The launch of Dubai’s solar power rooftop programme last month is the latest step the emirate is taking to build a domestic market for solar-based technology.
Branding itself as a front-runner in sectors as diverse as trade and logistics, luxury tourism, financial services and entertainment, “green” technology now clearly forms part of the emirate’s economic strategy.
Dubai's rooftop solar scheme isn't the UAE's only programme aiming to test solutions to the country's long-term energy needs. In early 2013, Abu Dhabi launched Shams 1, at the time the world's largest concentrated solar power (CSP) plant. The project has been developed by a subsidiary of Masdar, which aims to invest in renewable and clean energy solutions both in Abu Dhabi and around the world. Another project, Masdar City, is designed to show the feasibility of carbon-neutral cityscape development.
The signalling power of projects such as Shams 1 and Masdar City is augmented by the launch of renewable technology incentive schemes such as Dubai’s solar rooftop programme. This places the UAE well ahead of many of its neighbours in the region.
Renewable energy has only recently attracted systematic interest in the Middle East, which traditionally has an energy mix based heavily on fossil fuels. In the Gulf Cooperation Council (GCC) states in particular, oil and more recently natural gas have formed the backbone of economic development and financial wealth, as well as regional energy supply.
The perception of fossil fuels as an eternally abundant and low-cost fuel for domestic power generation has meant oil and natural gas supply virtually all of the UAE’s and the GCC region’s energy needs.
The change in thinking about renewables as part of a future energy vision in the UAE and the region has come as a result of two primary factors. One is the fall in cost of many renewables-based energy technologies during the 2000s, particularly in the case of solar photovoltaics. The other is the surge in demand throughout the region.
Energy demand in the UAE today is more than 60 times the rate back in the early 1970s, and the UAE’s per capita consumption is now among the highest in the world.
Much of this can be attributed to the UAE’s rapid economic growth and development in the past four decades, along with fast-rising population and very high living standards. The UAE’s low-cost price environment for energy also plays an important role, because it reduces incentives for energy-saving consumption behaviour and investment in greater energy-efficiency by the market.
It is against this background that the UAE, along with many of its Gulf neighbours, is looking into future energy supply options while developing policies aimed at curbing growth in energy demand.
The UAE is about to become the first GCC country to have civilian nuclear power, part of its long-term strategy to diversify away from hydrocarbons and towards cleaner energy solutions. Renewable energy forms another potentially important part of the equation, and the UAE’s dependable year-round sunshine is one very good reason to consider solar.
Like other renewables, solar power is still not yet fully cost-competitive with conventional energy sources, particularly in the case of CSP. But like with other future markets, proving the technology and gradual cost savings made through the learning curve of early deployment are important in driving the viability of solar power. This is not only in the UAE, but also in other, less sun-abundant markets such as Germany, the UK and North America.
Developing domestic markets for alternative energy is also an important long-term investment for the UAE for other reasons. By relying on hydrocarbon energy sources for virtually all of its domestic energy needs, the UAE consumes increasing amounts of oil and gas. But every barrel consumed domestically is a barrel not exported, thus costing the UAE in real terms through foregone export revenues.
The cost of the UAE’s continued reliance on oil and gas for its domestic energy mix is high in the long-term, and taken in conjunction with the likely recovery of oil prices, it could well exceed the initial cost of deploying renewable technologies such as utility-scale photovoltaic solar power in particular.
This is in addition to the additional potential benefits of renewable energy for the region as a whole, including a deceleration of the GCC’s rapidly rising carbon footprint, and the creation of incentives for growth of the green economy.
Streamlining policy inside the UAE will be the next logical step to turn emirate-level initiatives such as Dubai’s solar power rooftop programme into broader UAE policy. This would augment the parallel efforts being made in the regulation of energy efficiency and management of energy demand. Together these can establish the UAE as a genuine front-runner – not only in renewable energy but also in the efficient and sustainable use of its precious natural resources.
Laura El-Katiri is an Abu Dhabi-based consultant and a research fellow at the Oxford Institute for Energy Studies