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A region's renewed hope

Report states the Middle East region could become world leader

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Solar power could be deployed widely throughout the Middle East region.
Solar power could be deployed widely throughout the Middle East region.

Report states the Middle East region could become world leader in renewable energy technology if correct steps are taken.

The Middle East and North Africa region has the potential to become one of the world’s largest producers of renewable energy, according to a report by Booz & Company.

The firm has stated that renewable energy industry developments combined with the region’s potential in wind and solar power could give a significant advantage to companies in the region looking to capitalise on them.

“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, says Ibrahim El-Husseini, a partner at Booz & Company. However the firm states that there are seven reasons why the region could change this and become a leader in renewable energy.

The first of these reasons is the advantageous geography and climate. “The MENA region has the world’s greatest potential for solar power generation, offering 45% of the world’s total energy potential from all renewable sources. If the region achieved this potential, it could generate more than three times the world’s total current power demand. The region also has some potential for large-scale wind farms,” the report states.

Another potential driver of renewable energies in the region is the fact that the current energy supply may not be sufficient to meet the world's future energy demand.

“With demand forecasted to grow at more than 7% per year for the next decade, countries in the MENA region will need to build 80 to 90 gigawatts of new capacity by 2017 to meet demand,” explains Walid Fayad, who is also a principal at Booz & Company.

The report also states that renewable in the region will help mitigate the global climate change challenge through minimising the impact of certain countries in the region which rank among the highest greenhouse gas emitters in the world on a per capita basis.

Other environmental problems in the region could be addressed through renewable energies according to the report, such as rising pollution levels and resultant reductions in quality of life.

Renewables can generate value in their own right, the report states, which would result in the freeing of oil and gas for more profitable uses rather than purely energy, such as those in the petrochemicals sector.

“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,” notes Tarek El Sayed, principal, Booz & Company.

The final two reasons which are listed in the report are that renewables enhances export value of the region’s traditional energy assets and the potential for the renewable energy industry to drive economic diversification and create jobs.

The report also evaluates the various types of renewable power and their suitability for this region. Booz & Company concludes that wind and solar offer the greatest potential to the Middle East. Onshore wind power is already cost competitive with fossil fueled generation, although it has major problems with intermittency.

However, the report states that this can be partially mitigated by the dispersal of wind turbines over a large geographic area rather than concentrating them in small areas.

“Additionally, planners can capture excess wind-sup¬plied energy by linking wind turbines to hydroelectric plants, which can be used to offset intermittency and absorb wind power surpluses,” comments El-Husseini.

Within the solar sector, there are two major forms of power. One is concentrating solar power (CSP) which uses mirrors and lenses to concentrate solar energy within plants that are utility-scale generators.

The other form of solar power is photovoltaic (PV) solar, which directly converts sunlight using semiconductors and is often used on a smaller scale.

“Both solar technologies could be deployed widely throughout the region", says Fayad.
"The Masdar Initiative in Abu Dhabi recently commissioned the first large-scale PV installation in the MENA region," Fayad adds.

Renewable resources
How to develop renewable power in the Middle East, according to Booz & Company.

1. Develop a renewable energy strategy.
A renewable energy strategy will require a number of considerations. Governments must assess their renewable resources and technical capabilities. They should consider the economic benefits of creating a manufacturing sector capable of supplying renewable energy projects versus importing the parts for such projects.

Next, they will need to determine the scope of their ambitions, for example, whether they want a strong renewables sector supported by research institutions, education initiatives, and other efforts, or just act as a technology user.

2. Put in place the appropriate institutional setting for renewable energy.
In most MENA countries, there is no clear ownership at the government level of issues related to renewable energy. “Governments must appoint and empower an entity to lead the development of policies and regulations and follow up on their implementation,” notes El Sayed.

3. Develop a favourable policy and regulatory framework to promote the development and use of renewable energy.

In most MENA countries, the regulatory environment is such that national utility companies define power generation requirements, which they must meet at the lowest possible cost.

Accordingly, their delivery models usually involve private developers under independent water and power producer (IWPP) schemes. This procurement model is geared toward large-scale, conventional power stations which take on more complex contracts.

4. Enable technical grid integration.
Because power production from wind and solar sources is intermittent, these sources must be combined with conventional power generation methods.

"This presents a technical challenge but large shares of renewable power generation have been successfully integrated into the grid in other parts of the world,” comments Fayad.

5. Develop R&D capabilities and a deep talent pool.
The renewable energy industry needs a skilled workforce of technicians, designers, and engineers. In addition, the renewable energy sector depends heavily on R&D for advancements in materials, technology, and implementation.

Pioneers in the renewable energy sector are often situated in close proximity to world-class research institutions providing a knowledge base. “The MENA region currently lacks such research institutions, but it is addressing this situation," says El Sayed.

"For example, Abu Dhabi’s Masdar Institute of Science and Technology, a new university focused on renewable energy technologies, welcomed its first class of students in September 2009,” El Sayed concludes.

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