The Makings Of A Solar Superpower? - Gulf Business
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The Makings Of A Solar Superpower?

The Makings Of A Solar Superpower?

Solar power is supercharging the alternative energy industry, but can the Middle East become a leading global provider?

There are some basic truths that give the countries in the Middle East a powerful edge in the race to the top in the world of solar energy.

The most obvious is that arid climatic conditions mean there’s a great deal of sunlight throughout the year, with clear skies on average for 80 per cent of the year.

For decades, governments and businesses in other regions have been working to overcome the challenges associated with harnessing their weather systems to generate energy. The key obstacle is the intermittent nature of these natural resources.

To generate electricity from the sun, photovoltaic solar panels capture light energy, or photons. Various weather conditions can substantially impact the effectiveness of solar, for example when the air is humid or is of poor quality or when the skies are cloudy, making solar electricity generation intermittent.

The intermittency and variability of solar generation often limit their practical ability to meet electricity demand. Energy firms argue that the need to have additional generation to ensure a reliable electricity supply increases their cost relative to alternatives like gas and nuclear.

That’s why, according to Exxon Mobil, even though by 2040 the world will witness a 20-fold increase in solar power, it will only account for about two per cent of electricity supply.

The Middle East’s natural climate advantage has seen leaders in the region pushing for a central role in expanding this space.

Some bet the region will emerge as one of the top renewable energy markets in future, with solar at its heart. The current renewable energy targets, policy maker commitments, ongoing project developments and above all urgent need to trim down the domestic consumptions of hydrocarbon leaves the region with good odds.

Most likely, Saudi Arabia and UAE will dominate the renewable energy initiatives in the Middle East, as they have done in the last ten years.

According to analysts at Kuick Research, these two countries will account for more than 75 per cent of the region’s renewable energy capacity in the future.

However, there is some way to go until the Middle East’s solar achievements mean it can carve itself as a world leader, according to Tamsin Carlisle, senior editor at energy intelligence firm Platts in Dubai. She’s argued for a change in strategy: “The region’s renewable energy efforts are currently narrowly focused on supplying burgeoning domestic energy needs rather than developing excess power capacity for export. While certain states, notably Abu Dhabi, a few years ago voiced ambitions to become global leaders in renewable energy technology and equipment manufacturing, in practice that goal has been elusive.

“It is possible that, over time, government-supported technology transfer initiatives, including those championed by Abu Dhabi’s Masdar and Saudi’s King Abdullah University of Science and Technology, will enable the region to achieve its alternative energy world leadership aspirations, but that is likely to take decades.”

Carlisle said in the meantime, the rationale for developing extensive domestic and regional alternative power infrastructure is becoming ever more compelling.

Saudi and the UAE’s large-scale solar-power build-outs expected in the coming years will require extensive international investment and equity partnership in projects.

“Oman won’t be far behind, despite being more financially constrained than its neighbours, and is already establishing itself as an international leader in the application of solar power to heavy oil extraction – a specialised niche, to be sure, but an increasingly important one both regionally and worldwide,” added Carlisle.

Energy-poor North African and Levant countries, including Morocco, Jordan and to some extent Egypt, will continue from necessity to pursue previously established renewable energy initiatives as a means of reducing oil and gas imports, but budgetary constraints and Arab Spring political turmoil may compromise the momentum of such programs, said Carlisle.

“In my view, they are likely to be overshadowed in the medium term by alternative energy development in richer, more politically stable Arabian Peninsula states.”

Carlisle’s views are shared by other industry commentators. Logan Goldie-Scot, an analyst at Bloomberg New Energy Finance, said: “The number of projects in the region is increasing steadily but the region is unlikely to become an alternative energy leader in the foreseeable future. The project pipeline remains small, and the limited state of policy in the region is a major barrier to investment and deployment in the sector.”

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