Renewable Energy in GCC: Need for a Holistic Approach

The importance of renewable energy sources in the energy portfolio of any country is well known, especially in the context of energy security and impacts on climate change. The growing quest for renewable energy and energy efficiency in the Gulf Cooperation Council (GCC) countries has been seen by many as both – a compulsion to complement the rising energy demand, and as an economic strength that helps them in carrying forward the clean energy initiatives from technology development to large scale deployment of projects from Abu Dhabi to Riyadh.

Current Scenario

The promotion of renewable energy (RE) is becoming an integral part in the policy statements of governments in GCC countries. Particular attention is being paid to the development and deployment of solar energy for various applications. Masdar is a shining example of a government’s commitment towards addressing sustainability issues through education, R&D, investment, and commercialization of renewable energy technologies. It not only has emerged as the hub of renewable energy development and innovation but is also acting as a catalyst for many others to take up this challenge.

With the ongoing developments in the clean energy sphere in the MENA region, the growing appetite for establishing clean energy market and addressing domestic sustainability issues arising out of the spiralling energy demand and subsidized hydrocarbon fuels is clearly visible. Saudi Arabia is also contemplating huge investments to develop its solar industry, which can meet one-third of its electricity demand by the year 2032. Other countries, such as UAE, Qatar, Oman and Kuwait are also trying to reciprocate similar moves.

While rationalizing subsidies quickly may be a daunting task for the governments (as for any other country, for that matter), efforts are being made by UAE to push renewable energy in the supply mix and create the market.

Accelerating Renewable Energy Growth

However, renewable energy initiatives are almost exclusively government-led projects. There is nothing wrong in capitalizing hydrocarbon revenue for a noble cause but unless strong policies and regulatory frameworks are put in place, the sector may not see viable actions from private players and investors.

The present set of such instruments are either still weak or absent, and, therefore, are unable to provide greater comfort to market players. This situation may, in turn, limit the capacity/flexibility to reduce carbon footprints in times to come as government on its own cannot set up projects everywhere, it can only demonstrate and facilitate.

In this backdrop, it is time to soon bring in reforms that would pave way for successful green electricity deployment in all spheres. Some of the initiatives that need to be introduced or strengthened include:

• Enabling policies for grid-connected renewable energy that should cover interconnection issues between renewable power and utilities, incentives, facilitation and clearances for land, water, and environment (wherever relevant); and
• Regulatory provisions relating to – setting of minimum Renewable Purchase Obligation (RPO) to be met, principles of tariff determination for different technologies, provisions for trading in renewable energy, plant operation including scheduling (wherever relevant), and evacuation of power.
• Creation of ancillary market for effectively meeting the grid management challenges arising from intermittent power like that from solar and wind, metering and energy accounting, protection, connectivity code, safety, etc.

For creating demand and establishing a thriving market, concerted efforts are required by all the stakeholders to address various kinds of issues pertaining to policy, technical, regulatory, and institutional mechanisms in the larger perspective.

In the absence of a strong framework, even the world’s most visionary and ambitious project Desertec which  envision channeling of solar and wind power to parts of Europe by linking of renewable energy generation sites in MENA may also face hurdles as one has to deal with pricing, interconnection, grid stability and access issues first. This also necessitates the need for harmonization in approach among all participating countries to the extent possible.

Conclusions

It is difficult to ignore the benefits of renewable energy be it social, economic, environmental, local or global. Policy statements are essential starting steps for accelerating adoption of clean energy sources including smaller size capacity, where there lies a significant potential.

In GCC countries with affluent society, the biggest challenge would be to create energy consciousness and encourage smarter use of energy among common people like anywhere else, and the same calls for wider application of behavioural science in addressing a wide range of sustainability issues.