UAE Becoming a Leader in Renewable Energy

Abu Dhabi is one of the most important examples of a city that is creatively seeking to strengthen its renewable energy sector.

Countries across the world are planning to increase the share of renewables in their national energy baskets, particularly to generate electricity. The United Arab Emirates has an ambitious plan to become a leader in the Middle East in reducing reliance on fossil fuels and increasing renewable energy production.

The United Arab Emirates intends to expand the use of new energies in pursuit of such goals as exploiting renewable resources that are not oil-dependent. The Emirates has become a hub for clean energy technology, providing funding to build renewable energy projects around the world and investing millions of dollars in fundamental research on energy, water, microelectronics, advanced materials and transport systems.

The UAE serves as a model for renewable energy sector. Masdar Abu Dhabi, for example, a regional leader and international player in renewable energy and sustainable urban development, has invested more than $2.7 billion in clean energy development since 2006.

MENA countries with huge oil and natural gas reserves are looking to increase the use of renewable energy. Some have the potential to export electricity generated by renewables and decrease dependency on revenue from exported oil and decrease greenhouse gas emissions. Studies suggest that electricity generated from renewable sources is cheaper than power produced from fossil fuels.

The UAE State of Energy Report 2015 said the share of power generated from natural gas will drop from 98% in 2012 to less than 76% in 2021, as clean energy enters the mix and energy efficiency grows.

UAE Energy Strategy 2050 targets an energy mix combining renewable, clean energy sources and nuclear power to meet the Emirates’ economic requirements and environmental goals of 44% clean energy, 38% natural gas, 12% coal and 6% nuclear.

The United Arab Emirates has a clear, ambitious target for clean energy and is joining other countries to maximise clean energy use. It is likely to become one of the world’s leading solar power producers because sunlight is one of the natural advantages of the country.

Studies indicate that, if the UAE reaches its renewable energy goals, it could save $192 billion by 2050 in the energy sector.

More than in any other city in the United Arab Emirates, Dubai is seeking to become a Smart City, focusing on the use and development of clean energy. Dubai recently initiated its “Clean Energy Strategy 2050” initiative, which is designed to increase Dubai’s green and clean energy share by 75% by 2050.

Dubai officials stressed their commitment to creating a sustainable model for energy conservation and supporting economic growth without harming the environment and natural resources. The project, estimated at $13 million, is “scheduled to provide up to 7% of Dubai’s energy from clean sources in 2020, which will increase to 25% in 2030 and to 75% in 2050,” a UAE government report stated.

Last May, Dubai began the second phase of what will be the world’s largest solar park. Worth some $14 billion, the park will eventually produce 5,000 megawatts (MW) of energy, providing power for about 800,000 households.

Meanwhile, a French power company and Masaood Abu Dhabi jointly offered to construct a 300-MW photovoltaic power plant to produce power at 1.79 cents per kilowatt-hour, which would be the cheapest rate at which electricity has ever been produced in Abu Dhabi.

The United Arab Emirates is determined to find a clean replacement for natural gas, helping both the environment and its budget. By 2050, the UAE will have invested approximately $150 billion in renewable energy. This is expected to save the country $192 billion through reducing dependence on gas subsidies.

The Masdar city project is one of the UAE’s most important renewable energy-based projects. Begun in 2006 as a wholly owned subsidiary of the state-owned Mubadala Development Company and guided by Abu Dhabi Economic Vision 2030, Masdar aims to develop clean technology and future energy solutions in terms of design, innovation, research laboratories and implementation.

Masdar operates through four interconnected business units and a research division that complements their work. With $2.7 billion put towards clean energy development in the past decade, the project functions as an investment model for other cities.

The UAE government plans to invest $340 million in sustainable development efforts in developing countries. Abu Dhabi has invested some $46 million in renewable energy projects in Africa and the Caribbean.

In addition, Emirates Company is the host and official partner of the Solar Impulse 2 project, a plan to fly a solar-powered aircraft around the world without the use of fossil fuels.

The UAE’s pioneering outlook in developing renewable energy will help the country become a leader in developing environmental policy and in job creation. Investing in renewable energy creates approximately three times more jobs than oil and gas and the United Arab Emirates plans to create more than 90,000 jobs in renewable energy by 2030.

Abu Dhabi is one of the most important examples of a city that is creatively seeking to strengthen its renewable energy sector. By 2030, the city is expected to contain about 40,000 inhabitants and the project will create more than 50,000 jobs there.

As solar energy gains traction throughout the world as an inexpensive source of energy, countries with high solar indexes are looking to reassess their energy strategies. Increased investment by the Emirate government and private energy firms in other countries gives the United Arab Emirates an opportunity to be a key player in renewable in the region.

