Future of the middle east holds energy dominance through investments in renewable energy, discuss RE Leaders in a webinar sponsored by L&T and Huawei
In 2012, oil and gas revenues for the middle east was $1 trillion but it reached $400 billion in the last one year. Reduction of consumption of fossil fuel based energy, resulted in lesser production and fall in the prices. The reason could be stated as the adoption of renewables. With the emergence of renewable energy it is predicted that hydrogen will be the future of renewable energy. It is also said to replace the electric and non-electric industry (for example, transportation like trains, planes, ships and cars).
From oil and gas to renewable to hydrogen, this process will mark the transition in the Middle east, claims Shaji John, Vice President & Head Business Development, Larsen & Toubro Limited. He believes that even if it is a difficult time because of module pricing there is a bright future for the industry.
Powering RE in Middle East:
Discussing segments that will open avenues for the renewable sector up to 60 GW or more in the next 5-10 years, John stated:
1. The transition from fossil fuel to renewable energy.
2. Development of new cities like Red Sea city will demand renewable energy.
3. Huge market for green hydrogen.
Shaji also mentioned that 60-65 per cent of green hydrogen is renewable. If one is able to drive down renewable costs, the hydrogen that is at $4 or $5 per kg might come down to $1-2 per kg. This will help in competing with grey and blue hydrogen.
Advantages of the Middle East:
The middle east is blessed with radiation of about 2000-2500 KWh/metre square. As much as 4-5 per cent of land from the region can power the whole world, such is the potential of the region. It is also supported by the evacuation, especially the GCC grid from Kuwait to Oman. Besides radiation, another advantage of the geography is the connectivity to the ports. Since the Middle East is situated in the centre of the world, it has better connectivity and makes the transportation easy and efficient. These factors give an upper edge to the region, claims John.
Challenges Faced by Developers:
Existence of lowest tariff and the basic need to deliver projects of high quality is one of the major challenges in the region. On the top of it, managing high performing assets in those price targets is another hurdle according to Manish Singhal, Director – Solar PV Solutions, ACWA Power. The unavailability of skilled labourers controlled by various visa regimes and travel restrictions in the last two years are some of the reasons that stand in the way of a prosperous future.
Trends in Utility PV Solar Projects for Inverters:
Faris: As manufacturers it is a trend to adapt to the needs of different people in the market. To achieve this, one must look into the architecture of inverters and make it localised or better for developers to purchase.
Module Pricing:
“We believe that in the second half of this year we may see some reduction in prices and this is based on the current supply and demand, and the current price of raw material. By the second half of the year, the new production of polysilicon and all the raw materials will be available. If those production lines start producing more raw material, we will be able to benefit from bigger supply and therefore, supply and demand will find an equilibrium then…” stated Gonzalo Bonelo, Middle East Area Manager, LONGI Solar.
Adding to this he said that the trend is headed towards lower prices even if not at the same pace due to the global pandemic. Due to economic slowdown induced by coronavirus, most of the projects were delayed, reducing the demand of modules and therefore manufacturers and suppliers were willing to provide everything at competitive cost. With these new trends and rising demand the market becomes difficult, and the supply and demand needs some time to adjust and find some clarity.
Future Risk Management:
While talking about the future threats Miguel Angel Escribano Del Rey, Director, Global Sales – Solar, Bureau Veritas Group mentioned cybersecurity as a rising concern. He elaborated that there is a need for awareness regarding the issue. It is imperative to understand that power generation assets are being talked about. Giving a solution to it, he announced one of their recent services in their portfolio to deal with this threat.
Scenario of Trackers:
In the harsh environment it is crucial to understand the requirements. Alvaro Casado Portuondo, M.D. Middle East, PV Hardware explained that their organisation uses HPG and alloys for the tracking system. The company has alliances with skilled suppliers to enable good work and provide the warranties required to support this extreme environment. With the experience they have (3GW), there is an understanding of the effect of extreme weather. Therefore, this tracker company focuses on having reliable technology to be used on site.
Improving Performance of Tracking System:
To do so work on ways to integrate the inverter into the tracking system to use the inverter are underway. Perhaps attempts to integrate the controller on the tracking system to reduce the pricing are also made. Alvaro claims that big areas are difficult to optimise, so whatever is developed is their own tracking system. This is done to make sure that the trackers perform the most precise back tracking. It also takes into account the specific location of every single tracker. This algorithm helps optimise even large areas in one go.
The conversation concluded on the promises of a bright future for renewable energy in the middle east region.
(The excerpts were taken from a panel discussion conducted during a webinar by EQ International and sponsored by L&T and Huawei. The views and predictions are reflective of market trends and personal opinion.)
