The UAE turns to renewables

The UAE turns to renewables

Arianna Pescini
By 2050 half of the energy produced by the UAE will be either solar or nuclear powered. The government and investors aim at moving away from gas. But it won't be easy
#UAE on the verge of a green transition: 10 MW of energy from renewables in 2009 to 135 MW in 2015

From fossil fuels to renewables: A change that for the United Arab Emirates constitutes an epochal energy transition. The announcement of Energy Minister, Suhail Al-Mazrouei, who spoke of investments of 150 billion dollars in the sector, confirms the economic plan that will over the next few decades save up to 192 billion dollars, aiding the environment and improving efficiency. The energy mix for 2050 will comprise 44 percent green energy, 38 percent gas and 12 percent "clean" coal. An exciting project but with some variables that need to be considered. "Even if the Energy Ministry achieves its goals, gas will continue to represent a sizeable percentage - explains Coline Schep, Middle East and North Africa Associate at Eurasia Group. "Abu Dhabi will also increase oil production in the coming years and this resource will constitute a large portion of the entire Federation’s earnings in exports." As for fossil fuels, the State ranks seventh in the world for both oil and natural gas reserves. At the beginning of 2016 nearly four million barrels of oil a day were produced (4.1 percent of the total), while 725 thousand barrels were consumed; natural gas production stands at 59.76 billion cubic meters per year. According to Bloomberg New Energy Finance, the country's goal is far too ambitious, given its still sizeable dependence on LNG (a source massively supported up to now by the government) in producing electricity. This is also why in the future the seven emirates are planning to forego on subsidizing power plant projects that run on natural gas.

Solar and atomic

Even amidst doubts and contradictions, the big energy conversion plan is already underway, even though, as the most sceptical about the transition emphasize, the UAE has only just started considering clean sources. The country has seen an exponential increase in production in the sector: according to the  International Energy Agency (IEA), in fact,  production increased from 10 MW in 2009 to 135 MW in 2015; of this, as much as 133 MW is derived from solar power, one from wind and the rest from biogas. The natural potential and the reduction in costs have convinced the government to focus on solar power, with over a billion dollars of investments over the past decade: "Renewable energy, especially solar energy, will reach a production of 41.1 GW of power in 2050 - continues Schep - thanks to two giant projects underway. In Dubai, two more 800 and 200 MW power plants will be added to the 5 GW of the Mohammed Bin Rashid park; Abu Dhabi is building a 350 MW power plant, and in a short while work for an additional GW of power will start up." The new project will be built in Sweihan, east of Abu Dhabi, and involves the Chinese giant Jinko Solar panels and the Japanese company Marubeni. But the UAE will also develop nuclear power, with the support of Korea, the US and India: "Six percent of the energy capacity could come from the Barakah center, which should be operating fully by the end of 2017 and the beginning of 2018, with an output of 5600 MW. Given the high costs involved, this will remain the only plant in the region."

The energy mix for the year 2050 will comprise the following: 44% green energy and 38% gas while the remaining 12% will be made up of "clean" coal

The future scenario

Hence, over and beyond data and percentages, the Federation's energy mix will change in the next few years: "It is realistic to think that the UAE will become much less dependent on oil than they are now. Compared with other Arab states - Schep reflects -  here the economic and energy diversification will be more successful." Renewables will already meet 30 percent of demand by 2030, with advantages more on the domestic side. "Petroleum and derivatives apart, the country is not a significant competitor in the global energy market - Schep states - despite the fact that  the dramatic drop in costs and the availability of free land offer an ideal environment, for example, for investments in solar energy. With the increase in clean sources, there will indeed be more natural gas for export, but we are talking about small amounts when compared with industry giants like the US, Australia or Qatar. The carbon-free energy will mostly be used for the growing domestic consumption, and will indirectly bring benefits to the population: energy security, fewer withdrawals from state coffers for subsidies and gas imports, less environmental damage, as well as job and training opportunities." Such as the experimental project of a small hydroelectric plant at Hatta, Dubai, on the border with Oman, which, if successful, would contribute to the economic development of the area and the creation of almost two thousand jobs.

The Persian Gulf state went from 10 MW in 2009 to 135 MW in 2015. Of these 133 were from solar power, one from wind power and the remaining MW from biogas