2. Objective Statement:
The predominant objective of this document is to come up with an opportunity rational for Bahraini investors to put their money into surging Renewable Energy projects, essentially Solar Power projects.
Say hello to the Sunshine:
iWith an increasing Electricity Consumption per capita and snowballing dependence on a finite source of energy, the world had to think about an alternative source of energy which should carry more of the infinite features along with lowering the energy cost as % of total budget for the consumers. As per the published sources, the energy bills sit on 3-11% of the monthly income and a steady increase has been witnessed in the recent periods, making the case more severe.
The solution to the above depicted dilemma is “Renewable Energy” which is other words can be labelled as Green Energy.
Figure 1 illustrates the projected cost comparison of solar power and conventional natural gas & fuel driven energy over a few years down the line. It is quite flagrant to be induced that solar power cost per KWh is expected to go down all the way from 25 cents to even below 10 cents. The story does not end here; Solar Power cost is expected to touch the rock bottom level once the silicon shortage is remedied through alternative materials.
Figure 1: Global Cost Projections for Solar and Conventional Power
3. RE Activities in GCC and rest of the Globe:
Global RE Happenings and Predominance of Solar:
iiFigure 2 illustrates the surge in installed capacities of Renewable Energy sources during 2012. The Concentrated Solar Thermal Power (CSP) topped the list with an up move of 61%. It’s quite interesting to note that the Globe has moved from the stand alone Solar PV to CSP in 2012 as the dwindling Photovoltaic % portrays. Total New Investment (Billion USD) 2008 2009 2010 2011 2012 Solar power 59.3 62.3 99.9 158.1 140.4
Wind power
69.9
73.7
96.2
89.3
80.3 Biomass and waste-to-energy 14.1 13.2 13.7 12.9 8.6
Hydro <50 MW
7.1
5.3
4.5
6.5
7.8 Biofuels 19.3 10.6 9.2 8.3 5.0
Geothermal power
1.8
2.7
3.5
3.7
2.1 Ocean energy 0.2 0.3 0.2 0.3 0.3 Total New Investment 171.7 168.2 227.2 279.0 244.4
Table 1: Global Trends in Renewable Energy Investment
Figure 2: Average annual growth rates of Renewable Energy Capacity
4. Table 1 illustrates the overall growth in Renewable Energy investment in last five years along with a breakdown of different sources of energy. Total investment has registered a CAGR of 7.3% during the last five years. Investment in Solar power amounted to 34.5% of total money in 2008 and it has mounted up to 57.4% in 2012. This could be the reason for aforementioned 61% gush in installed capacities for solar power.
As the above pasted figure and table supports the assertion that globally, people are whirling their attention from conventional sources of energy generation to Renewable and predominantly solar sources of energy generation, making the investment in Solar projects worth analyzing.
MENA Renewable Status:
iiiThe MENA region is among the limited regions in the world where renewable energy investments seems less prone to global financial crisis. As per Figure 3, investment in Renewables in MENA region registered a YOY escalation of 40% to USD 2.9 billion in 2012. This can be cited as 6.5 fold increase when compared with the total investment in 2004. The hasty surge in Renewable energy investment in MENA region is driven by the entry of large energy players into the sector. These large players either financed the solar projects or directly undertook the ventures.
Figure 3: New Investment Comparative Analysis
2009
2010
2011
2012
Global
168.20
227.20
279.00
244.40
MENA
0.47
1.45
2.06
2.87
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
0.00
50.00
100.00
150.00
200.00
250.00
300.00
MENA
Investment in USD Billion
Global
New Investment in Renewable Energy
5. The noteworthy progress in the last couple of years was the 160 MW Concentrated Solar Power project in Morocco which was owned by Saudi project developers and received financing from the World Bank. Another bustle could be the three Solar PV projects grandfathered under the name of Saudi Aramco. This led to an augmented growth rate of electricity produced by the renewables, especially the Solar PV (see figure 4).
Solar Power and Bahrain:
ivBahrain and whatever remains of the GCC states are subjected to extremely high sun powered radiation levels throughout summer months arriving at up to 7,200 Whr/m2 with a yearly mean radiation of 5200 Whr/m2 which legitimizes the utilization of this vigor for small/medium measure force era (see figure 5). In spite of the accessibility of such gigantic vigor, which is clean and renewable, requisitions are still exceptionally constrained in this district. There are just a couple of aspiring projects for examination and improvement meant to grow the utilization of these energies.
In June 2013, the Minister of State for Electricity and Water Affairs announced that the Govt. of Bahrain will look into the alternative sources of energy generation and thus will incorporate a three megawatt solar plant along with a two MW wind plant. This point was further raised in “Optimal Energy Usage” agreement with the World Bank.
Figure 4: Average Annual Growth Rate
27%
112%
25%
9%
33%
6%
0%
20%
40%
60%
80%
100%
120%
Wind
Solar PV
Biomass
Hydro
Total RES (Ex. Hydro)
Fossil Fuels
Annual Average Growth Rate of Electricity Production by Source in the MENA Region, 2008–2011
6. Critical Success Factors – A teaser
v
Technological CSFs
•FeasibleTechnologicalDesign
•Enabling Technology
•Fit with Infrastrucuture
•Modular Design
Commercial CSFs
•Compelling value proposition
•Economies of scale
•Market access
•Appropriation rights
Socio-Political CSFs
•Insecure energy supply
•Enabling government channels
•De-regulated energy markets
•Utility buy-in
Organizational CSFs
•Strongly endorsed, proactive strategy
•Up-front homework
•Persistent approach
•Development and launch processes
0
2
4
6
8
10
12
2000
3000
4000
5000
6000
7000
8000
Daily Global Radiation and sunshine hours
Solar Radiation
Daily Average Sunshine Hours
W hr/m2
hrs
Figure 5: Radiation and Sunshine Hours
Figure 6: CSFs
7. Leading Players in Global Solar Market:
vi
i Figure 1: http://www.meed.com/Journals/2013/04/21/v/s/c/Sample-Content.pdf
Projected Per Unit Cost: http://peswiki.com/index.php/Directory:Cents_Per_Kilowatt-Hour
ii Figure 2: http://www.ren21.net/Portals/0/documents/Resources/GSR/2013/GSR2013_lowres.pdf
Table 1: http://www.ren21.net/Portals/0/documents/Resources/GSR/2013/GSR2013_lowres.pdf
iii Figure 3: http://www.ren21.net/Portals/0/documents/activities/Regional%20Reports/MENA_2013_lowres.pdf
8. Figure 4: http://www.ren21.net/Portals/0/documents/activities/Regional%20Reports/MENA_2013_lowres.pdf
http://www.bna.bh/portal/en/news/580912
http://robsobhani.com/2012/06/06/the-future-of-solar-energy-is-now/
http://www.oxfordbusinessgroup.com/economic_updates/bahrain%E2%80%99s-renewable-energy- plans
iv Figure 5: http://www.jccp.or.jp/english/wp-content/uploads/14assessment-of-solar-and-wind-energy-potential- in.pdf
v Figure 6: http://www.thecis.ca/cms3/userfiles/Image/John%20Van%20Hams%20prsentation%20March%2011%202003.pdf
vi Market Players: http://www.ren21.net/Portals/0/documents/Resources/GSR/2013/GSR2013_lowres.pdf
