POWER FROM THE ROOF

Utilities Middle East - - CONTENTS - By Baset As­aba

While in­te­grat­ing largescale vari­able re­new­able en­ergy will be vi­tal into the fu­ture of the GCC, the rapid up­take of dis­trib­uted en­ergy re­sources such as rooftop so­lar are prov­ing to be cru­cial

While Dubai has con­tin­ued to reg­is­ter suc­cess, the prospects for rooftop so­lar are look­ing brighter even be­yond, with in­creased up­take in other emi­rates and sev­eral GCC coun­tries. With a port­fo­lio of 506MW of projects, En­vi­rom­ena is one of the com­pa­nies cur­rently driv­ing rooftop so­lar in the re­gion

Jebel Ali Free Zone (Jafza), a sliver of land along the Ara­bian Gulf, is the in­dus­trial heart of Dubai and host to some of the world’s largest man­u­fac­tur­ing fa­cil­i­ties, nes­tled along the ninth largest con­tainer port in the world. But more re­cently, it is the scale of rooftop so­lar in­stal­la­tions at Jebel Ali that seems to be driv­ing the free eco­nomic zone’s pop­u­lar­ity.

Al­ready, 5,240 pho­to­voltaic (pv) pan­els are in­stalled on the roof of the Jebel Ali based wa­ter reser­voir at M-Sta­tion, a power pro­duc­tion and de­sali­na­tion plant with a to­tal ca­pac­ity of more than 2,000MW of elec­tric­ity and 140 mil­lion im­pe­rial gal­lons of wa­ter a day. The pv pan­els are pro­duc­ing 1.5MW of power, which is enough to power about a quar­ter of a mil­lion homes.

It is also here that DP World, which runs Jafza, has launched the UAE’s first green stor­age and ware­house fa­cil­i­ties and is set to in­stall 88,000 PV mo­d­ules across its Dubai fa­cil­i­ties’ rooftops. Al­ready, some cool stor­age fa­cil­i­ties are run­ning en­tirely on so­lar en­ergy, while many other Jafza ware­houses are set to be­come more en­ergy ef­fi­cient as DP World’s So­lar Pro­gramme is rolled out over the com­ing years.

The project in­cludes con­struc­tion of what the com­pany claims to be the largest dis­trib­uted so­lar rooftop project in the Mid­dle East, with the planned in­stal­la­tion of the 88,000 rooftop pan­els ex­pected to pro­duce enough clean power for the equiv­a­lent of 3,000 homes a year.

These projects are em­blem­atic of the grow­ing ac­cep­tance of rooftop so­lar as a sus­tain­able source of power for com­mer­cial and in­dus­trial fa­cil­i­ties as well as res­i­den­tial homes. Dubai’s so­lar rooftop projects are part of Shams Dubai, a three-pronged ini­tia­tive to help the emi­rate reach its goal of 25% re­liance on so­lar en­ergy by 2030 through a net-me­ter­ing scheme.

While Dubai has con­tin­ued to reg­is­ter suc­cess, the prospects for rooftop so­lar are look­ing brighter even be­yond, with in­creased up­take in other emi­rates and sev­eral GCC coun­tries. Last year, Oman launched its re­new­able en­ergy ini­tia­tive, ‘Sahim’, which is sim­i­lar to Shams Dubai and will en­able res­i­den­tial as well as com­mer­cial cus­tomers to slash their an­nual elec­tric­ity bills by up to 40% by in­stalling rooftop so­lar.

Through the net me­ter­ing scheme used by Shams Dubai and Sahim in Oman, a sin­gle bidi­rec­tional me­ter can mea­sure the elec­tric­ity utilised or pur­chased from the grid, and the ex­cess elec­tric­ity pro­duced by the cus­tomer and ex­ported or sold back to the grid.

Abu Dhabi-based En­vi­rom­ena Power

We hope to ex­e­cute 1GW of so­lar projects in the com­ing years, a por­tion of which will be rooftop so­lar. We ex­pect soon to be in­volved in the net me­ter­ing pro­gramme in Saudi Ara­bia once it is in­tro­duced there. From what we have to­day, we ex­pect around 6 times growth in rooftop in­stal­la­tions, com­mer­cial in­dus­trial leases as we like to call them within the Dubai mar­ket over the next 12 months.

