Owing to its significant solar and wind potential, the Middle East and North African (MENA) region has the opportunity to lead the decarbonization of the global steel industry.
Emphasized in a recent report by the Institute for Energy Economics and Financial Analysis, the regional steel industry – which currently represents one of the most competitive globally – has already taken significant strides to decarbonize through the application of direct reduced iron-electric arc furnace technology (DRI-EAF).
Now, with new opportunities emerging across the green hydrogen landscape and government objectives to accelerate the transition even further, the MENA region is set to lead the world in the adoption of green hydrogen within the steel industry.
“The MENA region can lead the world if it shifts promptly to renewables and applies green hydrogen in its steel sector. MENA has an established supply of DR-grade iron ore and its iron ore pelletizing plants are among the world’s largest. In 2021, MENA produced just 3% of global crude steel but accounted for nearly 46% of the world’s DRI production,” said Soroush Basirat, author of the Institute for Energy Economies and Financial Analysis report.
With the region offering the highest potential for photovoltaic power globally – with theoretical production estimated at more than 5.8 KWh per m² – converting existing gas-powered generating plants to green hydrogen would create a carbon-free steel industry in the region. Decarbonizing the steel industry aligns with the World Bank’s prediction that by 2050, more than 83GW of wind and 334GW of solar will be added to the regional energy mix, improving the provision of clean energy and making the conversion to green hydrogen-powered steel production that much simpler.
“MENA’s knowledge of this specific steel technology is an invaluable asset. This production knowledge, abetted by further work on iron ore beneficiation, pelletizing and DR plants, is among the most important steel decarbonization pillars, and will greatly assist MENA’s transition. Compared to other regions, MENA’s existing DRI-EAF capacity means that no extra investment is needed for replacing the base technology. All new investment could be focused on expanding production of green hydrogen among other renewables. If it acts fast, MENA has the potential to lead the world in green steel production,” Basirat said.
Progress is being seen in some aspects of the built environment on the drive to be more sustainable, according to RICS Sustainability Report 2022, however the rate of advancement needs to accelerate significantly and become more widespread.
The report, which collated sentiment from almost 4,000 chartered surveyor contributors, around 1,200 of which are from the UK, across commercial and construction sectors globally, shows that some improvement in the push for sustainability has been made in the past year, notably in the commercial real estate sector as demand for green buildings continues to rise.
However, the data also shows there has been little or no change in some important areas in the past 12 months. Indeed, in construction, a significant share of professionals say they do not measure carbon emissions on projects.
While the appetite to seek green buildings in the commercial property sector continues to rise in the UK, the change is modest.
Looking at investors and occupiers separately in the UK, around 65 per cent of contributors note that occupier demand for green/sustainable buildings has risen over the past 12 months, however the UK is falling behind Europe as a whole, with Europe leading the way with around 52 per cent of contributors across the region seeing a modest increase in demand, and just under one-quarter stating that occupier interest in green/sustainable buildings has increased significantly.
On the investment side around 45 per cent of survey contributors in the UK report a modest increase in investor appetite for green/sustainable buildings over the past 12 months, which is five per cent higher than the global average. A further 21 per cent suggest there has been a more significant increase in demand. Comparing the UK to the rest of Europe where the pick-up in investor demand is again stronger, around 80 per cent of those surveyed across the whole of Europe see an increase in investor demand for green/sustainable real estate in the past year.
As demand for sustainable buildings continues to increase not just in the UK but on a global scale, it is impacting both rents and prices, with a significant share of contributors seeing a market premium for sustainable buildings, and citing that non-green real estate assets are subject to a ‘brown discount’. For those buildings that aren’t classed as green or sustainable, 48 per cent of respondents noted a reduction in rents, and around half also cited a reduction in sale prices in the UK, with both figures lower than as can be seen in the whole of Europe, with 57 per cent of respondents noting ‘brown discount’ for rental properties, and 60 per cent noting a ‘brown discount’ in prices.
In another signal that people in the UK are placing more focus on sustainable property, the majority of respondents (55 per cent) note a rise in climate risk assessments by investors on their built assets, suggesting that climate issues are now rising up the agenda and could be influencing the behaviour of key market players.
