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.”
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.”
Solar operations and maintenance company Alectris has completed a project to automate asset management activity at a photovoltaic plant in Jordan.
Alectris implemented the initiative at the 11.5MW facility with MASE, a solar O&M provider in the Middle East.
The partnership between Alectris and MASE aims to automate and standardise asset management activity across new solar projects in the Middle East and North Africa (MENA).
As solar development has increased in the MENA region, O&M and asset management has “struggled to keep pace”, limiting long-term productivity prospects, said Alectris.
The partnership began in 2016 with MASE responsible for field operations and maintenance services on location, while Alectris provided operations and “legacy expertise” in global asset care.
“Working together, both businesses successfully improved the bankability of the project, which was financed by key development finance institutions operating across the region,” said Alectris.
The initiative involved the integration of Alectris’ ACTIS software platform for solar PV plant asset management, with all data monitoring streams gathered under the single platform to “improve oversight” into project activity.
Alectris managing director Vassilis Papaeconomou said: “Solar development in the MENA region offers a significant opportunity to invest in clean energy projects.
“But if this market momentum is to be maintained, it is imperative that operating plants offer security and stability of financial returns. By partnering with MASE, we’ve been jointly able to combine the latest in asset management software with leading experience in services activity.
“This will ensure that project owners and investors benefit from enhanced and efficient performance reporting and operational management, saving time, reducing costs and ensuring the plant delivers at its optimum. As a result, the plant delivered above expectations with an excellent performance ratio and availability close to 100% over the last three years.”
MASE chief executive Tareq Khalifeh added: “Throughout this collaboration, Alectris have proved to be reliable, dedicated and experienced with a wealth of knowledge that has been indispensable when working in an exciting but challenging market.”
GivePower is launching containerized, solar-powered water desalination and purification plants in Mombasa, Kenya and La Gonave, Haiti this quarter. Like GivePower’s debut solar-powered microgrid desalination plant, which went live in Kiunga, Kenya in 2018, these new projects will operate with Tesla’s powerwall battery storage technology.
At launch, both of the nonprofit’s new solar water farm projects will produce a maximum of 75,000 liters of water a day by coupling a 50-kW solar system with 120 kW-hrs of Tesla batteries; together this solar plus battery system will power two low-wattage, reverse osmosis desalination pumps that run simultaneously to ensure continuous operation.
When developing solar-powered desalination projects, pinning down the point at which the technology and the operating model make economic sense is key because the one of the biggest challenges with solar desalination is the amount of energy that it takes to desalinate sea water. Often, this outsized energy need means that a plant requires a larger solar array, which increases the cost of the project.
“We need to see that [these philanthropic] projects are economically viable – that these projects can continue to operate without ongoing funding from donors to keep the systems operational,” said Kyle Stephan, GivePower’s vice president of operations. In addition to building solar water farms, GivePower trains local technicians to operate the plants.
GivePower’s solar water farm systems cost just over $500,000, and they have a 20-year expected lifespan.
Commercial applications for GivePower’s solar water farm technology are not in the pipeline currently, according to Hayes Barnard, CEO of GivePower.
When it comes to developing commercial off-grid, solar-powered desalination systems for water-stressed communities, industry officials see solar microgrid players as particularly well placed to offer solutions.
Drought, saltwater intrusion and climate change are intensifying the need for solutions that use renewable energy to address water scarcity. Simultaneously, falling PV prices and energy storage innovations are making solar-powered desalination solutions more appealing.
So far, all of GivePower’s solar water farms are coastal well-based desalination plants. This is because 98% of the world’s water is in the ocean, and 73% of the world’s population live in coastal areas, where well water is susceptible to becoming brackish, Barnard noted. Additionally, off-coast solar desalination plants’ intake processes are expensive, and coastal well-based solar water farms do not stress underground aquifers.
For its project on La Gonave, which is off the coast of Port-au-Prince, GivePower is applying international building code seismic requirements for its solar water farm’s concrete foundation, and it is building a solar canopy that is capable of withstanding a category-four hurricane.
Initially, the nonprofit focused on providing solar-powered lighting to schools without electricity in the hope that this would open up educational opportunities for girls in developing countries. But quickly it became clear that helping communities achieve water security was key to addressing this issue because often girls were often missing school because their days were spent fetching water, according to Barnard, a GivePower co-founder. GivePower became an independent organization in 2016.
Last week GivePower’s solar-powered desalination technology received the UAE’s Global Water Impact Award for innovative small projects.
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.
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.
