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by Gavin Davids on Feb 15, 2012

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The fall in photovoltaic prices has made solar power competitive.
The fall in photovoltaic prices has made solar power competitive.

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MEP Middle East talks to the experts about whether the GCC could see a rise in the popularity of photovoltaic solar technology, following a drop in prices

Ever since solar energy was mooted as a viable energy alternative to hydrocarbon fuels, the GCC has attracted attention as being the ideal location to develop and test the technology, thanks to its round-the-year-sunshine, relatively clear weather and abundant financial resources.

Despite these obvious advantages, the uptake of the technology in the region has been relatively slow, certainly in comparison to the likes of Germany, France and Spain. Even a traditional heavy fuel consumer nation like the United States has seriously approached the technology as an energy source for the future.

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However, over the last few years, there has been a clear shift in attitude towards solar energy, with the GCC governments finally realising that there is a need for the technology as peak electricity demand has grown by more than 60% in the years between 2003 and 2009, a study conducted by AT Kearney Middle East has found.

As a result, there has been a spate of new solar projects announced, with Saudi Arabia, Qatar and Abu Dhabi taking the lead in this regard and investing heavily in the technology.

A joint venture between Abu Dhabi’s Masdar and Spain’s Sener plans to invest up to $5bn in the construction of concentrated solar power plants in Spain, the United States and most crucially, in the Middle East.

The 60/40 joint venture, Torresol Energy, is expected to develop a pipeline of projects across the MENA region. Speaking at the sidelines of the World Future Energy Summit, Enrique Sendagorta, president of the firm, announced that the company plans to add about 60,000MW of capacity over the next three years, and hinted that Abu Dhabi could be host to one of the plants.

Furthermore, Dubai has announced that it plans to spend $3.62bn on a 100MW solar energy project, which is scheduled to begin operations by the end of 2013. It will be operated under the supervision of Dubai Electricity and Water Authority.

In addition, Saudi Arabia will install the Kingdom’s first solar rooftop in the King Abdullah Financial District, in parcels 5.07 and 5.08.

In collaboration with local partner, Modern Times Technical Systems, German solar technology provider, Conergy, will install over 800 Conergy PowerPlus 230M modules on 1.7km of Conergy Sun Top III mounting systems, over a surface of 1,300m2. Approximately 300MWh of clean energy is expected to be generated each year, the solar company said during the announcement.

Furthermore, studies have revealed that the worldwide solar uptake has increased from 40GW at the end of 2010, to around 60GW at the end of 2011, a massive jump and one that is indicative of the gains that solar technology has made in a short time.

Most intriguingly though, a recent major reduction in the price of photovoltaic technology has made it economically viable for end users to invest in it, or so experts claim.

According to Jose Alberich, vice president of AT Kearney Middle East, the prices of photovoltaic systems have seen a sharp drop off over the course of 2011, which was in line with the industry’s expected cost curve.

He added that an oversupplied market situation had also contributed towards the falloff in price, but despite this, significant PV capacity development is yet to be realised in any of the GCC countries.

In comparison, Europe has been commissioning utility scale PV projects for the last three years, he said. However, Alberich was optimistic about the growth of PV technology in 2012, thanks to the fall off in price making it more attractive to consumers.

“We see that this year and the coming year could be the breakthrough (for solar PV). The reason being that (earlier), it was not cost competitive with conventional power generation, but (after) playing around with the numbers now, we see that it is starting to become competitive,” he explained on the sidelines of the World Future Energy Summit.

Alberich added that the price fall off was also due to the increase in the import of cheaper products and materials from the Far East, thereby making the technology more affordable to the average consumer.

Furthermore, the study conducted by AT Kearney found that by the year 2020, PV could become more competitive than the traditional gas or oil fuelled energy sources, thereby fulfilling peak power demand.

While Aslan Al Barazi, executive director of IMEC Electro Mechanical Engineering, agrees that solar power is a viable alternative technology, he does not feel photovoltaic technology is being taken up with the same gusto as other solar related technology.

“While there are initiation efforts in place for solar water heaters in the UAE market (for example) by Dubai Municipality and Estidama, no such thing is being planned for Solar PV technology, except on special projects,” he said.

As a result of these efforts, solar water heaters are becoming the norm in the building industry, while photovoltaic remains largely underdeveloped, he added.

Al Barazi said that one of the major problems with the uptake of photovoltaic technology was that it had a very long payback system, often lasting between 25 to 30 years. When this is coupled with the high initial cost for its installation, it becomes prohibitive to the average consumer.

“Therefore, it only really works when there are government subsidies in place, like there are in places like Germany and Japan.”

“With the current economy being in the midst of a strong recession, expensive designs like solar PV systems take a major step back as budgets tighten. They would be more realistic when the economy comes back into a new boom cycle sometime in the future,” Al Barazi added.

However, he did concede that the heavy investment by the likes of the UAE government into solar PV, such as Masdar and the Dubai Solar Park, could have a positive impact on the technology by laying the groundwork for future uptake.

With more solar PV products becoming available from the Far East, concerns have been raised over their suitability and quality, in order for them to perform to the standards expected of them by the international market. Alberich dismissed these as he said that while standardisation played a role in integrating the capacities, the solar PV model can be standardised or adapted to fit the requirements of the country or region it is in.

“There have not been any limitations. There might have been some back in 2007 or 2008, when in some countries, there were imports that had issues, but they were very marginal,” he stressed.

“What is true is that we’re missing some standardisation in Europe, not in the connection, but in the integration of renewable. Fortunately we’re deploying smart metering in parallel, and in smart metering, there are also some standards and platforms that play into that integration. But in the end, what you have is the PV module, where the module, the difference in voltage, the inverter, etc, they’re all standard devices, so I don’t see it as such a problem,” he said.

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