A Global Perspective on Renewable Energy and Opportunities for the GCC Region

1. A Global Perspective on Renewable
Energy and Opportunities for the GCC
Region
Henning Wuester,
Director, Knowledge, Policy and Finance Centre, IRENA
1st GPCA Responsible Care Conference
12 October 2015
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2. 2
The energy sector is transforming

3. Electricity generation costs are falling

4. Investments in renewables

5. Rapid capacity expansion

6. Benefits of the transition to
renewable energy at the global scale
6
IRENA’s REmap 2030 analysis emphasises that doubling the share of renewable energy in
the global energy mix is achievable and can lead to remarkable socioeconomic benefits

7. Growing demand
The GCC per capita energy consumption is increasing rapidly,
22% in the last decade
Source: EIA, 2014; World Bank, 2014
Power demand has doubled in last decade while the
per capita demand has increased by 30%
Energy and power
Rising Populations
Harsh climate
(Cooling and
Desalination)
Industrialization
(steel, aluminum
& petrochemical)
Energy-intensive
hydrocarbon industry
serving world demand
Young and fast
growing infrastructure
7

8. Fuel mix in the GCC power sector
Source: EIA, 2014; World Bank, 2014
8
37%
1%
2%
55%
64%
63%
100%
100%
99%
98%
45%
36%
GCC
Qatar
Bahrain
UAE
Oman
Saudi Arabia
Kuwait
Fuel Mix (%, 2012)
Oil Gas
By 2020, the GCC electricity consumption is expected to reach 856 TWh
requiring an additional 100 GW capacity
USA 13.5
EU 5.8
Total
(TWh)
Per capita
(MWh/person)
57 15.3
240 8.2
20 6.1
98 10.1
13 8.9
28 14.9
520 9.2

9. Growing Demand
Source: IEA, 2015
Rising Populations
Harsh climate
(Cooling and
Desalination)
Industrialization
(steel, aluminum
& petrochemical)
Energy-intensive
hydrocarbon industry
serving world demand
Young and fast
growing infrastructure
Natural Gas
The consumption of natural gas in the GCC has doubled in the last decade
to reach 8 trillion cubic feet in 2013 and is increasing by around 7%.

10. Rationale for diversification
• Forgone earnings from fossil fuels exports
9% – 28%
of government revenue
Subsidy costs in GCC
countries
• Pressure on government budgets
tCO2 per
Capita
GCC 19
United States 17
European Union 7
China 5
World 4
• Interlinkages between resources
• High per capita carbon footprints
30%
28%
23%
15%
10%
Qatar UAE Bahrain Oman Saudi Arabia
Percentage of Total Fuel Consumed for Desalination
10
• Resource constraints – Gas and Oil

11. 11
Source: Deutsche Bank Research, 2015
Subsidy cuts in the UAE – A model for the GCC?
Current Momentum for Subsidy Reform
– also for GCC?
• Low oil prices make reform easier and
give stronger arguments for GCC
countries.
• Reform underway in: Bahrain, Kuwait,
Oman, UAE
• Subsidies distort investment cost
decisions, putting renewables at a
competitive disadvantage.
• IRENA analysis shows that energy
pricing reform in the MENA region would
have fiscal benefits and level the playing
field for RE deployment.
currentprices