Sys­tems, one of the re­gion’s lead­ing clean en­ergy com­pa­nies, is in the process of in­stalling a 1.34 megawatt peak (MWp) rooftop so­lar pv sys­tem to power the fa­cil­ity of Gulf Cen­ter for Soap & Chem­i­cal In­dus­tries (GCSCI) in Dubai.

As part of its broader strat­egy to ramp up in­vest­ments in re­new­able en­ergy, En­vi­rom­ena says it will in­stall 4,126 so­lar PV pan­els on the 400,000 square foot GCSCI fa­cil­ity lo­cated in the Jebel Ali In­dus­trial area. This is one of sev­eral so­lar projects that En­vi­rom­ena is ex­e­cut­ing in the Mid­dle East

Util­i­ties Mid­dle East re­cently sat down with Sami Khorebi, CEO, En­vi­rom­ena, who spoke at length about the fu­ture of the so­lar in­dus­try in the Mid­dle East and how En­vi­rom­ena, with a port­fo­lio of 506MW pv projects, is po­si­tion­ing it­self to drive up­take es­pe­cially fol­low­ing its ac­qui­si­tion in Q4 of last year by Ar­jun In­fra­struc­ture Part­ners (AIP).

Since En­vi­rom­ena’s cre­ation in 2007, the com­pany has been busy build­ing and op­er­at­ing so­lar power plants in the Mid­dle East & North Africa. What projects are you cur­rently work­ing on?

We have done projects in nine coun­tries giv­ing, us one of the broad­est foot­prints of so­lar projects in the Mid­dle East & North Africa. In Egypt, we are cur­rently con­struct­ing 256MW of so­lar PV projects in the Ben­ban area which will help pro­vide power to nearly 370,000 homes while dis­plac­ing 454,000 tonnes of car­bon diox­ide an­nu­ally. These are de­vel­oped un­der the feed in tar­iff pro­gram and we are very ex­cited to be build­ing one of the largest port­fo­lios within that so­lar park and it is not just an ex­cit­ing project for En­vi­rom­ena who has built projects in Egypt since 2011 and was the first com­pany to do a grid con­nec­tion in the coun­try but a very ex­cit­ing project for Egypt.

En­vi­rom­ena has also bro­ken ground on a 247MW project in Al Muwaqqar, Jor­dan. The project is sched­uled to be com­pleted in 2020, which will bring elec­tric­ity to 320,000 homes while dis­plac­ing 408,000 tons of car­bon diox­ide an­nu­ally.

1GW Ca­pac­ity of so­lar projects that En­vi­rom­ena plans to ex­e­cute in the next few years To­day, fun­da­men­tally the cost of elec­tric­ity used in tra­di­tional sources is higher than the cost of us­ing so­lar re­sources. So, when it comes to the un­der­ly­ing eco­nomics and the un­der­ly­ing poli­cies to make this re­al­ity, they ex­ist to­day, it is just to us as the pri­vate sec­tor work­ing very closely with the gov­ern­ment and util­i­ties to turn this into re­al­ity more quickly.”

One trend that we are fol­low­ing very closely is the im­pact of elec­tric ve­hi­cles on power grids, where ve­hi­cles are no longer a source of hy­dro­car­bon de­mand, but a source of elec­tric­ity de­mand. The im­pact that will have in terms of what time of day they are be­ing charged and the ad­di­tional power re­quired onto grids is a very in­ter­est­ing one to fol­low.” If you take a look at the his­tory and the growth of the busi­ness, ev­ery year we seem to take on big­ger and big­ger projects. And now, not only do we have the ca­pac­ity to build these projects, we can now work with part­ners or in­de­pen­dently to in­vest in these projects as well.”

In the UAE, we have started work on four rooftop so­lar projects to­tal­ing 5MW. The sys­tems are all lo­cated in Dubai, in­clud­ing Al Barakah dates fac­tory – which will be the world’s first date fac­tory to run on so­lar power. We are in­stalling a 1.34MW sys­tem at the Gulf Cen­ter for Soap and Chem­i­cal In­dus­tries.

