Energy Transition could reshape the Geopolitical Landscape

Energy Transition could reshape the Geopolitical Landscape

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. 

How does this transition have the potential to reshape the geopolitical landscape and how does it compare to the impact of the last transition from traditional biomass energy 200 years ago? 

How the Global Energy Transition is Set to Disrupt the Geopolitical Landscape

5 April 2019

Gitika Bhardwaj, Digital Editor@GitikaBhardwajLinkedIn

Adnan Z. Amin, Director-General, International Renewable Energy Agency

Solar panels at the Noor Concentrated Solar Power (CSP) plant which is located 20km outside Ouarzazate in Morocco. The solar plant is one of the largest in the world designed to boost renewable energy production in Morocco. Photo: Getty Images
Solar panels at the Noor Concentrated Solar Power (CSP) plant which is located 20km outside Ouarzazate in Morocco. The solar plant is one of the largest in the world designed to boost renewable energy production in Morocco. Photo: Getty Images

The last transition created an energy system that was based on resources that are geographically concentrated. This allowed the exercise of geopolitical power around the distribution of those resources which, in turn, had economic advantages for those countries that extracted those resources. 

But we are now moving from an energy system of scarcity to one of potential abundance for almost every country around the world. This is because almost every country will have some degree of energy independence in the new energy system we are moving to since almost every country will be able to harness renewable energy.

This shift is a fundamental change for the world and it’s going to have a profound impact on the global economy. That’s why I believe that the energy transition we are going through is going to be as consequential, if not more, than the last one we experienced 200 years ago.

How do you anticipate countries, particularly those that have benefitted from fossil fuel production in the past, to respond to these geopolitical changes, given that it could potentially disrupt existing power dynamics and trade patterns?

One of the greatest challenges that the energy transition presents is for fossil fuel-producing countries, many of which are countries that have run their economies on these resources in the past, to adopt a new, diversified, economic model.

We are beginning to see the emergence of this around the world. In the United Arab Emirates, for example, there is an energy strategy in place that is calling for 70 per cent decarbonization and 44 per cent clean energy power generation by 2050. This is at the base of an economic diversification strategy to move away from their reliance on one particular resource – which currently is oil.

I think this is a critical challenge for many countries who are in the same situation. For example, although Saudi Arabia is trying to diversify its economy, it faces immense challenges, although it’s Vision 2030 strategy points the way towards moving in a positive direction.

But there are other countries that are unprepared. If you think of the possibilities that a fast-moving energy transition has for the prices of fossil fuel resources, and the impact it could have on countries like Nigeria, Angola, Gabon and others that are highly dependent on these resources, then unless they have ambitious strategies of economic diversification, they could face some severe challenges in the near future.  

In terms of the geopolitics, the trade in oil and gas has been at the base of the geopolitical system we have today, but if you think of the fact that we are moving away from these resources into a much more electrified world with power movements across borders based on electricity from renewable energy, there is an enormous opportunity for fossil fuel-producing countries. 

This is because many of them are rich in renewable energy resources too so there is a chance for them to remain as energy players. However, it needs leadership and it needs vision to make it happen.

How are emerging economies across South America, Asia and Africa responding to the global energy transition at a time that they are seeking to develop their economies?

One of the most exciting things is that they are already responding well. What has happened over the last four years is that renewables have formed the majority in new capacity addition to the global power sector – which is remarkable.

Furthermore, the majority of renewables capacity addition has been in emerging economies and developing countries, so some of these countries are really pointing the way towards a very exciting future.

You have leaders in this field, like Morocco, which is coming from a 90 per cent energy import dependency to a target of having 52 per cent renewables in their electricity mix by 2030 – which is an extraordinary achievement. I’ve seen some of their installations and they have state-of-the-art technology and low-cost power generation that’s competitive with any fossil fuel power generation in the country.

Chile, too, has some of the lowest prices for renewable electricity in the world and it’s quickly moving to a zero-carbon energy economy.

What these countries are showing, is that this is the development strategy of the future, especially for emerging economies. It’s not merely about the replacement of one fuel for another – it’s a whole new paradigm of development that is emerging based on the current global energy transition.

