Some countries in the world, especially Germany and the United States, have made considerable efforts to invest in developing solar energy cells. Solar power — referred to as future energy — is one of the most important sources of clean and renewable energy. The US and German governments offered huge financial support to companies operating in scientific research and production of solar cells.
On a parallel level, China has quietly worked on developing solar cells and made tremendous progress in developing them over the last few years to reach the forefront. But there is a huge gap in production cost which is much lower than European and American production.
This has created a real problem for German and US companies which are facing difficulties in marketing their production of solar energy materials in the global market — which poses a threat to these companies and the possibility of bankruptcy. Adverse procedures by both countries to encounter the fierce Chinese competition have greatly varied.
Germany has almost stopped the government subsidy provided to companies operating in solar energy production, leaving them to face an uncertain fate. These companies have no choice but to move to China and other Asian countries or dissolve their business operations and turn into companies that export Chinese products.
On the contrary, the US has decided to deal with the Chinese extension by imposing stringent restraints on its imports from Chinese solar energy-related products in an effort to encourage sales of US products.
Future of energy
In fact, these developments gain exceptional importance for GCC countries which strive to develop alternative energy sources, especially solar energy. This is simply because of the abundance of solar power throughout the year which can substitute for other power sources, specifically oil and gas, not only as a source of locally consumed power, but also as a source of power developed for export as well.
This was manifested in the announcement of initiatives by some GCC countries to produce solar energy. For example, the UAE has established Masdar City — the global centre of future energy in Abu Dhabi with huge investments estimated at $50 billion (Dh183.6 billion) and Dubai launched a Dh12 billion solar energy park.
Furthermore, Saudi Arabia is planning to invest $109 billion in solar power to generate two-thirds of its electric power needs by 2032, according to Bloomberg.
Apart from electric power production, solar power can reduce the production cost of desalinated water on which the GCC countries depend to meet their water needs.
Saudi Arabia, the world's first producer of desalinated water, will invest $80 billion in water production over the next two decades. This simply means that there is a significant opportunity for these countries to save the huge amounts spent on electricity and water production in case of adopting Chinese technologies, especially since local demand for electric power is increasing by eight to ten per cent annually.
Therefore, the Chinese achievement in cutting costs of solar cells production is extremely important to the GCC countries which all have future energy projects as part of preparations for the post-oil era to secure clean sources of energy in the Gulf region.
Reduced costs
The importance of China's advancement in this field is represented in several aspects; most notably the volume of expenditure allocated for development of sources of solar power in the GCC countries. The allocated amounts of tens of billions of dollars can be reduced if Chinese companies participate in global tenders for building solar power production plants in the GCC countries.
On the other hand, China has broken the costly Western monopoly over technology which allows not only the rich GCC countries but also poor developing countries to develop alternative power.
Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.
