The Middle East has two things in abundance – oil and sunshine.
Seeking to capitalize on the latter, Dubai’s Supreme Council of Energy has presented plans for the 1,000 megawatt Mohammed Bin Rashid Al Maktoum Solar Park at the World Future Energy Summit.
A mere $3.2 billion.
Started in 2007, the World Future Energy Summit is being held in neighboring Abu Dhabi’s National Exhibition Center.
Supreme Council of Energy Vice Chairman Saeed Mohammed Al Tayer said, “The Mohammed bin Rashid Al Maktoum Solar Park is an advanced model of power production, which achieves our leaders' aspirations to diversify sources of energy; specifically by using renewable energy to conserve resources and protect the environment from pollution. This solar park will significantly enhance our efforts to achieve sustainable development, which is the cornerstone of our projects to achieve prosperity for everyone, for generations to come.”
Although Dubai's economy was built on oil, the Emirate's model of business drives its economy with its main revenues now from tourism, real estate, and financial services, as the Emirate seeks to make itself the “Switzerland of the Middle East.”
The most potent symbol of its financial ambitions is the 2,717-foot high Burj Khalifa skyscraper, currently the world’s tallest, and star of the most recent “Mission Impossible” movie.
But why solar in one of the world’s most productive oil regions?
The second-largest of the seven emirates that make up the United Arab Emirates, Dubai has nearly run out of its own oil - output stands at around 50,000-70,000 barrels per day (bpd), down from a peak over 400,000 bpd in 1991, with the majority of the UAE's oil concentrated around its astonishingly wealthy capital, Abu Dhabi.
Given such slender revenues from modest oil exports, Dubai reinvented itself as a leading business center, but its ambitions were badly dented by the global recession that began in 2008. International credit tightened and deflated asset prices constricted Dubai’s economy in 2009 and 2010, as it was heavily exposed to depressed real estate prices. Dubai lacked sufficient cash to meet its debt obligations, prompting global concerns about its solvency before the UAE Central Bank and Abu Dhabi-based banks bought the largest shares of its debts. In December 2009 Dubai received an additional $10 billion loan from Abu Dhabi and its economy is expected to continue a slow rebound.
So, investing in renewable energy makes sense as a way for the Emirate to pare energy import bills.
The Mohammed Bin Rashid Al Maktoum Solar Park forms the centerpiece of Dubai’s Supreme Council of Energy’s “Dubai Integrated Energy Strategy 2030” program, unveiled last year, which proposes that Dubai use solar energy to generate 5 percent of its total power supply by 2030. Besides solar, the strategy seeks to diversify Dubai’s power generation matrix to include clean coal providing 12 percent, nuclear energy 12 percent and natural gas - 71 percent. At present Dubai generates 99 percent of its electricity from natural gas and the remaining one percent from fuel oil.
Dubai is not unfamiliar with solar energy, as the Emirate already has some modest projects underway, with some private sector utilities producing 4.5 megawatts from solar energy such as Jebel Ali, Jumeirah Palm Island and the Meydan Project.
Solar power fits in with a long-term national initiative announced on 15 January by Dubai’s ruler, Shaikh Mohammed bin Rashid Al Maktoum to build a green economy in the UAE under the slogan, “A green economy for sustainable development.” The Green Economy Initiative, scheduled for completion by 2021, includes six major fields covering a wide range of legislation, policies, programs and projects.
Mohammed said, “Our goal from this national initiative is clear, that is to build an economy that protects the environment as well as an environment that supports the growth of the economy. We in the UAE, within our 2021 initiative, are striving to build a diversified economy based on knowledge and innovation, through which we can provide excellent employment opportunities to our citizens. Through this, we can protect our natural and environmental resources, and strengthen our competitive position in global markets, especially in the areas of renewable energy products and technologies on the green economy. We are serious about the transformation of our development process to reach the first positions on the global level. During the next nine years and up to the year 2021 we will launch a range of initiatives and projects in all areas to achieve our goal.”
By. John C.K. Daly of Oilprice.com