Wind turbines at the San Gorgonio Pass wind farm near Palm Springs in California, US. Located in the gap between Southern California's two highest mountains, the facility is one of three major wind farms in the state. Photo: Getty Images.
Wind turbines at the San Gorgonio Pass wind farm near Palm Springs in California, US. Located in the gap between Southern California’s two highest mountains, the facility is one of three major wind farms in the state. Photo: Getty Images.

In a recent report, the transition to renewables is said to be set to reduce the risk of energy-fuelled conflicts, and as such, you recently said that renewable energy is the ‘defence policy of the future’.

Can you explain this in more detail particularly given the increasing security concerns posed by climate change?  

Fossil fuels, particularly oil, have had a marked imprint on patterns of conflict over the last 100 years. As the world shifts to renewables, and the relative importance of fossil fuels declines, a geopolitical shift in the frequency and location of conflict is likely to occur.

The risk of confrontation over contested hydrocarbon reserves, such as in the Middle East or in the South China Sea, may diminish. To this extent, the global energy transformation could generate a ‘peace dividend’. 

Climate change poses an existential security threat to humanity but renewable energy serves as a defence policy for the future as it plays an essential role in all strategies to combating climate change.

The latest IPCC report set out evidence of the need to limit global warming to a maximum of 1.5°C above pre-industrial levels in order to prevent irreversible changes to the Earth. But unless urgent steps are taken to decarbonize the energy sector, the world will remain way off this target. This is because pathways to a low-carbon economy require a rapid deployment of renewable energy and a doubling of energy efficiency – given that the energy sector accounts for two-thirds of global greenhouse gas emissions.

Renewables have the added potential to mitigate against wider socio-economic stresses and shocks that can lead to conflict too: by improving access to energy to the 1 billion people who are energy-poor, by creating jobs, reducing local pollution, promoting sustainable development and alleviating competition over scarce natural resources.

The renewable energy sector has achieved a number of milestones and currently employs over 10 million people globally. Are there any challenges presented by the global energy transition that need to be considered, for example, safeguarding those currently working in fossil fuel industries?

There is a lot of discussion about the disruption of the energy transition, which is correct, that’s why I think it should be a priority for policymakers and decision-makers to understand how the transition to renewable energy will impact everyone.

If the energy transformation begins to permeate into industrial sectors that have traditionally been dominated by fossil fuel energy, there could potentially be severe social disruption, and we are currently seeing the fear of this disruption playing out in the coal industry.

However, there are some innovative models, like a model that has recently emerged in Spain to enable a just transition in the coal sector. Social arrangements have been made to accommodate Spanish coal workers in the future as the country moves towards its renewable energy transition. 

But then if you think about how technology is beginning to reshape the global economy, if we move rapidly into the renewable energy-based electrification of the economy – where major sectors like mobility become increasingly electric – then you could see the whole supply chain of conventional vehicles, that employs millions of people around the world, with hundreds of billions of dollars of investment, very quickly begin to experience significant challenges.

So there is a lot of work to be done in terms of developing a cross-understanding of industrial policy and social policy. For example, understanding the scale of this energy transformation, how it will affect significant sectors in the economy, what kind of coping strategies there are and how we can create a workforce fit for the future which will involve reskilling the present workforce. I believe this has to be at the centre of thinking for policymakers and decision-makers today.

I wholeheartedly believe that we have the opportunity to move to a decarbonized society that can at least keep us below 2°C. But, unless we have the will at different levels of society – from politics to industry – that incentivizes investment in low-carbon growth, then I fear we may not achieve the goals of the Paris Agreement.

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UAE plans $163 billion spend on sustainable energy

UAE plans $163 billion spend on sustainable energy

The UAE will invest Dh600 billion ($163 billion) until 2050 to meet the growing energy demand and ensure the sustainable growth of the economy, said the Dubai Electricity and Water Authority (Dewa) in a new report.

The UAE has taken early steps to bid farewell to the last barrel of oil, and achieve a balance between development and maintaining a clean, healthy, and safe environment. The UAE Energy Strategy 2050 aims to achieve an energy mix that combines renewable and clean energy sources to balance economic requirements and environmental goals.

