s total energy consumption. Even with adjustments to imports and consumption levels, the country would still need some 50 GW of power to avoid blackouts (with 72 hours at 50 GW equating to 3.6 TWh). Total water pumping capacity today is 7 GW over four hours or about 30 GWh. Assume this multiplies ten-fold by 2050, and assume that 45 million cars are battery electric vehicles with surplus capacity of 20 kWh each. This would deliver about 1.2 TWh in total, meaning the system would still need 2.4 TWh of power or a continuous load of 33 GW.
During these periods, restarting old gas-fired power plants could be an economically rational way to deliver the power needed to keep the nation running as usual. The carbon footprint of this would be small – probably less than the footprint associated with constructing gigantic battery facilities for those few extreme cases. Germany presently has 263 gas power plants, with a total capacity of 25 GW.
Thus, finding a way to maintain these plants for emergency back-up capacity could be an enabler for an energy future based around solar and wind power. Capacity pricing rather than price per kWh is probably one of the commercial changes needed. This is the same pricing model that most people also have for home internet services, and should thus not be too difficult to implement.
Solar deployment continued to pick up in the Middle East and North Africa in 2019, the Middle East Solar Industry Association has said in its annual report. Brian PUBLICOVER in a PV magazine article titled ‘Solar is gaining traction in MENA region – but plenty of obstacles remain’ and dated January 17, 2020, explains the whereabouts of such deployment.
The Middle East Solar Industry Association (MESIA) says energy investment in the Middle East and North Africa (MENA) region could hit $1 trillion in the 2019-23 period.
The organization cited statistics from consultancy Frost & Sullivan valuing the region’s operational PV capacity at $5-7.5 billion, with an additional $15-20 billion worth of projects set to come online by 2024.
However, policymakers in many countries are still struggling to find the right mix of legislation, technology, financing and procurement options to kick-start development, the region’s top solar industry group said in its Solar Outlook Report 2020.
MESIA noted a large gap among the region’s varied PV markets in terms of cumulative installations and development. Egypt, Jordan, Morocco and the United Arab Emirates lead on deployment with Saudi Arabia soon to swell their ranks. While a handful of countries including Pakistan and Iraq are struggling to bring more solar online, markets such as Tunisia, Kuwait and Oman are starting to add significant projects to the regional PV pipeline, said the association.
Regional policymakers are increasingly prioritizing distributed solar, led by Dubai. The most populous city in the United Arab Emirates launched its Shams Dubai program in 2015 to support residential PV and commercial and industrial solar installation. By October, Dubai had installed around 125 MW of distributed PV capacity at 1,354 sites, MESIA said.
The industry association also highlighted the important role played by the Dubai Electricity and Water Authority in getting commercial and industrial projects built, noting market drivers for the segment vary across the MENA region. Cuts to electricity tariffs in markets such as the UAE, Jordan, Oman and Saudi Arabia have played a role, backed by the establishment of supportive regulatory frameworks, particularly for wheeling and net metering, the regional body said.
The Egyptian authorities made significant progress on the massive Benban solar complex last year. Roughly 1.47 GW of solar capacity – including a wealth of bifacial and tracking projects – was commissioned at Benban by the end of November, MESIA said. The $4 billion, 1.8 GW complex will eventually feature 41 projects.
The Egyptian government wants renewable energy to account for 20% of its electricity mix by 2022, and 42% by 2035, including 52 GW of large scale and distributed-generation projects. It continues to look beyond feed-in tariffs with the Egyptian Electricity Transmission Co (EETC) and World Bank private sector arm the International Finance Corporation signing a deal in April to fund projects chosen via auctions, for example. The EETC signed a solar power purchase agreement with Saudi’s ACWA Power in October for the 200 MW Kom Ombo project, at a price of $0.0275/kWh. Construction is expected to wrap up in the first quarter of next year.
However, Egyptian energy demand is set to leap from 27.6 GW last year to 67 GW by 2030, MESIA said, citing Frost & Sullivan data. To facilitate renewables deployment, the country will need a competitive electricity market and will have to scrap subsidies for fuel and electricity tariffs dating back to 2016 while also facilitating the development of energy storage to support distributed PV roll-out, the industry group argued.
United Arab Emirates
MESIA describes the UAE as a regional “front runner” for PV and it made undeniable progress last year. Having launched commercial operations at the 1,177 MW Sweihan PV project, Abu Dhabi in November the allocated the fifth, 900 MW phase of the massive, 5 GW Mohammad bin Rashid Al Maktoum Solar Park for a record low power price of $0.01693/kWh. The solar park’s installed capacity currently hovers around the 713 MW range, MESIA said, noting the third to fifth stages of the project will be finished in the years ahead, with full completion scheduled for 2030.
The future also looks bright for solar in the wider UAE, particularly at utility scale. In November, the Emirates Water and Electricity Co closed submissions from developers for a 2 GW solar project at Al Dhafra. That project is set for completion by the first quarter of 2022.