The MENA region has $100 billion worth of clean energy projects currently in the pipeline, according to a report by Energy & Utilities.
The report estimates total investment in clean energy to exceed $300 bn by 2050 if the region’s utilities are to meet their ambitious targets.
Middle East Energy said that the sharp drop in the cost of solar and wind power technologies is driving clean energy, with the cost of installing photovoltaic (PV) solar and wind having fallen by 73 percent and 80 per cent respectively since 2010.
The commissioning of the world’s largest single-site photovoltaic (PV) solar plant in 2019, the 1.17GW Sweihan independent power project (IPP) in Abu Dhabi, is one of the milestones reached this year in the push for clean energy, the report noted.
Dubai also reached financial close for a $4.3 billion concentrated solar power (CSP) project, Noor Energy 1, which is the largest single-site power investment project in the world.
The report estimates that installed power generation capacity will be required to increase 35 percent by 2025 just to meet rising demand in the Middle East. Rapid population growth combined with ambitious industrial and economic expansion programmes is resulting in the growing need for power, as demand for electricity is expected to triple by 2050.
“Driven by well-designed auctions, favourable financing conditions and declining technology costs, renewables are being brought into the mainstream. Based on the renewables targets already in place, the region, led by the UAE, could save 354 million barrels of oil which is equivalent to a 23 per cent reduction, cut the power sector’s carbon dioxide emissions by 22 percent, and slash water withdrawal in the power sector by 17 percent by 2030,” Gareth Rapley, Group Director, Industrial, at Informa Markets said.
The report was published as a preview to an event in Dubai, The Middle East Energy 2020, which will be organised by Informa Markets in March 2020.
A globalised solar-powered future is wholly unrealistic – and our economy is the reason why is elaborated on by Alf Hornborg, Professor of Human Ecology at Lund University.
Over the past two centuries, millions of dedicated people – revolutionaries, activists, politicians, and theorists – have been unable to curb the disastrous and increasingly globalised trajectory of economic polarisation and ecological degradation. This is perhaps because we are utterly trapped in flawed ways of thinking about technology and economy – as the current discourse on climate change shows.
Rising greenhouse gas emissions are not just generating climate change. They are giving more and more of us climate anxiety. Doomsday scenarios are capturing the headlines at an accelerating rate. Scientists from all over the world tell us that emissions in ten years must be half of what they were ten years ago, or we face apocalypse. Schoolchildren like Greta Thunberg and activist movements like Extinction Rebellion are demanding that we panic. And rightly so. But what should we do to avoid disaster?
Most scientists, politicians, and business leaders tend to put their hope in technological progress. Regardless of ideology, there is a widespread expectation that new technologies will replace fossil fuels by harnessing renewable energy such as solar and wind. Many also trust that there will be technologies for removing carbon dioxide from the atmosphere and for “geoengineering” the Earth’s climate. The common denominator in these visions is the faith that we can save modern civilisation if we shift to new technologies. But “technology” is not a magic wand. It requires a lot of money, which means claims on labour and resources from other areas. We tend to forget this crucial fact.
I would argue that the way we take conventional “all-purpose” money for granted is the main reason why we have not understood how advanced technologies are dependent on the appropriation of labour and resources from elsewhere. In making it possible to exchange almost anything – human time, gadgets, ecosystems, whatever – for anything else on the market, people are constantly looking for the best deals, which ultimately means promoting the lowest wages and the cheapest resources in the global South.
It is the logic of money that has created the utterly unsustainable and growth-hungry global society that exists today. To get our globalised economy to respect natural limits, we must set limits to what can be exchanged. Unfortunately, it seems increasingly probable that we shall have to experience something closer to disaster – such as a semi-global harvest failure – before we are prepared to seriously question how money and markets are currently designed.
This article is part of Conversation Insights The Insights team generates long-form journalism derived from interdisciplinary research. The team is working with academics from different backgrounds who have been engaged in projects aimed at tackling societal and scientific challenges.
Take the ultimate issue we are facing: whether our modern, global, and growing economy can be powered by renewable energy. Among most champions of sustainability, such as advocates of a Green New Deal, there is an unshakeable conviction that the problem of climate change can be solved by engineers.
What generally divides ideological positions is not the faith in technology as such, but which technical solutions to choose, and whether they will require major political change. Those who remain sceptical to the promises of technology – such as advocates of radical downshifting or degrowth – tend to be marginalised from politics and the media. So far, any politician who seriously advocates degrowth is not likely to have a future in politics.