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Challenges and Opportunities for Saudi Arabia’s Energy Transition from Oil

Currently, the main source of Saudi revenues is oil production—at a rate of nine to ten million barrels per day. Yet, this is not the kingdom’s only resource: Saudi Arabia is actively engaged in implementing many industrial projects, including energy projects and projects based around crude oil, in an effort to diversify its economy and wean itself off of dependence on oil.

 

Saudi oil resources and oil policies play a primary role in the kingdom’s dealings with the outside world. Yet in light of recent international outrage over various Saudi abuses and atrocities, such as the killing of journalist Jamal Khashoggi, the country is focusing more and more on plans for diversification under Vision 2030.

Oil prices will continue to play a significant role in Saudi Arabia’s economy, but whether Saudi Arabia can maintain oil prices to provide a steady stream of income, is a matter that must be coordinated with OPEC, of which it is a powerful member state. Success in this arena will require coordination among the ruling Saudi government, the U.S., and the other major oil powers.

According to reports, the U.S. has announced that it will be able to supply 80 percent of the world’s oil demand through its own shale oil supplies within the next three years. While this may be exaggerated, the U.S. seems intent on keeping oil prices at a level of at least $55 to $60 per barrel over the next three years. At this price, Saudi Arabia can be confident over the next few years of a steady income stream from oil.

Saudi Minister of Energy, Khalid Al-Falih, has announced that there will be no change in Saudi oil policy. Riyadh’s goal is to keep its share of the market in oil, and it expects to earn at least $2 trillion in sales of up to 5 percent of Aramco stock, although in August 2018, Saudi Arabia postponed the much anticipated initial public offering. Nevertheless, Al-Falih has promised to bring this amount into the global industry, and the proceeds from the Aramco sale and the resulting business will be transferred to Saudi Arabia’s Public Investment Fund (PIF).

 

The PIF Program (2018-2020) is one of twelve Saudi “vision realization” programs. The program outlines Saudi objectives in local and international investments that will enable the diversification of the kingdom’s sources of development and growth. In total, with other revenues injected into the fund, it is expected to reach $3 trillion. The minister hopes that other industries will also be motivated to grow.

Saudi Arabia’s 2030 plan is an opportunity to reduce the kingdom’s dependence on oil. Crown Prince Mohammed bin Salman has strongly criticized decades of the Saudi addiction to oil – blaming it for the kingdom’s recession.  The sale of a small part of Aramco, the world’s largest oil company, will create the world’s largest investment support fund intended to operate in a wide range of capital markets, create more employment for women, and focus more on the dynamics of non-oil industries from mining to military hardware.

These goals are very radical in a country where 90 percent of the government’s revenues come from oil, and whose budget deficit has reached 13.5 percent of GDP since the fall in oil prices in 2016. The crown prince claims that the country can develop trade, investment, and foreign tourism to bring its non-oil revenues up to $600 billion by 2020.

Renewable Energy

 

At present, Saudi Arabia’s domestic consumption is fully dependent on hydrocarbon fuels, which accounts for a quarter of its oil and natural gas production. The government hopes to supply more oil and gas to lucrative foreign markets by replacing its reliance on it with atomic energy and renewable resources. The Saudi government plans to develop 30 solar and wind power plants over the next ten years. The plans will be part of a major $50 billion expansion plan for renewable energy to reduce dependence on oil by 2030.

Saudi Arabia is preparing itself to provide around 30 percent of its electricity needs over the next 20 years from its largest potential source of energy – solar power. It has one of the world’s highest levels of solar radiation and targets installing photovoltaic capacity of more than 41 gigawatts of electricity by 2032. To do this, Saudi Arabia has been counting on China’s help as a leading developer.

Riyadh hopes that in the decades ahead, it will contribute more to reducing its fossil fuel consumption to export markets, but the Saudi Energy Research Center has acknowledged that hydrocarbons will still have a major contribution to the energy basket by 2032 and beyond. The projections of the energy mix until then include 60 gigawatts (GW) of hydrocarbon fuels, 41 GW of solar energy, 17.6 GW of nuclear power, 9 GW of wind power, 3 GW of waste to energy, and 1 GW of electricity generated by geothermal energy.

Wind

Saudi Arabia has high potential for wind around the Red Sea and southeast of the country. Four large consortiums have signed contracts worth $500 million to build the first Saudi wind power plant. The contract is based on a 20-year Power Supply—Power Purchase Contract, signed by Saudi Power Company. The plant is expected to supply 70,000 Saudi Arabian households. In addition, based on Saudi Arabia’s 2030 vision, American company General Electric will launch a pilot project for a 2.75-megawatt wind turbine for Saudi Arabia, expected to replace diesel fuel from one of Aramco’s refinery complexes.

