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Renewables refuse to leave the agenda

Renewables remain a hot topic.

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Green enterprise in the Middle East would profit from more government support.
Green enterprise in the Middle East would profit from more government support.

Renewables remain a hot topic. While many remain pessimistic about the lack of government enthusiasm, green enterprise is starting to stir in the region in spite of lacking regulatory support.

In the massive push to bring power infrastructure in line with growing demand, renewables are not much more than an afterthought to GCC governments.

There are exceptions. Saudi Arabia, which is investing heavily to build new power plants, is one of the few countries to consider the solar alternative, and to invest in research and technology.

The King Abdulaziz City for Science and Technology, Saudi Arabia’s national research group, aims to open the world’s largest solar-powered desalination plant by 2012 in the city of Al-Khafji.

The pilot plant will supply 30.000 cubic meters of clean water per day to 100.000 people, and reduce operating costs by using newly developed membrane technology, which will be powered by ultra-high concentrator photovoltaic technology, developed in conjunction with IBM.

In addition, the King Abdullah University of Science and Technology is due to build a solar plant for research and development purposes. The Masdar project in Abu Dhabi is another government green initiative.

A promising start by the oil-rich countries, one might think, yet those projects seem to pale into insignificance compared to the tens of billions that both governments are allocating to increase their electricity and freshwater generation capacities.

And Saudi Arabia’s deputy energy minister Saleh Alawaji only last month admitted that the kingdom is looking to raise the amount of fossil fuels used for electricity generation to 2.5 million barrels of oil equivalent per day by 2020, up by 1 million barrels per day from current levels.

Lacking enthusiasm
While renewable energy initiatives and targets have been set in several Arab countries, real political will is lacking, according to participants of a recent conference on the subject.

The environmental sceptics, it seems, still have the upper hand. “They keep saying we need more research,” May Jurdi, professor of environmental health at the American university in Beirut, told
the Reuters newswire at the
conference.

“Why do we need additional diagnosis when the patient is dying?”

Given this context, it is little wonder that the solar industry the Middle East is nascent at best. And one of the last things one would expect is an UAE company manufacturing glass and metal exteriors branching out into solar.

Despite the political lethargy surrounding solar, or other green technologies, Sharjah-based Mulk Holdings have done precisely that. After researching and developing a range of solar panels over the last three years, the company now set to launch its new products.

According to a spokesman, it is the first producer of solar panels in the UAE. Yet tellingly, the company’s first order will not be delivered into the region. Instead, it has signed an agreement to supply a plant in India with solar troughs. Mulk will take a 25% equity stake in the first stage of the project, with a capacity of 40MW.

The company is set to profit from India’s commitment to developing renewable energy capacities. According to Mulk, the new plant is set to receive a feed-in tariff of 15 rupees per MW, a price that is above that is above market levels.

Feeding on economic recovery?
As last month’s lead article pointed out, feed-in tariffs are an absolute must if governments in the Middle East are to take serious steps to develop green energy solutions for the region.
These tariffs are an effective subsidy for renewable energies, and are vital to attract investment into power plants and research, as Michael Krämer from Taylor Wessing explains in his
article in this month’s edition of
the magazine.

Company chairman Nawab Shaji Al-Mulk could not agree more: “You need feed-in tariffs. It makes sense, because obviously solar is not competitive with coal, but coal is damaging. So the government needs to say ‘Ok, we will pay you more so you come in with clean energy.’”

So is the future bright or bleak for renewables in the Middle East? Mulk is optimistic, and believes that the region would be further down the road of progress had it not been for the recession.

“These things need a huge investment, we are talking about hundreds of billions of dollars, so the governments need to be in a position to
do that.”

This is a good point. After all, it is the countries least affected by the global downturn that are doing the most on the green front.

Saudi Arabia and Abu Dhabi, whose enormous oil-wealth has allowed them to keep their infrastructure projects running even in the darkest days of the crisis, are the ones who are doing the most in pushing the green agenda. It is to be hoped that investment in
alternative energies go hand-in-hand with economic recovery in the region.

In an irony that must border on the surreal to environmentalists, it might in fact be hydrocarbon derived wealth that will do most to advance alternative energy in the Middle East.

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