UAE winning 'power' play
Dubai, investing heavily in clean energy resources, plans to have the world's lowest carbon footprint by 2050.
Dubai - Nation edges closer to achieving clean energy goals
Dubai in May took another big step toward its goal of becoming the world's greenest city when the inauguration of the 200MW first stage of the 800MW third phase of the Mohammed bin Rashid Al Maktoum Solar Park brought the emirate's clean energy share of its total installed capacity to four per cent.
This follows His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, breaking ground on the solar park's 700MW fourth phase in March.
Dubai plans to have the world's lowest carbon footprint by 2050, when it targets clean energy sources such as solar power to account for 75 per cent of the city's power output, up from a targeted seven per cent by 2020 and 25 per cent by 2030.
Further capacity to be added over 2 years
It will add further clean energy capacity when the second and third stages of the third phase, each supplying 300MW, are completed in 2019 and 2020, respectively.
The solar park's third phase achieved a world record in June 2016 when a bid of just 2.99 US cents per kilowatt-hour was accepted from a consortium led by Abu Dhabi clean energy company Masdar and Électricité de France Group. This was nearly half the winning bid for the plant's 200MW second phase, which at 5.84 cents was itself at the time a world record low.
Fourth phase also breaking records
The fourth phase is also breaking world records. It will have the world's tallest solar tower, at a height of 260 metres, and the world's largest thermal storage capacity. The first stage of the concentrated solar power (CSP) fourth phase will be commissioned towards the end of 2020.
CSP stores power that can be released when the sun is not shining, such as at night. Although more expensive than solar PV, Dubai's solar thermal technology will allow up to 15 hours of storage, meaning it can release electricity into the national grid 24 hours a day.
Demand for power is rising in the Middle East, but the precariousness of fossil fuel dependency as shown by the crash in oil prices in 2014 and the political fallout of climate change is making renewable energies such as solar power more attractive propositions, particularly as prices fall, and none is falling faster than solar. In April 2016, the GCC states pledged to pump $100 billion into renewable energy projects over the following 20 years.
The $3.8 billion fourth phase has achieved the world's lowest levelised cost of electricity, at 7.3 cents per kilowatt-hour.
Solar power costs tumbling
In many parts of the world, the cost of solar power is plummeting to a point where it will soon meet a rising cost for electricity generated by coal or gas. Part of the reason for this is that once a solar plant is built, the marginal cost of the power it produces is next to nothing, whereas for fossil fuels, these resources need to be constantly supplied. In 2016, the amount of solar photovoltaic capacity added around the world rose around 50 per cent, continuing a stellar growth from little more than zero at the turn of the millennium.
One concern about solar power has been that it is only available when the sun shines, and that because of this it will still be necessary to maintain base load generation from fossil fuels. But this objection collapses in the face of CSP.
Indeed, CSP holds so much promise that the International Energy Agency predicts up to 11 per cent of global electricity generation could come via CSP by 2050. Spain and the United States account for nearly 90 per cent of installed CSP capacity, but by 2016 there were facilities being built in Saudi Arabia, Australia, Chile, China, India, Mexico and South Africa, among others, while Morocco brought online the 160MW first phase of its Noor-Ouarzazate solar power station, to be built by a consortium led by Saudi private electricity company Acwa Power. This plant will grow to 580MW when fully operational by the end of 2018, making it the world's largest CSP plant.
Abu Dhabi is similarly committed to increasing its share of renewables in its energy mix, and is home to Masdar City, which it plans to be the world's most sustainable eco-city. The Masdar City Solar Photovoltaic Plant is the largest of its kind in the Middle East, producing about 17,500 MWh of clean electricity a year.
Masdar has also contributed a number of renewable energy world firsts over the past decade including Shams 1, which at the time of its inauguration in 2013 was the world's largest CSP plant. An even larger CSP plant will be built in Abu Dhabi for a total cost of Dh3.2 billion. Noor Abu Dhabi is planned to generate 1,177MW from the second quarter of 2019. Masdar is also developing a waste-to-energy plant in Sharjah to assist in that emirate's effort to reach its zero waste-to-land?ll target by 2020 and the UAE to achieve its 2021 goal of diverting 75 per cent of solid waste from land?lls.
Greater involvement of private firms
Several GCC countries have recently moved towards allowing greater participation by the private sector in renewable energy schemes, mainly involved in building and running power plants, and the Mohammed bin Rashid Al Maktoum Solar Park is one of the first projects contracted under an independent power producer environment by the Dubai Electricity and Water Authority. Its fourth phase will be co-developed by Acwa Power, while Shanghai Electric will serve as contractor for the fourth phase's engineering, procurement and construction elements.
As the UAE has somewhat higher electricity prices than others in the GCC such as Saudi Arabia and Bahrain, which have some of the lowest utility prices in the world, there is greater incentive there to push renewables, particularly solar power. But even in Saudi Arabia, then-oil minister Ali Al Naimi told reporters in 2015: "I believe solar will be even more economic than fossil fuels."
The writer is global head of banking for the UAE at Standard Chartered. Views expressed are his own and do not reflect the newspaper's policy.