4 THE RISE OF RENEWABLES IN THE GULF STATES …
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Qatar, the opportunity cost of exporting these resources at market prices
is more easily ignored by planners.
UAE
With the strongest track record thus far in the GCC, the UAE also has
some of the most ambitious plans moving forward. The two headline
targets at the federal level aim for 27% clean energy by 2021 and 44% of
generation capacity by 2050. Credible short-term plans center on a series
of solar PV and CSP plants planned for Dubai and Abu Dhabi. Individual
emirates also have also set their own targets, with Dubai and Abu Dhabi
both targeting 7% renewables capacity by 2020.
Looking at the member states’ plans as a whole it is clear that the UAE
is still anticipated to retain its substantial lead, though Saudi Arabia and
Kuwait are also planning on adding significant capacity, predominantly
through large state-backed utility-scale projects, narrowing the large gap
that exists today. The UAE’s earlier efforts to lift energy subsidies in the
period between 2008 and 2014, particularly for commercial and industrial
consumers, also allowed it to become the regional leader in the development of distributed solar PV. More recent subsidy reform in Saudi Arabia
and Oman, however, which has led to increases in electricity costs for
some heavy energy users, will also likely translate into more distributed
PV projects in these markets, particularly at the commercial and industrial scale; the next section will look at the potential in these segments in
greater detail.
Distributed Renewable Energy in the GCC
It is really at the distributed scale that one sees many of the archetypical
effects of the rentier paradigm affecting the development and deployment
of renewable energy. Here the distortive effects of energy subsidies on the
incentives of the private sector and citizen are laid bare, and the market as
it is experienced by players outside of the state—subject to its set utility
prices—has insured that private investment in distributed energy resources
has been limited till now. In other states that have experienced strong
growth in distributed PV over the last 10 years, not only have utility prices
been significantly higher, but a variety of incentives have been deployed.
103
Qatar, the opportunity cost of exporting these resources at market prices
is more easily ignored by planners.
UAE
With the strongest track record thus far in the GCC, the UAE also has
some of the most ambitious plans moving forward. The two headline
targets at the federal level aim for 27% clean energy by 2021 and 44% of
generation capacity by 2050. Credible short-term plans center on a series
of solar PV and CSP plants planned for Dubai and Abu Dhabi. Individual
emirates also have also set their own targets, with Dubai and Abu Dhabi
both targeting 7% renewables capacity by 2020.
Looking at the member states’ plans as a whole it is clear that the UAE
is still anticipated to retain its substantial lead, though Saudi Arabia and
Kuwait are also planning on adding significant capacity, predominantly
through large state-backed utility-scale projects, narrowing the large gap
that exists today. The UAE’s earlier efforts to lift energy subsidies in the
period between 2008 and 2014, particularly for commercial and industrial
consumers, also allowed it to become the regional leader in the development of distributed solar PV. More recent subsidy reform in Saudi Arabia
and Oman, however, which has led to increases in electricity costs for
some heavy energy users, will also likely translate into more distributed
PV projects in these markets, particularly at the commercial and industrial scale; the next section will look at the potential in these segments in
greater detail.
Distributed Renewable Energy in the GCC
It is really at the distributed scale that one sees many of the archetypical
effects of the rentier paradigm affecting the development and deployment
of renewable energy. Here the distortive effects of energy subsidies on the
incentives of the private sector and citizen are laid bare, and the market as
it is experienced by players outside of the state—subject to its set utility
prices—has insured that private investment in distributed energy resources
has been limited till now. In other states that have experienced strong
growth in distributed PV over the last 10 years, not only have utility prices
been significantly higher, but a variety of incentives have been deployed.