Renewable Energy in the Arab World

Transcription

1 Renewable Energy in the Arab World Presentation before the Arab Energy Club Beirut, Lebanon Saturday 28 th May 2011 Dr. Mehdi M. Ali

2 Objectives of the Presentation Status and Future of Renewable Energy (RE) in the Arab World Obstacles facing RE in the Arab World Role of governments in support of RE Policies of RE Lessons learned from MASDAR city in UAE Possible Regional Cooperation in RE

3 Renewable Energy in the Arab World Interest in RE in MENA is not new. It goes back to 1960s. Reasons for this interest. Oil is finite and abundance of sunshine in the region. Interest in RE surged in recent years due to: Increase in oil prices Concern over climate change Climate Change Conferences in Copenhagen & Cancun Saudi Arabia was vocal in both Copenhagen & Cancun. Aware of its leadership role in OPEC, Member in G20, good homework. Other Arab countries were low key. Reasons: Some secondary oil producers, hence on the defensive New comers to the debate

4 Renewable Energy in the Arab World RE in MENA region has been mostly solar due to enormity of solar potential in the region. Hence solar energy in MENA is a good representative to RE. Therefore, the presentation will focus on solar development in MENA We will come across two technologies to generate solar energy: Photovoltaics (PV) and Concentrated Solar Power (CSP) Major solar investment has been in Saudi Arabia and UAE. Therefore, we will have more detailed discussions on these two countries

5 Regional and Country Initiatives on Solar Energy Two Regional Initiatives: (i) Desertec Industrial Initiative (Dii). Launched in Target: 15% of Europe s electricity by 2050 from solar power generated in the desert south of the Mediterranean. Cost $570bn. Egypt, Morocco, Tunisia, Algeria and Mauritania will reap huge benefits if the plan takes off. Arab countries and Turkey could earn some $90bn a year by 2050 from their solar energy exports. Desertec is developing at much faster pace (MEES) (2) The Mediterranean Solar Plan Launched in July 2008 Paris Summit for the Mediterranean Region Target: 20 GW of power by 2020 (3-4 GW PV, GW CSP, 5-6 GW wind). France and Egypt will jointly prepare an Action Plan for implementation.

6 Country Initiatives and Projects Morocco: In Nov. 2009, the government announced Solar energy project, $9 billion, five solar power generation, 2,000 MW by Funding: private and government. The project will account for 38 % of Morocco's power by Algeria: Target: 7% of its electricity from RE by In 2007 it constructed hybrid power station using both solar and natural gas to produce 80 MW of electricity. Plans for more solar over 20 years. Tunisia: July 2010 Govt agreement with Japan for 5 MW-pilot solar power station at El Borma. Libya: Contemplation stage.

7 Country Initiatives and Projects Egypt: Target: 20% of electricity from solar by MW solar energy project, south of Cairo, opened end Solar energy for 2 Siwa villages with Italian cooperation, will be Operational in Lebanon: Contemplation stage. Syria: Contemplation stage. Jordan: Target: 10% of its energy from RE by In Jan 2010 Law passed to enable citizens to sell RE to provider at retail rate. Plans: MW of electricity from Solar. Iraq: Contemplation stage.

8 Country Initiatives and Projects Kuwait: Experimented with solar in 1970s but nothing remained today. Planning to generate electricity from solar, capacity of 1,250MW, at $650 million, part of PPP. In 2008 Government signed MOU with Toyota Tsusho Corporation. Bahrain: Contemplation stage. Reports to build wind energy plant, and two new hybrid power plants for solar and wind energy at $8mn. Qatar: Contemplation stage. Solar thermal cooling part of 2022 FIFA World Cup Oman: Contemplation stage. Reviewing potential solar plant between 50 and 200 MW for electricity.

9 Country Initiatives and Projects UAE: Target 7% renewable by Operational projects 10 MW PV power station adjacent to Masdar city. First project. Operational since MW PV on roof of Masdar Institute. 1MW PV over 10 buildings in Abu Dhabi (pilot project).

10 Country Initiatives and Projects UAE: New projects Shams MW CSP, $500 - $700 m. Contract awarded in Masdar (60%) TOTAL (20%), Abengoa Soalr (20%). Construction by Abengoa. O & M by TOTAL & Abengoa. Power will be sold to ADWE under long-term contract Noor MW PV plant under preparation Abu Dhabi Solar Roof Program. Masdar and Abu Dhabi Gov. Eventual capacity 500 MW over 10 years (50 MW per year).currently on shelf.

11 Country Initiatives and Projects UAE: MASDAR City (As conceptualized) $22 billion, established in Fully owned by Abu Dhabi Government. (Mubadala). Will have research-driven graduate university, to become a leader in making solar real, viable business, and make Abu Dhabi global centre of excellence in solar technology. It integrates research, development and innovation with investment, sustainable production, development and export, a pillar for Abu Dhabi Economic Vision 2030, which seeks to diversify the emirate s economy and transforms it from natural resource-based to knowledge-based.