The figures suggest Europe is seeing stronger progress on sustainability in the built environment due to the spotlight being turned on green buildings by the European Commission’s ambitious Green Deal. Policymakers in other regions turning their attention towards sustainable real estate will lead to market shifts elsewhere, the report notes.
Survey respondents report that Construction professionals in the UK are beginning to embrace digital tools and technologies to complete sustainability-related analysis for construction projects, predominantly to assess energy needs and costs, but they are less likely to utilise these tools to reduce embodied carbon or to measure the impact on biodiversity. Forty-seven per cent of respondents in the UK report that digital tools and processes are used to complete sustainability assessments on less than half or none of their projects. By comparison, Europe’s figure is lower with 40 per cent of respondents reporting that digital tools and processes are used to complete sustainability assessments on less than half or none of their projects, indicating that the UK is falling behind the rest of the region.
This year’s results also show that there is much room for improvement in measuring carbon emissions. Seventy-six per cent of professionals in the UK state that they make no operational measurement of carbon emissions on projects, which is in line with the whole of Europe, but slightly higher when compared globally (72 per cent). With more than half of the UK respondents also saying that they don’t measure embodied carbon, even for those that do, less than 14 per cent use it to select the materials they use in their project.
When probed on the barriers to reducing carbon emissions, around 38 per cent of contributors identified both the lack of established / adopted standards, guidance and tools and high costs or low availability of low-carbon products as the most fundamental issues. Alongside this, contributors also highlight cultural issues and established practices as a challenge.
Kisa Zehra, RICS Sustainability Analyst, commented: “It is of benefit to all to embrace climate strategy, and we must reduce our impact as the built environment. Behaviour change is happening, with higher rents and prices being seen for the more desirable sustainable properties, and climate risk assessments by investors on their built assets rising across the globe. But, measuring all forms of carbon, is also critical to the changes we need to see from the built environment.
“Barriers to progress cited in the report have included a lack of established standards, guidance and tools. However, it is equally fair to say that industry must adopt these tools and standards where they are available and should make carbon assessment and management an integral part of business practice. Industry needs to work in collaboration to succeed. The work RICS is leading with partners, for example the ICMS coalition in developing a cost measurement standard that combines cost and carbon reporting, is a key example.
“RICS will continue to promote research, and demand policy changes while working in collaboration with industry, governments and our professionals to increase the impact of the built environment on positive climate strategy.”
FANACK‘s ENVIRONMENT is on how the MENA region falls short of reaping the benefits of renewable energy. Here it is.
MENA Region Falls Short of Reaping Benefits of Renewable Energy
Published on September 21, 2022
This article has been translated from Arabic.
The main economic challenge caused by the reliance on fossil fuels for energy production is the effect of changing oil derivative prices on the price of electricity production. This is precisely what transpired in 2021, when the average price of a barrel of oil increased by around 68% year over year and fuel consumption soared as economies resumed activity following widespread closures caused by the coronavirus pandemic in 2020.
The Ukraine conflict’s consequences made the situation even worse this year. The average price of a barrel of oil increased by 50% over the previous year due to shortages in Russian energy supply, despite sustained high global demand for oil as the world struggled to recover from the pandemic’s impacts.
As a result, the price of power produced from fossil fuels rises proportionally to every rise in the value of crude oil, putting additional pressure on consumers as well as raising the cost of production in various economic sectors.
The drawbacks of solely relying on fossil fuels
Fluctuations in the cost of electricity production are not the sole difficulties resulting from a reliance on fossil fuels to generate power. The problems grow more severe for countries importing oil derivatives because the amount of hard currencies needed to import fuel increases in parallel to the rise in oil prices, linking these countries’ financial stability to the price of oil.
As a result, economic growth forecasts and the financial stability of oil-importing countries are often linked to expectations in oil prices. Furthermore, oil markets often witness harsh interactions between oil-producing countries, which have a vested interest in higher prices, and oil-importing countries, which push for measures to rein in oil prices.