Experts believe the wind industry in Saudi Arabia is an important step in the country’s energy resource shift strategy. The first large Saudi-scale wind turbine is actually an important chapter in Saudi Arabia’s efforts to diversify its energy mix. Saudi Arabia’s Aramco Oil Company said it plans to turn the country into a clean and renewable energy hub through the construction and development of a massive wind project.

 

Aramco, Saudi Arabia’s oil giant, recently announced plans to allocate billions of dollars to build and develop a huge project called Spark, which will make Saudi Arabia the largest clean energy hub and facility. According to officials and executives of the company, the project will be completed in 2035, spanning a land area of 50 square kilometers, near the two cities of Dammam and Alhassa.

Experts estimate that the development and operation of this massive project will, directly and indirectly, generate over 100,000 jobs in Saudi Arabia, with positive changes in the infrastructure of industries and sectors.

Given the projected decline in world oil and gas reserves, many analysts have said for almost half a century now that all countries will have to fully utilize clean and renewable energies.

 

$7 Billion in Renewable Energy Projects Expected This Year in Saudi Arabia

Saudi Arabia expects this year to launch several renewable energy projects, especially solar power plants, worth $7 billion. Turki Mohammed al-Shihri, director of the Saudi Renewable Energy Development Project Office, has claimed that bids will be issued for eight projects with a total capacity of 4.125 GW this year. The cost of these projects will be between five and seven billion dollars.

Saudi Arabia and other Middle Eastern oil producers are looking for renewable energy to grow domestic demand so that they can export more oil to receive higher oil revenues. Saudi Arabia is looking to install 9.5 GW of solar and wind capacity by 2023. Manufacturers have lowered their solar pricing offerings in recent years. Saudi projects this year include 3.3 GW of solar photovoltaic and 800 megawatts of wind.

The winners of these bids cover the cost of the tender, while the government guarantees that it will buy electricity from these projects within 25 years. The country plans to connect 3.45 GW of renewable energy by 2020, which includes 700 megawatts (MW) of solar and wind power, which has already been tendered. Saudi Arabia expects to receive the final proposals for a 400 MW wind power plant Northwest of the country by March 20th.

Aramco, Saudi Arabia’s oil giant, recently announced plans to allocate billions of dollars to build and develop a huge project called Spark, which will make Saudi Arabia the largest clean energy hub and facility.

Nuclear Energy

Nuclear energy is relatively costly, and in the long run, nuclear generators accrue significant expenses. In addition, there are the obvious dangers, both security and environmental, of nuclear power plants. Saudi Arabia is likely to follow other countries that typically have one or two nuclear generators, notwithstanding that they are not profitable for Western countries.

Nuclear energy is relatively costly, and in the long run, nuclear generators accrue significant expenses.

 

Saudi Arabia’s 2030 Program for Renewable

Saudi Arabia is moving toward new energy sources by the 2030s, but success depends on whether other resources will be available at affordable prices. Given the huge amount of oil resources available and vast amounts of extracted oil, in the short-term, the Saudis prefer to use these resources and sell their oil as much as possible. But today, there are more urgent needs for energy for making seawater potable and for economic development.

Saudi Arabia is geographically ideal for solar energy, perhaps uniquely so. In fact, this country could produce a lot of clean energy from the sun, but it will likely need countries like Sweden to help it develop clean-running transmission systems.

In Saudi Arabia’s vision, reducing dependence on oil revenues is the country’s most important economic target by 2030.

 

 

Challenges

In Saudi Arabia’s vision, reducing dependence on oil revenues is the country’s most important economic target by 2030. However, oil revenues will continue to be important for Saudi Arabia’s domestic political economy because its efforts in the areas of job creation and social services depend upon the continued inflow of oil revenues in the short-term.

Saudi Arabia will be a serious rival in attracting foreign investment to the countries of the Middle East and North Africa, including Iran, in line with the principles and plans outlined in the 2030 vision plan, and this could spell added tensions in the region.

The principal benefits of the Saudi diversification program, if achieved, are that it would buoy the Saudi economy and decrease the vulnerability of the country to fluctuations in the global oil market.

However, the implementation of this large program is dependent on oil revenues and the ability of the country to procure investment from abroad. Saudi Arabia’s oil marketing strategy, on the other hand, continues to expand investment in the refineries of countries with demand growth potential, especially China.

The consequences of the sale of part of Aramco, one of the first steps in this process, will likely be daunting to policy-makers, and may intensify internal disputes; yet, the sale of stock could be the beginning of a wave that provides a model for other governments with similar challenges in the region.

