In November 2015, Sheikh Mohammed launched Dubai Clean Energy Strategy, under which, the Emirate will produce seven percent of its energy from clean sources by 2020. It will increase this target to 25 percent by 2030, and 75 percent by 2050.
The UAE as a whole will increase its green energy production to 44 percent in 2050, up from just one percent in 2017, Zoheir Hamedi, International Renewable Energy Agency (IRENA)’s regional program officer told Wamda. The country is investing over $163 billion to boost national green energy projects.
“By 2020 we will achieve more than our target. Our target is seven percent but I think we will achieve eight to nine percent,” said HE Saeed Mohammed Al Tayer, managing director and CEO of Dubai Electricity and Water Authority.
With the numerous green-led projects Dubai is initiating, the Emirate is steadily migrating away from its reliance on gas to produce electricity.
Using hydrogen fuel
During the sixth edition of the World Government Summit, HE Reem Al Hashimy, UAE Minister of State for International Cooperation and Director General, Dubai Expo 2020 Bureau, HE Saeed Mohammed Al Tayer, and Joe Kaeser, president and CEO of Siemens, signed an MoU to kick-off a pilot project for the region’s first solar-driven hydrogen electrolysis facility at DEWA’s outdoor testing facilities at the Mohammed bin Rashid Al Maktoum Solar Park in Dubai.
The facility aims at testing and showcasing an integrated MW-scale plant to produce hydrogen using renewable energy from solar photovoltaic at the Mohammed bin Rashid Al Maktoum Solar Park, store the gas, and then deploy for either re-electrification, transportation or other industrial uses, as was mentioned in the press release.
Dietmar Siersdorfer, CEO of Siemens Middle East and UAE explained to Wamda what does it mean and how does it work.
“The facility will use a Siemens Silyzer electrolysis system, which uses proton-exchange membrane technology to convert energy from renewables into ‘green’ hydrogen and oxygen. There’s no waste or CO2 emissions. The clean-burning hydrogen can then be stored for use in fuel-cell cars, as an industrial gas or even to fuel a power plant,” he said.
He further explained: “Large-scale adoption of renewable energy generation has, to some extent, been hampered by a lack of appropriate storage solutions, and this technology allows us to store renewable energy in the form of hydrogen, for use at a later time.” This would help to mitigate the inconsistency of renewable power generation - when the wind stops blowing or the sun goes down, the electricity stops. “Using hydrogen to store energy has the potential to drive a hydrogen economy in the UAE and Middle East, and also to boost the adoption of renewable energy across the region,” he added.
“This project will not only result in the development of the region’s first solar-driven hydrogen electrolysis facility, but is an example of what can be achieved through collaboration between Expo 2020 Dubai and our partners, truly embodying the Expo theme of ‘Connecting Minds, Creating the Future’,” said HE Al Hashimy.
According to Siemens’ Siersdorfer, the management and storage of renewable energy is crucial if we are to diversify the region’s energy mix and cater for increasing demand. Power demand is growing by more than three percent a year, he said, adding that the region will need around 277 gigawatts (GW) of additional capacity by 2035. “Much of this will be catered for by increasingly efficient natural gas-fired power generation, but we also expect the share of renewables to triple in that time. In order to enable this share of renewables and maintain a strong, stable grid, it’s essential that we investigate options for energy storage. Hydrogen could well play a significant role here.”
Money paid, money gained
Globally, the fall in electricity costs from utility-scale solar photovoltaic (PV) projects since 2010 has been remarkable. The global weighted average levelized cost of electricity (LCOE) of utility scale solar PV has fallen 73 percent since 2010, to $ 0.10 kilowatt hour (kW/h) for new projects commissioned in 2017, as mentioned in the ‘Renewable Power Generation Costs in 2017’ report published by IRENA.
With the bold cash Dubai, and the UAE as a whole, is investing into renewable energy and the multiple projects it is leading, is helping cutting down the cost of (kW/h) of electricity produced through green energy.
Lately, DEWA awarded the 700 MW AED14.2 billion ($3.8 billion) fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park. This is the largest single-site Concentrated Solar Power (CSP) project in the world, based on the Independent Power Producer (IPP) model. The contract is awarded to a consortium comprising Saudi Arabia’s ACWA Power and China’s Shanghai Electric.
The consortium bid an LCOE of $0.73 per kW/h. The project will have the world’s tallest solar tower, measuring 260 metres. The power purchase agreement and the financial close are due to be finished shortly. The project will be commissioned in stages, starting from Q4 of 2020.
According to IRENA, by 2019, the best onshore wind and solar PV projects will be delivering electricity for an LCOE equivalent of $ 0.03/kWh, or less with CSP. The agency states that ‘already today, and increasingly in the future, many renewable power generation projects can undercut fossil fuel-fired electricity generation, without financial support. With the right regulatory and institutional frameworks in place, their competitiveness should only further improve.’
Hamedi said that through this new formula, governments are more aware, and have actually a proof that investing in renewable will be a tool to economic diversification. “Various opportunities will rise with the implementation of bold renewable energy projects. Governments will be able to seize business in manufacturing, production, and others. It will allow them to save resources and even export them.”
To sum it up, renewable energy and ‘green’ schemes moved from being a CSR-driven initiative into true business-worthy and strategic projects helping governments to diversify their economies away from classic sectors. Dubai is taking the lead in the region, but other countries, such as Morocco, KSA, Egypt, Jordan, and Lebanon, are also making steady steps on that route. Will the region’s solar belt replace its oil reserves as a more sustainable resource?