Coals to Newcastle? Finally Nuclear? A Solar Revival? … but where’s the Policy??
Over the past decade, the United Arab Emirates (UAE) was the most visible proponent of renewable energy in the region, with plans for a Zero Energy City (Masdar), largely funded by one of the country’s leading sovereign wealth funds. Intentions included integrated solar PV manufacturing activities and installations, carbon sequestration, and a broad range of new energy technologies. In (partial) partnership with MIT, the country and the vision have attracted global attention.
The UAE, among several countries in the region, is running low on cheap/associated gas, amidst oil, gas, water, and power subsidies which have led to other worldly demand growth (7-9% AGR for electricity in the UAE and the region). Even “expensive” renewables can present a favorable relative investment versus subsidized hydrocarbon feedstocks.
While the financial crisis substantially delayed execution against the Mission, poor progress on New Energy Economics and those ongoing Old Energy Subsidies also played a major role in Deferral of the Dream. Carbon sequestration programs have steadily shrunk in scope and moved ‘to the right,’ and solar PV manufacturing never got off the ground. On the other hand, a couple of utility-scale PV installations are producing in UAE and Qatar, and plans for nuclear power have progressed to early construction of the first two plants (2.8 Gigawatts in UAE), with scheduled 2017-18 startup. Egypt has just started early construction for its first nuclear power capacity.
“On the Other Hand (part II), Coal is in the mix! The UAE has recently approved projects to construct two coal-fired power plants in country, arguing ‘energy diversity.’ Kuwait has also considered coal fired power, and Turkey, sitting in the middle of Caspian and Medierranean gas riches, has also approved a coal-fired project.
Meanwhile, solar power economic continue to improve – scale installation economics (8-10 cents/kwh) don’t match subsidized regional power costs (averaging 2-3 cents/kwh), but they’re a lot better than market-based oil/gas fired costs, and more timely than nuclear. Sunedison has inked a deal to study an integrated silicon-to-PV-to power venture deliver electricity in Saudi Arabia later this decade.
Conclusion – There’s a LOT going on in the region – forward toward energy efficiency, backward to coal-fired power, and ‘stuck in neutral’ (so far) on those nasty subsidies (for more information, search the archives!).