Renewable energy could become the dominant source of energy across the world, provide up to 86% of global power demand under a scenario in which deeper electrification means that electricity’s share of final energy consumption jumps from its current levels of 20% to 50% by 2050.
A new report published by the International Renewable Energy Agency (IRENA), this week at the Berlin Energy Transition Dialogue and entitled Global Energy Transformation: A Roadmap to 2050, charts a pathway to accelerating the transformation of the global energy mix to meet climate objectives, create jobs and foster economic growth.
IRENA says stepping away from reliance on fossil fuels like coal, oil, and gas is key to this transformation, and electrification delivers the best pathway. This includes the move to more electric vehicles and to using electricity for heating and cooling, which can be supplied by wind and solar.
IRENA says that under this scenario, energy-related CO2 emissions would decline 70% below today’s levels – of which, 75% can be achieved through renewable energy and electrification technologies.
Renewable energy sources would provide the bulk of global power demand, under such a scenario, with as much as 86% of demand, driven by as many as 1 billion electric vehicles and electrified heating & cooling, as well as the emergence of renewable hydrogen.
Under such a plan, then, renewable energy could supply two-thirds of final energy consumption.
“The race to secure a climate safe future has entered a decisive phase,” said newly-installed IRENA Director-General Francesco La Camera. “Renewable energy is the most effective and readily-available solution for reversing the trend of rising CO2 emissions. A combination of renewable energy with a deeper electrification can achieve 75 per cent of the energy-related emissions reduction needed.”
The pathway laid out by IRENA would also have significant economic benefits, saving the global economy between $65 trillion and $160 trillion – or, put another way, between $3 and $7 per each $1 spent on the energy transition – helping the economy to grow by 2.5% in 2050.
“The shift towards renewables makes economic sense,” La Camera continued. “By mid-century, the global economy would be larger, and jobs created in the energy sector would boost global employment by 0.2 per cent.
“Policies to promote a just, fair and inclusive transition could maximise the benefits for different countries, regions and communities. This would also accelerate the achievement of affordable and universal energy access. The global energy transformation goes beyond a transformation of the energy sector. It is a transformation of our economies and societies.”
Unfortunately, at the same time as it lays out a pathway forward, the IRENA report also warns that current action is lagging well behind what is necessary.
The authors write that, “Despite clear evidence of human-caused climate change, support for the Paris Agreement on climate change, and the prevalence of clean, economical and sustainable energy options, energy-related carbon dioxide (CO2) emissions have increased 1.3% annually, on average, over the last five years.”
Their conclusion? “The gap between observed emissions and the reductions that are needed to meet internationally agreed climate objectives is widening.”
“The energy transformation is gaining momentum, but it must accelerate even faster,” concluded La Camera. “The UN’s 2030 Sustainable Development Agenda and the review of national climate pledges under the Paris Agreement are milestones for raising the level of ambition.
“Urgent action on the ground at all levels is vital, in particular unlocking the investments needed to further strengthen the momentum of this energy transformation. Speed and forward-looking leadership will be critical – the world in 2050 depends on the energy decisions we take today.”
The authors of the report urge national policymakers to focus on zero-carbon long-term strategies as well as boosting and harnessing systemic innovation such as fostering smarter energy systems through digitalisation and coupling end-use sectors – particularly the transport and heating & cooling sectors – with greater electrification.
The report also found that, while additional investments needed is $15 trillion by 2050, this is nevertheless 40% down compared to IRENA’s previous analysis “due in large part to rapidly falling renewable energy costs as well as opportunities to electrify transport and other end uses.”
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.
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:
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.
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.
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.
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.
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.
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
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
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
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.
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.”
One of the ongoing arguments that the forces
opposed to dealing with climate change make is that transitioning the grid to
renewables will be economically devastating. A nuance that’s emerging is that a mixed grid
with lots of fossil fuels is economically superior. It isn’t, and it’s worth pulling together the
set of arguments for why.
