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Renewable Energy in MENA– Why and How?
Hannes ReinischSenior Manager,
www.pwc.com
Renewable Energy and Sustainability Advisory, PwC
MEED Renewable Energy Conference –September 2012
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Renewable Energy in MENA– Why and How?
1. What makes the Middle East special for Renewable Energy?
2. The big question: Renewables vs. Oil & Gas vs. Nuclear?
3. The untapped supply: larger and smarter Grids
PwCIL 2
4. Plus: A sneak preview of the UAE Solar Survey 2012(Report to be published in October 2012 in collaboration with ESIA
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Renewable Energy in MENA– Why and How?
1. What makes the Middle East special for Renewable Energy?
2. The big question: Renewables vs. Oil & Gas vs. Nuclear?
3. The untapped supply: larger and smarter Grids
PwCIL 3
4. Plus: A sneak preview of the UAE Solar Survey 2012(Report to be published in October 2012 in collaboration with ESIA
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1. What makes the Middle East Special? A few contextual points
• More Power Needed – Stark Electricity Demand Growth
• Cheap Electricity ...is becoming more and more expensive
• We have plenty of Sunshine
PwCIL 4
• Each MENA country is different
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More Power Needed –
Stark Electricity Demand Growth SaudiArabiaOman
UAE
Qatar
Kuwait
Jordan
Egypt
7-11% year on year
Dubai
Today 2020 2030
50TWh 110TWh
14GW 23GW Abu Dhabi
=120%
PwCIL 5
KSA 45GW 121GW 65GW
=
=175%=44%
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Electricity is cheap in parts of MENA
MENA Avg. Prices ($cents/KWh)
UAE lowest 0.8
Saudi Arabia 1.3
Qatar 2.2
Tunisia 4.7 Algeria 4.8
UAE highest 8
Kuwait 7
Rest of World
Avg. Prices($cents/KWh)
Germany up to 35
Spain 27
Australia 25
UK 21
PwCIL Slide 6
Bahrain 8
Morocco up to 19
Jordan up to 45
California 16
China 9
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Cheap electricity is.......becoming more and more expensive
Opportunity Cost of subsidised electricity :
= ( Oil/Gas Market Price, Population, Electricity Price, etc.)
Foregoneexport
(un) collectedelectricity
Local powerdemand
PwCIL Slide 7
OIL & GASEXPORTINGCOUNTRIES
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Cheap electricity is.......becoming more and more expensive
Opportunity Cost of subsidised electricity :
= ( Oil/Gas Market Price, Population, Electricity Price, etc.)
Importexpenditure
Local powerdemand
(un) collectedelectricity
PwCIL Slide 8
OIL & GASIMPORTINGCOUNTRIES
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Cheap electricity is.......becoming more and more expensive
Opportunity Cost of subsidised electricity :
= ( Oil/Gas Market Price, Population, Electricity Price, etc.)
PwCIL Slide 9
Inefficienciesand wastefulconsumer
behaviour
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We have plenty of sunshine
PwCIL 10
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More sunshine means lower Levelised Cost of Electricity (LCOE)
LCOE
Technology A
PwCIL 11
900 1200 1800 2500 Yield/Insolation
Technology B
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How much exactly – best to measure locally
• Satellite-based data vs.measurement on the ground
• Dust
• Aerosols in atmosphere
• Temperature
• Data history
• Measurement frequency
PwCIL 12
Regional monitoring station at the Masdar Institute
Yield measurement at a site
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MENA
PwCIL 13
•Plenty of Demand for Power•Plenty of Oil & Gas
•Plenty of Renewable Energy Resources
•Plenty of Carbon Emissions
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Target markets for MENA solar
PwCIL 14January 2012
Source: ‘Sunrise in the Desert – Solar becomes commercially viable in MENA’ –Emirates Solar Industry Association White Paper by Robin Mills, January 2012, Copyright 2012. All rights reserved
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Renewable Energy in MENA– Why and How?
