Rapid economic growth, rising industrial activity, and an increase in population have been occurring in the Gulf countries over the last few years, making this region one of the biggest energy consumers in the world. However, GCC nations have also been at the forefront when it comes to spending on, and adopting, energy-efficient systems.
According to Kuwait News Agency (KUNA), Samira Ahmad Omar, director-general of the Kuwait Institute for Scientific Research (KISR), contends that Gulf nations plan to invest up to $100bn in renewable energy projects during the course of the next two decades.
In a speech at the opening ceremony of the sixth Middle East and North Africa Renewable Energy Conference (Menarec-6) in April 2016, Omar attributed the increasing demand for energy to economic transformations, including the tendency towards the establishment of industrial and service bases, and the growth of populations.
“The environmental challenges relating to pollution and global warming left us with no choice other than relying heavily on clean and renewable energy, which is the focus of energy research circles worldwide,” she said. “The GCC states, as well as other countries in the Middle East and Africa, have promising opportunities in the field of exploitation of solar energy, given the fact that they enjoy [an] equatorial climate and sunlight of up to 1,400 to 1,800 hours a year.”
Moreover, according to a recent study from Frost & Sullivan, Saudi Arabia will invest more than $100bn (SAR375bn) in the next 25 years, in new renewable energy projects, as the kingdom grapples with growing power needs amid increasing population and industrial activity. Energy demand in the kingdom is expected to grow by 45%, to 100GW by 2040, a figure that represents almost the amount of energy consumed by the rest of the GCC states.
The report says: “To keep pace with the growing demand, Saudi Arabia is planning to spend $109bn to install 54GW of renewable energy by 2040. By 2020, Saudi projects alone will account for 70% of the total value of the GCC’s renewable energy projects”.
Both the governments and private sector in the GCC countries are making major commitments to, and investing in, forward-looking energy strategies, from Dubai’s Integrated Energy Strategy 2030 to the Qatar Foundation’s launch of the region’s first Energy Monitoring Centre, and the King Abdullah City for Atomic and Renewable Energy’s plans to develop 54GW of renewable energy in Saudi Arabia by 2040.
Benoit Dubarle, president for Gulf countries and Pakistan at Schneider Electric, explains: “With the GCC countries focused on a move towards the post-oil economy, there have been major strides towards the diversification of the region’s energy mix to focus on renewables.
“However, in order to meet this need, it is crucial that the Gulf countries continue to invest in large-scale projects, in order to increase energy efficiency and the capacity of generation, while ensuring that the private sector is incentivised to incorporate energy management into their strategies.”
Schneider Electric is currently working on several projects with various entities across the GCC, including DEWA, SEWA, ADWEA in the UAE; Kahramaa (Qatar General Electricity and Water Corporation), and Smart Doha in Qatar; as well as utilities bodies in Kuwait and Oman – to name a few.
Dubarle points out: “The energy demand in the region is expected to increase three times in the next 15 years, and will not be met by today’s supply. Currently, financing for renewable energy projects is limited, providing the private sector with a major opportunity to work with the regional governments, to shape and conceptualise policies and projects in clean energy.”
Dietmar Siersdorfer, CEO of Siemens Middle East, believes that the GCC countries have invested heavily in developing their power infrastructure. “However, [GCC governments] have also realised quite a few years ago that relying on oil and gas revenues alone is not sustainable. As countries such as the UAE develop and expand new energy-hungry industries, and the population continues to grow, demand for electricity is only set to rise.
“This is where implementing energy-efficient and reliable technology can translate into substantial financial and environmental benefits,” he says.
Among the recently executed contracts for Siemens is the SARB offshore oilfield in Abu Dhabi. In April this year, the company shipped the 1,000th gas turbine from its factory in Berlin to Umm Al Houl power plant in Qatar. In addition to this, Siemens has signed a service agreement for 25 years for the planned Umm Al Houl combined-cycle power plant in Qatar.
Experts also emphasise the fact that in today’s challenging economic conditions, it is a perfect opportunity to create a sustainable ecosystem, when the regional governments seek to mitigate their carbon footprint, and utilise energy efficient resources. Dr Raed Bkayrat, vice president — business development, Middle East, from First Solar, believes that diversification is critical for a sustainable economy, and adding renewable projects to the energy mix will ensure a positive, long-term future for economies in the GCC.
“What is significant is that the investments mentioned earlier are not simply being seen as a means of complying with green legislation. These are being made to address critical energy needs, reinforcing the fact that sunlight has truly come of age as a reliable and affordable energy source, capable of standing shoulder-to-shoulder with conventional power generators.”
First Solar currently has 152,880 modules powering the 13MW first phase of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai. Additionally, the company has been selected by the consortium led by ACWA Power and TSK to supply high-performance modules to power the 200MWAC second phase of the Mohammed bin Rashid Al Maktoum Solar Park.
In Saudi Arabia, in conjunction with the Al Watania Agriculture Company, First Solar jointly funded and constructed a pilot solar-assisted water pumping project at Al Watania Organic Farm in the Al Jouf region.
Although major steps have been taken towards realising the importance of renewable energy, more awareness needs to be created among the private and public sectors to achieve further progress in this field. Schneider’s Dubarle comments: “Today, the GCC governments have shown their commitment towards energy efficiency and sustainability, and are actively investing in R&D towards alternate energy sources. To continue achieving progress in this field, all Middle East authorities will need to enhance awareness among policy makers and stakeholders and open up communications between the private and public sectors.”
Siersdorfer from Siemens concludes: “There is a lot of energy saving potential that can be leveraged presently. And even more is possible if we look into what digital services can achieve; for example, through condition monitoring, data analytics, and predictive maintenance. Let us see it this way: if we invest now in the right technologies, the Middle East has a unique opportunity to lead the way by adopting the latest innovations.”