We have to start by asking ourselves what we mean
when we say ‘economically superior’. The Exxon-Valdez disaster of 1989 spilled
35,000 metric tons of oil into sensitive waters off of Alaska. Was that an
economic benefit or negative? It depends on what lens you use. One of the odd
impacts of the spill was a short-term economic uptick in jobs and
business due to the massive oil spill cleanup efforts. In the long term,
tourism, fisheries and related industries have continued to be impacted, but if
you picked your timeframe the disaster could be read as an economic benefit.
Similarly, the US healthcare system has a very high
per-capita cost with poorer outcomes than other roughly equivalent societies,
yet the healthcare industry in the USA is a massive economic driver. Is the
poor structuring and payment system in the USA a net economic benefit or a net
In context of economic benefits, we have to cast
our nets across a broader rather than narrower set of topics and a broader
rather than narrower timeframe in other words.
Power generation mixes
The question boils down to whether a solely
renewable grid is superior to a grid with a remaining substantial percentage of
fossil fuel generation mitigated with carbon capture and sequestration.
The first contains a couple of variants that are
worth exploring a bit. The first variant is a fully electrified economy, with
industry, agriculture, transportation and the like all using electricity
generated by renewables and stored in some interim form, mostly batteries but
also hydrogen in some cases and (cleaner) manufactured hydrocarbons in others.
The second variant adds biofuels from woodchips, biodiesel, and biomethane
sources to the mixture with continued thermal generation of electricity and
greater continued use of internal combustion and diesel engines for
The partially fossil fuel grid assumes that the
negative externalities of fossil fuel generation and transportation fuels can
be managed. The expectation is that these will be internalized in the cost
rather than remain uncosted negative externalities. This includes carbon
dioxide and methane emissions which cause global warming, with the Pigovian
tax being some combination of a straight carbon tax, cap and
trade, and regulation. This would enforce carbon capture and sequestration in
theory, although the practice remains so uneconomic it’s hard to see it
working. Pollution negative externalities include loss of productivity via
multiple causal mechanisms, additional burdens on healthcare systems and
premature loss of life.
The timeframe is important. Carbon emissions today
create economic impacts 20–100 years from now. Pollution emissions today create
economic impacts that are both immediate and long-term, as the Exxon Valdez
example shows. Burning fossil fuels for transportation and generation, in other
words, requires us to view longer term, not quarterly or annual economic
There are a couple of additional pieces to the
puzzle. A key one is viability. Can we actually transform our global economy to
one powered by renewable energy, regardless of storage?
Yes, we can. The go-to source for this is the work
of Dr. Mark Jacobsen out of Stanford. The Solutions Project
he spearheads looks at the transformation globally through 2050. That gives us
the timeframe necessary, but to be clear, Jacobsen is only looking at direct
economic impacts of jobs and the like. He’s ignoring negative externalities in
Renewables create a lot more jobs than the
increasingly capital-intensive fossil fuel industry. Putting up 100 3.3 MW wind
turbines across a few dozen square miles of Idaho and then maintaining them
takes more people than the equivalent generation in gas or coal.
This can perhaps be most clearly seen in the jobless recovery
in Canada’s oil sands, where economic recovery did not see a return of the
thousands of jobs for workers whose jobs had been automated in the efficiency
drive of the recession. Traveling to Brazil is instructive, as Petrobras
remains a governmentally-owned oil company and is vertically integrated. There
are half-a-dozen service people at every gas station and it takes four times as
much labor per barrel in their refineries. This is because Petrobras is a
governmental mechanism for balancing employment numbers, not an efficiently run
organization. It’s a dying breed globally, when even Saudi Aramco has floated
shifting to private ownership.
Right now in the USA, there are more people employed in the solar industry
alone than in the entire fossil fuel industry. Add in wind generation and the
necessary transmission and distribution of electricity. Add in Tesla’s
employees and all of the businesses working on the transition to electrified
transportation. There’s a big jobs gain to be had in the transition.