The Dubai Clean Energy Strategy 2050

Dubai has become an international pioneer in developing the clean and renewable energy sector. It has developed a number of techniques and practices to enhance the efficiency of the energy sector while rationalising consumption and finding alternative solutions to conventional energy. This supports the sustainable development of the Emirate.

The Dubai Clean Energy Strategy 2050, which was launched by Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, aims to provide seven per cent of Dubai’s total power output from clean energy by 2020. This target will increase to 25 per cent by 2030 and 75 per cent by 2050. Dubai is the only city in the region to have launched such a promising strategy, with set goals and timelines that map the future of energy until 2050.
The strategy consists of five main pillars: infrastructure, legislation, funding, building capacities and skills, and having an environment-friendly energy mix. The infrastructure pillar includes initiatives such as the Mohammad bin Rashid Al Maktoum Solar Park, which is the largest single-site solar energy project in the world, with a planned total production capacity of 5,000 megawatts (MW) by 2030, and a total investment of Dh50 billion.

Dubai to be the city with the lowest carbon footprint in the world by 2050

“We are working to achieve the ambitious vision of our wise leadership within the framework of federal and local strategies, including the UAE Vision 2021, the UAE Centennial 2071, and Dubai Plan 2021. Our strategies and business plans are inspired by the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Rule of Dubai, for the Emirate to be the city with the lowest carbon footprint in the world by 2050,”said Saeed Mohammed Al Tayer MD & CEO of Dewa.

The Mohammed bin Rashid Al Maktoum Solar Park is one of the key projects to achieve this vision. Since its launch, the solar park’s projects see considerable interest from international developers, reflecting the confidence of international investors in the projects that are supported by Dubai Government,” he added.
“We are proud that the solar park, which bears the name of an exceptional personality who is leading the sustainable development of Dubai, was recognised as one of the UAE Pioneers, an achievement that the late Sheikh Zayed bin Zayed Al Nahyan would have been proud of.
“Naming the solar park as one of the UAE pioneers drives us to continue our efforts to achieve the vision and directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, which guides us in all our projects and initiatives and achieve the objectives of the Dubai Clean Energy Strategy 2050, which aims to produce 75 per cent of Dubai’s total power output from clean energy by 2050,” Al Tayer concluded.

TradeArabia News Service

500 MW solar project to be built in Oman

500 MW solar project to be built in Oman

With no details reported on the final electricity price agreed for a 500 MW solar project to be built in Oman, speculation will center on whether the victorious Saudi power company and its Kuwaiti partners have again trumped lower offers from overseas rivals. The winning ACWA says:

We are a developer, investor and operator of power generation and desalinated water plants with 51 assets in operation, construction or advance development across 11 countries. We employ over 3,500 people with ~60% local employment. ACWA Power’s portfolio, with an investment value in excess of USD 45 billion, can generate 29+ GW of power and produce over 4.8 million m3 /day of desalinated water.

ACWA triumphs again in Middle Eastern tendering exercise

By Max Hall

With big players from France, Korea, China, Spain, India, Turkey and the U.K. all having expressed an interest in developing a 500 MW solar park in Oman, the organizing body will have surprised hardly anybody by eventually settling on a winning consortium led by Saudi Arabia’s ACWA Power and two Kuwaiti partners.

The winner was reportedly announced late on Sunday night by Kuwait’s state-owned news agency KUNA. pv magazine has been unable to verify that decision, which was reported by news wire Reuters yesterday.

According to the Reuters report, ACWA and partners the Gulf Investment Corporation and the Alternative Energy Projects Co have landed the contract to develop the project at Ibri, 300 km west of Muscat.

Originally announced as a $500 million project, the Ibri scheme is now being reported as a $400 million plant but the commissioning date of early 2021 is unchanged.

Home advantage

The decision of commissioning body the Oman Power and Water Procurement Company (OPWP) will come as a fresh snub to French energy giant EDF, which last year submitted the lowest bid for a 300 MW scheme in Saudi Arabia – SAR0.06697/kWh ($0.018) for the energy generated – only to lose out to ACWA despite the Saudi company offering a higher tariff of SAR0.08872. The Reuters report did not carry any details of final negotiated power tariffs in the Omani procurement exercise.

