x Abu Dhabi, UAEFriday 28 July 2017

To harness the sun, first break it into little pieces

In a region that derives its electricity from sprawling power plants that generate millions of kilowatts every day, it is little surprise that the advance of solar power is measured in utility-scale arrays.

While rooftop solar intallations may not be a common sight in the UAE, we may be seeing more of them in the future. Sarah Dea / The National
While rooftop solar intallations may not be a common sight in the UAE, we may be seeing more of them in the future. Sarah Dea / The National

In a region that derives its electricity from sprawling power plants that generate millions of kilowatts every day, it is little surprise that the advance of solar power is measured in utility-scale arrays.

Abu Dhabi kicked off a trend that will involve huge swaths of desert being covered with solar equipment over the coming decades when it inaugurated the Shams-1 plant in March.

The 100-megawatt concentrated solar power plant is the largest completed solar project in the Middle East, and it will not be the emirate's last. Dubai and many other governments in the region also want to generate power from the sun with large-scale arrays. The real big hitter will be Saudi Arabia, which has plans to draw 41 gigawatts of electricity from the sun by 2032.

With attention fixed on large installations, it is easy to forget that there are other means to achieve heavy solar penetration. Much of the world's renewable energy comes from panels fixed up on rooftops, which supply electricity to households and businesses and feed excess power into the grid. Germany, the leader in installed capacity, achieved its status this way.

As The National reported last week, Dubai is working on a plan to introduce rooftop solar to the emirate. Similar efforts are under way in Abu Dhabi.

Should these efforts come to fruition, Dubai's Government could introduce regulation that allows the installation of solar panels on top of houses by next year.

In Abu Dhabi, where the Abu Dhabi Water and Electricity Authority, Masdar and the Regulation & Supervision Bureau are in consultation, it is likely to take a little longer for a legal framework to come into effect.

Aside from giving permission to install solar photovoltaic (PV) panels, a rooftop solar programme also needs to provide incentive to do so. While their costs are falling, panels remain expensive, and their installation requires significant upfront costs.

In countries that have taken to rooftop solar, the payback comes from so-called feed-in tariff for electricity that is surplus to requirements at the source, and is fed into the national grid. Feed-in tariffs are above the going rate for electricity, making rooftop solar financially viable to households or businesses, which also make a saving by satisfying some of their own electricity needs.

Dubai is considering feed-in tariffs, and it has little choice if it wants to encourage rooftop solar. Due to the peculiarities of power generation in the region, such a tariff might have to be significantly higher than elsewhere. Throughout the Middle East, electricity is heavily subsidised, and while Dubai has restricted subsidies to UAE nationals, expats still benefit from cheap gas that is feeding power plants in the emirate.

Cheap electricity encourages waste, which has done its part to make the UAE the world's second- biggest emitter of carbon dioxide per capita.

But it also undermines the economic rationale for rooftop solar, as electricity from PV panels is comparatively more expensive, and the savings less pronounced. The only answer is to offer a feed-in tariff that compensates for the price discrepancy.

In Germany, utilities pass on the additional cost feed-in tariffs to consumers by adding it to the electricity bills, but this is unlikely to happen in a region where cheap fuel, electricity and water is regarded as a basic right by the population.

Another concern is grid stability. Grids that have to cope with two-way flows of electricity from thousands of sources need to be sophisticated, and countries with a large renewables content in their energy mix have resorted to upgrading to so-called smart grids equipped with the latest technology. The Dubai Electricity and Water Authority (Dewa) has been smartening up its grid for some time, but still seems uneasy at the prospect of mass solar input.

Such worries are unfounded, says Michael Krämer, a Dubai-based lawyer at Taylor Wessing and solar specialist. Because the average household in the Emirates uses about 10 times as much electricity as its European counterpart, even the most extensive rooftop solar mounting will not be large enough to feed substantial amounts of power into the grid.

Mr Krämer recommends a conservative feed-in tariff to avoid a rush towards rooftop solar that could lead to overcapacity and grid instability.

With only small amounts of electricity likely to flow into the grid from rooftop panels, the impact of feed-in tariffs may be limited in any case. This seems to have been recognised, and Dewa is looking into a "whole series of economic and support tools," according to Ivano Iannelli, the chief executive of government-owned advisory company Dubai Carbon Centre of Excellence.

While the cost of adopting rooftop solar may be substantial, the drain on government budgets would likely decline over time. Not only are panels getting cheaper, but installation - which accounts for about two thirds of the costs of a rooftop array - will become less expensive once demand creates more competition among providers, says Vahid Fotuhi, the president of the Emirates Solar Industry Association.

"Once you create a market the costs will come down."

And even though solar remains a more expensive option to natural gas-fired power plants for now, the growing shortage of cheap gas could in time turn this calculation on its head.

 

fneuhof@thenational.ae