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MIDDLE EAST: In the Race for Renewable Energy Sources

Meena Janardhan

DUBAI, Aug 20 2008 (IPS) - As the world scrambles to develop renewable energy resources (RES), the oil-rich Gulf countries that benefit from high prices on fossil fuels are making sure that they do not get left behind.

The Masdar campus will be part of a Green Community that observes zero-carbon footprint. Credit: Masdar Institute of Science and Technology

The Masdar campus will be part of a Green Community that observes zero-carbon footprint. Credit: Masdar Institute of Science and Technology

According to ‘REN 21: Renewables Global Status Report 2007,’ though the share of fossil fuels in the global final energy consumption in 2006 stood at 79 percent, the fact that the share of RES has climbed to 18 percent is a clear indication of trends.

A report by the Dubai-based Gulf Research Centre (GRC), ‘Alternative Energy Trends and Implications for Gulf Cooperation Council Countries’, offers this analysis: “High costs of fossil fuels alongside technological breakthroughs and decreasing costs with growing economies of scale will play out well for RES, which have developed into an industry to reckon with and are also underpinned by growing government support and concerns about global warming.”

Experts say that the overall technical potential for renewable energy is huge and several times the current total energy demand. According to the International Energy Agency, global electricity consumption in 2050 could be between 113 and 167 Exajoules (EJ). The technical electricity production potential of RE technologies, excluding biomass, is almost 2,500 EJ per year.

“Sustainable energy investment was 70.9 billion US dollars in 2006, an increase of 43 percent over 2005. The sectors with the highest levels of investment are wind, solar and biofuels, which reflects technology maturity, policy incentives and investor appetite,” Eckart Woertz, programme manager at the GRC, told IPS.

Investments in developing countries still play a minor role in comparison, but increasing quickly and are already considerable in China, India and Brazil. Currently India 4,300 of Mw a year, followed by China with 765 Mw.

In line with the global trend, interest in RES is growing among Saudi Arabia, Oman, Kuwait and the United Arab Emirates (UAE), resulting in huge investments and several notable projects.

“The GCC countries were reluctant to adopt renewable energy. Although they have favourable conditions, the attitude was that they are sitting atop a sea of oil and gas which will last forever and, therefore, alternatives need not be contemplated,” said Woertz.

One sign of the changing attitude is the fact that UAE, which has the world’s sixth largest proven oil reserves of 100 billion barrels, signed a deal in January with a French company to build two nuclear reactors. Kuwait and Bahrain also have plans to build nuclear plants.

Though many see these countries and Saudi Arabia pursuing nuclear energy plans as a hedge against Iran’s nuclear programme, they are certainly looking beyond it too.

Analysts feel this new emphasis on RES also arises from the growing realisation that oil is a finite resource. Hence, they are now seeking to conserve and prolong the longevity and value of their hydrocarbon resources, especially since the global demand for fossil fuels is bound to increase and prices are likely to remain on the higher side.

Further, given their enormous liquidity they are also confident that they can be just as successful in developing RES as they were in developing their oil industry.

Most importantly, shortages in domestic energy supply are looming up for the rapidly growing GCC countries, and many of them are already facing gas scarcities.

Saudi oil minister Ibrahim Al Naimi recently stated that his country is planning to make solar energy an important pillar of the national energy mix. Hailing solar energy as “abundant, clean and available to all,” he said Saudi Arabia will be giving ‘’that sort of energy special attention’’.

Within the mix, Saudi Arabia plans to include waste-to-energy plants that can convert commercially hazardous, organic and toxic wastes into saleable electricity.

In Oman, a roadmap for the development of RES has been outlined. The establishment of large-scale solar thermal plants and a 750 Mw wind farm in the south of the country rank prominently among proposed projects.

A study is being carried out for the Dubai Electricity and Water Authority for a one billion US dollar wind farm that aims to supply up to 10 percent of Dubai city’s power requirement.

Then, there is the ambitious Masdar project in the UAE where the projected overall investment for Masdar City – which aims to be the first carbon neutral city in the world – is 22 billion dollars with another 15 billion dollars earmarked for Masdar renewable energy projects.

To promote its new outlook, Masdar has instituted the Zayed Future Energy Prize, a 1.5 million dollar international award, to encourage innovations in the field of clean energy and sustainable development. An eminent jury headed by 2007 Nobel Peace Prize co-recipient R.K. Pachauri will select the winner in January 2009.

Masdar is also carrying out a study for a 500 Mw, 500 million dollar solar power plant and is considering the feasibility of a hydrogen-fuelled power plant with a budget of 100 million dollars.

“Energy security, climate change and sustainable development require engaging, aligning and collectively committing to investing in and shaping a better, and more secure future. Through Masdar, we want to play a major role in developing solutions that answer present challenges…We are not simply a renewable energy initiative, our aspirations are far higher. We truly believe that we can make a difference,” said Sultan Al Jaber, chief of Masdar, in a statement on the company’s website.

Economist Woertz endorses the Masdar initiative: “This is one of the most significant RE projects in the GCC thus far. It seems that the government of Abu Dhabi has taken up the Saudi initiatives of the 1980s on a much larger scale, in order to take advantage of the technological progress and the improved economics that have taken place in RES since then.”

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