EDF was one of 12 bidders shortlisted by the OPWP after an initial request for expressions of interest attracted 28 enquiries from around the world. Indian state-owned utility NTPC Ltd was filtered out at the first stage but that left big solar companies including Engie, X-ELIO, Hanwha Q Cells, BP, Chint, GCL New Energy and Abengoa in the running.

The OPWP announced in November there were three consortia left standing, with ACWA and its partners joined by a group made up of Chinese manufacturing giant Jinko Solar, French oil major Total and state-owned Abu Dhabi concern Masdar; and a third bid, from Japan’s Marubeni Corp and the Oman Gas Company.

Oman is aiming to install 4 GW of renewable energy capacity by 2030, from a low base, and is also running a separate 500 MW solar tender as well as a reported $1 billion, 300 MW wind park.

The UAE and Hydrogen its power revolution

The UAE and Hydrogen its power revolution

Industrialists the world over say the gas can become a crucial part of the global energy mix – and faster than many people might imagine

UAE in prime position as hydrogen power revolution accelerates

By Satish Kumar / The National.

Updated: February 28, 2019.

Toyota’s hydrogen fuel cell car the Mirai. Such vehicles may power a sea-change in the use of the gas.

An energy source that can power everything from mass transport by land, sea and air to heavy industry, that does no harm to the environment and is practically limitless sounds like an ecologist’s Utopian dream.

But it’s no dream – and the revolution is already underway. Its name? Hydrogen – the most abundant element in the universe.

Industrialists the world over say the gas can become a crucial part of the global energy mix – and faster than many people might imagine. “I think the real test is when will the man in the street starts to recognise that hydrogen is part of the energy mix,” Ronnie Chalmers, vice president of the French industrial gases’ supplier Air Liquide’s Africa, Middle East and India hub, tells The National. “I think that will come before 2030, at different places and different times around the world.”

Ronnie Chalmers. Chris Whiteoak/The National

The Hydrogen Council says that by 2030 the gas will be a significant energy player with millions of hydrogen-powered vehicles on the road. Launched at the World Economic Forum 2017, in Davos, Hydrogen Council founders include Air Liquide, Toyota, BMW, Alstom and Airbus, among other big names.

The council believes the hydrogen sector will carry similar financial weight to the hydrocarbons industry with revenues worth some $2.5 trillion annually by 2050 and jobs for more than 30 million people globally. By comparison, the oil and gas market had total revenues of $1.97tn worldwide in 2017, according to BusinessWire’s Global Oil & Gas Industry Guide 2013-2017.

The council’s view may be a little optimistic, Robin Mills, the chief executive of the consultancy Qamar Energy, and author of The Myth of the Oil Crisis, tells The National. “Oil today is a $2.2tn business, gas say $0.5tn, coal $0.8tn,” he says. “So $2.5tn for hydrogen looks like a stretch. But it could certainly be a very major business.”

The mass implementation of hydrogen as a transport power source is already taking place. Hydrogen fuel cells power electric forklift trucks around the world and helps businesses such as Amazon, Ikea and others increase their production hours and reduce operating costs. The fuel cells do not need recharging like traditional battery-powered forklifts – hydrogen powered forklifts can be fully fuelled in under five minutes.

Hydrogen has been used in industry for decades such as in refining, treating metals and food processing but it is the acceleration of renewable energy that has spurred the multinationals’ interest – and Air Liquide sees the UAE as an ideal destination to further the hydrogen cause.

As a pioneer in renewable energy, particularly solar, the Emirates is committed to developing its green energy economy and, in part, this is why Air Liquide recently undertook a study in collaboration with Al Futtaim Toyota – which distributes Toyota’s hydrogen-powered Mirai vehicle in the UAE – and Khalifa University to look at strategies to grow the hydrogen industry here.

This month, the first solar-driven hydrogen electrolysis facility in the Middle East and North Africa (Mena) region was inaugurated in Dubai.

Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Dubai Supreme Council of Energy and chairman of the Expo 2020 Dubai Higher Committee, broke ground on the project, a collaboration between Dubai Electricity and Water Authority, Expo 2020 Dubai and Siemens. It will be built at Dewa’s outdoor testing facilities in the Research and Development Centre at the Mohammed bin Rashid Al Maktoum Solar Park in Dubai, state media agency WAM reported.

Mr Chalmers adds that the UAE has all the right ambitions regarding decarbonisation in the economy and “it was easy for us to say to Al Futtaim, ‘You have the same problem as us, you have the product, you need somebody to build fuel stations, we need somebody to market the cars'”.

A Toyota Mirai hydrogen-powered car. Reuters

Speaking at a press event in December to showcase hydrogen mass transport potential, Saud Abbasi, managing director of Al Futtaim Toyota, said: “In our next chapter, and in line with the UAE Vision 2021, we believe that Mirai [hydrogen fuel cell-electric vehicle] and any other FCEV in the future, once adopted on a large national scale, can actively help the UAE in its march towards serious climate action thanks to the many practical benefits it presents such as zero pollutants, zero behavioural change, long mileage and minimal hydrogen filling time of three to five minutes.”

So far, Al Futtaim in partnership with Air Liquide has opened a hydrogen station, the first in the Middle East, at Al Badia, Dubai Festival City. A second station is set to start construction this year in Masdar City, in collaboration with Adnoc, Masdar and Al Futtaim.

Hydrogen refilling station in Al Badia. Reem Mohammed/The National

Air Liquide is also pushing the use of renewables as a source of hydrogen.

“The ultimate goal is to have 100 per cent green hydrogen – the definition of green hydrogen is that it comes from green energy. This could be solar, wind, biogas,” says Olivier Boucat, head of Air Liquide’s H2 Mobility unit.

Olivier Boucat. Chris Whiteoak/The National

The company admits it is not at that stage yet. Today, Air Liquide uses a mix of green and “brown” hydrogen – where methane sourced from coal or natural gas is processed to release hydrogen – producing a lot of CO2 as a byproduct.

But it aims to rapidly ramp up its share of green hydrogen produced by using water electrolysis and renewable sources of electricity, such as solar in the UAE, which does not emit CO2. In January, Air Liquide announced it had acquired an 18.6 per cent stake in Canadian company Hydrogenics Corporation for $20 million, which makes electrolysis hydrogen production equipment and fuel cells.

Electrolysis works by passing electricity through water which splits it into hydrogen and oxygen. The hydrogen is collected, transported and stored either in gas form or as a liquid super-chilled to minus 253°C – which, incidentally, is the form in which it is used to power space rockets. The oxygen can be used in other industrial processes.

Toyota’s Mirai has an electric motor over the front wheels, fuel cell under the front seats and a high pressure hydrogen tank beneath the rears. Courtesy Toyota

To power a car, for example, the hydrogen runs from the fuel tank into a fuel cell, where it re-combines with oxygen from the air, producing energy as electricity, rather than explosive energy as in an internal combustion engine. The resulting electricity is released in a controlled manner to power the engine, the same kind of engine an electric battery car uses.

But there is another significant difference between an electric battery vehicle and an FCEV.

“The heavier the car is the more energy it consumes,” says Pascal Schvester, Air Liquide’s director of the Middle East and India Industrial Merchant unit. A high-end electric vehicle (EV) today needs about 700kg of battery, which is maybe a third of the weight of the vehicle, he says. “That is something you do not have with a hydrogen fuel cell car – in which you have, say, 6kg of hydrogen.”

Pascal Schvester. Chris Whiteoak/The National

Currently, however, green hydrogen is prohibitively expensive to produce. But as countries move away from hydrocarbons as a fuel, economies of scale will bring the price down. “At the moment it’s better to have a large facility and then transport the hydrogen as a gas but when the volumes get big enough it will be better to transport as a liquid,” says Mr Boucat.

“This is happening already in California; we are just commissioning the first liquid hydrogen plant to provide liquid hydrogen to a station.”

With construction to start later this year, at a cost to build of around $150m, the plant will have the capacity to generate nearly 30 tonnes of hydrogen per day – enough to fuel 35,000 hydrogen-powered vehicles. The facility is designed to accelerate the deployment of new hydrogen FCEVs – cars and fleet vehicles such as taxis, trucks and buses and trams, as is happening in Europe.

