Solar energy is way forward
Assuming that GCC countries intend to fully rely on solar energy to cover all their electricity requirements until 2025, they will need to invest approximately $200 billion in current prices
It seems like the current decade will witness a drastic shift in the establishment of renewable energy institutions with the announcement of several massive projects for solar energy production. However, the most practical step was taken last week by Abu Dhabi's Masdar, who signed an agreement with French company Total and Spain's Abengoa to construct the world's largest solar power plant.
The power plant, called Shams 1, is a 100 Megawatt Concentrating Solar Power (CSP) Plant and will cost a total of $600 million (Dh2.203 billion). It will be completed in 2012.
Investing in renewable energy is an important strategic approach that aims to transfer revenues of crude oil supplies into modern and scientific institutions that will develop renewable energy sources, which will provide new and long-lasting income.
It also goes hand in hand with the constant scientific advancements in the field of renewable energy, and especially solar energy, which requires less production costs when compared to other forms of energy. Moreover, it will also help in developing methods for the transportation and exportation of solar energy into areas and countries that are far away from production centres.
If we compare the advantages of solar power to other forms of energy, such as nuclear, fuel and gas energy, solar energy surpasses them all. This is due to many factors. The first is that it produces far less pollutants when compared to fuel technologies, which makes it more environmentally-friendly. The second is its reliability on an everlasting source for the production of power, unlike other forms of energy which require depleting raw materials, such as locally available hydrocarbons or imported uranium.
Comprehensive plan
Therefore, such a strategic approach can be achieved within a comprehensive plan to produce renewable energy all across the UAE and other Gulf Cooperation Council (GCC) countries, who recently completed an integrated GCC electric grid, designed to supply electricity to all GCC countries using a joint grid. The cost of the project is approximately $2 billion.
Assuming that GCC countries intend to fully rely on solar energy to cover all their electricity requirements until 2025, they will need to invest approximately $200 billion in current prices. If, however, they intend to export produced solar energy after that year, and the necessary technology and logistics are made available, the GCC will need to double its investment in the future.
To bring about the advantages of such a strategic approach that will achieve economic growth in the GCC will require huge investment. However, the advantage of such an approach is GCC countries' capability to achieve it both financially and technically.
From a financial aspect, fuel prices are increasing, a trend that is expected to continue in the coming years, which will allow the GCC countries to make the necessary investment to achieve this ambitious programme. This is also a necessary approach, especially after the global financial crisis brought to light many truths, among the main ones the quick deterioration of cash surpluses invested abroad.
As for the technical aspect, GCC countries have achieved levels of education that allow for the importation and localisation of necessary techniques for the development of solar energy. Moreover, solar energy is considered less complicated than other renewable energy technologies, such as nuclear energy.
In this regard, it is possible to establish strategic partnerships with some countries that possess solar energy technology and need to import this energy from the Middle East, and specifically the Gulf region, where it is sunny all year round, making it an ideal source for solar power.
Abu Dhabi has placed the initial foundations for this project, which establishes a new era in the field of energy on a global scale, and especially the Gulf region. It is expected for other countries to follow a similar approach to ensure the supply of energy, in addition to harnessing it for economic diversity on the one hand, and making use of oil revenues on the other.
Dr Mohammad Al Asoomi is a UAE economic expert.
