Energy Outlook

The IEA's Paolo Frankl talks about prospects for ME renewable energy

Renewables now account for 16.7% of global power consumption. (GETTY IMAGES)
Renewables now account for 16.7% of global power consumption. (GETTY IMAGES)

Utilities Middle East talks with Paolo Frankl, head of the International Energy Agency’s renewable energy division, about regional prospects for renewable energy

January’s World Future Energy Summit in Abu Dhabi saw the release of a number of reports assessing the current state of renewable energy markets around the world.

Amongst the notable findings was Frost & Sullivan’s forecasting of potential renewable energy adoption in the GCC of 25GW by 2020.

The report, “The Future for ‘Green’ in the GCC’s Energy Sector”, stated that this impressive figure was driven by rising power demand (set to double to reach 215GW by 2020) and concerted efforts to diversify the energy mix.

Elsewhere, the REN21 “Renewables 2012 Global Status Report” painted a similarly positive picture of the current state of renewables. The report showed a growth in renewable energy across power, heating, cooling and transport, and now contributes 16.7% of the world’s final energy consumption.

Almost half of all power capacity additions in 2011 were renewable sources, whilst total installed renewable power capacity stood at over 1,360 MW by the end of that year.

With such a ringing endorsement of the market, UME spoke with Paolo Frankl, head of the International Energy Agency’s renewable energy division, about where the Middle East region currently is with renewable deployment.

“So far, the Middle East hasn’t deployed too much, particularly in comparison with other parts of the world. However the potential is massive – obviously solar energy but some countries also have wind potential.

A big change we have observed in several countries in the Middle East, particularly with the declining cost of solar, is comparing the generating cost of solar with the opportunity cost of burning oil rather than selling it.

These opportunity costs are very helpful and PV – indeed solar in general - is immediately very helpful. I think this is certainly one of the reasons why several countries now have ambitious targets in renewables, and particularly in solar.”

Frankl also points to the move towards energy diversification and energy security as other key drivers to renewable energy adoption.

“Looking in the long term, for the moment oil and gas are clearly enough, but if they want to sustain export markets for a long time, it’s better to diversify at home.”

This sentiment has been echoed by many commentators in the region, with the region’s maturing fields prompting a more measured approach to remaining hydrocarbon reserves.

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Frankl also suggests that diversifying the economy towards renewables development – such as Masdar’s very evident efforts – can have its own direct economic incentive.

“Another element is technology and innovation. It’s very clear that several countries have expressed a clear interest in entering renewables at an early stage – to develop their part, to have their intellectual property, to have their innovation - as an element of economic development in this region. Abu Dhabi, for instance, has made a very clear declaration in that sense.”

If the current situation is one of high potential, the most pertinent question facing the region is how best to embrace the evident renewable energy resources available.

“Some countries have institutional arrangements that go very well in the right direction. I think the next step is to see how this goes in practice. Of course the world, in general, is in a macroeconomic situation now that is not optimal, and we will need to see how rapidly these things on paper materialise into real projects. Because these first projects will certainly suffer from lack of experience in the specific circumstances.

"If you consider, for example, a big PV system in a very specific climate such as the one in the UAE – with a lot of sand, high temperature – this is the kind of environment where technology needs to be tested and adapted. There is still a way to go from the first projects to a really large mass-scale. Although, of course, the numbers that Saudi Arabia is talking about are incredible. Even for the richest country, this is a really big number.”

So how then does the Middle East fit into the global picture for renewable energy?

“So far pretty little. But the potential is immense. There was a talk [at WFES] that was asking whether the Middle East was a rising star of renewables. I think the clear message was maybe ‘not yet’. We obviously need to see how it goes, but the first steps are going in the right direction.”

ce president of projects and head of its Middle East operations.


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