These issues only underscore the significance of the fact that, according to figures from the International Renewable Energy Agency, the cost of producing electricity using even the cheapest fossil fuels is still four times higher than producing an equal amount of power through renewable energy. In fact, the same figures indicate that the energy generated using renewable energy over the past resulted in about $55 billion in savings.
Thus, with the cost of producing electricity using solar energy has decreased by 88 per cent between 2010 and 2021, the continued use of fossil fuels to generate power has become a far more expensive practice compared to renewable alternatives.
The importance of renewable energy in the Arab region
Today there are ample reasons to push societies toward producing electricity by using renewable energy as an alternative to fossil fuels, but for the countries of the Arab region the need for this direction is more pressing. With the growth rates of populations in these countries surpassing global growth rates, they witness an inordinately high energy demand.
In addition, many oil-importing Arab countries such as Lebanon, Syria, Sudan and Egypt suffer from severe and long-term monetary crises, which are exacerbated with every rise in global prices of basic goods, including oil, as result of increasing pressure on their balance of payments with the rise in the cost of imports.
The Arab region has a wealth of potential for renewable energy, partly because it has the highest solar brightness, or sunlight exposure, across the globe. The Middle East and North Africa region enjoys the benefits of a solar ray with productivity that ranges between 4 and 8 kilowatt-hours per square meter, according to research by the United Nations Environment Program. It is also distinguished by a low occurrence of clouds, which enables it to use sunlight to produce power for most of the year.
The International Renewable Energy Agency’s statistics, which show that every square kilometer in the MENA region receives solar energy yearly equivalent to the output of 5.1 million barrels of oil, may be used to quantify the significance of this renewable energy.
Therefore, it is obvious that the Arab area can benefit significantly from renewable energy, not only by supplying its own population and economic sectors’ energy demands, but also by exporting power to other parts of the world.
It is important to note that certain Arab nations, like Egypt, already have electrical networks that link them to numerous European and African nations. This serves as a foundation for the infrastructure needed to build systems for power export.
Existing renewable energy projects in the Arab region
Even though their strategic location presents Arab countries with numerous advantages in terms of renewable energy, only four nations, namely Egypt, the United Arab Emirates, Saudi Arabia and Morocco, have embarked on ambitious projects in this area.
That is not to say that other Arab countries, do not have programs, small projects, and plans in the works for the production of renewable energy, but such projects are small in scope compared to the volume of their electricity needs. As a result, they continue to remain heavily reliant on fossil fuels for power generation.
Egypt is now significantly ahead of other nations in the area in its use of renewable energy as a power source. Mohamed El-Khayat, head of the Renewable Energy Authority, confirmed that his country had raised the contribution of renewable energy to Egypt’s total electricity production to 20 per cent, the highest proportion in the region compared to other Arab countries.
Egypt is also currently striving to raise this ratio to one-third by 2025 through new projects, which include producing 16 percent of Egyptian electricity from wind energy, 7 per cent from solar cells, and 10 percent from hydroelectric energy. The rest of the energy produced from traditional sources will depend on gas extracted from the Egyptian fields, ensuring the country’s energy self-sufficiency.
On the other hand, the UAE’s energy policy is centered on solar energy projects to achieve its objective of using renewable energy to ensure 50 per cent of the country’s power production by 2050 while depending on nuclear energy to secure an additional 25 per cent of overall electricity production. As a result, just 25 per cent of the UAE’s energy demands will be met by fossil fuels, reducing the country’s dependency on them.
As for Saudi Arabia, last year the kingdom saw the highest growth rate among Arab countries in the generation of electricity through renewable sources, increasing its production of renewable energy by 301 per cent over the previous year.
According to Saudi plans, the contribution of renewable energy to the total locally produced electricity is expected to rise to 30 per cent by 2030, alongside plans to develop electricity delivery networks that would later allow it to export the surplus to neighboring countries.
Morocco is the most ambitious among Arab countries in terms of power production. It had already successfully increased the proportion of electricity produced from renewable sources to 37 per cent in 2021 – wind energy (13.4 per cent), solar energy (7.03 percent) and hydroelectric (16.57 per cent) – and Morocco plans to increase that contribution to 52 per cent by 2030.
