3 PAIRING COAL WITH SOLAR: THE UAE’S FRAGMENTED …
73
amid gas shortages that required expensive diesel backup. Criteria for the
diversification included:
• Economic performance (including reducing the use of expensive
backup fuels, particularly diesel, and reducing exposure to volatile
commodity prices)
• A preference for domestic fuels (based on energy security concerns
about potential for supply disruption)
• Dispatchability and flexibility of generation (versus intermittent or
inflexible sources)
• Environmentally clean sources, technologies involving technical
knowledge transfer and quality jobs. 45
After the 2017 breakdown in UAE-Qatar relations, the UAE
announced its intention to achieve self-sufficiency in natural gas prior
to the 2032 expiration of the main Dolphin contract. Preexisting plans
to diversify toward nuclear, coal, and renewables fit well within the
self-sufficiency mandate and the UAE’s more forceful regional and international political stance.
Further, for oil and gas exporters like the UAE, reduced gas demand
at home—where prices are subsidized—allows more to be sold abroad at
full international prices. At a minimum, the Gulf monarchies have been
subject to enormous opportunity costs in providing subsidized domestic
power, and in some cases, the domestic price for gas is insufficient even
to cover costs.
Every gigawatt of solar power capacity offsets consumption of some
3 million barrels of oil equivalent, or roughly 0.5 bcm gas, per year. 46
For each gigawatt of dispatchable generation, the hydrocarbon savings
are larger: 6 million barrels of oil equivalent/year (or 1 bcm/y) saved per
gigawatt of coal-fired capacity (at 50% capacity usage) and as much as 10
million boe/y (2 bcm/y) per gigawatt for nuclear plants.
Regime Security and Nuclear Power
As mentioned, the first of Abu Dhabi’s four 1.4 GW nuclear power
plants was expected to begin providing power to the UAE grid in 2020.
Levelized cost of electricity (LCOE) for Abu Dhabi’s South Korean-built
nuclear plants (including decommissioning costs) is estimated at the low
73
amid gas shortages that required expensive diesel backup. Criteria for the
diversification included:
• Economic performance (including reducing the use of expensive
backup fuels, particularly diesel, and reducing exposure to volatile
commodity prices)
• A preference for domestic fuels (based on energy security concerns
about potential for supply disruption)
• Dispatchability and flexibility of generation (versus intermittent or
inflexible sources)
• Environmentally clean sources, technologies involving technical
knowledge transfer and quality jobs. 45
After the 2017 breakdown in UAE-Qatar relations, the UAE
announced its intention to achieve self-sufficiency in natural gas prior
to the 2032 expiration of the main Dolphin contract. Preexisting plans
to diversify toward nuclear, coal, and renewables fit well within the
self-sufficiency mandate and the UAE’s more forceful regional and international political stance.
Further, for oil and gas exporters like the UAE, reduced gas demand
at home—where prices are subsidized—allows more to be sold abroad at
full international prices. At a minimum, the Gulf monarchies have been
subject to enormous opportunity costs in providing subsidized domestic
power, and in some cases, the domestic price for gas is insufficient even
to cover costs.
Every gigawatt of solar power capacity offsets consumption of some
3 million barrels of oil equivalent, or roughly 0.5 bcm gas, per year. 46
For each gigawatt of dispatchable generation, the hydrocarbon savings
are larger: 6 million barrels of oil equivalent/year (or 1 bcm/y) saved per
gigawatt of coal-fired capacity (at 50% capacity usage) and as much as 10
million boe/y (2 bcm/y) per gigawatt for nuclear plants.
Regime Security and Nuclear Power
As mentioned, the first of Abu Dhabi’s four 1.4 GW nuclear power
plants was expected to begin providing power to the UAE grid in 2020.
Levelized cost of electricity (LCOE) for Abu Dhabi’s South Korean-built
nuclear plants (including decommissioning costs) is estimated at the low