A recent study carried out by US consulting company IHS forecasts a need for USD 350 billion in new investment by 2030 in order to meet GCC power demand. For now GCC countries have total installed capacity of about 90 GW, with a common grid apart from Saudi Arabia, who together with UAE consumes around 75 percent of the total power produced in GCC.
According to Doha-based Gulf Organization for Industrial Consulting (GOIC), GCC states are projected to invest more than USD 300 billion in some 20 energy projects by 2020. In a region where sun always shines (direct radiation exceeding six kWh per square meter per day), solar plants are still rare, but the public climate is changing towards renewable energy: new solar facilities are sprouting around the region that is emerging as one of the world’s major green energy producers. IHS predicts that around USD 50 billion of the new investment will be required in GCC to develop around 17 GW of mainly solar renewable generation, while some data shows that the GCC countries have backed up some USD 155bn worth of solar power installation projects. Currently, solar contributes just 0.271 GW of the 16 GW of installed renewable energy capacity in the Middle East, with hydroelectric power plants providing almost all of the rest. Middle East Solar Industry Association (Mesia) reported that MENA region could see more than USD 50bn worth of investments in solar power over the next two decades.
On the forefront in investing in renewable energy are Saudi Arabia and UAE: the Kingdom is set to install 54 GW sourced from renewable energy by 2032, of which 41 GW of solar generation capacity, an investment estimated to be worth around USD 109bn. For UAE, experts predict that the Emirates could by 2030 deploy solar power generation capacity of more than 20 GW, with Abu Dhabi planning to produce 7 percent of its electricity from renewable sources by 2020, and Dubai five percent from solar by 2030. UAE already invested into projects, such as USD 600 million worth Shams 1 concentrated solar plant 1 (the world’s largest CSP plant) and Masdar City in Abu Dhabi, while Dubai recently released a tender for the 100 MW-Phase II of the USD 3.2bn facility Mohammad Bin Rashid Al Maktoum Solar Park, one of the biggest renewable energy projects in the region, which will produce the 1,000 MW upon completion in 2030.
Qatar, where upcoming rail system is announced to integrate solar technology into its network, plans to produce 200 MW of solar energy by 2020 or two percent of the total power generation, which would provide enough energy to power up to 66,000 homes a year. Country’s solar energy potential equals 1.5 million barrels of crude oil annually, and the aim is to install 1.8 GW of solar capacity by 2020, while the government is planning to generate 20 percent of energy from renewable sources by 2030. In June, Qatar Foundation, which produces 3.3 MW or 85 percent of Qatar’s total solar photovoltaic (PV) power, has announced plans to increase its output by some 150 percent over the next few years. Meanwhile, Qatar Solar Energy (QSE) has opened one of the largest solar panel factories in MENA region.
But the renewables are not the only source that GCC countries are considering in order to secure enough power: Saudi Arabia plans to build 16 nuclear power plants worth USD 100bn by 2032 plants. These will generate about 20 percent (17.6GW) of power of Saudi Arabia’s electricity whose high consumption is threating to bite into oil and gas exports. Construction of first reactor is expected to begin in 2017 and is planned to be completed by 2022. UAE, whose electricity demand is expected to rise nine percent a year, is planning to generate 25 percent of its electricity through USD 20bn worth four nuclear facilities by 2020. Region’s first nuclear plant, Barakah Unit 1 in Western Region of the Abu Dhabi Emirate is expected to start operating in 2017, and construction of Barakah Unit 2, scheduled for operations in 2018, is under way, while Unit 3 and 4 are planned to be finished in 2019 and 2020. All four 1,400 MW units will produce 5.6GW of electricity, saving up to 12 million tones of greenhouse gas emissions a year. Other GCC member states also entertained their own plans for nuclear power program: according to World Nuclear Association report, in 2010 Qatar raised the possibility of a regional project for nuclear generation, and signed a nuclear cooperation agreement with Russia’s Rosatom. In the same year Kuwait, whose government also aims to generate five percent of its electricity from renewable sources by 2020, and 10 percent by 2030, announced an intention to build four 1000 MW nuclear power reactors by 2022, but in mid 2011 said it would not proceed with the plan.
Solar half the price, but not without hazard
Advocates of nuclear and renewable energy have been fighting fierce arguments war for decades, but both technologies appear to be largely welcomed in the GCC. The 2012 poll conducted in UAE found that 89 percent of residents felt that peaceful nuclear energy is “extremely important, very important or important” for the UAE, and 55 percent viewed it as a main source of power generation, second to oil. Nuclear, although the fuel the drives it is deadly, is a clean method of generating power releasing next to zero emissions. Solar arrays are a safer method of delivering power with zero emissions, but don’t deliver the power capacity required by society: if a 500 MW nuclear reactor is taken off the grid, over 100,000 solar home installations and 750 wind turbines would need to be installed in order to generate enough power to fill the void. Although there is no hazardous byproduct in solar plants, their creation comes at a price: according to studies, a 1,000 MW solar electric plant would generate 6,850 tones of hazardous waste from metals processing alone, over a 30-year lifetime.
Thanks to advancing technology, solar power costs have fallen dramatically: 10MW solar power plant build in 2008 cost USD 50 million, while today an identical plant can be built for USD 15 million. The study by Swiss consultant Prognos AG shows that newly built wind and solar facilities with natural-gas as a backup, can make power a fifth cheaper than nuclear backed by gas. Excluding the backup generation, renewables produce power 50 percent cheaper than nuclear, according to the study. Calculation from 2010 by NC WARN, a member-based nonprofit nuclear and climate change watchdog group, showed that the cost of solar energy dropped to roughly 15.9 USD¢ per kWh, while nuclear power costs rose to nearly 20 USD¢ per kWh at the plant site, before any transmission charges.
Germany is often called “solar miracle” state: the country hopes to generate at least 35 percent of its electricity from green sources by 2020; by 2050, the share is expected to surpass 80 percent. But Germany’s renewable energy depends heavily on subsidies, and the country is forced to import electricity from nuclear-powered France, while consumers are complaining that prices have risen. This year alone, the renewables, which make up about 25 percent Germany’s power, will be backed up with USD 33bn of taxpayers money. Moreover, recent analysis show that over 11-year period Germany has added just 1 MWh/person/yr by wind and solar, while Sweden, France, and Belgium added 5-7 MWh/person/yr building nuclear plants.