Mainstream optimism about technology is often referred to as ecomodernism. The Ecomodernist Manifesto, a concise statement of this approach published in 2015, asks us to embrace technological progress, which will give us “a good, or even great, Anthropocene”. It argues that the progress of technology has “decoupled” us from the natural world and should be allowed to continue to do so in order to allow the “rewilding” of nature. The growth of cities, industrial agriculture, and nuclear power, it claims, illustrate such decoupling. As if these phenomena did not have ecological footprints beyond their own boundaries.
Meanwhile, calls for a Green New Deal have been voiced for more than a decade, but in February 2019 it took the form of a resolution to the American House of Representatives. Central to its vision is a large-scale shift to renewable energy sources and massive investments in new infrastructure. This would enable further growth of the economy, it is argued.
So the general consensus seems to be that the problem of climate change is just a question of replacing one energy technology with another. But a historical view reveals that the very idea of technology is inextricably intertwined with capital accumulation, unequal exchange and the idea of all-purpose money. And as such, it is not as easy to redesign as we like to think. Shifting the main energy technology is not just a matter of replacing infrastructure – it means transforming the economic world order.
In the 19th century, the industrial revolution gave us the notion that technological progress is simply human ingenuity applied to nature, and that it has nothing to do with the structure of world society. This is the mirror image of the economists’ illusion, that growth has nothing to do with nature and so does not need to reckon with natural limits. Rather than seeing that both technology and economy span the nature-society divide, engineering is thought of as dealing only with nature and economics as dealing only with society.
The steam engine, for instance, is simply considered an ingenious invention for harnessing the chemical energy of coal. I am not denying that this is the case, but steam technology in early industrial Britain was also contingent on capital accumulated on global markets. The steam-driven factories in Manchester would never have been built without the triangular Atlantic trade in slaves, raw cotton, and cotton textiles. Steam technology was not just a matter of ingenious engineering applied to nature – like all complex technology, it was also crucially dependent on global relations of exchange.
This dependence of technology on global social relations is not just a matter of money. In quite a physical sense, the viability of the steam engine relied on the flows of human labour energy and other resources that had been invested in cotton fibre from South Carolina, in the US, coal from Wales and iron from Sweden. Modern technology, then, is a product of the metabolism of world society, not simply the result of uncovering “facts” of nature.
The illusion that we have suffered from since the industrial revolution is that technological change is simply a matter of engineering knowledge, regardless of the patterns of global material flows. This is particularly problematic in that it makes us blind to how such flows tend to be highly uneven.
This is not just true of the days of the British Empire. To this day, technologically advanced areas of the world are net importers of the resources that have been used as inputs in producing their technologies and other commodities, such as land, labour, materials, and energy. Technological progress and capital accumulation are two sides of the same coin. But the material asymmetries in world trade are invisible to mainstream economists, who focus exclusively on flows of money.
Ironically, this understanding of technology is not even recognised in Marxist theory, although it claims to be both materialist and committed to social justice. Marxist theory and politics tend toward what opponents refer to as a Promethean faith in technological progress. Its concern with justice focuses on the emancipation of the industrial worker, rather than on the global flows of resources that are embodied in the industrial machine.
This Marxist faith in the magic of technology occasionally takes extreme forms, as in the case of the biologist David Schwartzman, who does not hesitate to predict future human colonisation of the galaxy and Aaron Bastani, who anticipates mining asteroids. In his remarkable book Fully Automated Luxury Communism: A Manifesto, Bastani repeats a widespread claim about the cheapness of solar power that shows how deluded most of us are by the idea of technology.
Nature, he writes, “provides us with virtually free, limitless energy”. This was a frequently voiced conviction already in 1964, when the chemist Farrington Daniels proclaimed that the “most plentiful and cheapest energy is ours for the taking”. More than 50 years later, the dream persists.
Electricity globally represents about 19% of total energy use – the other major energy drains being transports and industry. In 2017, only 0.7% of global energy use derived from solar power and 1.9% from wind, while 85% relied on fossil fuels. As much as 90% of world energy use derives from fossil sources, and this share is actually increasing. So why is the long-anticipated transition to renewable energy not materialising?
One highly contested issue is the land requirements for harnessing renewable energy. Energy experts like David MacKay and Vaclav Smil have estimated that the “power density” – the watts of energy that can be harnessed per unit of land area – of renewable energy sources is so much lower than that of fossil fuels that to replace fossil with renewable energy would require vastly greater land areas for capturing energy.
