By MedilynManibo - Responsible Business, Dubai
The sun is the ultimate supplier of renewable and clean energy. In recent years countries in the Middle East and North African regions have been turning to this power source and building clear business cases for its use. Often, projects are driven by governments showing a sincere interest in alternative energy.
The scale of conversations in the United Arab Emirates concerning the importance of renewable and sustainable energy as a major driver of the green economy recently, goes to show that sustainability can no longer be reduced to roundtable talk. Despite Abu Dhabi and Dubai’s low renewable energy target commitments by 2030, namely 7 and 5% respectively, the topic is gaining substantial attention in the region.
The Shams 1 solar energy project, the largest concentrated solar panel in the world, inaugurated in Abu Dhabi’s western region this March, is a tangible testament for investors. Recent developments in Saudi Arabia and Qatar also show that GCC governments will not leave any stone unturned in terms of maximizing its energy potentials. The momentum is now set to satisfy those who have flocked to the region over the last six months in to believing that there are sincere commitments to drive solar investments. Is the sun finally shining on sustainability in the Middle East?
In 2012, the Emirates Solar Industry Association (ESIA) sponsored a report called ‘Sunrise in the Desert’ which showed that sustainability is not the sole aim of solar power development in the MENA region. Conducted byPriceWaterhouseCoopers (PwC), the report demonstrated the commercial viability for solar power in the Middle East and North Africa (MENA) region, owing to the climatic conditions, the economic viability of solar panels - particularly solar photovoltaics, and the increasing price of conventional gas. In order to rationalize energy pricing, introducing appropriate regulations to accommodate solar and developing large-scale projects MENA governments should work together with the private sector.
Governments as Drivers
Marc Norman, project finance lawyer at the international law firm Chadbourne&Parke and Director of Marketing and Communications at ESIA, noted that “there is a strong political will to push things forward”.
Last year, Dubai launched the first phase of its 1,000MW Sheikh Mohammed bin Rashid Al-Maktoum solar park in Dubai with the award of a 13MW project to US-based company, First Solar. More recently, Abu Dhabi completed the 100MW Shams 1 CSP project, an important milestone for the region.
“The UAE has been at the forefront of solar power developments. The country has been keen to position itself as a leader in the development of solar energy and other forms of clean, sustainable energy,” Norman told Responsible Business.
Norman views the government’s role as key, “Investors, local and international, need certainty and incentives. Investors expect government to implement specific policy directions and regulatory frameworks. Investors also expect governments to devise incentive mechanisms. This is what will lead to the creation of a viable market.”
In Saudi Arabia, the government is getting very serious about its plans to promote the renewable energy industry following its recent announcement to initiate a major renewable energy procurement program spearheaded by the King Abdullah City for Atomic and Renewable Energy (K.A.CARE).
Norman says opportunities are abound for industry players moving to the region; a trend that will only increase once the market develops and strengthens.
“An increasing amount of companies are entering into the market hungry for new opportunities. The market presents a number of challenges, such as dust, sand and sometimes even salt in the air which reduces plant efficiency. We expect to see a greater number of specialized companies flocking in and offering sophisticated technologies such as advanced solar panel cleaning technologies. In turn, we expect to see developers and integrators include such technologies into the projects they bid to governments. This will develop the solar power value chain which in turn will pave the way towards a more sustainable environment.”
Norman said ESIA has also witnessed the growth of local solar power players, with approximately 10 UAE-based companies now operating in the country. Increasing the share of solar power in the energy mix as well as innovative solar rooftop programs are seen as key vectors towards greater sustainability and making solar power more available for companies and consumers. “Once the policy frameworks and embedded feed-in-tariffs are launched next year, companies and probably even consumers will be able to apply solar rooftop installations on their roofs and connect them to the grid. This will constitute a major step towards the development of a viable solar power market in the region and in turn a more sustainable environment,” he added.
Start From the Streets
Some multinational and local companies in the UAE and the MENA region have begun exploring solar lighting applications, the most common of which is solar street lighting. PTL Solar, a renewable energy solutions company based in Dubai, has taken the initiative to offer solar solutions directly to companies and consumers alike.
“Off-grid solar power generation is experiencing phenomenal growth in the region. Solar will light the path for countries seeking energy independence and more cost-effective means of providing energy to citizens and businesses. The increased growth will spark innovation in the industry, providing continued cost efficiencies. Solar lighting is still a little on the expensive side. However, they are much easier to install because there are no wires or electricity needed. We will see the emergence of much more flexible technologies which will allow for our sector to better respond to the needs of building integrated applications and to provide greater cost competition with conventional electricity,” stated Prabissh Thomas, Founder and Group Managing Director for PTL Solar.
Since 2005, PTL Solar has engaged with a significant number of companies to seriously engage in solutions concerning their energy use, including the use of solar power. To reach even more people, the company has recently launched PTL Solar Mart Franchise in the UAE and the region to offer individuals and entrepreneurs more practical solar power solutions. The franchise-based business model is widely used in the region, but is being applied for the first time in an energy market that is largely dependent on fossil fuels.
“As solar technology develops, we can uniquely see sustainable products starting from lighting a house to powering telecom sites and buildings. On each project executed by PTL Solar, we provide them with energy savings and CO2 savings reports. We also provide cost-analysis reports to encourage clients to engage with this initiative and implement solar lighting or power systems installed at their facility,” Thomas added.
The UAE has been at the forefront of solar power developments. The country has been keen to position itself as a leader in the development of solar energy and other forms of clean, sustainable energy.
Marc Norman, Emirates Solar Industry Association
PTL Solar agrees that government leadership is necessary for the industry to develop. “Government leadership provides the key to market success and governments should now provide subsidies to make solar energy more economical. But this is based on the condition that energy consumption by society should be met in an environmentally sustainable manner and the only way to do that is by educating people on energy efficient technologies,” said Thomas.
Role of Research
Alongside investments in the energy sector, the UAE government has made sure to tap into constructive research through extensive research programs at Abu Dhabi’s Masdar Institute of Science and Technology. The institute has been actively pursuing various research projects, including bio-research in water, environment and health, renewable energy technologies and other future energy systems, as well as micro-systems and advanced materials.
According to the Masdar Institute website, its portfolio of new research projects integrates theory and practice to incubate a culture of innovation and entrepreneurship. Recent studies include: an in-depth research project on the potential of biofuels-from-algae, a study on portable ultrasound machine systems, and a remote sensing study on “urban heat island” effects in Abu Dhabi, Dubai and Doha.
The various approaches and responses to renewable and sustainable energy in the UAE show that there is serious interest to tap into this energy potential. If there is anything that should not be missed, it is the opportunity to identify the possible engagement of private investments to current initiatives and how these can truly contribute to sustainability in the region.
Source: Responsible Business Magazine