The MENA region, which is home to more than half of the world’s crude oil reserves, and more than a third of its natural gas supplies, may be synonymous with oil and gas. However, in the past few decades the region has made real efforts to diversify its economy and become a leader in the renewables sector. While reducing costs and carbon emissions has played a key role in this, so has the fact that MENA is one of the world’s biggest energy consumers.
According to the Oxford Institute for Energy Studies, alongside Asia, the MENA region is forecast to account for the largest proportion of global energy consumption growth until the 2030s. In Saudi Arabia alone, the recently announced Vision 2030 highlighted that domestic energy consumption is set to increase three-fold by 2030.
As a result, regional governments have recognized that alternative, sustainable, and reliable sources of energy must be introduced to reduce the regions consumption of, and reliance on, fossil fuels. In light of this, The United Arab Emirates (UAE) government recently announced that it is looking to increase clean energy power generation from 25 per cent to 30 per cent by 2030, while Egypt plans to raise its share of renewable energy to 20 percent by 2022. However, Morocco has the most ambitious clean energy target in the MENA region and is on track to have 42 percent of its installed energy capacity dedicated to renewable sources by 2020.
Over the last decade the MENA region has started to harness the abundant natural energy resource which it possesses – the sun. Last year marked a turning point for solar in the region. Solar project investments in MENA grew from approximately $160 million in 2010 to around $3.5 billion in 2015 and, over the course of the year, the region saw several record-low bids, which led to solar becoming one of the most competitive energy sources available.
This year the prices dropped even lower. In May, the Dubai Electricity & Water Authority (DEWA) recently secured a record-breaking bid of 2.99¢/kWh for the expansion of the Mohammed bin Rashid Al Maktoum Solar Park, at the time the lowest solar price bid in history. This was followed in September by a bid of 2.42¢/kWh for a solar PV project planned to be built in the town of Swaihan, Abu Dhabi.
Below are four factors which have made the MENA region so successful in the drive towards renewable energy.
1. Government commitment and targets
Throughout the region, governments have set stringent renewables targets, showcasing their commitment to increasing the role of renewables in the wider energy mix. For example, the solar industry in Dubai receives strong support from the highest levels of government. Last year, the political leader of Dubai, Sheikh Mohammed bin Rashid, announced the Dubai Clean Energy Strategy 2050, which will see the emirate generate 7 percent of total power from clean energy sources by 2020, 25 percent by 2030 and 75 percent by 2050. While in Jordan, the energy minister announced that several renewable energy projects with a total capacity of 1,800 MW will be connected to its national power grid by the end of 2018.
The climate is a huge factor in the Middle East’s renewables success – especially solar. The region has an abundance of sunlight, around nine hours per day. However, temperatures of up to 53 degrees Celsius pose a number of structural and technical challenges for solar power which could put a cap in growth if not addressed. And, as solar farms are usually located in remote areas of desert, with no shade or protection from the sun, with high levels of heat, dust and humidity, equipment must be designed to deal with these conditions for a sustained period of time. Liquid cooling of inverters can ensure they can withstand the heat and extreme conditions necessary.
Understanding the need to develop solutions that can withstand the sweltering temperatures often seen throughout the Middle East, and boost efficiency, GE has developed Silicon Carbide solar inverters. Silicon Carbide (SiC), a synthetically produced crystalline compound of silicon and carbon, was first discovered in an attempt to produce artificial diamonds and shares many of its properties, including strength and resistance to high temperatures.
Whereas today’s solar inverters are about 98% efficient, a Silicon Carbide inverter allows an additional 1% in power conversion efficiency. At first look, this may not seem like much, but if a 100MW solar plant was just 1% more efficient, this would result in approximately $2.5M more power being produced over the plant’s lifetime.
3. Easy financing
The economic climate in the UAE has ultimately contributed to the Middle East’s success in the solar sector. The Dubai government for example maintains an AA credit rating, which has meant that interest rates are low and there is a lot of international investment, in particular from Saudi Arabia.
The MENA region has worked hard to create an appealing environment for investors; looking to create the facilities, skills base, resources and fiscal environment that makes it an appealing hub for international businesses operating in the region.
4. Using technology to further reduce costs
Despite solar power becoming competitive with the wholesale price of electricity in many regions across MENA, additional cost reductions are needed to make solar electricity fully competitive against conventional power sources in the long term.
The opportunity of improving PV system costs via voltage increases on the DC side has already been successfully applied worldwide with the move from 600 VDC to 1,000 VDC large scale PV systems. Today, new developments at GE have created a shift towards 1,500 VDC architecture and this is widely seen as the next natural step in the evolution of utility scale PV power plants. By increasing the voltage level, the inverter has higher power density and decreased system losses and balance of plant costs. It can help reduce up to 3% system cost and save up to 15% inverter operating expenses.
A more secure and sustainable energy system requires continued progress in phasing out fossil fuel subsidies, clear policies and technology co-operation. While governments throughout the MENA region firmly grasp the opportunities that renewables bring, the continued development of innovative technologies are required to enable the region to continue to break global records in the years to come.
For customers, having the right partner is as important as having the right technology. GE has a long history of utility scale solar projects across the globe, including countries like Germany, France, Japan, India, Chile, South Africa and the U.S. GE’s involvement in some of the biggest solar projects strengthens its position as a key technology enabler within the industry.
ABOUT THE AUTHOR
Hani Majzoub leads GE’s Power Conversion, Sales for the Renewables Segment across the MENAT region.
GE Power Conversion, http://www.gepowerconversion.com/