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World's Cheapest Power Project: A milestone shift to solar electricity generation?

Date : 28/12/2017
Author:  Marmore MENA Intelligence





Saudi Arabia recently registered the cheapest price bid to supply solar electricity ever recorded. Abu Dhabi’s Masdar and Electricite de France SA bid to supply power from a 300-megawatt photovoltaic (PV) plant for as cheap as 1.79 cents a kilowatt hour. If the project is successfully awarded by the Ministry of Renewable Energy Project Development, it would top the leader board beating the previous record for a solar project in Abu Dhabi for 2.42 cents a kilowatt-hour. It is a milestone in Saudi Arabia’s nascent solar program and a landmark start of a USD 50 billion program to diversify domestic energy supplies away from fossil fuels.
 
Bids for Saudi Arabia’s Sakaka Solar plant


Source: TheNational


Saudi Arabia is among the leading Middle Eastern oil producers looking to renewables to feed growing domestic consumption that’s soaking up crude which it could profitably export to generate higher revenues. The plant in Sakaka will be the first project awarded under the renewables program, which targets 9,500 megawatts of electricity generation capacity using solar and wind by 2030( Bloomberg). The project is set to start producing power by June 2019.  

Record lowest solar power pricing (US cents/kWh)


Source: Electrek

Prices for new solar power projects have fallen so rapidly that the cheapest price of previous year has become the ceiling price for the current year. The prices have reduced by as much as 78% since 2013. A combination of improving and less costly technology, free land earmarked for the plants, connections to the national power grid and favourable financing have helped to significantly reduce the costs. Developers are also expected to benefit from the economies of scale due to the large sized projects. The already-plummeting costs of installing solar power could fall by further 60 percent over the next decade(IRENA).
 
Current power generation scenario
 Saudi Arabia generated 330.5 billion kilowatt-hours (kWh) of electricity from installed capacity of 66 GW in 2016(EIA). It faces a sharply rising demand driven by population growth, a rapidly expanding industrial sector led by the development of petrochemical cities and high demand for air conditioning during the summer months. Total generating capacity is expected to be over 120 GW by 2032.
 
Saudi Arabia’ installed electric power capacity by fuel as of Jan 2017

blog-4.jpg



Source: EIA
 
Saudi Arabia that gets less than 1 percent of its power from renewables currently, is targeting 60 projects in renewable energy program with investments estimated between USD 30 billion and USD 50 billion by 2030(Reuters). The expansion into renewables will substitute the usage of 18 million barrels of oil equivalent for electricity generation by 2020.
 
Outlook for solar energy in Saudi Arabia
 
Saudi Arabia’s renewable energy program is part of a broader project to wean the economy from its reliance on oil exports. The kingdom is restructuring its energy sector as part of Vision 2030 and a focus on renewable projects is a pillar of this transformation. Saudi Arabia is an ideal location for both Concentrated Solar Power (CSP) and PV power generation as it has remarkably high solar radiation of around 2,550 kWh/m2 per year, which is almost double the average radiation in European countries. There is also the availability of vast areas of empty desert that can host solar installations. Additionally, Saudi Arabia has huge deposits of the type of clear sand that can potentially be used in the manufacture of silicon PV cells.
 
However, some barriers may exist such as large reserves of oil with relatively low cost compared to solar energy. Saudi Arabia also currently lack any demand-side policies to stimulate the private sector. These include tax benefits or feed-in tariffs for renewable electricity generation. In addition, the dust effect, which can reduce solar energy by up to 10–20 % can be a major hindrance and will require solar energy technology to be adapted for desert conditions to enable more efficient harnessing of the energy.
 
Still, the percentage of renewable energy is estimated to reach 10 percent of total installed capacity in Saudi Arabia by 2023. Further, The King Abdullah City for Atomic and Renewable Energy (KACARE) is targeting for 41 GW of solar power, 17.6 GW of nuclear power, and 9 GW of wind power by 2032(KACARE). The fact that Saudi Arabia, an ardent booster of fossil fuels, has found compelling economic reasons to bet on solar is one of the clearest signs yet that solar has become a cost-effective source of power.
 