 

 

 

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Turkey’s Renewable Energy Potential

As a country with a strong dependence on oil and gas imports, Turkey is pursuing a developmental strategy for domestic resources which includes a renewable energy agenda alongside increases in nuclear and coal facilities. Turkey’s growing energy demand make a reliable supply of multiple resource streams a necessity. Turkey holds great potential for renewable energy and is giving priority to developing a broader contribution of renewable to the national energy basket. In 2017, Turkey took significant steps towards developing renewable energy resources such as wind and solar power. According to Turkey’s National Energy Plan, Turkey must ensure that 30% of its electricity is sourced from renewable energy sources. It is no coincidence that renewable may also provide the answer to lessening Turkey’s dependency on foreign resources.

One of the most important pillars of the “National Energy and Mine Policy,” launched by the Ministry of Energy and Natural Resources, is boosting access to renewable energy sources. Electricity generation from water, groundwater, wind, solar, and biological waste reached 32% in the last quarter of 2017, boldly expanding beyond the 2023 target of 30%. In the last 10 years, 53% of investments in power generation facilities have been made in renewable energies. Electricity production, which was 129.4 billion kWh in 2002, reached 219.6 billion kWh in the third quarter of 2017. In Turkey, the average amount of annual sunshine totals around 2750 hours… with this in mind, it is evident that solar energy could be an extremely productive resource to invest in.

According to General Director of Renewable Energy of Minister on Energy and Natural Resource, Oğuz Can, Turkey’s energy decision-makers believe that, while the 5 thousand megawatts target for the 2023 on solar and 20 thousand megawatts on wind goal is an ambitious target, it is more than possible for Turkey to achieve.

In the latest negotiations in the wind energy sector, the energy tariff was set at 3.48 cents / kilowatt-hour. This is the lowest price for wind energy among countries like Morocco, Peru, Mexico and Egypt, which have roughly the same levels of renewable energy production. This also marks a significant reduction compared to the previous price of 10.3 cents / kilowatt-hour, indicating significant savings in energy costs, which also indicates the capacity and competitiveness of the Turkish wind energy sector, which is set to benefit from further investment.

Employment opportunities in Renewable

According to the International Renewable Energy Agency’s (IRENA) 2018 Report on renewable Energy and Employment, employment in the renewable energy sector has increased in line with unemployment. Despite some constraints on production, wind energy provides a significant advantage for the countries’ energy supply security and contributes to the reduction of environmental damage. Wind energy is one of the least harmful energy sources of energy which has yet been developed, as well as an important source of employment. By the end of 2017, the clean energy sector in Turkey will employ 84 400 people: 33 400 in the solar energy sector, 16 600 in wind energy, and 14 200 people in related work.

Investment incentives

In 2012, the Turkish government announced plans to provide incentives for investment in the development of renewable energy sources, such as customs duties on imported goods. Obtaining a guaranteed power supply at low costs is another benefit to investing in this sector. Investing $610 million in financial facilities toward renewable energy companies is another part of Turkey’s plans to continue to play a leading role in renewable energy in the Middle East and North Africa.

The Turkish Ministry of Energy has been asked by the Norwegian DNV GL to launch a feasibility study on solar energy and energy storage in the country. The goal of this study is to research what combinations of energy storage and solar energy is possible, the best practices will be presented to the Ministry of Energy and Natural Resources of Turkey to be included in the ministries’ coming funding bid. The project is part of Turkey’s strategic plan to achieve a national target of 30% renewable energy production by 2030. The Ministry of Energy announced in late February that it will hold the bid for renewable energy projects this summer.

With this new bidding, the government plans to increase the capacity of the country’s solar power plants by 5% by the year 2023.

The country has long been seeking to link the natural gas producing countries in the Middle East and European import countries. The plan will make Turkey competitive with top regional producers by creating a new and independent source of energy while increasing energy security in the region, especially in southeastern Europe. If Turkey can develop its own renewable sources of finance through technological and financial challenges, it will be able to afford diversity, independence and sustainability in the energy sector.

Increased energy consumption usually brings with it significant environmental problems. Emissions from common energy sources are contributing to air, water, and soil pollution. Human energy consumption threatens nature and biological diversity. The only solution to the problem is the use of renewable energy sources. As in many developing countries, in Turkey, there is an effective and economical way to combat global climate problem; increase energy efficiency, reduce energy intensity and provide energy savings. When increasing energy efficiency, the effect on carbon intensity should be determined and plans and applications should be crafted accordingly.

Renewable energy could help Turkey supply the majority of its electricity demand and decrease dependency on foreign resources. Turkey is affected significantly by climate change, and therefore public and private organizations in this field ought to be put under intense pressure to expand the renewable sector. Turkey has a good investment climate, and will be able to attract foreign technology and capital, providing benefits in terms of energy, the environment and employment.

 

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