UAE stepping into the 'green zone'

Jul 2, 2010 - Datamonitor - Energy Central

The global drive to improve the environmental profile of energy production continues, and the UAE has the potential to be a leader in this area, partly due to its natural geographical advantages. While no immediate changes can be expected, it is likely that nuclear and renewable power will play a significantly greater role in the federation's energy production activities over the longer term.

Worldwide solar demand, driven by lower costs and greater availability of credit, is expected to exceed 19GW by 2013, representing a very healthy CAGR of 25% from 2010. The United Arab Emirates (UAE) has the opportunity to pave the way with the Shams 1 project, followed by Shams 2 and 3, which will directly contribute towards Abu Dhabi's target of making 7% of its power generation capacity renewable by 2020. Shams 1 will be the largest concentrated solar power plant in the world, extending over an area of 2.5 square kilometers, with a capacity of approximately 100MW and a solar field consisting of 768 parabolic trough collectors. The facility will displace approximately 175,000 tonnes of CO2 per year, equivalent to planting 1.5 million trees or removing 15,000 cars from Abu Dhabi's roads.

There is immense potential in building large-scale solar plants in the Middle East, a region that offers both unlimited solar resources and a huge number of possible site locations for the creation of solar plants in its deserts. Power demand in Abu Dhabi peaks during the day due to air conditioner use, making solar power ideal, as sunlight is strongest at this time.

The UAE plans to embark upon a nuclear power program with the International Atomic Energy Agency, and the first of its reactors will come online by 2017. It will be constructed in three phases at Al Bayyaa, close to the Saudi Arabian border, with a planned investment of $23 billion. The plant will have a capacity of 5,000MW upon completion, much larger than the original projection.

The six members of the Gulf Cooperation Council (GCC) - the UAE, Kuwait, Saudi Arabia, Bahrain, Qatar and Oman - rely exclusively on fossil fuels for electricity generation and have been experiencing 5-7% annual demand growth in recent years. A 2009 report estimates that electricity demand in the GCC block will increase by 10% per annum to 2015, accompanied by desalination demand, which will rise annually by 8%, in total requiring 60GW of new capacity by 2015 (World Nuclear Association, 'Nuclear Power in the United Arab Emirates', June 2009).

Calls for renewables are driven by the growing awareness in the UAE that the federation should reduce its environmental footprint. In 2005, the World Wildlife Fund for Nature revealed that the federation had the highest per-capita ecological footprint on Earth at 9.5 global hectares, ahead of even the US and Kuwait, and much higher than the worldwide average of 2.1 global hectares.

Original equipment manufacturer (OEM) giants such as Siemens and General Electric have had a presence in the UAE for decades, generating gigawatts of electricity under multibillion dollar deals. The global surge of renewable energy will have a dynamic impact on the UAE. Resistors such as the established major OEM players generating 98% of their energy from fossil fuels and the space and cost constraints of renewable power are counteracted by the fact that eco-friendly energy is supported by environmental legislation, an abundance of space and foreign cash injections for investments in renewables.

The paradigm for energy supply is shifting. To meet the growing demand for energy worldwide, regional biofuel/solutions must be identified that are not only sustainable, but that can actually rejuvenate the ecosystems where they are produced. In the UAE, the primary focus is on integrated seawater agriculture systems, while using solar-energy equipment on rooftops in cities to generate about 500MW of power has also been proposed. Burj Khalifa, the world's tallest building, taps solar energy to meet the bulk of the water-heating requirements of its residents. This is the perfect complement to the sustainable development initiatives spearheaded by the UAE.

Datamonitor believes that three key factors globally are driving the quest for clean fuel and eco-friendly construction: one, the days of cheap oil are about to end; two, the climate is paying a heavy price for the reckless burning of fossil fuel; and three, while green technology is expensive in the short term, it leads to huge savings in the long term, whether for individuals or corporate firms. In the UAE, green investments total about $60 billion at present, and this will stay about the same in the near future. Datamonitor expects no significant increase in the impact of or contribution from renewable energy in the next few years. In the foreseeable future, however, fossil, nuclear and renewable energy will complement each other significantly.