In part because of this issue, visions of large-scale solar power projects have long referred to the good use to which they could put unproductive areas like the Sahara desert. But doubts about profitability have discouraged investments. A decade ago, for example, there was much talk about Desertec, a €400 billion project that crumbled as the major investors pulled out, one by one.
Today the world’s largest solar energy project is Ouarzazate Solar Power Station in Morocco. It covers about 25 square kilometres and has cost around US$9 billion to build. It is designed to provide around a million people with electricity, which means that another 35 such projects – that is, US$315 billion of investments – would be required merely to cater to the population of Morocco. We tend not to see that the enormous investments of capital needed for such massive infrastructural projects represent claims on resources elsewhere – they have huge footprints beyond our field of vision.
Also, we must consider whether solar is really carbon free. As Smil has shown for wind turbines and Storm van Leeuwen for nuclear power, the production, installation, and maintenance of any technological infrastructure remains critically dependent on fossil energy. Of course, it is easy to retort that until the transition has been made, solar panels are going to have to be produced by burning fossil fuels. But even if 100% of our electricity were renewable, it would not be able to propel global transports or cover the production of steel and cement for urban-industrial infrastructure.
And given the fact that the cheapening of solar panels in recent years to a significant extent is the result of shifting manufacture to Asia, we must ask ourselves whether European and American efforts to become sustainable should really be based on the global exploitation of low-wage labour, scarce resources and abused landscapes elsewhere.
Solar power is not displacing fossil energy, only adding to it. And the pace of expansion of renewable energy capacity has stalled – it was about the same in 2018 as in 2017. Meanwhile, our global combustion of fossil fuels continues to rise, as do our carbon emissions. Because this trend seems unstoppable, many hope to see extensive use of technologies for capturing and removing the carbon from the emissions of power plants and factories.
Carbon Capture and Storage (CCS) remains an essential component of the 2016 Paris Agreement on climate change. But to envisage such technologies as economically accessible at a global scale is clearly unrealistic.
To collect the atoms of carbon dispersed by the global combustion of fossil fuels would be as energy-demanding and economically unfeasible as it would be to try to collect the molecules of rubber from car tires that are continuously being dispersed in the atmosphere by road friction.
The late economist Nicholas Georgescu-Roegen used this example to show that economic processes inevitably lead to entropy – that is, an increase in physical disorder and loss of productive potential. In not grasping the implications of this fact, we continue to imagine some miraculous new technology that will reverse the Law of Entropy.
Economic “value” is a cultural idea. An implication of the Law of Entropy is that productive potential in nature – the force of energy or the quality of materials – is systematically lost as value is being produced. This perspective turns our economic worldview upside down. Value is measured in money, and money shapes the way we think about value. Economists are right in that value should be defined in terms of human preferences, rather than inputs of labour or resources, but the result is that the more value we produce, the more inexpensive labour, energy and other resources are required. To curb the relentless growth of value – at the expense of the biosphere and the global poor – we must create an economy that can restrain itself.
The evils of capitalism
Much of the discussion on climate change suggests that we are on a battlefield, confronting evil people who want to obstruct our path to an ecological civilisation. But the concept of capitalism tends to mystify how we are all caught in a game defined by the logic of our own constructions – as if there was an abstract “system” and its morally despicable proponents to blame. Rather than see the very design of the money game as the real antagonist, our call to arms tends to be directed at the players who have had best luck with the dice.
I would instead argue that the ultimate obstruction is not a question of human morality but of our common faith in what Marx called “money fetishism”. We collectively delegate responsibility for our future to a mindless human invention – what Karl Polanyi called all-purpose money, the peculiar idea that anything can be exchanged for anything else. The aggregate logic of this relatively recent idea is precisely what is usually called “capitalism”. It defines the strategies of corporations, politicians, and citizens alike.
All want their money assets to grow. The logic of the global money game obviously does not provide enough incentives to invest in renewables. It generates greed, obscene and rising inequalities, violence, and environmental degradation, including climate change. But mainstream economics appears to have more faith in setting this logic free than ever. Given the way the economy is now organised, it does not see an alternative to obeying the logic of the globalised market.
The only way to change the game is to redesign its most basic rules. To attribute climate change to an abstract system called capitalism – but without challenging the idea of all-purpose money – is to deny our own agency. The “system” is perpetuated every time we buy our groceries, regardless of whether we are radical activists or climate change deniers. It is difficult to identify culprits if we are all players in the same game. In agreeing to the rules, we have limited our potential collective agency. We have become the tools and servants of our own creation – all-purpose money.
