International operators keep keen eye on UAE renewable energy

There's expectation that the UAE’s renewable energy sector will grow through to 2016 as more projects are launched and it remains competitive amid low oil prices.

Powered by automated translation

International firms expect the UAE’s renewable energy sector to grow through to 2016 as more projects are launched and it remains competitive amid low oil prices, company executives said.

Laurent Longuet, managing director of Sunpower Middle East, said that the company’s regional plans include bidding on UAE projects expected to come up next year.

“There have been some announcements made by [Abu Dhabi-based Masdar regarding next year], and its our target to be a part of this,” he said.

Solar photovoltaic (PV) technology in particular has become cost-competitive compared to conventional forms of energy derived from natural gas which accounts for 97 per cent of the UAE’s power generation output. That ratio will be altered as more renewable projects come online such as the Mohammed bin Rashid Al Maktoum solar park.

An award for 200-megawatts from the project’s second phase to Saudi Arabia’s Acwa Power, at a fixed rate of 5.4 US cents per kilowatt hour beats out the current cost of electricity produced from natural gas, which stands at 9 cents.

“Here in the region we’re seeing more customers realising that there’s an opportunity [for the renewable energy technology] because the cost has come down so rapidly,” the ABB chief executive Ulrich Spiesshofer said. “Even with low oil prices today [renewable energy] is competitive.”

SunPower has been involved in the Mena region for the past decade with 10MW of installed solar.

“We are very ambitious on the region, and strongly believe in solar development,” Mr Longuet said.

The US PV panel manufacturer added that it was looking to establish a production facility in the region as part of the company’s strategy.

“When we’re in a market, we look to localise manufacturing,” he said.

The UAE will help to play a role in Sunpower’s goal of tripling its PV capacity in the years to come in line with overall market growth, according to Mr Longuet.

One of next year’s expected projects is the Nour-1 solar PV plant, located near Al Ain. The 100MW scheme received its first bids in 2011 but Masdar said the project will move forward this year.

“We’re looking to develop the Nour project, and that process will unfold this year more aggressively,” said Bader Al Lamki, director of Masdar Clean Energy.

Zurich-based ABB is also keen to further expand in the country’s green sector after winning a US$55 million deal for the Mohammed bin Rashid Al Maktoum solar park in Dubai.

Dubai Electricity and Water Authority (Dewa) has contracted the power and automation company to supply a substation for its second phase. The project’s total capacity is set to reach 1000MW.

“[The] UAE is a core market and will be there for many years to come,” said Mr Spiesshofer. “The renewable energy theme is coming up at lightning speed all around the world, and in the GCC it’s becoming a theme that’s moving strongly to the forefront.”

He said that the region accounted for about $5 billion of the power and automation company’s total portfolio and “a significant part of that is for renewable energy”.

The chief executive said that a large chunk of ABB’s revenue this year will depend on its solar and other renewable energy capabilities.

ABB announced last week that it was working with the Masdar Institute and Masdar to test new solar technologies that could be deployed in harsh desert climates. The initiative, which will be deployed at Masdar City, will simulate a PV power plant working in the severe weather in the region ranging from intense heat to sandstorms.

lgraves@thenational.ae

Follow The National's Business section on Twitter