Home / INTERVIEWS / Five minutes with: Martin Haupts, Phanes Group
Five minutes with: Martin Haupts, Phanes Groupby Jochebed Menon on Jan 7, 2017
How is the renewable energy sector faring in the GCC?
The Middle East is on the verge of significant growth momentum, judging by the projects that have happened here recently. The UAE has 2GW projects being discussed at the moment, Saudi Arabia has tremendous growth potential, and there has been a lot of activity in Iran as well. If you combine this with our projects, particularly in DP World, there is a dawn of solar activity here in the Gulf region that has been unprecedented. This, I would say, is on a global scale; certainly the region is a hotspot for solar energy.
Solar energy is predominant in the Gulf, compared to hydro and wind power. There is not much hydro power activity in the region, as there is a natural lack of water compared to classic hydro markets like Africa and Europe, or even Latin America. The same goes for wind power generation in the region.
Where does the Middle East stand, compared to the rest of the world?
We have to look at this from a perspective of an absolute and relative scale. Basically, this year, China will have 16GW of renewable energy deployed, North America will have 5GW, and Europe, in the past couple of years, probably 25GW. In that sense, the Middle East is still small, but if you compare the relative importance of solar energy generation for a small population, and also the significance of transforming from a hydrocarbon-driven economy, it is one of the global hotspots, and certainly one of the big growth areas within a global context.
Also, bear in mind that a lot of large solar players look at the Middle East and Sub-Saharan Africa as a combined market region. For example, Sub-Sahara is often covered from the Middle East, which is the same case with our company. You do have a lot of growth impulses coming in from the Middle East on a global scale.
What are some of the challenges you’ve faced in the GCC?
From a construction process point of view, there is no specific thing that makes it more difficult in the UAE than anywhere else in the world. Having a rooftop project is a different construction activity altogether from building a large ground-mounted site.
This has to do with the fact that every rooftop is basically a discrete project – it has to be planned separately; it has a different approval process; it has a different logistic chain; and typically, even if you have two adjacent rooftops, they are handled separately by two different construction teams. Whereas a utility-scale project, even though sometimes it’s much larger, is simpler to build because it is more homogenous, from a construction perspective.
I would not say there is any specific regional or GCC-related obstacle to building rooftop projects but, in general, a rooftop project is dealt with according to parameters that are different from a ground-mounted solar project.
What is in the growth pipeline for Phanes Group?
We have a very exciting pipeline in Sub-Saharan Africa; it’s our largest build area. We have a lot of projects in West Africa, too – at the moment, we’re in almost 10 markets in Sub-Saharan Africa. Apart from our current activities in the Middle East and North Africa (MENA), [Sub-Saharan Africa] is going to be our immediate focus for the next three to four years. We have a number of distributed projects in this market, as well as large, high-profile, utility-scale projects.
The DP World programme is one of [Phanes Group’s] two or three ongoing projects in the MENA region. It will keep us busy for the next year and a half, but this is a large market. We have more appetite and are discussing a number of other initiatives in this region.
Will renewable energy be the UAE’s primary energy source anytime soon?
Right now, if you look at the baseload suitability of solar energy without [large-scale] storage, solar cannot give you the response to the UAE’s baseload needs. Renewable energy has less than 2% of the energy mix in the UAE. I think it’s premature to talk about renewable taking over and running the show. But everybody has realised that renewable – in particular, solar energy – is an important part of the energy mix. I would say, for the next 10 to 15 years, the milestone will not be renewable taking over and running things, but it becoming an inevitable [component] of energy generation in the UAE.
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