However, hydrogen’s cost as a fuel is unlikely to reach commercial parity with petrol, diesel or electric battery power, although price is not likely to be the determining factor for its uptake, according to Mr Mills. “I think hydrogen will always be more expensive than petrol or diesel, but the reasons for its adoption would be that it’s zero-carbon, clean at the point of use, and (potentially) indefinitely renewable. The question is whether it can compete cost-wise with electric vehicles which are improving rapidly.

“Hydrogen’s at quite an immature stage, so this really depends on how much support it gets to build scale and bring down costs.”

Mr Mills says that the large-scale vehicle sector is most suited to hydrogen as a transport fuel. “Probably it will have to find its role in long-distance, heavy-duty transport like trucks, rail, shipping and perhaps aviation,” he says.

However, the more down-to-earth fleet vehicle sector is Air Liquide’s main focus in the UAE. “We’re not targeting the super cars like Jeremy Clarkson might drive on Top Gear,”says Mr Boucat, but he says “the aeroplane would be the last goal for us”.

Air Liquide’s Mr Schvester also points out that regarding fleets “you don’t need to have a massive network of hydrogen filling stations because in this case you are dealing with vehicles that are commuting from one place to the other on a fixed basis” so fuelling stations can be centralised.

Globally, Japan is generally seen as the leader so far in hydrogen take-up. The country’s Basic Hydrogen Strategy, released in December, 2017, reiterated its commitment to pioneer the world’s first “Hydrogen Society”. The strategy primarily aims to achieve cost parity of hydrogen with competing fuels, such as petrol in transport and Liquified Natural Gas (LNG) in power generation.

“By 2030 Japan will start to import hydrogen in liquid form to produce energy for various applications in the country,” says Mr Boucat. “When we reach that point we are at a very large scale.”

Last month, South Korea announced a major investment plan to go the same way. By 2040, the country aims to increase the cumulative total of fuel cell vehicles to 6.2 million, raise the number of hydrogen refuelling stations to 1,200 (from just 14 today) and also boost the supply of power-generating fuel cells.

Through these measures, the government hopes to create 420,000 jobs and $38.35 billion in value added to the economy each year by 2040.

China now invests about 100bn yuan a year (Dh54.09bn) in hydrogen energy, according to Professor Zong Qiang Mao of Tsinghua University’s Institute of Nuclear and New Energy Technology, who adds that the country has the capacity to produce about 170,000 FCEVs per year. It’s likely to become a huge market. “I predict that in about 10 years we will also be the largest market in the world for hydrogen energy,” Mr Zong told cH2ange, an organisation dedicated to promoting the hydrogen economy and which is supported by Air Liquide.

Germany in September opened its 50th hydrogen filling station. With the ramp-up of the number of fuel cell vehicles, another 300 hydrogen refuelling stations are planned over the next two or three years.

In Paris, the Societe du Taxi Electrique Parisien has a total of 100 hydrogen-powered vehicles in its fleet, and is aiming to have 600 such vehicles by 2020. In the UK, meanwhile, the government announced last year police cars and taxis will be among nearly 200 new hydrogen powered vehicles as part of a project that has won £8.8m (Dh42.4m) in funding from the Department for Transport to increase the number of hydrogen cars on the roads.

Air Liquide believes such developments are just the start.

“I think within a few years we’ll see more [hydrogen-powered] trains, taxis, buses and trucks and the man in the street will think, ‘ah yes, it’s just another hydrogen vehicle,'” says Mr Chalmers.

“We got used to LNG trucks, we’re getting used to EVs and next will be hydrogen.”

Renewable Energy Situation in Kuwait

Renewable Energy Situation in Kuwait

In September 26, 2018, Salman Zafar wrote about the Renewable Energy Situation in Kuwait as follows.

The renewable energy sector is in nascent stages in Kuwait, however there has been heightened activity in recent years mainly on account of the need for diversification of energy resources, climate change concerns and greater public awareness. The oil-rich State of Kuwait has embarked on a highly ambitious journey to meet 15 per cent of its energy requirements (approximately 2000 MW) from renewable resources by 2030.