Despite good intentions, it is not clear what Thunberg, Extinction Rebellion and the rest of the climate movement are demanding should be done. Like most of us, they want to stop the emissions of greenhouse gases, but seem to believe that such an energy transition is compatible with money, globalised markets, and modern civilisation.
Is our goal to overthrow “the capitalist mode of production”? If so, how do we go about doing that? Should we blame the politicians for not confronting capitalism and the inertia of all-purpose money? Or – which should follow automatically – should we blame the voters? Should we blame ourselves for not electing politicians that are sincere enough to advocate reducing our mobility and levels of consumption?
Many believe that with the right technologies we would not have to reduce our mobility or energy consumption – and that the global economy could still grow. But to me, that is an illusion. It suggests that we have not yet grasped what “technology” is. Electric cars and many other “green” devices may seem reassuring but are often revealed to be insidious strategies for displacing work and environmental loads beyond our horizon – to unhealthy, low-wage labour in mines in Congo and Inner Mongolia. They look sustainable and fair to their affluent users but perpetuate a myopic worldview that goes back to the invention of the steam engine. I have called this delusion machine fetishism.
Redesigning the global money game
So the first thing we should redesign are the economic ideas that brought fossil-fueled technology into existence and continue to perpetuate it. “Capitalism” ultimately refers to the artefact or idea of all-purpose money, which most of us take for granted as being something about which we do not have a choice. But we do, and this must be recognised.
Since the 19th century, all-purpose money has obscured the unequal resource flows of colonialism by making them seem reciprocal: money has served as a veil that mystifies exploitation by representing it as fair exchange. Economists today reproduce this 19th-century mystification, using a vocabulary that has proven useless in challenging global problems of justice and sustainability. The policies designed to protect the environment and promote global justice have not curbed the insidious logic of all-purpose money – which is to increase environmental degradation as well as economic inequalities.
In order to see that all-purpose money is indeed the fundamental problem, we need to see that there are alternative ways of designing money and markets. Like the rules in a board game, they are human constructions and can, in principle, be redesigned. In order to accomplish economic “degrowth” and curb the treadmill of capital accumulation, we must transform the systemic logic of money itself.
National authorities might establish a complementary currency, alongside regular money, that is distributed as a universal basic income but that can only be used to buy goods and services that are produced within a given radius from the point of purchase. This is not “local money” in the sense of LETS or the Bristol Pound – which in effect do nothing to impede the expansion of the global market – but a genuine spanner in the wheel of globalisation. With local money you can buy goods produced on the other side of the planet, as long as you buy it in a local store. What I am suggesting is special money that can only be used to buy goods produced locally.
This would help decrease demand for global transports – a major source of greenhouse gas emissions – while increasing local diversity and resilience and encouraging community integration. It would no longer make low wages and lax environmental legislation competitive advantages in world trade, as is currently the case.
Immunising local communities and ecosystems from the logic of globalised capital flows may be the only feasible way of creating a truly “post-capitalist” society that respects planetary boundaries and does not generate deepening global injustices.
Re-localising the bulk of the economy in this way does not mean that communities won’t need electricity, for example, to run hospitals, computers and households. But it would dismantle most of the global, fossil-fuelled infrastructure for transporting people, groceries and other commodities around the planet.
This means decoupling human subsistence from fossil energy and re-embedding humans in their landscapes and communities. In completely changing market structures of demand, such a shift would not require anyone – corporations, politicians, or citizens – to choose between fossil and solar energy, as two comparable options with different profit margins.
To return to the example of Morocco, solar power will obviously have an important role to play in generating indispensable electricity, but to imagine that it will be able to provide anything near current levels of per capita energy use in the global North is wholly unrealistic. A transition to solar energy should not simply be about replacing fossil fuels, but about reorganising the global economy.
Solar power will no doubt be a vital component of humanity’s future, but not as long as we allow the logic of the world market to make it profitable to transport essential goods halfway around the world. The current blind faith in technology will not save us. For the planet to stand any chance, the global economy must be redesigned. The problem is more fundamental than capitalism or the emphasis on growth: it is money itself, and how money is related to technology.
Climate change and the other horrors of the Anthropocene don’t just tell us to stop using fossil fuels – they tell us that globalisation itself is unsustainable.
With a combination of scale, a growing population, outstanding irradiation, and available capital, solar PV should be a ‘no brainer’ for the Kingdom of Saudi Arabia. But early explorations of the technology have soured expectations, and progress has come in fits and starts.