12 Country Initiatives and Projects UAE: MASDAR City (In Reality) Completion date extended by 9 years, from 2016 to Budget reduced by 15% Masdar has yet not provided offices for solar companies opened offices inside Masdar. Instead it housed them in Masdar free zone company building (INJAZAAT) located far way from Masdar. Its electricity is supplied from the public grid (not from solar). Most offices in INJAZAT are empty (only companies names on the doors, and few furniture. No people). Some companies not even established offices, they took space in hallways.

13 Country Initiatives and Projects UAE: MASDAR City (In Reality) PV value chain to support PV deployment is not yet established (distributors, installers, etc.). More importantly, Masdar shelved TAWEELAH PV plant, which was to produce solar PV products. Reason for closure was based on lack of market for PV production in MENA. Sir Bani Yas Windfarm, 30 MW under development. The project suffers from low winds, and 3 years behind schedule.

14 Country Initiatives and Projects UAE: MASDAR City (In Reality) Shams 1 (2 years behind schedule) Solar roof program (on shelf) Nour 1 pre-qualification of bidders started after long delays. bidding process most complex, lengthy, and costly (over 35 companies invited to bid). Normally 5-10.

15 Country Initiatives and Projects UAE: Masdar City (Experts Verdict) Masdar in current status is not enough to qualify as a pioneer, leader, or even part of the solution, as the carbon intensity of UAE has only increased. Masdar is unlikely to rein in UAE s carbon footprint per capita, which is now the second worst in the world after Qatar. Abu Dhabi s environmental record remain poor. As we know in 2009 Abu Dhabi lobbied hard to have International Renewable Energy Agency (IRENA) to set up HQs in Abu Dhabi beating Austria & Germany. The win was based in part on expectations that Masdar City would overhaul Abu Dhabi s record on energy consumption. Therefore, without rapid development of Masdar, there isn t great argument for having IRENA there. Hence, Abu Dhabi may lose IRENA to another country, or IRENA will simply lose its significance.

16 Country Initiatives and Projects Saudi Arabia 1/5 world s petroleum reserves. Over seven decades the country developed its oil resources. Now largest oil exporter in OPEC. Oil has been the engine of growth and financer of socioeconomic development. Developing solar energy may seem to be of low priority particularly prior to 1973 when oil prices were low. Despite its heavy reliance on oil, Kingdom showed keen interest in development of solar energy as far back as the 1960s when oil prices were low.

17 Saudi Arabia Why? (i) Sunshine in Kingdom produces minimum of 3million mw of electricity = output 3,000 large power stations; (ii) Awareness that oil is finite source of energy and that solar is most reasonable alternative. During 60s, Saudi universities were pioneers in solar applications: solar cooling, water heating, desalination Second Five Year Plan ( ) acknowledged oil is finite and made commitment to solar. This was also reiterated at the 1975 conference of COMPLES (Cooperation Mediterrane pour I'Energie Solaire) In mid 1970s Kingdom had joint venture with US on solar: SOLERAS (Solar Energy Research American Saudi).

18 Saudi Arabia Participants in SOLERAS believed that to develop solar energy, cooperation among Arab and Islamic states was vital. At that time, they felt that Saudi Arabia could get 25 percent of its energy from solar by In short, by end of 1970s there were about 150 solar research projects in universities and research centers

19 Saudi Arabia In addition to research, several solar projects also were carried out: Under SOLERAS: $16.5 million solar power generation for the villages of al-jubaila and al-'uyaina, located in Wadi Hanifa, north Riyadh. World's largest pv collector system at that time, largest venture of its kind ever undertaken in 1970s: The project is still operational according to KAUST Solar Against Pipeline Corrosion: Aramco used solar energy through PV cells. It installed 14 PV units to protect some 250 kilometers of crude oil pipeline between Qatif and Qaisuma. Second system installed in 1980 provided cathodic protection for 10 kilometers of crude oil pipeline north of Dhahran.

20 Saudi Arabia Solar Energy during Mid 1980s to Mid 2000s Low oil prices coupled with the growing impression that prevailed within the oil industry at that time that development of solar energy would compete with oil, had led the policy makers to focus their attention on oil to finance its soico- economic development. This in turn diverted their attention away from solar for about two decades from mid 1980s to mid 2000s. Consequently, with the exception of limited research at few universities, solar activities in the Kingdom witnessed a pause during this period. As a result, solar energy in the Kingdom by 2005 was meager, limited to few demonstration installations in the KW-and MW-range.

