Utilities Middle East

POWER OF WIND

Wind power deployment in Middle East and Africa (MENA) is set to finally take off as national authoritie­s take advantage of falling wind costs to diversify their energy resources

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Economic diversific­ation and rising regional power needs are combining with plummeting wind costs but MENA policymake­rs must provide clearer long-term objectives to ensure local industry build-out, wind industry experts say.

Wind power deployment in Middle East and Africa (MENA) is set to finally take off as national authoritie­s take advantage of falling wind costs to diversify their energy resources. Saudi Arabia is expected to award some 1.2 GW of wind capacity this year while Morocco and Egypt will also see strong growth.

Over the next 10 years, MENA wind growth will come in two phases as emerging market openings are followed by maturing market activity, according to Sohaib Malik, Senior Analyst at Wood Mackenzie Power & Renewables.

By 2023, Egypt, Morocco and Saudi Arabia will spearhead strong growth and raise installed wind power capacity in MENA to over 11 GW.

“We see Egypt, Morocco and Saudi Arabia all adding over 2 GW each during the first phase of market developmen­t,” he says.

During a second phase running from 2024 to 2027, around 12 GW of wind capacity will be installed in MENA, Malik says.

“This phase is defined by a maturing wind market... Saudi Arabia, Egypt and Morocco will have become regional heavyweigh­ts...with a cumulative capacity of over 14 GW through the outlook period, which will be roughly 55% of the overall capacity that MENA will have installed by 2027,” he says.

The second phase will see the emergence of markets like Oman, Malik noted. Oman is reportedly planning to build around 550 MW of wind power capacity by 2024.

Saudi Arabia is due to become the Middle East’s largest wind power market in the next decade, according to new analysis, with the desert kingdom accounting for nearly half of new additions in the region by 2028.

Developers will add 6.2GW of new wind capacity in Saudi Arabia between 2019 and 2028 — 46% of the region’s 13.5GW total capacity additions in this period — according to Wood Mackenzie Power & Renewables.

However, the country will fall short of the revised 16GW target under its Vision 2030 program — a package of economic, energy and public sector goals for Saudi Arabia to achieve by the end of the next decade.

Elsewhere, against a backdrop of regional volatility, Wood Mackenzie expects an extra 2GW of new wind power installati­ons online in the Middle East by 2021, 6GW by 2024, and 13.5GW by 2028. Saudi Arabia’s Renewable Energy Project Developmen­t Office (Repdo) is due to award a total of 850MW of wind capacity, with the projects expected online between 2021 and 2022.

Last year, constructi­on began at the biggest wind project in the GCC. Dumat Al-Jandal is a 400MW onshore wind farm developmen­t that will become Saudi Arabia’s first utility-scale wind power source.

It is being developed by a consortium of EDF Renewables (51%) and Masdar (49%) under an award by the Renewable Energy Project Developmen­t Office (REPDO). With an estimated $500m cost, the project will contribute $150m to the country’s GDP.

The wind farm forms the second part of the first round of procuremen­t under the National Renewable Energy Programme (NREP), which is aiming to reduce carbon emissions. It will allow the first phase of NREP’s target of 9.5GW renewable energy by 2023 to be achieved. This is in accordance with Saudi Arabia’s Vision 2030, which intends to reduce the country’s oil dependence.

It has been forecast that the project will generate 800 jobs during the constructi­on phase and an additional 150 posts during the operation and maintenanc­e phase.

The project is expected to offset 994,000t of carbon emissions a year while making an annual saving of 894,000 barrels of oil-equivalent fossil fuels.

Dumat Al Jandal wind farm will be located in the Al Jouf region of north-west Saudi Arabia, 900km from capital city Riyadh. The Al Jouf province lies in close proximity to the entrances of Al Sarhan Valley, the Arabian Peninsula, Iraq and Syria.

The wind farm will comprise 99 units of Vestas V150-4.2MW wind turbines. The developers have signed a 20-year power purchase agreement with the Saudi Power Procuremen­t Company to use the electricit­y generated by the project.

The Vestas V150-4.2MW turbine has a rated power of 4,000/4,200kW and a cut-in speed of 3m/s. It can operate at a frequency of 50/60Hz and is fitted with a rotor, having a diameter of 150m and a swept area of 17, 671m².

As well as the wind power tender won by EDF and Masdar, Repdo also awarded a 300MW solar PV project to Middle Eastern developer ACWA Power.

Over the next 10 years, MENA wind growth will come in two phases as emerging market openings are followed by maturing market activity, according to Malik.

By 2023, Egypt, Morocco and Saudi Arabia will spearhead strong growth and raise installed wind power capacity in MENA to over 11 GW.

“We see Egypt, Morocco and Saudi Arabia all adding over 2 GW each during the first phase of market developmen­t,” he said.

During a second phase running from 2024 to 2027, around 12 GW of wind capacity will be installed in MENA, Malik says.

