Renewables could outshine fossil fuels in Middle East

The renewables revolution appears to be making waves across the globe as a new report released today has revealed that solar and wind may now be the cheapest sources of new energy supply in the United Arab Emirates (UAE).

The report, developed by the UAE Ministry of Foreign Affairs, International Renewable Energy Agency (IRENA) and Masdar Institute of Science and Technology, compares the different energy technology costs and deployment potential in the UAE.

It found that, despite a heavy reliance on fossil fuels in the UAE, the country could achieve a 10% share of renewable energy in its total energy supply, and almost 25% in the power sector, resulting in energy system savings of $1.9bn (£1.3bn) annually by 2030.

“This report is an eye-opener,” said Masdar Institute president Dr Fred Moavenzadeh. “It provides policymakers and investors with an objective cost baseline, making the clear case that renewables, and especially solar, will have a much larger role sooner than we ever expected in the UAE and Middle East.”

The report cites sharp declines in renewable energy costs in the UAE as well as rising costs for natural gas as domestic production declines and the country turns to more expensive imported sources.

Solar PV costs, for instance, have fallen by 80% since 2008 and are set to fall even further, while the cost of new gas supplies in the UAE has grown from under $2.5/MMBtu (million metric British thermal units) in 2010 to $6-8/MMBtu for domestic production and $10-18/MMBtu for imports today, even after the recent decline of oil and LNG prices.

Global transformation

The report estimates that solar, wind and waste-to-energy are preferable for power generation when new gas is above $8/MMBtu – making them immediately competitive in the UAE, where natural gas supplies almost 100% of power.

Solar and wind are still challenged by intermittency, which will require natural gas to fill gaps in output. However, the report claims the savings from generating solar power during the daytime, instead of consuming gas, are so great that they could justify 17,500 megawatts of PV in the UAE by 2030, up from around 40 MW today.

IRENA director-general Adnan Z Amin said: “The UAE’s strategy of innovation and diversification has placed it at the fulcrum of the massive transformation of the global energy landscape that has already begun.

“Renewables have decisively emerged from a niche technology to a major component of the energy mix and have been the majority of global power capacity additions for the last three years. The dramatic technology cost declines we are mapping present a real possibility to move to a sustainable energy future even in the hydrocarbon producers in the MENA region.”

The report is one of the first three country analyses under IRENA’s REmap 2030 project, which evaluates how the world can meet the United Nations’ Sustainable Energy for All goal of doubling the global share of renewable energy by 2030.of doubling the global share of renewable energy by 2030.

Luke Nicholls

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