21 Saudi Arabia Renewed Commitment to Solar Energy Since 2005 A combination of factors revived the interest in solar. Main factor has the alarming increase in domestic oil consumption sold at heavily subsidized prices. This coincided with a sharp increase in world market oil prices, thus widening gap between local ($5/b) and international prices ($75/b). Based on this conservative gap, subsidies cost the county $8 billion per year. Heavy burden on the budget. Moreover, according to Aramco, total domestic demand for energy (oil and gas) will rise from 3.4m b of oil equivalent/d in 2009 to 8.3m b/d in % increase. Rapid domestic demand for oil has been fuelled not only by subsidies but also by: rapid population growth (2%) & Saudi development model which attracts energy intensive industries (aluminum, petrochemicals, water desalination)

22 Saudi Arabia Oil currently meets 65% of the country s primary energy demand double the world average. Most of it used for electricity generation. With electricity consumption to grow by double digit in next decade, the Kingdom is looking for gas to supplement oil for electricity generation. But with unpromising prospects for discovering non-associated gas, the Kingdom has to rely increasingly on gas import. As a result, for country endowed with uninterrupted sunshine throughout the year, it has become economically tempting to explore the enormous potential in solar energy to meet the rapidly rising domestic demand for energy.

23 Saudi Arabia In addition to the urgent need to arrest the rapid rise in domestic use of oil, there are other drivers of solar energy in the Kingdom. These: 1. The country boasts an average solar radiation of 1,700-2,200 kwh/m2 per year, among the highest in the world. 2. Saudi private sector has the financial strength to launch solar power generation and manufacturing. 3. Peak electricity demand due to air-conditioning during summer midday coincides with highest performance of solar power generation.

24 Saudi Arabia Public Sector Initiatives In April 2010 set up nuclear and renewable scientific research centre: King Abdullah City for Atomic and Renewable Energies (KACARE) in Riyadh as regulatory framework for RE. Although it also covers nuclear, it will focus on solar Established King Abdulaziz City for Science and Technology (KACST), as national science agency and laboratories. Private Sector Initiatives Saudi companies are engaged in solar power generation and manufacturing. Aramco is to ramp up solar power generation capacity in GW range in next decade to free domestically consumed oil for export.

25 Saudi Arabia In parallel to setting up institutions, the government moved into investment in solar energy at a large scale. These: (1) Solar Powered Desalination projects In January 2010 KACST launched major initiative to produce desalinated water and electricity using solar power. First stage, desalination plant, 30,000 cubic meters of desalinated water per day for the city of Al-Khafji to serve 100,000 people. The plant, will be opened in Second, desalination plant, 300,000 cubic meters of water per day. Third more solar powered desalination plants in different parts of the Kingdom. (2) Solar Powered Electricity Generation 500 MW of solar energy in the next 3 years The Kingdom aims to make solar energy a major contributor to power supply in the next 5-10 years.

26 Saudi Arabia (3) Solar Park: In May 2010, contract was signed for 2MW solar park on roof top of King Abdullah University of Science and Technology (KAUST). Two rooftop solar installations, one MW each. (4) Carport System: 10 MW of solar Carport System at North Park at Aramco Headquarters in Dhahran. Contract was awarded to Belectric company of Germany.

27 Saudi Arabia The Road A Head Target: 15% of energy from solar by 2020 Developing regulatory regime and incentives to encourage investment in solar energy Estimating $100 Billion investment in solar and nuclear for next 10 years.

28 RE in MENA Region Summary & Conclusions There is an immense potential for RE particularly solar in MENA Although aware of solar since 60s, the region moved very slowly to adopt solar energy. Significant solar investment and actions on regulations started only recently, Today 7 out 14 (50%) of MENA countries are still at contemplation stage regarding solar energy. Solar energy activities on significant scale (Investment & regulations) started only recently since Hence, solar energy in MENA is at very early stage of development. Therefore, the region suffers from paucity of data and weak solar energy institutions, and lack of solar value chain. Oil has been a curse and blessing for solar in MENA: it hampered solar development in the past, but recently it has become driver of solar due to increased oil prices and concerns about the environment

29 RR in MENA Region Summary & Conclusions Saudi Arabia has been the pioneer in solar energy in MENA and recently is taking the lead out of necessity. UAE is also taking the lead in solar energy based on noneconomic factors. Both are the only MENA countries with significant solar activities MENA countries making strong advancement in RE technology need to excel in management of RE projects in order to be a role model and provide leadership to others. RE continue to face many obstacles in MENA: lack of : vision, planning, clear policies, legal framework, etc. Current Cooperation among MENA countries is limited. Recent rapid advancement in solar technology brought down cost and increased viability of solar energy projects. There is now excellent opportunity for MENA to invest in solar. Today s political changes in MENA (The Arab Spring)may adversely affect RE particularly regional projects in North Africa, but the recent rise in oil prices may minimize this effect.

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