Oil-rich kingdoms investing in renewable energy

Green energy is becoming increasing popular in the land of carbon. John Dyer reports.

Ain Beni Mathar Integrated Combined Cycle Thermo-Solar Power Plant. Photo: Dana Smillie / World Bank

Controlling more than half of the planet’s oil reserves and more than a third of its natural gas, Middle Eastern countries are investing more in solar, wind and other renewable energies that many sheiks consider a hedge against further price plunges in the region’s traditional cash cows.

“Solar photovoltaic is now the most competitive form of power generation in the Gulf, with wind, hydroelectric and other renewables all also looking like strikingly attractive alternatives to conventional sources when it comes to future investment in energy production projects across the region,” the International Renewable Energy Agency found in a report published earlier this year at the World Future Energy Summit in Abu Dhabi.

Sustainable energy can limits energy imports

The agency added that members of the Gulf Cooperation Council, including Saudi Arabia and the United Arab Emirates, or UAE, are planning to install almost 7 gigawatts of renewable energy capacity in the early 2020s.

Energy demand in the Middle East is expected to grow by around 2 per cent annually through 2035, according to the World Bank. Oil-rich countries don’t want to cut domestic demand to eat up exports. Countries that traditionally have not enjoyed big oil reserves, like Oman, see sustainable energy as a way to limit imports, argued analyst Kerry Boyd Anderson in the Arab News.

The region has ample sunlight and significant wind resources, too, Anderson added. Egypt, Morocco, Jordan, Iran, Israel and Kuwait have invested big in wind. Israel, Morocco, Yemen, Jordan and the UAE have been leaders in solar.

Saudi Arabian officials aim to generate 60 gigawatts from renewable energy in the next decade. The UAE is striving to generate 44 per cent of its energy from solar and other renewable sources by 2050, wrote Oil Price.com.

Riyadh-based ACWA Power and the Abu Dhabi Future Energy Company, or Masdar, are working on giant facility called the Mohammed bin Rashid Al Maktoum Solar Park in Dubai’s southeastern desert. The park is forecast to generate 5 gigawatts of electricity when finalized in 2030.

Sustainability in the region and beyond

Masdar is bidding on numerous Saudi projects designed to contribute to the desert kingdom’s energy goals. The company is also working on solar projects in Oman and Ethiopia, suggesting it will have the capital and expertise to continue to lead the way towards sustainability in the region and beyond.

Countries in the region have another reason to invest in renewable energy. Most depend on energy-hungry desalination plants for their water. In the long-term, especially as government around the world crack down on carbon emissions, Middle Eastern states will need alternative energy sources if they want to survive.

“Because energy production is mainly based on fossil fuels – a finite natural resource with environmental externalities – the development of renewable energy to power desalination is needed,” Arabian Gulf University Professor of Water Resource Management Waleed Zubari told the New Arab.

More work needs to be done

For true change to come, regional energy markets need to be reformed to incentivize utilities to offer and consumers to use renewable energy, for example, an Oxford University Institute for Energy Studies report found.

But those hurdles can be surmounted, claimed Adnan Amin, former director general of the International Renewable Energy Agency in an interview with the National.

Currently, renewables contribute only around 2 per cent of the UAE’s power, Amin said. Worldwide, they supply around 25 perc ent. But they could generate 100 per cent of the country’s needs within 50 years.

“Energy use accounts for two thirds of emissions and decarbonizing energy is possibly the quickest way to reach the goals of the Paris agreement,” said Adnan, referring to the 2016 accord seeking to curb global temperatures to no more than 2 per cent Celsius. “This is an existential issue.

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