1. What makes the Middle East special for Renewable Energy?
2. The big question: Renewables vs. Oil & Gas vs. Nuclear?
3. The untapped supply: larger and smarter Grids
PwCIL 15
4. Plus: A sneak preview of the UAE Solar Survey 2012(Report to be published in October 2012 in collaboration with ESIA
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Complements – not Substitutes
CC ‘cheap’ Gas
CC LNG
OC LNG
PwCIL Slide 17January 2012
Source: ‘Sunrise in the Desert – Solar becomes commercially viable in MENA’Emirates Solar Industry Association White Paper by Robin Mills, January 2012Copyright 2012. All rights reserved
Generation mix with/without solar power (July)
CC ‘cheapest’ Gas
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Complements – not Substitutes
CC ‘cheap’ Gas
CC LNG
OC LNGSolar PV
PwCIL Slide 18January 2012
Source: ‘Sunrise in the Desert – Solar becomes commercially viable in MENA’Emirates Solar Industry Association White Paper by Robin Mills, January 2012Copyright 2012. All rights reserved
Generation mix with/without solar power (July)
CC ‘cheapest’ Gas
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Renewables OR Nuclear Energy?
PV CSP Wind
VS.
Nuclear
PwCIL Slide 19
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Solar PV OR Solar CSP OR Wind?
CSP Wind
VS.
PV
VS.
PwCIL Slide 20
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...Renewables OR AND Other Energy Sources
Oil & GasNuclear
+
PV CSP Wind
+ ++
PwCIL Slide 21
Complements – not Substitutes (for now...)
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A low(er)-carbon Energy Mix
Jordan 2020: 10%Dubai 2030:5%
Kuwait 2020:10%
RE
Abu Dhabi 2020 :7%KSA 2032: 16-22%
Egypt 2020: 20%
PwCIL 22
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Renewable Energy in MENA– Why and How?
1. What makes the Middle East special for Renewable Energy?
2. The big question: Renewables vs. Oil & Gas vs. Nuclear?
3. The untapped supply: larger and smarter Grids
PwCIL 24
4. Plus: A sneak preview of the UAE Solar Survey 2012(Report to be published in October 2012 in collaboration with ESIA
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...Renewables OR AND Other Energy Sources
Oil & GasNuclear
+
PV CSP Wind
+ ++
PwCIL Slide 25
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...Renewables OR AND Other Energy Sources
Oil & GasNuclear
PV CSP Wind
PwCIL Slide 26
Trade
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Supply Efficiency and Renewable shares riseas grids become larger and smarter
UAEKSA
PwCIL 27
GCC Interconnection EU-MENA Grid Integration
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Larger and Smarter Grids connect demand and supplyacross national and international borders
•
• LESS storage requirements for RE
• MORE harvesting of Renewable Sources for local power demand
• MORE export revenues from freed-up oil & gas
• MORE export revenues from exported electricity
PwCIL 28
• MORE economic diversification in new generation and transmission
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Renewable Energy in MENA– Why and How?
1. What makes the Middle East special for Renewable Energy?
2. The big question: Renewables vs. Oil & Gas vs. Nuclear?
3. The untapped supply: larger and smarter Grids
PwCIL 29
4. Plus: A sneak preview of the UAE Solar Survey 2012(Report to be published in October 2012 in collaboration with ESIA
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UAE Solar Survey 2012October 2012
• Initiative by ESIA and PwC in collaboration withthe UAE Federal Government
• Over 100 survey respondents providedcommentary and insights over a period of 6 weeks.
• 76% were based in the UAE, the majority considered themselves to have either ‘expertknowledge’ or ‘good knowledge’ of the solarIndustry, both globally and in the UAE.
PwCIL 30
• Most had 3-10 years’ experience in the GlobalSolar Industry. A significant number of
respondents were senior executive level.
• Representation from government, projectengineering and solar technology developers andIndustry Consultants.
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“What sectors will
drive furtherdevelopment of
”
“What are the issuesin funding and
financing solar
developments?”
“How quickly will the market develop?”
“What are thechallenges solar
in the UAE?
“Which Solartechnologies are
best suited for
“How can UAE nationals benefit
“What can thegovernment do todrive growth in thesolar industry?”
PwCIL 31
“What is the best incentive system
to support thesolar industry?”
the UAE?” rom e currengrowth in renewable
energy?” “What are thechallenges forresearch and
developing humancapital?”
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Q8: Which applications do you think will drive further development of solarprojects in the UAE?