Saudi Arabia’s renewable energy sector over the years can be best described as a roller coaster. Just when momentum seemed to be building, the ride came to a halt. Then it began to move, but never really gave potential investors the confidence needed for serious acceleration. Progress started to take shape in 2016 and has continued, showing that this time is different.
Yet, to understand how the country got to where it is today, it’s important to know where Saudi Arabia has been, and that stems all the way back to 1977.
Much like the creation of the national oil company Saudi Aramco — formed between the United States and Saudi Arabia — solar power has been explored as part of a bilateral partnership between the two countries. Saudi Arabia’s National Center for Science and Technology (now known as the King Abdulaziz City for Science and Technology or KACST) and the United States Department of Energy (DOE) struck a deal four decades ago for the Saudi Solar Village Project. The five-year agreement included $50 million from both countries and was extended for three more years. What resulted was a 350 kW solar PV system located 50 kilometers from Riyadh, as well as an additional 350 kW solar hydrogen demonstration plant.
The system operated well for its time, but the technology was nowhere near where it is today, which resulted in panel degradation of 20%. Operating temperatures were much higher than originally specified, and the heat sink insufficient for cooling.
From there continued a list of projects, including solar-powered water desalination, solar hydrogen utilization, solar water heating, and other PV research projects.
In 1990, the Persian Gulf War erupted and once again, Saudi Arabia saw solar power come via the United States. Solar panels were used to power GPS satellites, but just like the problem seen in the solar village, modules again quickly deteriorated in the harsh desert conditions.
There is little doubt that these observations helped shape the kingdom’s solar PV sector — and industry in general — but it would still take many years before substantial movement could be seen.
In April 2010, the King Abdullah City for Atomic and Renewable Energy (K.A.CARE) was established to be the “driving force for making atomic and renewable energy an integral part of a national sustainable energy mix.”
K.A.CARE’s target was to have 41 GW of renewable energy by 2032, with 16 GW of solar PV. In 2011, a contract was signed to establish a polysilicon plant in Jubail, which would begin the production of solar cell materials. Polysilicon Technology, alongside Hyundai Engineering and KCC Engineering and Construction, announced that it would build a $380 million plant to produce 3,350 metric tons of solar-grade polysilicon, with future expansion plans. This was one of many announcements that failed to materialize, as developer Polysilicon Technology later went bankrupt, according to local sources.
K.A.CARE went a step further in February 2013, when it published a white paper that announced a new renewable energy target of 54 GW by 2032 (41 GW was to be solar). And in the first five years, it planned for 5.1 GW to be installed, with 23.9 GW by 2020. The white paper has since been removed from the organization’s website, and K.A.CARE’s renewable energy ambitions disappeared along with it, as it began to focus more on nuclear power.
The new crown prince
Volatility in oil prices began in 2014, and it forced the country to broadly rethink its economic policies.
As Saudi Arabia grappled with the new normal of low oil prices, then deputy crown prince, Mohammed bin Salman, released a new economic vision for the country. The National Transformation Plan, part of the wider Vision 2030 agenda, was launched in 2016. It included a target to have 9.5 GW of solar and wind power feeding electricity into the national grid by 2023. It was understandable that the plan was met with leeriness, considering previous attempts to jump-start a renewable energy market in the country, but this time was different. This was the first time that Saudi Arabia had a government mandate to incorporate renewable energy into its overall energy mix.
In 2017, the Renewable Energy Project Development Office (REPDO) was created, featuring members from K.A.CARE, Saudi Aramco, Saudi Electricity Company, and the Electricity and Cogeneration Regulatory Authority. The new unit fell under the energy ministry’s oversight, and immediately began accepting applications from companies that were looking to participate in the development of 700 MW of solar and wind capacity projects.
Local company ACWA Power came in with the winning bid for the first utility-scale solar PV plant, Sakaka, at $0.0234/kWh. “PV is a no-brainer in our part of the world [to supply] a significant source of load,” said ACWA chief executive officer Paddy Padmanathan.
Yet what was also significant was how REPDO announced the winning bids, which was done via live stream. This showed a level of transparency that isn’t seen anywhere else in the region’s renewable energy sector.
In November 2018, Saudi Arabia’s first utility-scale solar PV project began construction, with more than 1.18 million modules and 1,200 new jobs. The Sakaka solar power plant began a new era in the kingdom, heralding a “more to come” drive with at least seven projects to be tendered in this year alone. And people started to believe it. In fact, Padmanathan said that throughout the region, more companies are jumping into the market — and they’re looking at Saudi Arabia. He estimates that over the past five years, there has been growth of 20% of new market players trying to get into the Middle East’s solar sector.
