Complementary, not competitive — this ethos must be etched into the global energy playbook. Sleeves must be pulled up to ensure that the BP Outlook’s forecast of a 49 per cent increase in energy consumption in the Middle East by 2035 is met — without incurring avoidable bills, major price fluctuations and public discontent.
The same mentality applies worldwide, as the US’ Energy Information Administration (EIA) expects global energy consumption to rise by 28 per cent by 2040.
Fossil fuels and renewables are two sides of the same coin. Energy security in the Middle East and beyond relies on both renewables and more conventional fossil fuels flourishing. Traditional energy sources — including fossil fuels and nuclear power — still account for 77 per cent of total electricity generation, according to the International Energy Agency (IEA).
Even aggressive scenarios do not envision the global generation share of traditional sources falling below two-thirds by 2030. IHS Markit estimates that through to 2040, the largest number of new megawatts (MW) in the Middle East will be fuelled by gas at approximately 9 gigawatts per year (GW/yr), with solar at 4-5 GW/yr.
However, the future is undoubtedly a diversified one. The transition to this new era is well underway, with solar and wind especially becoming an integral part of the global energy puzzle, in part due to the political momentum behind the Paris Agreement, the world’s most comprehensive climate-related deal signed in 2015. More than half of new power plant orders in 2016 were for renewable energy technologies and 750,000 electric vehicles were sold in the world in 2016.
Closer to home, the UAE’s Energy Plan 2050 lays out an energy future that has many faces: 38 per cent gas; 44 per cent clean energy; 6 per cent nuclear; and 12 per cent clean coal. But the low-carbon transformation will not happen overnight; the size, complexity, regulatory and technological topology, as well as inertia behind existing businesses, means it will take time.
A notable hurdle is the lack of storage solutions for renewable energy at a time of rising power demand. The World Energy Council estimates that the Gulf states will require 100 gigawatts (GW) of additional power over 10 years, marking an investment of more than $50 billion (Dh183.65 billion) in new power generating capacity. Worldwide, about 1.2 billion people don’t have power.
Traditional power producers’ vital efforts to meet global energy demand is being extended to complementary efforts to provide base load supply when weather renders renewable technologies dormant. For example, GE HA gas turbine technology, now available at more than 64 per cent efficiency in combined cycle power plants offers a flexible complement to intermittent renewable sources, capable of ramping up or down at 65MW/minute while still meeting emissions requirements to help balance grid instability.
Such merging of expertise represents just one step in a long and progressive road.
Conventional energy players — many simultaneously expanding their slice of the “green” economic pie — can also engage with renewable energy producers to help identify efficiencies in their new value chains. Knowledge sharing and joint research and development (R&D) among fossil fuel and renewable energy producers will only accelerate progress and quieten the devil’s advocates who deem the two worlds as being incompatible.
Unity equates to speed. Energy producers must collaborate to cultivate new technologies and revitalise traditional ones to carve out a diversified and innovative 21st century global energy system. The world is ever-changing — so must our thinking.
— The writer is President & CEO Gas Power Systems — Sales, GE Power, Middle East & North Africa.