The recent United Nations report on climate change has added to the already building momentum on the urgent need to be environmentally mindful. Clearly the idea that we all need to be environmentally conscious is very far from new. However, it often seems like everything has an environmental impact and it can be a little overwhelming to think of where to begin. In analysing climate change and implications, I had a similar issue – the issues are way too many. So this month, I decided to focus on one that I feel has the maximum potential in the GCC region i.e. renewable energy or more specifically solar energy.
By definition renewable energy is any energy that is indefinitely available with limited risks of running out. This usually encompasses energy in naturally occurring elements and therefore refers to energy generated using wind, biomass, water and the sun.
As per Department of energy (USA), the amount of sunlight that strikes the earth's surface in an hour and a half is enough to handle the entire world's energy consumption for a full year. Geographically, solar energy is the easiest step for the GCC region. This is evident with the significant strides that have been made recently. Dubai is expected to see the completion of Mohammed bin Rashid Al Maktoum Solar Park worth 4.3 billion dollars. Abu Dhabi National Energy Company (TAQA) is slated to construct the Al Dhafra Solar Photovoltaic (PV) Independent Power Producer (IPP) project which, once operational, will generate enough electricity for 16,000 homes in the UAE though its four million solar panels.
The question which then comes to mind is what is Photovoltaic and how is solar energy actually used. Photovoltaic (PV) is one of two primary methods to harness solar energy. Solar panels are made up of numerous PV cells which absorb natural solar energy and store it and transmit it as programmed. For larger energy needs, Concentrated Solar Power Systems (CPS) that use mirrors to concentrate natural solar energy are used to transmit energy to driver turbines or engines that create electricity.
Even though it’s an obvious choice, solar energy utilisation is a complex and expensive system and that too in a cost competitive environment. The soft cost of generating solar energy can be quite high. In a mature market like the United States, hardware comprises only about 34% of the costs while the soft costs can account for up to 66% of the total costs. These soft costs comprise labour, clearances, supply chain costs, sales and marketing and other overheads. Once the electricity is generated, it is then sold to power grids based on long term agreements known as power purchase agreements. Once a deal is signed, its locked in for around 25 years.
Bahrain has also been taking a number of steps towards increasing solar energy usage. Solar One is the country’s first solar panel manufacturing facility that has a capacity of 60,000 panels per year. For generation, private solar generation plants are gaining popularity for specific projects. Recently, the Formula 1 track of Bahrain has tendered a 3MW PV solar project for which 5 firms have submitted bids. Bahrain Mall is slated to have a 6MW power plant to be designed and maintained by Dubai based Yellow Door Energy and has the potential to reduce carbon emissions by 6,300 tonnes annually.
Solar energy is a small drop in the ocean of things we can do to save our planet – but for the drive to come from industry, there needs to be incentive. Survival incentive or economic incentive. Its appears like firms and individuals are learning to evaluate the intangible and tangible costs alike. It’s a step in a direction we inevitably all have to take.