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“Middle East On The Right Track To Achieve Net-Zero Emissions By 2050”: ENGIE’S Omar Fatoom | |
| Staff Writer |
Over the course of the forecast period, the renewable energy market in the UAE is projected to grow at a CAGR of 7.5%. Remarkably, the COVID-19 epidemic had no effect on the country's growth in the field of renewable energy. In 2019 and 2020, the country had a rise in its installed solar PV capacity of roughly 34%. Numerous factors point to the renewable energy market in the United Arab Emirates expanding in the years ahead including the increasing need for cleaner ways to generate energy thereby tackling the current GHG (greenhouse gas emissions) rates and a continual advance in solar power technology.
Competition from alternative energy sources, such as nuclear power, may slow the (solar) market's expansion. However, increased commercialisation opportunities through the GCC grid are being explored as witnessed by the agreement between GCC countries and Iraq. The agreement stipulates that the GCC will connect their electricity network to Iraq's grid. The agreements are expected to advance plans to supply Iraq through the GCC Interconnection Authority (GCCIA), an idea first raised in late 2018 and that began to take shape the following year. Such opportunities will further increase with the reduction of cost of generation through the use of sources such as solar and the global support for renewable energy in itself.
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AED 100 billion Dubai Green Fund to support the Shams Dubai initiative, a programme to encourage the installation of rooftop solar panels, is just one example of the financial innovation taking place in the sector to help facilitate and supply the investments necessary over the long run.
Omar Fattom, Solar Engineer, ENGIE Solutions in an exclusive chat with T2NZ magazine reveals the floor plans for the Middle East to achieve net-zero emissions by 2050.
Fatoom opined that as a major renewable energy source with a low LCOE and great efficiency over the long term, solar is extremely significant. A partnership with ENGIE will help the UAE get closer to its objective of reaching zero emissions by the year 2050. KAHRAMAA recently granted ENGIE Cofely Mannai a contract for the supply and installation of electric vehicle chargers (Phase I). With the help of this project, Qatar and the GCC will be able to significantly cut their CO2 output.
Renewable Energy Market Increases Its Network
Historically, government-owned utilities have dominated the electrical market in the MENA area, leaving limited openings for private enterprises to establish cost-effective on-site electricity generation.
This sudden change occurred for a number of reasons. Many nations in the MENA region have begun setting goals and objectives to reduce their CO2 emissions in line with those of other nations across the world. As a result, governments in these nations have issued new legislation aimed at getting energy consumers interested in and using renewable sources of power.
Numerous builders and financiers are considering making investments in renewable energy projects in the MENA areas.
Large commercial and industrial businesses in the region are becoming increasingly interested in having their own rooftop and utility-scale on-site PV plant installed as a result of the declining costs of PV installations and their increased efficiency, as well as the progressive removal of subsidies on fuel and electricity prices in the context of increased sustainability challenges.
“Those who currently utilise Diesel/HFO Genests will appreciate the ease and lower cost of switching to a renewable energy source. It is for this reason that the term "PV-Agri" has recently begun to circulate.
“In addition, the availability of renewable energy has made food production nearly carbon dioxide (CO2) neutral,” said Fatoom.
Role Of Private Sector
Economic growth in the Gulf region is still being propelled by the state and state-linked groups. However, a determined effort to diversify the economy has created opportunities for domestic private companies to enter the renewable energy market.
For example, Saudi Crown Prince Mohammed bin Salman reshuffled the political and economic influence of oligarchic families and co-opted newer groups, such as the Abunayyan and al-Muhaidib families, who founded Acwa in 2002 and continue to be key executives and shareholders, in order to shape and consolidate his power base. The power of some of the older oligarchic families, such as that of Abdul Latif Jameel, was maintained, however. The renewable energy company Fotowatio Renewable Ventures owned by the latter now has assets (including those still in development) totalling more than 5 GW in countries other than Saudi Arabia.
In the United Arab Emirates, well-established family-run enterprises have done the same thing during the past decade, using their credibility, client base, and financial resources to launch brand-new lines of business. These are focused on creating residential and commercial solar power installations in the United Arab Emirates, South Asia, and the MENA region (MENA). Yellow Door (a spin-off from Adenium Energy owned by the Saudi AK Bakri family conglomerate and based in Dubai with distributed solar assets of 120 MW), Siraj Power (co-founded by notable Emirati businessman Abdul Ghaffar Hussain of Green Coast Enterprises with distributed solar assets of 100 MW), and AMEA Power are just a few examples (a subsidiary of Al Nowais Investment, which is owned by one of the wealthiest families in the UAE, with solar assets in Africa). The likes of Enerwhere, has thrived despite its lack of early connections to wealthy families in business, are still the exception.
Manufacturers of solar and wind components are proliferating throughout the Gulf. A number of new players have entered the solar industry in the Middle East, complementing long-standing powerhouses like Dubai's DuSol and Maysun and Saudi Arabia's Bin Omairah, Desert Technologies, and GTek and Bahrain's Solar One (PV Hardware in Saudi Arabia). In comparison to the proportion of the market held by imported renewable energy component manufacturers, the current scale of their manufacturing lines is low. For instance, Jinko Solar, a Chinese photovoltaic panel manufacturer, controls about a third of the Middle Eastern and North African (MENA) market. Caps set by state-owned utilities on the size of rooftop solar systems installed at industrial and commercial organisations of 500 kW in Bahrain and 2 MW in Saudi Arabia and Dubai also limit local demand. Despite concerns over the feasibility and legality of such schemes, local firms in Saudi Arabia and Oman are seeking to gain from larger levels of local (or even GCC) content requirements.
“The biggest difficulty is the LCOE, yet there are numerous sustainable solutions now being developed and researched to be included in the system. Energy Transition Masterplans, developed jointly by the public and private entities in the region's countries, can help accelerate this process,” opined Fatoom.
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Role of state-owned enterprises
The second dissimilarity concerns government-owned businesses operating in the renewable energy field. Acwa Power (Saudi Arabia), Masdar (Abu Dhabi), and Nebras Power (Oman) are "national champions" in renewable energy both domestically and internationally, representing three different Gulf republics (Qatar). Acwa and Masdar focus primarily on electricity development and operation, while Nebras Power is an equity investor. Nebras's asset portfolio is the smallest, with only 6.5 GW of producing capacity outside of Qatar. Masdar's new cooperation with Abu Dhabi's Taqa and the Abu Dhabi National Oil Company (ADNOC) has increased the size of its renewable portfolio from 10 to 23 GW, while Acwa's total power project capacity is over 42 GW. While Acwa and Nebras include fossil-fuel power stations as part of their portfolio, Masdar is the only one whose exclusive focus is on renewable energy. Acwa plans to double the percentage of renewable energy it uses by 2030, from the current 13%.
Speaking about expectations from the government, Fattom commented, “The rights of developers, contractors, and off-takers can be safeguarded by providing well-defined regulatory frameworks. In addition to making, it easier to get the necessary permits to connect a PV system to the utility grid, having an available power purchase agreement at a reasonable purchase price makes it possible to inject the surplus energy into the grid.”