12. RE plans in GCC
Saudi Arabia
Oman
UAE
Kuwait
Bahrain
Qatar
Targets:
2020: 5% of generation
2030: 15% of generation
2030: 3.5GW PV, 1.1GW
CSP, 3.1GW Wind
Plans
2022: 24GW
2032: 54GW. 41GW Solar
(25GW CSP, 16GW PV),
9GW Wind, 3GW W2E, 1GW
Geothermal
2020: 10%
Targets:
2020: (Abu Dhabi)7% of
capacity
2030: (Dubai) 15% of
generation
2020: 2% of generation by
solar (640MW)
2020: 5%
Policy: Bidding, Solar water
heating regulation in Dubai
and plans for FITs in Dubai.
Policy: Plans for auctions /
bidding for the 54GW target
Policy: Bidding initiated for
projects (70MW)
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13. 13
Seeds of enthusiasm for renewables
Saudi Arabia
Oman
UAE
Kuwait
Bahrain
Qatar
Oman
• Solar thermal EOR plant 1 GW Planned
• Solar thermal EOR plant (7MW) Completed
• Dhofar Wind farm 50 MW Planned
• Harweel Wind Farm (50 MW) Planned
United Arab Emirates
• Sir Bani Yas Wind Energy plant 30 MW Planned
• Solar power plant, Utico, RAK 40MW Planned
• Waste to Energy, TAQA 100MW Bids invited
• Masdar City PV park ADFEC 10MW Completed
• Shams 1 CSP plant 100MW Completed
• Dubai solar park 1 - 13 MW Completed
• Dubai solar park 2 - 200 MW Financial Closure
• Dubai solar park 3 - 800 MW Announced
• Waste to energy, Bee'ah 83 MW Announced
• Noor 1 Solar PV plant 100MW Planned
Qatar
• Mesaieed waste to energy 40MW Completed
• Al Duhail Solar PV Park 10 MW Announced
• KAHRAMAA–Solar Power 230 MW Announned
Bahrain
• Waste to Energy Plant 25MW Planned
• BAPCO Bahrain PV Plant 5 MW Commissioned
• Petro Solar-Manama Solar PV Park 5 MW Completed
Kuwait
• MEW/KISR–Shagaya Wind turbine 10MW bidders shortlisted
• MEW/KISR–Shagaya Solar Thermal 50 MW bidders shortlisted
• MEW/KISR-Shagaya PV 10 MW bidders shortlisted
• Al-Abdaliyah ISCC project 60 MW planned
• KOC – Umm Gudair PV 10 MW permitted
Saudi Arabia
• PV Plant Makkah 100 MW Bid Invited
• KAUST rooftop PV panels 2MW Completed
• KAPSARC PV Phase 1 - 3.5 MW Completed
• KAPSARC PV Phase 2 - 1.8 MW Completed
• Princess Nora University solar water heating 17MW
Completed
• ARAMCO, 300 MW capacity off-grid Planned
• Saudi Aramco North Park PV Project 10.5 MW Completed
• SEC – Duba ISCC Power plant phase 1 CSP 50 MW Planned
• Waad Al-Shamal ISCC Project 50 MW Announced
• Al-Aflaj Solar PV Park 50 MW Announced
• KACST Al Khafji PV desal Plant 10 MW Planned

14. Competition
Renewables and hydrocarbons
14
2
4
6
8
10
12
14
16
18
Solar PV Gas ($1-
$8/MMbtu)
LNG ($8-
$16/MMbtu)
Oil ($20/Barrel) Coal Nuclear
LCOE($/kWh)
LCOE OF GENERATION IN THE GCC (UTILITY SCALE)
Sources: Includes information from Channell et al. (2015), MANAAR (2014), Scribbler (2015), (Utilities ME 2015) and others.
REmap UAE states that Solar PV is possibly the cheapest source of new power in the country.
A 25% share of renewables in power generation by 2030 could be even cheaper to achieve than the current targets.

15. 15
• Flexibility for variable renewables -
gas turbines can ramp up quickly.
• In the GCC context, gas is a better
partner than oil given the emission
savings and economics
• Niche applications enhanced oil
recovery
Potential Challenges
• Loss in efficiency of CCGT as load
followers
• Managing upstream gas pipeline
variability
Integrated planning of the mix is key
Renewable and gas
Complementarity at system level
Pilot EOR 7 MW - Oman
© GlassPoint

16. 16
Renewable and gas
Complementarity at plant level
Gas can complement solar thermal plants by:
• Providing a firm capacity asset to utility.
• Increasing the efficiency of solar electricity
generation.
Shams 1 provides an interesting example.
Solar fields can augment fossil based plants by:
• Reducing the carbon footprint of generation.
• Increasing generation capacity; and adding
flexibility.
Examples include Ain Beni Mathar, Morocco
and Hassi R'Mel, Algeria.
Shams 1, UAE
© Abeinsa
© Shams Power Company
Ain Beni Mathar, Morocco

17. 20%
reduction
in water
withdrawal
in 2030
17
Conclusion
Renewables development brings multiple benefits in the GCC
6
22
46
75
2015 2020 2025 2030
ANNUAL FUEL SAVING
(MTOE)
12
45
94
155
2015 2020 2025 2030
ANNUAL EMISSION SAVING
(MTCO2)
4.0
Billion BOE
Cumulative
Fuel
Savings
Target Year
Bahrain 5% 2020
Kuwait 15% 2030
Oman 10% 2020
Qatar 2% 2020
KSA 54GW 2032
Abu Dhabi 7% 2020
Dubai 15% 2030
115-150
Billion
$
Discounted*
Fuel
Savings
6.4
Billion
Monetized and
Discounted*
CO2 Savings
1.2
GT CO2
Cumulative
Emission
Savings
$131,000
Jobs Every Year
(on average)

18. 18
Conclusion
Integrating Renewables brings multiple benefits for industry
Options for the Oil and gas industry:
• Integrating renewables in small applications in remote settings:
Examples include PV or wind powered systems for communications,
data transmission and process control.
• Integrating renewables in oil extraction through Enhanced Oil
Recovery (EOR):
In regions with ample sunshine, solar assisted steam generation
offers a cost effective solution for EOR
Option for industry at large:
• Adopting internal carbon prices:
Number of firms using internal carbon prices has trebled in the last
year to almost 450. A further 580 companies anticipate introducing an
internal carbon price within the next two years.

19. Thank you!