MESIA said it expects a similarly sized tender early this year, as Abu Dhabi may be gearing up to install another 6 GW of solar by 2026. However, PV will have to compete with nuclear and rival renewables in future. With more intermittent renewables capacity coming online, MESIA expects the UAE authorities to start to include more energy storage capacity in future PV tenders.
MESIA said energy storage will be “pivotal” to the development of Jordan’s solar sector. The country has been developing storage capacity for a while, as it is struggling to stabilize its electrical transmission network while it brings significant amounts of large scale solar and wind capacity online.
“At this stage, Jordan’s capability to strengthen the grid, commitment to achieve increased energy efficiency and develop additional storage is key for the future market attractiveness,” the industry association reported.
The authorities launched a tender last year for a study on the feasibility of installing 30 MW of pumped storage capacity at the nation’s key dams, MESIA noted.
Saudi Arabia’s growing PV market continues to move from strength to strength, according to the association, which highlighted the 300 MW Sakaka PV plant – the kingdom’s biggest to date. The regional body also noted the Renewable Energy Project Development Office asked 60 pre-qualified companies to submit bids for “six solar energy schemes with a combined capacity of 1.5 GW” late last year, in addition to six projects the authorities started tendering this month.
However, while the country remains one of the most promising regional PV markets, the Saudi authorities still need to tackle key challenges, MESIA said. The government must collaborate more effectively with the private sector, among other things. It also needs to improve the regulatory environment and propose new business models to unlock the potential of its fledgling commercial and industrial solar sector, the industry group said.
MESIA sees Tunisia’s commercial and industrial solar segment as particularly promising but noted the market continues to struggle in the face of fossil fuel subsidies. The regional body argued the Tunisian government must introduce incentives such as tax breaks to encourage greater investment in commercial and industrial PV, among other policy considerations.
MESIA also noted the Tunisian authorities have overseen critical investments in grid infrastructure upgrades over the past year, in anticipation of $2 billion of anticipated foreign investment in the solar and wind sectors over the next three years. The Tunisian Ministry of Industry and Small and Medium Enterprises has said the expected influx of funds could support development of 1.9 GW of fresh renewables capacity by 2022.
A Frenchman is credited with being the first to discover the photovoltaic effect that produces electricity from sunlight. The first solar panel was built in the US. But when Abu Dhabi decided to build the world’s largest individual solar power project, they looked east for help.
The country partnered with Chinese and Japanese companies to construct a facility, which opened this year, with a peak capacity of 1.18 gigawatts generated by 3.2 million solar panels. That’s because Asia, more than any other region on the planet, and China, more than any other nation, currently represent the future of solar energy, and are at the heart of the ensuing industrywide transformation from fossil fuels to renewable and nuclear energy.
Decarbonization is changing the face of energy and the world economy in more ways than most consumers — and even most executives — appreciate. Besides the transition from molecule to electron, as this move toward electrification suggests, it is also shifting the industry’s economic base from West to East and reconfiguring the hierarchy of companies and geographies that define energy.
Asia is the 800-pound gorilla in the energy story. First, its continued economic growth and rising standard of living will make its constituent nations pre-eminent energy consumers for the foreseeable future. A study by BP indicates that Asia, including China and India, will represent 43% of global energy demand by 2040, and through that year, the region will account for more than 50% of the growth in demand. In contrast, energy demand among the 36 nations in the OECD, which includes most big economies in the Americas and Europe, will be flat.
China’s sunny outlook
Second, places like China are already among the most important suppliers of non-fossil fuel-based energy and technology. By 2017, China owned 72% of the world’s solar photovoltaic module production; in comparison, the US has 1% and Europe 2%. Of the eight top producers, six are Asian. Not including hydropower, China has somewhere around one-third of the world’s installed renewable capacity; the EU has a little over a quarter; and the US accounts for 14%. China also leads in the generation of hydropower.
As the electrification of transportation advances and demand grows for renewable energy storage solutions, China looks likely to monopolize here, too. China produces at least two-thirds of the world’s production capacity for lithium-ion batteries, which are used in electric vehicles (EVs), mobile phones and laptop computers (some estimates put their share at closer to 70%), and it looks likely to hang on to that lead through at least 2028. And besides being the largest market for EVs, China also controls the bulk of production.
China is the third-largest miner of the primary raw material used to produce those batteries, lithium — often referred to as white petroleum because of its mounting economic importance. Chinese producers are also buying up lithium reserves in Chile, the world’s second-largest lithium miner (Australia takes the top spot).
A fundamental overhaul
Of course, climate change is forcing the energy industry to undergo an existential transformation that may eventually see the elimination of fossil fuels entirely. While most executives at oil companies will be dead or at least retired before that transition proceeds to what seems its inevitable end, the slowing of demand is already being felt.
