Middle East needs better planning for future of energy beyond oil

Speaking at a Transforming Energy debate on Sunday at the World Economic Forum in Jordan, Iraq’s oil minister, Jabbar al-Luaibi, said that despite optimistic predictions, he did not think that renewable energy “will substitute for oil & gas” for decades, and that the Middle East will play an increasingly important part in providing it.

Dead Sea // Governments in the region need to develop strategic energy policies and tackle rampant consumption by curbing subsidies, according to a panel of experts at the World Economic Forum (WEF) on the Middle East and North Africa.

Speaking at a Transforming Energy debate on Sunday, Iraq’s oil minister, Jabbar Al Luaibi, said that despite optimistic predictions, he did not think that renewable energy “will substitute for oil & gas” for decades, and that the Middle East will play an increasingly important part in providing hydrocarbons.

“But the most important thing is management and the planning for all of this energy. Planning is not easy.

“As far as Iraq, my country, is concerned, we rely about 97 per cent of our revenue on oil and gas - mostly oil. We spend lots and lots of energy share on electricity generation. I fear this is not being well looked after and not well managed. It is only feeding the electrical power station with hydrocarbons.”

He argued that too many countries adopt a short-termist attitude to oil, and are only sparked into action when revenues are threatened. He said that in Iraq, more concerted action is needed to ensure that its oil reserves are not dwindled on purely feeding electricity requirements.

“As the minister, I am doing my best,” he said. “Myself, I am shouting. But this is not enough. It’s a chaotic situation. The country is different.

“They look at the minister and say, ‘Just get the oil production higher.’”

Majid Jafar, the chief executive of the Sharjah-based Crescent Petroleum, said “the only form of clean energy is using less”. He pointed to reports highlighting the rapid growth in energy consumption in Saudi Arabia which have suggested that if consumption continues at current rates the country may not have enough oil to export within decades.

“No matter all of the efficiency building standards or education you have, if you don’t act on the subsidies or the pricing, you won’t really tackle that consumption problem. We’re getting high on our own supply to the point that it’s affecting our regional competitiveness.”

Dietmar Siersdorfer, the chief executive of Siemens Middle East, said the problem could be tackled in part by improving the efficiency of the region’s energy grids.

“When you look to the UAE, where I live, you have a very highly reliable energy system. Going into a country like Egypt, they had in the past a very unreliable system. We had 30 per cent to 40 per cent efficiency in these energy systems and that needed to be upgraded.

“Integration of systems and efficient use of gas resources is the key for this region.”

Sami Khoreibi, the founder of the Abu Dhabi-based solar systems integrator Enviromena, argued that solar power will play a much more prominent role in the region’s energy mix, especially as battery storage capacity increases, allowing for solar-generated power to be used around the clock.

“From 2011-15, China’s capacity of solar modules went up six times, which was a huge contributor to the decline in the cost of solar energy. That same kind of increase, a six-times increase in capacity, is occurring in lithium-ion batteries today.”

Mr Jafar downplayed the importance of solar, stating that “despite the tens of billions that have been invested”, renewable sources only generate 2 per cent of energy, compared with more than 80 per cent from fossil fuels.

However, he agreed it could help to supply parts of the region that do not currently have access to power.

Sarah Mousa, the founder of the Cairo-based Shamsina initiative, said that the programme operates from an unplanned district in the city teaching people from marginalised communities how to build solar-powered water heaters.

“It’s becoming more and more clear that traditional energy sources are not sustainable in the long term. That we need to explore alternative solutions, and I think we’re starting to do that,” she said. “There are grassroots success stories and the renewable energy landscape is more decentralised and more community-based than the traditional approach to energy.”

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