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Solar state of mind.

Byline: Sarah Abdullah

Summary: In a region with thousands of hours of sunshine a year, the solar energy industry is in its infancy. Can Saudi Arabia lead the way in harnessing a new source of energy?

The feasibility of harnessing Saudi Arabia's vast resource of solar energy has been studied as far back as the 1960s. Yet for all the research, the outcome has always been the same: Converting solar energy into electricity is just too expensive. This leaves fossil fuels - primarily diesel - as the main source of energy for the country's electricity power plants.

Yet recent indications suggest that this might soon change, although no one involved is getting too excited yet.

"I really do wish to say yes, since I was very optimistic 30 years ago, says Dr. Mohammed Bashrahil, electric generation expert and research manager at the Saudi Electric Company. "I expected more use and utilization of sun power in power generation, however I still have hope that one day we shall see a breakthrough in the field, so let's wait and see," he said.

Bashrahil also said that a deciding factor in whether solar power can finally be an economic alternative is the advancement in modern technology. "Solar power research and development has been increasing and implemented during the end of the last decade and hopefully will increase in this decade," he said.

With demand for electricity rising at 6 percent per year, coupled with an increasing population, it would seem to be in the electric company's best interests to use solar energy to relieve the power burden.

Just how big is the problem? Saudi Arabia's Industry and Electricity Ministry has estimated that the country will require up to 20 gigawatts of additional power generation capacity by 2019, which will require an investment of at least $624 billion over the next 15 years to cope with the demand, with $46.9 of the investment figure for power investment alone.

However, Bashrahil is clear that solar energy is not the complete solution to these problems. "Solar radiation is one of the alternatives to fossil fuels to generate electric power, but not the only one. Even though it is used, it will not replace oil, coal, nuclear, and other various other sources of generating thermal power used to run power plants."

He also says that all solar power plants in the country - either thermal or photovoltaic - are research plants, much smaller than others around the world. For example, the biggest solar thermal power plant in the American state of Nevada produces 64MW and the largest in Europe, in Spain, produces 60MW.

"The total produced in 2008 in Saudi Arabia is approximately 34,000MW. So you can see the magnitude of the power needed in Saudi Arabia, with the power in developed countries being much greater."

April 2009 estimates released by the American Department of Energy stated Aathat the cost comparison between fossil fuel and solar power to produce a kilowatt of electricity is 25 cents to 50 cents a kilowatt hour for sun power while oil-fired or conventional power is half that at just 12 cents.

"But in Saudi Arabia that price is even lower at only 3.2 cents a kilowatt," Bashrahil says. "Solar energy is not feasible compared to conventional fuels and is only feasible at smaller plants in remote areas and for certain applications."

However, statistics recently published in the 'Saudi Commerce & Economic Review' estimated that as much as 7,000 watts of energy per square meter fall on Saudi Arabia for 12 hours each day.

Because of this potential and the increasing electricity demand, many local and international entities are teaming up to bring prices down and make solar energy a feasible energy source.

Saudi Aramco is one just conglomerate that has been involved in researching solar energy and has met with international representatives such as Japanese refiners and solar panel manufacturers Show Shell Sekiyu.

They signed a memorandum of understanding last year agreeing to continue testing and to build a 10-megawatt pilot power plant as the first step in developing a countrywide solar energy strategy.

King Abdullah University of Science and Technology in Thuwal, 80 kilometers north of Jeddah, is also planning to build a 2-megawatt power plant to researchAasolar energy.

Despite these initiatives, Bashrahil says he remains skeptical. "We need to build more solar thermal power plants, using flat plate collectors, parabolic trough, reflecting mirrors, as well as photovoltaic, in order to reach a break-even point where it will be feasible," he said.

But can solar energy be integrated along with conventional power plants? This is what Arabian Qudra, a subsidiaryAaof the Abunayyan Group in Saudi Arabia has been testing.

"We are working on solar as a system integrator, and as well on conventional power plants," says Alexandre Allegue, the business development manager for renewable energy at Arabian Qudra/Acwa Holding.

"We started the solar activity within Acwa holding, and Acwa Power International and more than 6,000 megawatt of power and 2.23 million cubic meters per day of desalinated water has been produced," Allegue said.

"We have conducted several studies on the feasibility of solar energy in the kingdom through our company Sun & Life, a solar equipment manufacturer and evaluated the technology to be deployed in such a harsh environment, focusing on producing the most power at the lowest cost," he said.

"Most of the time people are not comparing apples to apples when they evaluate the levelized electricity costs of solar energy versus fossil fuels. To be fair, we shall incorporate all cost components involved in a fully transparent way without subsidies," he said. "It would be unfair to compare the costs of solar energy without subsidies with the actual costs of fossil fuels, which is artificially low here and completely subsidized."

This is just one of many problems when it comes to assessing the feasibility of solar energy: The price of the fuel isn't included in the generation costs, and the electricity prices are extremely high during peak demand.

Allegue also says that due to Saudi Arabia's intense solar irradiation that if solar energy was subsidized the same way as fossil fuels are, photovoltaics would become very affordable.

When asked the approximate cost of a kilowatt of electricity produced by his company, Allegue said that because of their partnerships in Saudi Arabia they are able to operate with the most competitive prices in photovoltaic solutions: 25 cents to 33 cents per kilowatt.

So how soon could solar power be used in the home? AaAccording to Allegue, a group of governmental stakeholders are working to implement a subsidy scheme related to solar energy, a carbon dioxide emission saving credit and a comprehensive grid tariff all of which will determine the speed of development of solar rooftops. These are the building blocks needed to make domestic use possible.

"Some institutes such as the Middle East Center for Sustainable Development are encouragingAaso-called green building construction, and accrediting certifications if a enough of the used energy produced is from solar panels," he said.

"The feasibility model of solar energy in the kingdom is unique, and not comparable to any other country. Indeed, the low electricity price generated from fossil fuels solutions, and the lack of solar subsidies makes it even more challenging. AaBut I believe that to tackle the Saudi market, securing the appropriate technology adapted to the kingdom's harsh environment is necessary, but not sufficient."

A.T. Kearney, a global management consulting firm, has said that it expects solar power to become cost-competitive in the form of concentrated solar power over the course of the next 12 months, as prices of fossil fuels such as oil and gas continue to increase. Some analysts are predicting that costs will rise to more than $100 a barrel.

And with solar technology costs decreasing because of productivity improvements, the company says it believes that the cost-benefit of solar energy will lead to a boom on a global scale. IfCethisCehappens, Saudi Arabia, and the rest of the region, willCeneedCetoCebeCepositionedCeto take advantage.

- Trends magazine

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Publication:Kippreport
Date:Feb 11, 2010
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