Renewables are most cost-competitive energy tech for UAE, report finds

Renewables could contribute 10 per cent of the UAE’s energy mix by 2030, saving $1.9bn per year, new analysis has found.

A report representing the UAE‘s first public comparison of the costs and potentials of various energy technologies, titled Renewable Energy Prospects: United Arab Emirates, was released this week by the UAE’s Ministry of Foreign Affairs, the International Renewable Energy Agency (IRENA) and the Masdar Institute. It found renewables to be the Emirates’ most cost-competitive energy technology.

Dubai’s 13 MW Mohammed bin Rashid Solar Park, phase one

According to the report, the key drivers for renewables’ financial attractiveness in the UAE are sharp cost declines in the sector combined with rising costs for natural gas. As the nation produces less gas domestically and begins to import more, prices have risen to $6-8/MMBtu for domestic gas and $10-18/MMBtu for imported gas, while costs for solar photovoltaics (PV) have fallen by 80 per cent since 2008. The report found that power from solar, wind and waste-to-energy plants can be “immediately competitive” in the UAE when the price of gas is above $8/MMBtu.

The report notes that gas will still be required to fill the intermittency gaps in solar and wind power generation. However, it said the savings that can be achieved by generating solar power during daylight hours rather than consuming gas could justify the UAE’s installing 17.5 GW of PV by 2030. The current installed capacity is around 40 MW.

“This report is an eye-opener,” said Dr Fred Moavenzadeh, Masdar’s president. “It provides policymakers and investors with an objective cost baseline, making the clear case that renewables, and especially solar, will have a much larger role sooner than we ever expected in the UAE and Middle East.”

“The UAE’s strategy of innovation and diversification has placed it at the fulcrum of the massive transformation of the global energy landscape that has already begun,” said IRENA Director-General Adnan Z Amin. “The dramatic technology cost declines we are mapping present a real possibility to move to a sustainable energy future even in the hydrocarbon producers in the MENA region.”

The UAE currently aims to get 7 per cent of its power from renewables by 2020, while in January Dubai announced a new renewable energy target of 15 per cent by 2030.

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