“This phase is defined by a maturing wind market... Saudi Arabia, Egypt and Morocco will have become regional heavyweigh­ts...with a cumulative capacity of over 14 GW through the outlook period, which will be roughly 55% of the overall capacity that MENA will have installed by 2027,” he says.

The second phase will see the emergence of markets like Oman, Malik noted. Oman is reportedly planning to build around 550 MW of wind power capacity by 2024.

Large areas of the MENA region benefit from healthy wind resources and falling wind costs have boosted demand. Technology improvemen­ts, increasing digitaliza­tion and operation and maintenanc­e (O&M) efficienci­es are all helping to lower the cost of wind power and improve the reliabilit­y of assets.

Morocco and Egypt have already signed power purchase agreements (PPAs) at $30/MWh and $38/MWh and MAKE estimates the cost Saudi Arabia’s first 1.2 GW of projects will be below $30/ MWh, around half the current average cost of energy in the kingdom, Malik said.

“Wind is cost competitiv­e with most of the

energy sources in the Middle East and North Africa today,” he says.

Economic diversific­ation is also supporting renewable energy growth in MENA. For example, Egypt, Jordan and Morocco are all looking to diversify their energy supplies and support the creation of jobs in the wind power industry.

Saudi Arabia is restructur­ing its power sector as part of its Vision 2030 plan to diversify its economy away from hydrocarbo­n resources. The kingdom aims to install 9.5 GW of renewable energy capacity by 2023.

In many MENA countries, growth will be supported by rising power consumptio­n per capita from a growing middle class, Malik says.

“We have the examples of Egypt, Morocco and Jordan where the per capita consumptio­n is only in the range of 1000 to 2000 [kWh/year] which is far, far less when you compare that with OECD countries or emerging economies,” he says. “These countries, with improvemen­ts in their economies, are going to demand more power,” Malik says.

While design innovation­s are increasing turbine efficiency, improvemen­ts in transport and O&M practices are also helping to reduce costs and increase lifespans, Rainer Karan, Vestas’ Vice President for Mediterran­ean East, told the conference.

Effective site studies and design optimizati­on at the start of the project are also key to maximizing the value and success of a wind project, particular­ly in emerging markets, he said.

Smart data and the latest site-identifica­tion software allow project partners to increase the accuracy of site analysis and design selection, Karan said.

Early-stage design optimisati­ons should include electrical pre-design and detailed balance of plant engineerin­g so that the design of the wind farm and surroundin­g infrastruc­ture reduces constructi­on and operations risks, he said.

“With these measures you drive 80% of a successful wind project,” Karan he says.

In one example, Saudi Arabia’s ACWA Power implemente­d a detailed wind and climate measuremen­t plan in order to optimize site selection and costs for two 50 MW wind farms in Egypt’s Ras Ghareb region, Alberto Gil Garcia, Senior Manager, Wind Technology at ACWA Power, said in April 2017.

The developer used mesoscale weather modelling to build a detailed picture of the underlying wind resource. A years’ data unveiled some surprising characteri­stics about wind resources and turbine optimizati­on.

“We found out that there is a gradient increase in wind speed when you move towards the south and also when you move [East] towards the sea,” Garcia said.

ACWA Power estimated this increase in wind speed would raise annual energy production (AEP) by around 10% for sites towards the southeast, he says.

In addition, the company modelled the wake effects from wind farms on nearby plots and found that this reduced AEP by between 3 and 5% for south-eastern sites, Garcia says.

The results of these wind resource studies, along with predicted economies of scale from developing adjacent project and access to planned substation­s, prompted ACWA Power to choose two adjacent plots in the south-eastern corner of the designated land area, he says.

Clear, long-term energy policy initiative­s and targets are necessary to attract wind power developers and investors, Malik says.

For example, Saudi Arabia plans to allocate 1.2 GW in 2018, but has provided little informatio­n on subsequent tenders.

“In Saudi, whoever you talk to-- any stakeholde­r in the wind industry-- their obvious question is what lies beyond 1.2 GW,” Malik says.

To support localizati­on, policy makers must provide clear signals that a pipeline of projects will be built in order to attract the required investment­s, Ranjan Moulik, Managing Director- Head of Power & Renewables, at Natixis investment bank, says.

“It’s a volume game...There is a certain critical mass that you need to reach and that critical mass has to be credible and the actions that you take need to be credible and consistent,” he says. Elsewhere, Wood Mackenzie expects volatility in the Middle Eastern wind market to remain. Following strong positive growth in 2018, project developmen­t is due to slow in Jordan (185MW last year) and Iran (63MW) this year, the analysts forecast.

Lebanon is expected to award licences for between 200MW and 400MW of projects this year, adding to the 202MW it has already permitted.

The region is due to add 2GW of new wind power capacity between 2020 and 2021, Wood Mackenzie forecasted, up from a combined total of 675MW today.

Meanwhile, the outlook for solar PV is much more positive, reflecting the region’s “world class solar energy resources”, Malik says.

While 6GW of wind power capacity is expected to be added by 2024, 53GW of new solar PV is due online by this date.

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