UAE leads region in renewable energy sector

Abu Dhabi / WAM

The UAE made great strides over the past few years and is leading the region’s drive towards renewable energy, particularly in the solar sector, according to a report by a leading Arab energy corporation.
”The development of the renewable-energy sector in the UAE has been moving ahead rapidly. Enjoying strong government support, solar energy has made particularly impressive progress. The UAE has again received some of the lowest renewable-energy prizes awarded globally for both photovoltaic (PV) and concentrated solar power (CSP), highlighting the great resources available in the country and the GCC,” according to a report from the Energy Research Department of the Arab Petroleum Investments Corporation (APICORP).
The report indicated many factors were contributing to this early success, with financing playing a critical role in achieving low costs.
”To meet rising demand, the country has embarked on a challenging mission to increase energy security, diversify its energy sources and increase the share of solar in its power mix,” according to a report on trends shaping the energy landscape in the UAE.
The monthly research report said that the UAE has proven that it possesses some of the best solar resources in the world, while supporting economic and regulatory policies have helped its clean energy programme to excel. A contributing factor, the report said, is access to affordable finance. ”In addition to conventional project financing, the sector is seeing financial innovation to help facilitate and provide the investments required in the long term, including the AED100bn Dubai Green Fund, which will support the Shams Dubai initiative, a programme aimed at facilitating the installation of rooftop solar panels.”
”There is no doubt that regulatory support, including renewable energy laws and national targets, has been pivotal in contributing to the expansion of the UAE’s renewables sector. Several solar PV and CSP projects in Abu Dhabi and Dubai broke world records, with both technologies having received lowest bids recorded globally this year,” the report said.
According to APICORP, the UAE has seen rapidly rising electricity consumption at an annual rate of 5% over the past five years, propelled by strong economic activity, a rising population, and industrialisation. ”With the country’s power demand requirements expected to increase at an annual rate of 5 to 6% until 2021, the government has placed clean energy at the heart of its energy strategy. Growing reliance on natural gas imports – currently representing almost all power generation – has made energy diversification a national priority, while the country plans to tackle environmental concerns and strives to evolve as a regional leader in clean energy.”
As a result, the report noted, the UAE has a nationwide strategy that has a target of reaching 50% clean energy by 2050. Solar power features heavily in its plans and is expected to account for 25% of the generation mix once a 5GW solar park is fully commissioned in 2030, it said.
A look at the bigger picture, the report said, underlines the crucial importance of solar energy for the country’s energy supply security, where almost all power generation capacity is gas-fired. According to Dammam-based APICORP estimates, the UAE needs to invest at least $35 billion to meet the 17GW addition to capacity that is needed over the medium term. The diversification efforts have already born fruit, with at least 10.4GW of new capacity already under execution. Abu Dhabi’s Barakah nuclear power plant will see four reactors come on line before 2020, contributing 5.6GW in total and representing 41% of new capacity between 2017 and 2023. Gas and coal will represent 21% and 18%, respectively, while solar PV and CSP projects are expected to account for 20 per cent of the UAE’s new capacity, according to the report.
The first local CSP project, costing $600 million, was the 100MW Shams CSP plant in the Al Dhafra Region of Abu Dhabi, which has been operational since 2014. More recently, Abu Dhabi’s 1.18GW Sweihan PV project, with an estimated cost of $872m, will become the largest solar PV site globally, surpassing an 850MW plant in China.
In Dubai, the 13MW Phase I of the Dubai Solar Park was the first PV project completed in 2013. The 200MW Phase II came online in early 2017. Phase III was awarded to a consortium led by Masdar earlier this year with plans to bring 800MW on line by 2020.
More recently, ACWA Power and Shanghai Electric were awarded a contract to build the world’s largest CSP project with a generating capacity of 700MW which will constitute Phase IV of the Dubai Solar Park. The first phase of the project is expected to be commissioned in 2020 and cost over $3.5 billion.
While it will only provide around 14 percent of the park’s expected total capacity of 5GW, it accounts for around 28 per cent of the total costs.
”Further progress is expected as the country is set to reach 7 per cent solar energy by 2020 and 25 per cent by 2030– its interim targets towards the more ambitious goal of 50 per cent of energy output by 2050. With a similar landscape and solar potential in neighbouring countries, GCC governments can draw some important lessons from the UAE’s journey towards clean energy,” the APICORP research report concluded.
The Arab Petroleum Investments Corporation (APICORP), is a multilateral development bank wholly owned by the member states of the Organisation of Arab Petroleum Exporting Countries (OAPEC), and is devoted to investing in, financing and providing advisory services to the Arab energy sector.