By Mohamed Jameel Al Ramahi
Technology: renewables will consolidate their position as a mainstream power
Renewable energy is now established as a highly attractive asset class and its appeal to the financial community will continue to grow in 2018. The significant cost decline in both solar and wind power has been well publicised and prices will continue to fall, driven not only by technological innovation but increasing efficiency on the development side.
The International Renewable Energy Agency (IRENA) predicts that with the right policies in place, the cost of electricity from solar and wind power will drop by as much as 59 percent between 2015 and 2025.
Cheaper clean energy means more capacity for every dollar invested, but storage technology will need to catch up for it to be fully optimised, and to enhance commercial returns. Expect renewable energy plants to be increasingly combined with storage solutions in the future.
Masdar was the first renewable energy company to deliver a solar thermal power plant with 24-hour storage using molten salt technology, at its Gemasolar plant in Spain. Advances in battery storage will unlock the commercial potential of solar PV technology as a baseload power producer. Again, dramatic price declines are predicted as storage solutions become more efficient, and as large-scale deployment achieves economies of scale.
The combination of continued technological innovation and increasing cost efficiency is allowing renewables to penetrate new markets and to reach more of the world’s 1.2 billion people without access to reliable energy sources.
The commercial deployment of floating offshore wind is opening up new geographies including the Americas and Asia, for example. Floating solar PV, meanwhile, converts lakes and reservoirs into solar power plants, boosting renewables output in regions where land is at a premium, such as South East Asia. Waste-to-energy is also becoming commercially viable, with construction of the UAE’s first plant now underway in Sharjah.
Abu Dhabi Fund for Development-led initiatives such as the UAE-Pacific Partnership Fund and the UAE-Caribbean Renewable Energy Fund are extending energy access in the some of the world’s poorest and most climate vulnerable communities. Expect renewable energy to become widely recognised as a form of development aid in the years ahead.
More cost efficient and higher capacity battery technology will pave the way for growth in the electric vehicle (EV) sector, here in the UAE and international markets.
But the electric cars of the future won’t necessarily depend on batteries. Fuel cell technology is an alternative power source, an option Masdar is exploring in partnership with Toyota, Al Futtaim Motors, Air Liquide and Abu Dhabi National Oil Company here in the UAE.
We’re not only seeing innovation and improved cost efficiency in the supply of energy; demand-side innovation is also delivering results. Highly sustainable seawater desalination techniques such as reverse osmosis will be deployed on a progressively larger scale as their commercial viability grows, a priority in view of the Middle East’s acute water needs and the energy intensity of flash thermal desalination technologies reliant on natural gas.
The commercial deployment of renewable energy and clean technology has become a pillar of the UAE’s economic diversification and the realisation of homegrown knowledge industries. Abu Dhabi established a regional benchmark in 2009 with its pledge to produce seven percent of its power needs by 2020.
Today, the whole of the UAE is embracing sustainability, epitomised by the development of the Mohammed Bin Rashid Al Maktoum Solar Park in Dubai, and the leading role of Sharjah and the Northern Emirates in sustainable waste management. Collaboration between the seven emirates of the UAE in the advancement of clean technologies will strengthen.
Saudi Arabia will also become a major renewables player, for both solar power and wind, driving innovation across the clean technologies sector as a whole.
Saudi Arabia is expecting to deploy 9.5 gigawatts of renewables capacity by 2023, but the pipeline could be four times bigger than that in the medium to long term. Masdar is committed to working with the kingdom in the realisation of its clean energy objectives.
Closer to home, Dubai is surging ahead with preparations to host Expo 2020. This will inevitably create opportunities for supply-side clean technologies as well as solutions that manage energy and water demand. The advances achieved in low carbon urban development at Masdar City are set to be rolled out on an ever wider scale.
Today, it’s difficult to overestimate the commercial opportunity of sustainability, which only reinforces the importance of youth engagement to ensure our future energy leaders and entrepreneurs have the skills to succeed. This will be readily apparent at Abu Dhabi Sustainability Week.