One of the most promising developments is the kick-starting of the initial phase of 2GW Shagaya Renewable Energy Park in December last year. As per conservative estimates, more than $8 billion investment will have to be made to achieve renewable energy targets in Kuwait. 

And here we are 6 months later.

Shagaya 2000 MW multi technology renewable energy park (Image Courtesy www.csptoday.com)

Kuwait inaugurates renewable energy park

KUWAIT CITY, Feb. 20 (Xinhua) — The Kuwait Institute for Scientific Research (KISR) on Wednesday announced the full operation of the first phase of the Shagaya Renewable Energy Park in the northwestern governorate of Jahra.

The announcement was made by Samira Omar, director general of KISR, at the opening ceremony of the energy park which “has a capacity of 70 megawatts and is connected to the national electricity grid.”

The complex is composed of a solar thermal power station, a wind power station and a photovoltaic station, Omar said.

It is designed as a world-class facility with a mix of renewable energy technologies to maximize the efficiency of electricity production per square meter in the Kuwaiti desert, she added.

According to the Kuwaiti official, the complex can help reduce the carbon dioxide emissions by 5 million tons per year.

Meanwhile, Khaled al-Fadhel, Kuwaiti oil minister, described the Shagaya project as a “pioneer” in the country’s ambition to provide 15 percent of its power needs from renewable sources by 2030.

Full potential of solar PVs in the MENA

Full potential of solar PVs in the MENA

pv magazine’s The weekend read article dated February 2, 2019 elaborates on the potential of solar PVs in the MENA.

The region’s climate, developing economies and demographic growth are driving increased electricity demand in the Middle East and North Africa. However, as a hub of conventional energy supply, the region has been slow to embrace PV. To capture more of the value chain and deliver the full potential of solar, there are increasing calls for distributed generation deployment to play a bigger role.

The untapped potential of the MENA region


Jordan’s DG segment has been booming since 2012, with 203 MW of capacity made up of small projects – less than 5 MW in size – already installed, and another 244 MW planned.
Image: Amjad Khashman

Distributed Generation (DG) is gaining momentum in the Middle East and North Africa. Regional governments formerly focused on utility-scale solar have begun to welcome small and medium PV systems. Jordan, the United Arab Emirates, Egypt, Tunisia and solar newcomer Saudi Arabia have all introduced legal frameworks to encourage DG adoption.

Traditionally, markets with low access to electricity such as Sudan and Yemen were where DG was needed most. Waleed AlHallaj is a cleantech entrepreneur based in Jordan who believes for DG to flourish in the region, financial innovation will play an important role.

DG project finance “is relatively easy to access, with limited capital and references needed,” said AlHallaj, adding: “Close competition is always expected. The differentiator would be the ability to offer flexible payment terms to customers. Also, already established local mechanical and electrical EPC companies have an advantageous position with their market depth, available resources and manpower.” However, for DG to flourish, enabling regulatory frameworks and government leadership will be required.

Preponderance of utility-scale

Until now, competitive bidding rounds for utility-scale centralized projects have been the preferred renewables option for MENA regional governments. Auctions have succeeded in delivering below grid parity prices, making PV the cheapest source of electricity in the region, with prices as low as $0.0178/kWh, as seen in a record low bid in a Saudi tender of 2017.

It is the economies of scale offered by mega-projects and ideal solar conditions that made such prices possible. Yet the centralized approach requires upgrades to the transmission grid to absorb so much single-point energy. Moreover, skeptics argue such projects fail to bring employment and supply chain capacity.

DG projects in either the residential or commercial and industrial segments are considered more grid-friendly, as the electricity generated is often consumed on-site. Indeed, DG capacity can bring more resilience and flexibility to the electrical system with minimal integration costs. Off-grid applications such as water pumping, with PV integrated with batteries or diesel generators, can be considered DG and used to supply remote and isolated loads.