The other is the Bay­nouna so­lar power project which will be the largest so­lar project ever built in Jor­dan. This is com­ing off the re­cent de­liv­ery in grid con­nec­tion of the Quweira plant which is a 103MW plant that we also built in Jor­dan.

We hope to ex­e­cute 1GW of so­lar projects in the com­ing years, a por­tion of which will be rooftop so­lar. We ex­pect soon to be in­volved in the net me­ter­ing pro­gramme in Saudi Ara­bia once it is in­tro­duced there. From what we have to­day, we ex­pect around 6 times growth in rooftop in­stal­la­tions, com­mer­cial in­dus­trial leases as we like to call them within the Dubai mar­ket over the next 12 months.

From your cur­rent as­sess­ment, what are key mar­ket driv­ers?

The key driv­ers for the com­mer­cial in­dus­trial mar­ket are the savings that we present to the end users. To­day we are pro­vid­ing sig­nif­i­cant savings off of the DEWA tar­iffs un­der long term leases that do not only pro­vide savings but also pro­vide a hedge to the con­tin­ued in­crease in the en­ergy cost and elec­tric­ity cost for the next 20 years.

Although there is an ex­cit­ing op­por­tu­nity in res­i­den­tial rooftop so­lar, En­vi­rom­ena is cur­rently very much fo­cused on com­mer­cial in­dus­trial and util­ity-scale projects. It is a func­tion of scale. When it comes to the na­ture of the projects where we feel we add the most value to­day, it is projects that are 500kW and above.

How do you rate the suc­cess of Shams Dubai and other net me­ter­ing schemes in the re­gion?

Suc­cess speaks for it­self when it comes to the Shams Dubai pro­gramme to­day. A num­ber of com­pa­nies have been launched fo­cus­ing on ser­vic­ing the Shams Dubai pro­gramme both from a res­i­den­tial and com­mer­cial in­dus­trial stand point and we are see­ing tremen­dous ac­tiv­i­ties in terms of new in­stal­la­tions across Dubai and we be­lieve that is a model that can be repli­cated suc­cess­fully in many other parts of the re­gion as well.

Although the re­gion con­tin­ues to see in­creased up­take of so­lar, some in­dus­try ex­perts have ob­served that leg­is­la­tion, aware­ness and ac­cess to fi­nance are not suf­fi­cient enough and that if not well ad­dressed, this progress is likely to slow down. What is your take on this?

When we speak to our in­dus­try peers from all over the world, we get the same nar­ra­tive. Ev­ery­body is a lit­tle im­pa­tient when it comes to see­ing the pro­grammes go from an­nounce­ments to ac­tual megawatts in­stalled on rooftops or on the ground. So, we don’t be­lieve that the re­gion is slow to come into reg­u­la­tion, I think we are mov­ing at a very ra­tio­nal pace. The op­por­tu­nity is there. So­lar in the MENA makes more sense than vir­tu­ally any­where else on the planet when it comes to the pro­duc­tion out­put that we get from our so­lar power plants.

To­day, fun­da­men­tally the cost of elec­tric­ity used in tra­di­tional sources is higher than the cost of us­ing so­lar re­sources. So, when it comes to the un­der­ly­ing eco­nomics and the un­der­ly­ing poli­cies to make this re­al­ity, they ex­ist to­day, it is just to us as the pri­vate sec­tor work­ing very closely with the gov­ern­ment and util­i­ties to turn this into re­al­ity more quickly.

I think all our in­ter­ests are aligned. Both the gov­ern­ment and the pri­vate sec­tor have an aligned in­ter­est to in­stall as much so­lar as pos­si­ble as quickly as pos­si­ble on re­gional grids. The rea­son for that is what so­lar elec­tric­ity dis­places as peak elec­tric­ity. In the mid­dle of the day when the sun is shin­ing, when peak up plants have to turn on, which in­her­ently are the high­est costs in terms of kilo­watt hour pro­duc­tion, so that is the most sub­sidised part of the cur­rent re­tail and com­mer­cial elec­tric­ity cost. So, so­lar is a wel­come ad­di­tion to the power grid to­day, and that is what re­ally is en­abling and al­low­ing for pro­grammes like Shams Dubai, net me­ter­ing in Abu Dhabi, Saudi Ara­bia and other re­gions as well.