By contrast, the demand for electricity seems insatiable. Electrification rates continue to rise across the globe, with Asia expected to be close to 100% coverage by 2030. Much of that growth in demand may be supplied by renewables and nuclear power rather than fossil fuel-generated power, although natural gas is expected to play a role for years to come. It also may be accomplished through a decentralization of generating capacity, such as recent rural electrification projects in places like Malawi and Bangladesh where farmers and villages use solar panels and small generators to provide their own electricity.
What’s the World Economic Forum doing about the transition to clean energy?
Moving to clean energy is key to combatting climate change, yet in the past five years, the energy transition has stagnated. Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago.
Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.
Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.
Yet despite the urgency of climate concerns and the rapidly falling cost of renewable energy, the speed at which this existential energy transition will happen is uncertain, as pre- and post-tax subsidies on fossil fuels remain in place, discouraging consumers to make the change to a more environmentally beneficial and frequently cheaper source of energy. The International Monetary Fund estimates post-tax subsidies on fossil fuels like coal and petroleum — a result of unpriced externalities, such as societal costs from air pollution and global warming — totalled $5.2 trillion in 2017.
Regardless of the speed of transformation, there’s no doubt it is already well underway. That’s why places like the United Arab Emirates (of which Abu Dhabi is the largest) are building solar power and nuclear facilities, despite being the world’s eighth-largest oil producer — and making the transition with Asian partners. They see the future.
Gas investments in the Middle East and North African (MENA) region are declining, according to a report from Saudi Arabia-based Arab Petroleum Investments Corp. (APICORP).
The report highlighted worries about the challenge of meeting domestic demand given this slowdown. Private investors are taking a wait-and-see approach, driven by low gas prices, potentially putting more strain on governments.
The Gas Investment Outlook 2019-23 charts a reduction of $70 billion in gas spending from the previous report, 2018-22, but the outlook for petrochemicals has increased by 50%. Of the nine countries covered, investments are set to fall in seven. Petrochemicals are on the rise as countries focus on extracting the most amount of value from oil production.
The most notable fall in gas plans was in Kuwait, down nearly 80%, while Saudi Arabia was down 60%, with Algeria and Iran down around 50% each. Driving the $70bn reduction were Saudi and Iran. This is not necessarily a question of cutting investments, it can also be driven by major projects being completed. Saudi, for instance, commissioned its Wasit gas plant.
While the MENA region has moved towards the consumption of gas, for power generation and industry, continued access to supplies is driven by the government’s willingness and ability to pay for these supplies. This willingness will have a direct impact on meeting future supplies, APICORP said. Saudi is planning an additional 12 GW of greenfield power, while Egypt has 9 GW of projects, which “will require additional gas supplies”.
LNG supplies in the area are playing a part in meeting increased demand. Regasification terminals are on track in Kuwait and the United Arab Emirates, while Qatar is working on expanding its export capacity to 126 million tonnes per year by 2027. Around the world, for the first time, investment commitments in new LNG capacity this year passed the $50bn mark. Global demand for gas is increasing, it noted, but supply may outpace this until 2023, although a number of factors – trade wars and geopolitical tensions – are complicating such calculations.
While Qatar is working to cement its dominance of the liquefaction sector, Saudi Aramco is taking steps to become a player, having signed a deal this year for a potential interest in the Port Arthur LNG plan, in the US. Construction of Qatari trains are expected to carry a price tag of around $15bn.
Iran is leading the charge in gas and petrochemical investments, followed by Egypt, despite the countries’ share of spending to 2023 declining by $11bn and $5bn respectively from the previous APICORP report.
Saudi has made progress on its energy intensity of GDP and is increasing gas production, with the target of increasing sales gas volumes to 164 bcm per year by 2026. There are challenges to gas in the kingdom, including alternative fuel stocks, while shale production has gained some attention but carries a high cost, at $6-10 per mmBtu.
Abu Dhabi is also pursuing unconventional gas resources such as shale, in addition to offshore sour gas. The state imports gas via the Dolphin link, with LNG coming via two regas terminals. Abu Dhabi also began
Algeria must tackle the problem of low upstream spending and access to technology around maturing fields, in particular its Hassi R’mel field. Just over $8bn is expected to be invested in the country during the next five years, APICORP said. Companies working in the country’s energy sector have struggled with bureaucracy, with the report citing the recent cancellation of the $100 million debottlenecking project at the Rhourde Oulad Djemma field.
Production and exports have declined in 2019, with new fields coming onstream in the southwest providing only a “short-term fix”. Gas flaring accounts for the equivalent of 20% of Algeria’s domestic consumption, suggesting this might be one area for improvement.
The APICORP report described Egypt as “touting itself as a gas hub”, based on regional supplies, from states such as Israel, and existing infrastructure “but key elements are still amiss”. The country expects to consume 72 bcm of gas in 2020 and 92 bcm in 2021, APICORP said, citing Egypt’s plans. The North African state could run into a net deficit in 2025, on high domestic consumption and increased LNG exports.
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