Sunny days ahead for REC Group in Middle East
1. REC has some presence in UAE and Egypt…what have been some of your key achievements in both countries in terms?
With our high quality solar panels and German engineering expertise, REC is well positioned in the Middle East region.
In Dubai we are in particular looking into commercial rooftop installations. Most recently, we carried out a 572 kW new rooftop solar installation for BMA International’s Redtag Group. This is our first project in line with Dubai’s new “Shams Dubai” initiative, which aims to diversify the country’s energy mix to include more clean and renewable energy sources.
Besides this, we have installed a solar test facility in the Sheikh Mohammed Bin Rashid Al Maktoum Solar Park. With around 130 solar panels installed of various technologies, including multicrystalline, monocrystalline and thin film, this is the biggest solar panel test facility worldwide. Furthermore, REC panels are powering one of the terminals at the Al Maktoum International airport in Dubai.
In Egypt, we recently signed a strong cooperation agreement with Orascom and have been already awarded for a first 50 MW project as part of the FiT.
2. Do you have region-wide expansion plans? How do you analyse the renewable energy market in the region from an investment opportunity view?
Countries in Middle East clearly aim to diversify their energy mix to include more clean and renewable energy sources.
The UAE has set a target of increasing clean energy contribution to the total energy mix from 0.2 per cent in 2014, to 24per cent by 2021.
Allocating increased budgets for renewable energies and related technology, like storage, while at the same time reducing fossil fuel subsidies, is gaining momentum on a global scale. 2015 saw a new record of USD 329bn investments in clean energy, with new markets leading the show, including Morocco.
Furthermore, the economics of solar and wind are becoming more and more competitive. During the last six years, global PV system costs decreased by half. By 2020 a further decrease of 40 per cent is expected and will reach a global average of 5-8 USD cents per kWh. The LCOE for utility scale solar PV installations in UAE is in the range of 5-10 USD cents per kWh.
Currently we are in the process of expanding business in the UAE, Egypt, Oman and Jordan.
3. The countries in the region are lagging behind their peers in the case of adoption of clean energy initiatives. But there seem to be a sudden enthusiasm among the major players. Please comment?
As pledged at the Paris conference, the nations have begun to implement impressive solar projects like the Sheikh Mohammed bin Rashid Al Maktoum Solar Park, with a planned capacity of 1GW by 2019 and 5GW by 2030. Climate change dominates the talks in this year’s World Future Energy Summit in Abu Dhabi. Therefore we expect a bright future for solar in the Middle East. IHS forecasts that the market will take off in 2017, passing the 1GW mark of new installations, and reaching almost 2GW in 2019.
COP21 is monumental for a global energy transition and in MEA 40per cent of global energy related CO2 emissions are coming from the power sector. Therefore, it makes sense for governments, organizations and industries to focus efforts on increasing energy efficiencies and switching to low-carbon energies like solar.
4. How important is it for businesses in the region to lead the climate change drive, in the light of agreements at COP2? And what progress have you seen?
Being significant contributors to global CO2 emissions, the world is of course watching the Middle East and their initiatives to fight climate change. As heavy energy consumers, businesses have an important part to play. There seems to be more and more an agreement and move to a) phase out fossil fuel subsidies and b) establish a carbon tax. Once these will be implemented, we can expect this rather sooner than later, the business case for renewable energies will be even stronger. Commercials with available rooftops can pretty easy switch to solar.
5. Do you worry that the lower price of oil is going to reduce the intensity of focus on clean energy because the financial incentive is not that strong?
More and more people clearly understand the urgency of fighting climate change, reducing emissions, improving energy efficiency and switching to renewable energies. We have been experiencing a low oil price now for 18 months but we haven’t seen a drop in annual solar installations and the further forecast is definitely more bright than cloudy. For 2016, Bloomberg New Energy Finance expects 65-70GW of new installed solar capacity worldwide. Continuing low prices for coal and natural gas will also not change this trend.
6. Saudi Arabia, UAE,Dubai, Qatar, etc have announced some renewable energy projects. Do you plan to enter into cooperation agreements or joint ventures with the local governments?
Partnerships are crucial for the solar industry in Middle East. Our USPs are high-quality products, long-term performance warranty, 20 years of industry experience and German engineering expertise. For ME, we are particularly looking into partnerships where we can combine our USPs with local experts like Orascom with excellent connections to related industries and governmental organizations.
7. And finally, what are you exhibiting at the WEFS 2016?
We are showcasing the REC TwinPeak solar panels. Rated up to 280 Watt peak (Wp), these panels deliver more power output per square metre.
REC solar panels aren’t limited to rooftops or ground-mounted installations but they can be deployed in floating solar installations to the same exacting standards of reliability, performance and quality. Wherever space is in short supply, floating installations enable otherwise underused freshwater bodies to double up as real estate for generating energy. Furthermore, they reduce water evaporation – a welcome benefit for regions affected by water scarcity.