How will the eco­nomics of rooftop so­lar play out once most of the util­ity scale pv projects come on­line?

The ground projects are re­ally act­ing as head­line num­bers to see how low so­lar power can be gen­er­ated at the util­ity level. So, we have seen record an­nounce­ments in the UAE, Saudi Ara­bia and across the re­gion for re­new­able in­stal­la­tions at util­ity scale. We be­lieve that can be di­rectly re­flected on a dif­fer­ent scale for the rooftop in­stal­la­tions as well. So the same kind of savings that the util­i­ties are see­ing com­pared to us­ing tra­di­tional hy­dro­car­bons sources for pro­duc­tion of elec­tric­ity can be seen in rooftops but at a dif­fer­ent scale, so that per­cent­age value in terms of savings can be con­sid­ered sim­i­lar.

You were re­cently ac­quired by Ar­jun In­fra­struc­ture Part­ners (AIP). Will this lead to a shift in your busi­ness strat­egy?

The ac­qui­si­tion of En­vi­rom­ena that oc­curred in Q4 of last year is a re­flec­tion of how the mar­ket has ma­tured over the past 10 years. Ini­tially, En­vi­rom­ena was the first com­pany to re­ceive ven­ture cap­i­tal glob­ally for a com­pany do­ing re­new­able en­ergy in the MENA re­gion. We have gone from ven­ture cap­i­tal to pen­sion cap­i­tal, which means that the way so­lar projects are be­ing built by the fi­nan­cial com­mu­nity and by in­vestors have gone from higher risk to more sta­ble long term in­vest­ments. The way that is play­ing out for us is, not only are we now build­ing and op­er­at­ing plants very ef­fec­tively and ef­fi­ciently, we have the ca­pac­ity to in­vest with con­ser­va­tive re­turn ex­pec­ta­tions into long term as­sets, and it’s re­ally en­abled a huge part of the busi­ness for En­vi­rom­ena.

If you take a look at the his­tory and the growth of the busi­ness, ev­ery year we seem to take on big­ger and big­ger projects. And now, not only do we have the ca­pac­ity to build these projects, we can now work with part­ners or in­de­pen­dently to in­vest in these projects as well.

What is your pro­jec­tion of the so­lar mar­ket over next few years?

If we take a look at en­ergy de­mand growth in the re­gion, it sits be­tween 7% and 9% de­pend­ing on what coun­try you are tak­ing a look at. As the cost of so­lar de­clines and the abil­ity to de­ploy at speed con­tin­ues to be a fact within our sec­tor, we think so­lar will make a more and more sig­nif­i­cant part of the new ca­pac­ity com­ing onto grids. When it comes to a spe­cific pro­jec­tion, we think that the gov­ern­ment tar­gets that have been set out from coun­try to coun­try are ones that will not only be achieved, but will likely be ex­ceeded be­tween 2020 and 2025.

One trend that we are fol­low­ing very closely is the im­pact of elec­tric ve­hi­cles on power grids, where ve­hi­cles are no longer a source of hy­dro­car­bon de­mand, but a source of elec­tric­ity de­mand. The im­pact that will have in terms of what time of day they are be­ing charged and the ad­di­tional power re­quired onto grids is a very in­ter­est­ing one to fol­low and we ex­pect that from a long term point of view, it will lead to a lot more elec­tric­ity de­mand on power grids both lo­cally and glob­ally.

250MW Ca­pac­ity of En­vi­rom­ena’s pv so­lar projects un­der con­struc­tion at the Ben­ban So­lar Park in Egypt

Mo­men­tum is ris­ing for rooftop so­lar on top of com­mer­cial and in­dus­trial fa­cil­i­ties

SAMI KHOREIBI, CEO, En­vi­rom­ena

ELEC­TRIC VE­HI­CLES Elec­tric ve­hi­cles to at­tract at­ten­tion from so­lar play­ers as their pop­u­lar­ity soars

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