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UAE making 2015 the year of renewable energy

2015-07-05 07:39:41

Some consider 2015 be the year for renewable energy in the UAE.

Drivers of the growing feeling that the country is coming of age regarding renewables are the country’s expansion of clean-energy projects, its funding of renewable projects abroad and the fact that the Emirates have the lowest solar-energy prices in the world are driving that

The sector has really developed in the first half of this year, according to Claudio Palmieri, the chief executive of CLS Energy Consultants in Dubai.

“[But] if you compare what the GCC is doing compared to others like Europe, the United States and Asia, it’s lacking,” he said.

In the UAE however, the country’s renewable energy sector was “taking off” this year.

In January, a consortium led by Acwa Power from Saudi Arabia won the contract to develop, build, own and operate a solar photovoltaic power project with a net capacity of 200 megawatts at the Mohammed bin Rashid Al Maktoum Solar Park in Dubai.

The consortium won the contract with a bid that offered a record low price of 5.84 US cents per kilowatt hour. That values solar energy at the same price as natural gas, which is used to fuel 98 per cent of the UAE’s power plants.

“The UAE among all the oil-producing countries has become the first mover,” said Adnan Amin, the director general of the International Renewable Energy Agency (Irena) based in Abu Dhabi.

He noted that many people had asked if the UAE’s plans were sustainable. “Every sign we see for the UAE, clean energy remains a major priority and there is a deep-seated commitment to making this happen,” he said, pointing to the national framework to help commercialise the sector.

The Shams Dubai initiative from Dubai Electricity and Water Authority (Dewa), is another project where the country is showing its credentials as a source of renewable energy. Dewa has issued a set of regulations for private owners and businesses to install solar energy using a net metering system. This means customers receive a market-value credit for any excess power they produce.

While projects are under way on the domestic front, financing from the UAE is heading to other countries to boost renewable energy overseas. 

Yves Baratte, partner for Paris-based Simmons & Simmons, said that since the beginning of the year, there has been more activity in the sector. “Obviously it’s one thing to have plenty of projects available across Africa but it’s another to have financiers and, in particular, project finance,” he said.

In January the Abu Dhabi Fund for Development (ADFD), together with Irena, awarded US$57 million in loans for renewable energy projects in five developing countries – Argentina, Cuba, Iran, Mauritania and St Vincent and the Grenadines.

The funding will involve soft loans provided for green projects totalling 35MW – enough to supply power to more than 280,000 people in rural communities.

So what can we look forward to for the remainder of the year?

Most notable, Mr Palmieri said, will be the 20MW of solar PV getting under way by Bee’ah, a Sharjah waste management company, as well as the Dewa 800MW tender expected by the end of this year.

Words spoken about the region at the beginning of the year are still echoing. “The renewable energy theme is coming up at lightning speed all around the world, and in the GCC it’s becoming a theme that is moving strongly to the forefront.” said Ulrich Spiesshofer, the chief executive of leading power and automation technology group ABB.