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Mena Region can Generate 3 Times
more of World Power Demand

Abdul Basit
Filed on December 27, 2009

DUBAI - The Middle East and North Africa, or Mena, region has the potential to generate more than three times of the world’s total current power demand by developing its renewable energy sector, a new study finds.

The region has the world’s greatest potential for solar power generation, offering 45 per cent of the world’s total energy potential from all renewable sources. Its geographical and climate conditions can help it become one of the world’s largest producers of renewable energy, according to a study by Booz & Company, a global management-consulting firm.

Countries that move quickly, such as the UAE with its unique Masdar Initiative and its hosting of the International Renewable Energy Agency headquarters in Abu Dhabi, could build a sizable and sustainable competitive advantage.

“Renewables in much of the Mena region are underfunded or not funded at all, in part due to the region’s abundant supplies of fossil fuels,” said Ibrahim El-Husseini, a partner at Booz & Company.

Renewable energy industry developments combined with the region’s potential in wind and solar power could create significant advantage for countries that move to capitalise on them.

Following the UAE initiative, some countries in the region have begun renewable energy projects, the region as a whole is still rife with potential. Competitive positions in this sector are not yet set, and there is substantial opportunity for first movers to become global leaders by adopting the requisite policies and launching bold initiatives.

The region’s current energy supply may not be sufficient to meet future demand. At present, it has 146 gigawatts of installed capacity for electricity generation.

“With demand forecasted to grow at more than seven per cent per year for the next decade, Mena countries will need to build 80 to 90 gigawatts of new capacity by 2017 to meet demand,” explained Walid Fayad, a principal at Booz & Company.

Renewables could generate value in their own right, as well as freeing oil and gas for more profitable uses.

“If renewable energy sources could replace the oil or gas currently used for power generation, the surpluses created could become available for more profitable downstream applications,” Tarek El Sayed, a principal at Booz & Company, said.

Renewables could enhance the export value of the region’s traditional energy assets. Fossil fuels will remain the dominant source of energy for the foreseeable future. In addition, Opec’s share of world oil supply is expected to grow from its current figure of 42 per cent to 52 per cent by 2030, according to the Opec World Oil Outlook 2008.

Renewable energy initiatives will free more oil and gas for export and enhance oil-producing countries’ position as major energy exporters for the world.

The renewable energy industry could drive economic diversification and create jobs. The oil and gas sector contributes 47 per cent of the GCC’s GDP, but only one per cent of employment. Countries struggling with high unemployment rates could generate employment opportunities in renewables.

There are two major forms of solar-generated power. Concentrating solar power, or CSP, uses mirrors and lenses to concentrate solar energy within plants that are utility-scale generators. Photovoltaic solar power directly converts sunlight into electricity using semiconductors, and is often used on a smaller scale. Prevailing desert conditions, however, result in extreme summer temperatures and high dust levels, both of which have a negative impact on solar energy.

“Both solar technologies could be deployed widely throughout the region. The Masdar Initiative in Abu Dhabi recently commissioned the first large-scale PV installation in the region. Smaller installations are proliferating, mainly in areas far from the grid,” Fayad said.

abdulbasit@khaleejtimes.com


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