Here’s how the face of Middle East energy is transforming

October 27, 2017 3:40 pm


When technology companies UL and GCC Electrical Testing Laboratory recently launched their JV to develop a renewables and smart grid testing facility in Dammam, KSA, that didn’t just signal a big name interest in green energy, but also cemented the drive towards that future for Saudi and the GCC as a whole.

“The MENA region is poised to make huge strides in the electricity sector over the next decade,” said Jeff Smidt, Vice President & GM of the Energy and Power Technologies Division at UL, at the inaugural Saudi Electricity Forum.

Cable manufacturing company Ducab also recently unveiled a new cable line, Ducab SolarBICC, which is specifically developed for the UAE’s growing solar energy sector.

Kurt Oswald, board member of the A.T. Kearney Energy Transition Institute and lead partner of the Utilities practice of A.T. Kearney Middle East, said: “The solar energy potential of the Middle East is huge given the favorable geographic location and the ambitious renewables targets of the individual countries.”

Why does solar sit squarely in the region’s crosshairs?

Read: Why is it crucial for Saudi to seek solar energy?

A bright UAE future

Ducab SolarBICC cables are now being supplied to two of the largest solar power-generation projects in the region: Shams 1 in Abu Dhabi and Mohammed Bin Rashid Al Maktoum Solar Park in Dubai.

Dubai’s Sheikh Mohammed bin Rashid Al Maktoum has recently announced the largest single-site concentrated solar power (CSP) project in the world, costing AED14.2 billion ($3.87bn), as part of the Emirate’s Clean Energy Strategy 2050.

The UAE is emphasising sustainable energy and allocating a $27.2bn Green Fund towards that Energy Strategy 2050. The country will shell out $165bn over that period to integrate renewable, nuclear and clean fossil resources.

Outlook on MENA

Bloomberg New Energy Finance released research pointing at key conclusions on the MENA’s energy outlook 2017 saying that, between 2017 and 2040, the region would witness 530GW of new power generating capacity coming online, of which 63 per cent is renewables and 23 per cent is gas.

Read: 75% of Dubai to be powered by clean energy by 2050. Here’s how. . .

The forecast predicts solar photovoltaic (PV) to dominate capacity additions with 274GW commissioned by 2040, 90 per cent of which is utility-scale.

“From 2020, PV is to boom, with an average 12GW added per year, as costs continue declining and net exporting countries gradually remove fuel subsidies,” said the report.

“Installed power generating capacity in MENA moves from 93 per cent fossil fuels to 53 per cent zero-carbon over 2017-40.”

Gas, a clear environmental champion compared to oil, will provide over half of electric generation by 2040 as renewables grow sixteenfold.

“Two thirds of all new capacity additions to 2040 are solar and wind, driving $361 billion of investment,” said the report, adding “electricity demand doubles but the electricity intensity of GDP falls 22 per cent by 2040.”

Global renewable efforts also pick up according to Bloomberg’s findings. Solar and wind dominate the future of electricity with $7.4trn to be invested in new renewable energy plants by 2040, or 72 per cent of the $10.2trn, projected to be spent on new power generation worldwide.

An important aspect of energy storage garnering interest in the Middle East is batteries, with the report expecting the lithium-ion battery market for energy storage to be worth at least $239bn between now and 2040.

Finally, it predicts that fossil fuel demand will be displaced by electric vehicles, as a fleet, which is electric at 33 per cent (totaling 530 million EVs), will need 8 million fewer barrels of transportation fuel per day, or about one twelfth of today’s global production.

Read: What’s a bigger threat to gas demand than electric vehicles?

KSA to lead with LED

A recent Frost & Sullivan (F&S) research says the Saudi lighting market is set for growth.

“While the need to conserve energy and reduce inefficient lighting is driving transformation, the widespread adoption of light-emitting diode (LED), declining illumination package prices, and technology trends such as dynamic lighting, adjustable white light, and wireless control systems are factors fueling growth,” F&S said.

“Intelligent street lighting and integrated lighting solutions that utilized remote monitoring and management of street lighting systems are currently in an experimental phase,” said Frost & Sullivan Homes and Buildings Team Consultant Suganya Rajan.

“Increased use of Internet of Things, indoor lighting automation, “Li-fi”, and Lighting-as-a-Service are further trends expected to impact the KSA market in the near future.”
The report says that businesses need to aim for portfolios that reflect 50 per cent contribution from LED lighting in the short to medium terms and 75 per cent in the long term.

 

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By Hadi Khatib
Hadi Khatib is a business editor with more than 15 years' experience delivering news and copy of relevance to a wide range of audiences. If newsworthy and actionable, you will find this editor interested in hearing about your sector developments and writing about it.



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