As small consumers take the initiative to install DG arrays, supportive laws and regulations are essential. Such consumers need to be empowered by regulation to grant them grid access as prosumers – producers and consumers. Cost now appears less of an impediment – recent PV technology cost reductions and technical advancements such as the extended lifetime of modules and continuous improvement of string inverters, have made solar more appealing to potential prosumers.

Besides the advantages for grid operators and electricity networks in MENA states, the bottom-up approach offered by DG has the advantage of employing local contractors and vendors, maximizing solar’s economic and social impact by creating sustainable jobs through project phases from design to decommissioning. And, as AlHallaj noted, they have an existing advantage in the market.

Challenges and success stories

The road to mainstream DG in MENA is still full of obstacles. A chief setback is the lack of legal and regulatory frameworks. Subsidized electricity prices are also limiting the financial feasibility of DG. Countries including Iraq, Kuwait and Bahrain apply huge subsidies to electricity tariffs for household and commercial applications.

A skilled, trained workforce is also lacking in some countries – especially those new to PV. As experience has shown in Jordan, technical standards are needed to ensure the safe design, construction and operation of DG systems.

Net metering is proving the favored mechanism to enable DG and seven countries in the region – Egypt, Jordan, Lebanon, Tunisia, the UAE, Morocco and more recently, Saudi Arabia – have adopted net metering policies, with Jordan and the UAE showing particular progress.

Since 2012, the DG sector has boomed in Jordan, with a total generation capacity of 203 MW made up of small projects – less than 5 MW capacity – and another 244 MW planned. High electricity prices and favorable solar conditions make net metering schemes very successful in the kingdom. In addition, a wheeling scheme was introduced to permit electricity to be generated off-site – very handy for large consumers such as hotels and hospitals in crowded cities where there is limited land on which to install ground-mounted PV arrays.

In Dubai, the Shams initiative was introduced to facilitate net metered rooftop systems. Household and building owners were encouraged to apply through a simple, well structured process including pre-approved contractors and equipment manufacturers. With the help of an online calculator, end consumers can estimative the required system size and energy savings they need.

Saudi focus: winds of change

Saudi Arabia, always viewed as a conventional energy fortress, is dramatically shifting towards renewables. Beside the huge tendering rounds for wind and PV that prompted world record low tariffs, DG is evolving and is about to kick off a new round of electricity reforms in the country. After years of reluctance and lack of a clear strategy, the country has finally taken steps to diversify its energy mix and started to look to solar as a strategic option.

On July 1, the Saudi Electricity & Cogeneration Regulatory Authority put in place the first framework to enable net metering in the country. Projects of up to 2 MW in capacity can be connected on low and medium voltage grids. Only certified PV contractors and consultants can carry out design and installation of small-scale systems. A 20-year connection agreement covers the relationship between distribution company and end consumer.

However, the fees and charges system owners will be required to pay have not yet been specified. To date, contractors are waiting to be officially accredited after providing trained workforce within the requirements. Project requests are already in the hands of Saudi electric companies and are expected to start in this quarter.

Expert opinion

Ali Hamam, MENA head of sales for Chinese module maker JinkoSolar, praised the DG market for its sustainable demand, by contrast with the stop-start nature of the utility-scale segment. As for Saudi, Hamam spoke of huge potential given the market’s vast size, with more than 280,000 GWh of annual electricity consumption by eight million customers. However, he also emphasized the importance of module quality, given the kingdom’s harsh climate. “There are three points to consider closely when it comes to module selection for the MENA region conditions: the quality of the bill of materials, with special attention to the backsheet, which is most prone to high temperature effects; testing procedures, which are advised to be beyond normal IEC standards; and the track record of the module supplier in similar harsh conditions,” he said.

Jordan’s AlHallaj is already engaged in the Saudi market. He said EPCs and contractors have been anticipating growth in the DG segment in the kingdom for some time and stand poised to jump in directly when projects start, which he expects to happen in the first half of this year.

“Even with an expected payback period of seven to eight years, end consumers have shown a huge appetite to build their own DG systems,” said AlHallaj. “Any new increase in electricity tariffs will give extra momentum to the sector, pushing it to boom in a way never seen before in any other country in the region. Even more, other gulf countries like Bahrain and Kuwait may likely follow the Saudi experience.”

By Amjad Khashman.