This article is published in "Marmore Blog"

 

Tags:  Arabia, Electricity, Energy, Power, Saudi, Solar

Ratings:
 Current rating: 0 (3 ratings)

Waste to Energy in the GCC Moving beyond the cost dynamics

Date : 12/09/2017
Author:  Marmore MENA Intelligence



Waste to Energy (WTE) provides an environmentally sustainable route for waste disposal while carrying the added benefit of producing clean energy. It is high time for the GCC countries to wake up and take note of their Solid Waste Management strategy as rapid urbanization has led to an increasing waste pile up year over year. Per capita waste generation in most GCC countries exceed the global average of 1.2 kg per day with Bahrain and Kuwait producing 2.5 and 1.9 kg of waste per day respectively. Despite these growing concerns, Waste to Energy has not taken off in the GCC yet with investments starting to made only during the past few years. We analyze the reasons why the governments have taken so long to unearth WTE.

Globally, the value of WTE market is estimated to be USD 28 Billion and expected to reach USD 37 Billion by 2023. WTE technologies based on thermal energy conversion is widely preferred and accounted for approximately 88.2% of total market revenue. Europe is the largest and most sophisticated market for WTE technologies, accounting for 47.6% of the total market. Despite the increase in industrial waste, strict waste management legislation in the EU have been responsible for the growth in Europe’s WTE market.  In the case of other developing economies the key challenge has remained the large up-front cost for implementation and hence the option of low-cost landfilling is widely preferred.
 


Source: Enerdata, IRENA
 
Firstly, from the perspective of power generation, the amount of electricity produced through WTE is miniscule as compared to the solid waste utilized for the purpose. In the case of Qatar, currently, 0.37% of its total electricity is produced by WTE plants. Even when we assume that the total annual solid waste produced domestically is converted to electricity, it is estimated to produce only 735 GWh which accounts for 1.78% of the total electricity produced. The power generation capacity through WTE can’t be increased beyond the threshold value since the raw material required for power generation in this case is solid waste, which is in limited supply. This is one of the key shortcomings of WTE when considered as a source for power generation.
 Secondly, when viewed from a financial angle, the investment required for WTE technology remains on the higher side. Qatar invested USD 1.7 Billion to complete the Domestic Solid Waste Management Centre. This is huge in comparison to other renewable/ environment friendly power generation technologies like solar. Solar PVs is witnessing a downward trend and in comparison the case looks weaker for WTE to be considered as an energy source.
 
However, a key dynamic which favors WTE is the limited land availability in the GCC. Excluding Saudi Arabia and Oman, the total land area available in the other countries is only 113,756 km2 which is three times lesser than the land area of Norway. But in comparison, Norway produces nearly 5 times lesser waste than the 4 countries combined showing the enormity of waste produced in relation to the land availability. Hence, landfill burial would not be a sustainable technique in the long run, especially when rapid urbanization is taking shape in the region and the city scape continues to grow.
 
Most of the GCC countries are cognizant of the situation and have taken initial steps towards waste management albeit still at a nascent stage. Only Qatar has thus far produced substantial amount of electricity from waste while other GCC countries continue to procrastinate this problem. Nevertheless, investments are beginning to flow in the past few years.



Waste disposal is a problem that has to be tackled with urgency. Leeching due to the landfill is highly hazardous and in most cases irreversible. Electronic and plastic waste is again a matter of deep and growing concern. Governments should take the initiative and involve private players to manage this issue and push the needle before time runs out. Providing subsidy, easy loans and strict regulations could be the measures taken. Investment in new technology and research should also be promoted by governments as pursued in the case of other non-conventional power generation mechanisms such as solar and wind. Countries should move beyond the cost dynamics of WTE and rather emphasize on the socio economic benefits to build on a better and sustainable future.

This article is published in "Marmore Blog"

Tags:  Electricity, Energy, GCC, Power, to, Waste

Ratings:
 Current rating: 5 (3 ratings)

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