IRENA GPCA presentation 2015 1012
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Renewable energy is becoming more competitive globally and offers opportunities for the GCC region. Summarizing the key points: 1) Electricity generation costs from renewables like solar and wind are falling rapidly and investments in renewables have increased significantly in recent years. 2) The GCC region is experiencing rising energy demand from population growth, industrialization, and a harsh climate requiring cooling. This growing demand and the region's high carbon footprint provides a rationale for energy diversification including renewables. 3) Many GCC countries have announced targets and plans to increase renewable energy, such as Saudi Arabia's target of 54GW by 2032 including 41GW from solar. Renewables can provide fuel savings, emission reductions, and economic benefits
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IRENA GPCA presentation 2015 1012
- 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 1
- 2. 2 The energy sector is transforming
- 3. Electricity generation costs are falling
- 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) 12
- 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!