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Middle East to Switch From Oil to Renewables

Middle East to Switch From Oil to RenewablesMiddle East to Switch From Oil to Renewables

Even as Saudi Arabian officials continue to tout its shift to renewable energy, it may be oil-poor countries in the region like Jordan and Egypt that can benefit sooner from falling prices in solar power.

“Costs have halved in just three years,” energy consultant Robin Mills noted last week, “meaning solar can now beat all conventional generation apart from the very cheapest gas”, Oil Price reported.

Mills cited the bids in Jordan’s recent solar auction, which were just over 6 US cents per kilowatt-hour. These were just slightly above the record 5.84 cents from Acwa Power last November for the 200 MW second phase of Dubai’s Mohammed bin Rashid Al Maktoum solar park.

It could be Egypt’s turn next, Mills suggested, as the North African country struggles with a gas and power crisis and is reportedly working on 6,500 MW of solar deals.

“Petroleum-poor countries such as Jordan should seize the opportunity now to boost their economic and energy security,” Mills, the head of consulting for Dubai-based Manaar Energy, urged in an article for Abu Dhabi’s “The National.”

In general, the expert said, any country burning oil for power – including oil-rich countries such as Iran, Kuwait, Iraq and Saudi Arabia as well as oil-poor countries like Jordan and Egypt – should replace this with solar as much as possible.

Egypt, as well as Kuwait and Dubai, could also save on imported liquefied natural gas by switching to solar, even though LNG prices have dropped sharply, he said.

  Sunrise in the Desert

The prospects for solar in the Middle East-North Africa (MENA) region are even more promising than forecasted in Manaar’s optimistic 2012 study, “Sunrise in the Desert,” Mills said.

The new evidence of plunging costs for solar in MENA come as Saudi Arabian oil minister Ali al-Naimi reiterated the kingdom’s plans to become a “global power” in solar and wind energy.

“In Saudi Arabia, we recognize that eventually, one of these days, we’re not going to need fossil fuels,” Naimi said at a climate change conference this month [May] in Paris. “I don’t know when - 2040, 2050 or thereafter. So we have embarked on a program to develop solar energy.”

The recent decline in oil prices won’t make solar power uneconomic, the influential official said. “I believe solar will be even more economic than fossil fuels,” Naimi told those attending the Business & Climate Summit at Unesco headquarters.

With its previously announced plans to develop solar and wind power, Saudi Arabia hopes one day to be exporting “gigawatts of electric power” instead of fossil fuels.

For one group – Jordan, Morocco, Lebanon, and the northern emirates in United Arab Emirates – solar power can save on high-cost oil imports. In countries like Saudi Arabia, Kuwait and Syria, solar can free up domestic oil consumption for export. For others, like Dubai and Tunisia, it can save on high-cost gas imports.

Other countries – Iraq, Libya and Yemen – can rely on solar while developing domestic gas resources. Another group – including Iran,  Algeria and Oman – can free up gas consumption for export.

 

Financialtribune.com