“Within the next five years, there will be a real race to deploy as much PV as possible throughout the region,” Padmanathan added.
And Saudi Arabia is a market mover for any sector, given its size and population of almost 33 million. So much so that many companies separate Saudi Arabia from their regional reports so that its size doesn’t skew results. The potential for the kingdom’s solar industry, coupled with its goal of creating a manufacturing hub, is enough to once again entice investors.
“We’ve been pushing anyone we’ve worked with for many years saying, ‘If you want to work with us and want to capture meaningful volumes — industrialize inside the kingdom,’” said Padmanathan.
Earlier this year, a Saudi consortium made up of the National Industrial Clusters Development Program and petrochemical giant SABIC, signed a memorandum of understanding with Longi Group and OCI for the development of a fully integrated solar manufacturing facility in the country. And such decisions may create momentum for others to move, particularly considering a potentially more favorable policy framework.
Gus Schellekens, a partner at the clean energy division of the consultancy EY, said that Saudi Arabia today is very different than pre-Vision 2030.
“New businesses are being set up that are very different to the old world that delivered success for the past 40 years,” Schellekens explained. Yet Saudi Arabia is still finding its footing. The head of REPDO, Turki Al Shehri, recently left the organization to join France’s Engie as the chief executive of Saudi Arabia. There has so far been no announcement about a replacement and sources have said that the energy ministry is instead looking to create a more centralized system.
It’s never an easy road when introducing a new model or system on a large scale, especially if people continue to focus on previous mistakes. “In the long run, there remains huge potential for Saudi Arabia, but it’s important to acknowledge practical challenges, and build on a robust plan that is integrated with other initiatives,” Schellekens concluded.
The pairing of wind and solar is emerging as a smart strategy to implement renewable energy sources with better economic feasibility.A Fine Couple They Are (Wind and Solar Power) as suggested by Jim Romeo would definitely affect this Energy Transition era if only in terms of duration.
The pairing of wind and solar power is an advantageous complement; the two benefit each other. The synergistic combination is an emerging trend in renewable energy and power generation as costs drop. The pairing of sustainable sources is in early stages, however. And the configuration still has challenges regarding return on investment (ROI), ease of implementation, and storage.
In western Minnesota, a 2-MW wind turbine and 500-kW solar installation—wind-solar hybrid project—is an early entrant to the wind-solar market and one of the first of its kind in the U.S. It was introduced at a cost of about $5 million with high expectations and the goal that Lake Region Electric Cooperative in Pelican Rapids would acquire the power for its 27,000 members.
The pioneering project got a boost amid the lower costs of solar. The power generation from both renewable sources is calculated to provide dividends on its investment.
According to market researcher Global Market Insights, hybrid solar-wind projects are expected to grow by 4% in the U.S. over the next five years to join a $1.5 billion global market. Some attribute the growth to the 2015 United Nations Climate Change Conference objectives, combined with lower costs of development and materials, and a keen interest by many nations to rely more on renewable energy sources. Because wind turbine power and solar both have excess capacity, together they offer far greater possibilities.
Lucrative but Limited
Renewables especially make economic sense in non-urban areas, where costs per kWh are higher, said Mike Voll, principal and sector lead for Smart Technologies at Stantec. “So, rural communities and remote locations, where energy prices often reach $0.40 to $0.45 per kilowatt-hour, actually see an ROI from these projects. When it comes to combining both wind and solar with storage, however, the list of locations is even smaller still. In a perfect world, we’d have a place that has excellent radiance with enough wind and low cloud cover, but the reality is there are very few locations that meet the geographic requirements. So even as the price continues to drop, there will still be significant limitations to pairing solar and wind.”
Despite limitations, renewables can work well in locations where everything clicks. A storage option is an essential component. “Adding energy storage can reduce intermittency of output, reshape the generation profile to match to load, and enable dispatch of the renewable energy to maximize revenue generation through ISO market participation or utility programs,” said Todd Tolliver, senior manager at ICF, a global consulting and technology services company headquartered in Fairfax, Virginia.
Tolliver said the economic viability of these systems is constrained by equipment, costs of storage, and limited or irregular revenue streams. But he explained that the most common combination today is solar plus battery storage, thanks to investment tax credit and incentive programs in certain markets that provide clear lower costs and better revenue streams. Still, wind power energy storage has challenges.