Much more is needed
The figures show that these four Arab countries are giving great importance to renewable energy, not only for the sake of economic stability but also to reduce the impact of fossil fuels on the environment.
However, the scope of these projects remains modest considering the opportunities available in the Arab region, given that it is mostly limited to only four countries and absent from the vast majority of other Arab nations in the region.
This is due to the fact that most Arab countries have limited available financial resources that can be invested in renewable energy. In addition, even the four countries leading the transition to renewable energy in the Arab region are suffering from delays in implementing some of the projects stipulated in the official plans. They will likely fail to meet their targets in a timely manner.
As things stand now, countries of the Arab region can best make use of their potential in renewable energy by looking into partnerships with the private sector, which can help attract foreign investments to the energy sector and contribute to generating clean energy at competitive rates.
These countries should also develop an intraregional electrical grid to enable those that have already started to invest in renewable energy to export their surplus energy to countries suffering from power shortages.
A viable option would be to establish joint investment funds that would enable countries with surplus capital to invest funds in clean energy projects in other countries, thus benefiting both parties simultaneously.
A Pennsylvania State UniversityRESEARCH on living materials that are the future of sustainable building has elaborated on this aspect of the building materials and / or their combination as illustrated by the above image of Jose Duarte, professor of architecture, and doctoral student Elena Vazquez adjust panels on a prototype of a dynamic window shading system that Vazquez designed and built. Credit to: Patrick Mansell. All rights reserved. If this goes through, we could safely say that building sites will look a bit different in the future.
In most of the MENA and the Gulf region, we reach for the A/C control when entering any living or working space. But as we casually flip a switch, we tend not to consider all those carbon emissions caused by machines.
After years of indulgence and as witnessed by all of the end results, climate change is forcing all to go green by trying to keep buildings cool as it gets hotter. Greening the Global Construction Industry has already engaged in developing new techniques, tools, products and technologies – such as heat pumps, better windows, more vital insulation, energy-efficient appliances, renewable energy and more imaginative design – has enabled emissions to stabilize the past few years.
The Conversation Weekly podcast is now back after a short break. Every Thursday, we explore the fascinating discoveries researchers are using to make sense of the world and the big questions they’re still trying to answer.
In this episode we find out how “modern” styles of architecture using concrete and glass have often usurped local building techniques better suited to parts of the world with hotter climates. Now some architects are resurrecting traditional techniques to help keep buildings cool.
From western Europe to China, North Africa and the US, severe heatwaves brought drought, fire and death to the summer of 2022. The heatwaves also raised serious questions about the ability of existing infrastructure to cope with extreme heat, which is projected to become more common due to climate change.
Yet, for thousands of years, people living in parts of the world used to high temperatures have deployed traditional passive cooling techniques in the way they designed their buildings. In Nigeria, for example, people have long used biomimicry to copy the style of local flora and fauna as they design their homes, according to Anthony Ogbuokiri, a senior lecturer in architectural design at Nottingham Trent University in the UK.
But in the 20th century, cities even in very hot climates began following an international template for building design that meant cities around the world, regardless of where they were, often had similar looking skylines. Ogbuokiri calls this “duplitecture”, and says it “ramped up the cooling load” due to an in-built reliance on air conditioners.
Alongside this, there was a massive boom in the use of concrete, particularly after the second world war when the Soviet Union and the US started gifting their cold war allies concrete technology. “It was a competition both to discover who actually mastered concrete and who was better at gathering the materials, the people and the energy to make concrete,” explains Vyta Pivo, assistant professor of architecture at the University of Michigan in the US. But too much concrete can contribute to the phenomenon of urban heat islands, where heat is concentrated in cities. Concrete is also a considerable contributor to global carbon emissions.
Some architects and researchers are working to rehabilitate and improve traditional passive techniques that help keep buildings cool without using energy. Susan Abed Hassan, a professor of architectural engineering at Al-Nahrain University in Baghdad, Iraq, focuses a lot on windcatchers in her work, a type of chimney which funnels air through houses to keep them cooler in hot climates. She’s now looking at how to combining underground water pipes with windcatchers to enhance their cooling effects.
Listen to the full episode to find out about other techniques being used to keep buildings cool without relying on air conditioning.
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