54
58
Installation onto existing solar rooftops
Integration of solar into new construction
13
14
38
41
46
47
Other*
Electric vehicles and their charging stations
Desalination
Replacement of gas for electricity generation
Replacement of diesel
Heating / cooling of industrial processes
Integration into new construction
PwCIL
Example: Al Bateen School Abu Dhabi,
(Photo Courtesy of Environmena)
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Thank you
Hannes ReinischSenior Manager,Renewable Energy and Sustainability Advisory, PwC
ESIA Research and Policy Committee Member
PwCIL Slide 33
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PwC Middle East Centre of Excellence for Renewable Energy, Cleantech and Sustainability Meet the Team
Hannes ReinischCOE CoordinatorSenior Manager, Renewable Energy andSustainable Development
Paul NavratilLead Partner for Energy - Middle [email protected]
Saudi Arabia
Oman
UAE
Q
atar
Kuwait
Jordan
Egypt
. . .
Jakub Zielkiewicz
Dr. Anil KhuranaPartner, PwC’s PRTM Management [email protected]
Mohammed SalemPartner, Climate Change and Sustainability [email protected]
Maarten WolfsDirector, Finance & [email protected]
Nathan CluteDirector Clean technolo
Bernhard HaiderPartner – Power & UtilitiesSmart Grid and Renewable Energy
PwCIL
anager, ma e ange an ar on [email protected]
Gus SchellekensDirector, Renewable Energy Expert
Emily Manuel Assistant Manager, Renewables & Power
investment & deployment [email protected]
Andrew Thurley Director, Director - Public SectorSustainability
Tania Abu ZeidConsultant, COE [email protected]
Global Members of ME COE
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About ESIAThe Emirates Solar Industry Association (ESIA) is a non-profit, non-governmental organization that brings together the region’s solar industry. Our goal is totransform the Middle East’s vast solar potential into a commercially and environmentally viable solution for the region’s growing electricity demand.
ESIA provides its members with services such as educational workshops, networking functions and special reports on breakthrough solar innovations. We alsoprovide assistance to international companies seeking to expand their solar operations in the Middle East. The association is currently working on initiatives thatbring together leaders from the policy sector, academia, and the private sector. The monthly ESIA newsletter goes out to over 1,200 readers in the Middle Eastrenewable energy space – the largest of its kind.
About The Author Robin Mills is the Head of Consulting at Manaar, the Dubai-based energy consultancy providing business advice and operations management consulting servicesfor private and government energy companies in the Middle East. Until October 2011, he was the Petroleum Economics Manager at Emirates National OilCompany. From 2006-2008, he was Senior Evaluation Manager at Dubai Energy and before that, had a variety of economic and geological roles during his eightyears with Shell. Robin has published two books, "The Myth of the Oil Crisis: Overcoming the Challenges of Depletion, Geopolitics and Global Warming" (Praeger Publishers, 2008) and “Capturing Carbon” (Columbia, 2011), and features widely in MENA and international media on energy and environmental issues. He holdsan MS in Geological Sciences from Cambridge University.
About PwCPwC firms help organisations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with close to 169,000 people who arecommitted to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com.
Established in the Middle East for 40 years, there are PwC firms in Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman, the Palestinian territories, Qatar,Saudi Arabia and the United Arab Emirates, with around 2,500 people. (www.pwc.com/middle-east) © 2012 PricewaterhouseCoopers. All rights reserved.
"PwC" is the brand under which member firms of PricewaterhouseCoopers International Limited (PwCIL) operate and provide services. Together, these firms formthe PwC network. Each firm in the network is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide anyservices to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional
judgment or bind them in any way.
s pu ca on as een prepare or genera gu ance on ma ers o n eres ony, an oes no cons u e pro ess ona a v ce. ou s ou no ac upon einformation contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to theaccuracy or completeness of the information contained in this publication, and, to the extent permitted by law, the authors and distributors do not accept or assumeany liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this
publication or for any decision based on it.
Copyright 2012. All rights reserved.
“PwC” refers to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of thePwC network. Each member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services toclients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bindthem in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member firm’s professional judgment or bind another member firm or PwCIL in any way.
"ESIA" refers to the Emirates Solar Industry Association, non-profit industry group based in the UAE.