On the road from Wadi Rum to Petra in Jordan, where signs point to the Sheikh Zayed solar complex, wind turbines turn languidly in a steady breeze. At Petra, even Bedouin encampments have solar panels and many homes in Amman use solar tubes to heat water. The UAE made headlines with its world-record solar installations, but in all the Middle East, the impact of the renewable revolution is most visible in the Jordanian landscape.
By last year, the Hashemite kingdom had installed 285 megawatts of wind and 771MW of solar power, a significant chunk of its total generation of about 4 gigawatts. By 2021, it wants to have 2.7GW of renewable capacity. Over the next decade, Jordan’s efforts could really take off – providing half of all electricity output, in our analysis at Qamar Energy. It is only a small market, but it is an important trailblazer for the region’s aspirations in renewables.
Jordan’s success has been built on good resources, solid policy and the imperatives of an energy crisis. Like most Middle East countries, the kingdom has abundant sunny desert land and, similar to Egypt and northern Saudi Arabia, it’s also quite windy in places.
The country started early on encouraging renewables with the Tafila wind farm, a joint venture with Masdar, built in 2015. It offers investors a reasonable return and gives smaller users such as hospitals and universities the chance to build solar panels on vacant land and transmit the power through a grid.
The biggest impetus to alternative energy was the cut-off from Egyptian gas supplies following the 2011 revolution, because of repeated militant attacks on the Sinai pipeline. Jordan’s budget deficit widened because the country, which imports more than 90 per cent of its energy needs and has historically financed its deficits through grants and soft loans, had to burn expensive oil for electricity. Jordan, which already hosted thousands of Iraqi refugees, had to accommodate an increasing power demand due to an influx of 1.3 million Syrians escaping the conflict in their country.
In response, the kingdom opened a liquefied natural gas import terminal at Aqaba, and negotiated supplies from the American company Noble, which produces from offshore Israel. Jordan has large resources of oil shale, effectively an immature form of petroleum source rocks, which can be cooked into oil. A Chinese-led consortium is developing a power plant based on burning this dirty material.
Jordan’s success has been built on good resources, solid policy and the imperatives of an energy crisis.
Efforts to construct a nuclear power plant have been hampered by a lack of cooling water, public opposition and the high costs of financing. Instead, Amman may opt for smaller, modular nuclear reactors that could be fabricated off-site.
To cover the higher costs of fuel, energy subsidies had to be cut back, putting a heavy burden on citizens at a time of sharp economic slowdown. But this had the positive effect of making individual rooftop solar installations attractive for small businesses and householders.
Local Jordanian companies, such as Kawar Energy and Shamsuna Power, along with Dubai-based companies including Yellow Door Energy, have created viable businesses and high-skilled employment. By the early 2020s, Jordan will have the Middle East’s lowest carbon output electricity grid, despite the carbon-heavy oil shale facility.
Success will soon bring its own challenges. Renewable output will exceed total demand at times, while the country still needs to provide for high-consumption and night-time periods. Hydropower, which could be used to store excess renewables, is minimal in the desert country.
The Red-Dead Sea project is intended to bring water to the Dead Sea, which is fast drying up due to climate change and the overuse of the Jordan River. On the way, the water would generate power for desalination. But the expensive venture faces environmental concerns and political hurdles in co-operating with Israel.
Philadelphia Solar, a local company, has announced plans for a solar plant with battery storage. Concentrated solar thermal plants (CSP), like the one under construction in Dubai, can save the Sun’s heat to generate power overnight. These do not seem to be part of Jordan’s plans yet, but the country has excellent conditions for CSP.
Electricity interconnections with Egypt, Saudi Arabia, Iraq and the West Bank are also underway, which could boost the resilience and renewable share of the whole area’s power grid. It could also send power to help rebuild war-torn Syria.
Jordan’s consumers will have to consider the benefits from the country’s renewable expansion, particularly industries which have complained of high electricity prices. Prices are high during peak demand hours, but this scheme will have to become more flexible to lower prices when there is an excess of solar.
Jordan’s small market and head start in renewable energy means it will reach these hurdles to solar deployment probably before any other country in the region. Its success in devising policies to continue attracting capital, boosting its renewable generation, local employment and electricity exports, while reducing consumer bills, will be an important signal for its neighbours.
This is particularly true for countries in the Arabian Gulf – whose utility companies are thinking about how to overcome similar barriers to their bold renewable plans. Such complementary resources and opportunities open the space for co-operation between these two regional allies.
Robin Mills is CEO of Qamar Energy and author of The Myth of the Oil Crisis.
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