Why investing in alternative energy could help boost the UAE's economy
Orkhan Mustafayev, President of Ideal Concept Holding, outlines the potential of alternative energy for the UAE
SHIMMERING IN THE DESERT, just south of Dubai, row upon row of solar panels stretch into the distance.
The sheer scale of the Mohammed bin Rashid Al Maktoum Solar Park is hard to comprehend from the ground. Stretching over 77 square kilometres, it is the largest of its kind, and by 2020 its capacity will be 1,000MW, with an increase to 5,000MW by 2030.
The government is investing Dhs50bn into the park, but with the right partnerships, the country could capitalise even further on its climate and arid landscape.
In a recent presentation, the billionaire CEO of Tesla Energy, Elon Musk outlined his belief in solar power over nuclear energy. “People talk about fusion and all that”, he said, “but the sun is a giant fusion reactor in the sky. It’s really reliable. It comes up every day”.
Like Musk, companies in the UAE should consider how they can commercialise solar energy and create successful businesses while saving the environment and protecting the future of the planet.
After all, the UAE is the perfect location for solar parks and wind farms. It is in the sunbelt, and gets roughly 350 sunny days a year, 10 hours of sunshine in each 24 hour period, and there’s plenty of space for the photovoltaic panels.
Admittedly, sand is a serious problem. A recent computer simulation by scientists in the United States and India found that dust reduces solar energy generation in the Arabian Peninsula (including the UAE) by about 25 per cent. Only two fifths of that reduction in efficiency actually comes from dust settling on the panels – the rest is due to ‘ambient particulate matter’.
Other studies have shown less negative results, and machines that automatically clean the panels have been developed, dramatically improving the rates of energy produced. What is more, irradiation levels in the UAE are high, and the photovoltaic panels produce an average 2,150 kWh/m2 per year – a huge advantage.
The UAE desert is also the ideal landscape for wind farms. The space, the lack of arable land, and the low number of migrating birds mean that turbines can be erected with minimal negative consequences. The desert winds often exceed 12 meters per second (m/s) and most turbines start generating electricity at speeds of 3-4 m/s – the UAE’s average.
The economic case for traditional wind turbines cannot yet be made, but new designs by GE’s subdivision, Renewable Energy, and Siemens Gamesa have been released onto the market this month.
The government has already invested heavily in alternative energy, for which the vision of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, VicePresident and Prime Minister of the UAE and Ruler of Dubai deserves recognition. The scope of his ambition is extraordinary, as outlined in the UAE’s Energy Strategy. By 2050, the Emirates aims to invest Dhs600bn to meet the country’s growing energy demand and ensure the sustainable growth of the economy.
This public investment is galvanising private companies to get involved in the space. Over time, the price of photovoltaic panels falls, and competition between constructors is driving down prices. Businesses planning to get involved in these industries should look for experienced overseas partners, and hire knowledgeable contractors – the best are from China, the US and the Netherlands. Proper training of local staff will be necessary to keep maintenance costs down, and to gradually reduce the reliance on expensive contractors.
Government subsidies for renewable energy would also boost business interest from abroad. In the UK, subsidies have led to a significant increase in the deployment of renewables, and this has rapidly reduced costs. Price assurances would encourage private investors - many funds based in the DIFC would be interested in guaranteed returns. If the UAE’s public sector were to further embrace private partnership, it could act as a lightning bolt to the sector.
The UAE needs more power. Its energy demand increases by 9 per cent annually, partly due to rapid population growth, and the expansion of its industrial capacity. Solar and wind power will reduce the country’s reliance on imported gas, and preserve valuable oil reserves. Investing in alternative energy will protect the environment and provide extraordinary business opportunities.
With the right incentives for private investment from both the UAE and abroad, Dubai is set to become a knowledge bank for renewable energy. The potential for economic growth is huge.
THE UAE IS THE PERFECT LOCATION FOR SOLAR PARKS AND WIND FARMS. IT IS IN THE SUNBELT, AND GETS ROUGHLY 350 SUNNY DAYS A YEAR, 10 HOURS OF SUNSHINE EACH DAY