The Future of Solar Energy in UAE

Presented by:Tameem ALZOABI 7995650Sami KASEM 8398841 Fadi MANTASH 7645453 Hatem KAMAL 8409858Yousef ELMASRE 849223

Focus statement & research aimsThe research question seeks to determine the readiness of the UAE market

for adopting a home-based solar system grid connected solution?

• The question answered by the secondary research seeks to determine the readiness of the UAE from the following perspectives: Regulations, environment, infrastructure, culture and growth.

• The questions answered by the primary Research was focused on two areas within the UAE:– Readiness of the consumer market

– What is delaying the UAE from engaging the public to adopt solar Energy?

What is solar energy and how it is gathered?

Solar is radiant energy that produced from the sun harnessed using different technologies such as solar photovoltaic(PV) and solar thermal energy. It is clean

and most abundant renewable energy source available and has variety of uses, for example: generating electricity and heating water.

Type of Solar Systems: Off- Grid is using batteries to store extra power On-Grid connected to local utility Grid

Solar energy key drivers

1. Energy security (access and diversification)

2. Increase of energy demand

3. Costs of fossil fuel

4. Cost of solar technology

5. Environmental concerns

6. Creation of jobs

• Developing new technologies such as fracking might be the game changer for new solar investments as it has a direct impact to most of discussed factors.

How can these drivers change and become more or less important?

Energy Security concern

Energy Demand

Jobs

Cost of Solar energy

Cost of convetional energy

Environment

0

2

4

now future

Energy Security concern

Energy Demand

Jobs

Cost of Solar energy

Cost of convetional energy

Environment

0

5

now futurefracking

How will solar energy evolve?

• Cost of solar system is declining continuously ($1.9/Watt by 2020 compared to $2.62/Watt).

• Solar to replace part of nuclear, coal & fossil fuel sources

• Global governments will triple subsidy for renewable energy by 2035

• New development in solar technology

• Fortune 100 companies investment in solar, for example;

Global interest in solar energy Country 2010 Rank 2014 Rank CAGR %

Germany 1st (9.8GW)

1st (35.5GW)

30%

China 8th (0.3GW)

2nd (18.3GW)

127%

Italy 5th (1.2GW)

3rd (17.6GW)

71%

Japan 3rd (2.6GW)

4th (13.6GW)

39%

USA 4th (1.6GW)

5th (12GW)

49%

Spain 2nd (3.4GW)

6th (5.6GW)

10%

Type of solar policies

• Feed in Tariffs

• Quotas

• Bidding tenders

• Tax credits

• Subsidies/ Rebates

• Net metering

How did they succeed?Drivers Targets Policies

Germany• Oil Shock in 1973• Shutting down nuclear plants• Climate Change

• Generate 40-50% of energy by 2025• Generate 100% by 2050

• FiT

China• Depleting coal reserve • Highest carbon footprint in the world

• Revised target from 30GW 2030 to 70 GW 2017

• Capital subsidies• Quotas •Tax credits

Italy• limited natural resources • Relies heavily on imported natural gas• Energy security

• 14% of the energy by 2030

• Net metering •FIP (Feed in Premium) & FIT incentives • Law changed to give small development a green light without permit from local authorities

Japan • Fukushima Daiichi Nuclear disaster

• 53 GW by 2030• 70% of new home to have solar power installed• Reduce nuclear power

• Subsidies Solar projects• FIT

Spain lost its leadership• Targets were set to achieve 20% of primary energy by 2020

• Spain’s global rank dropped from 2nd in 2010 to 6th in 2014

• Reasons: Decrease in energy demand due to economic crisis Government decided to cut subsidies from existing solar projects Announced a cap on solar subsidies

Regulatory/political positionEnvironment position

Infrastructure position Growth in energy demand

Culture

So what is the position in UAE ? (PESTLE ANALYSIS)

What is the regulatory position in the UAE?

• UAE 7 emirates, political power in Abu Dhabi

• Electricity bills are heavily subsidized by the Abu Dhabi government.

• Abu Dhabi & Dubai applied a quota policy to reach 7% by 2020 & 5% by

2030 respectively

• 7% reduction in CO2 emissions by 2020

• Lacking the mechanism and regulatory frameworks to achieve targets

What is the environment position in the UAE?• #6 per capita emitter of CO2 • Depletion of main energy resources • Solar radiation• Dusty environment

What is the infrastructure position in the UAE?• Dubai & Abu Dhabi’s power grids were connected in mid-2006, allowing the two emirates to share energy resources. In 2007 SEWA was connected & 2008 FEWA joined.

• Grid-connected solar completed projects in operation in the UAE

• Constraints related to the infrastructure:Market TechnologyPolicy Cost

What are the cultural factors?• UAE - 7 emirates each one has a family ruling group

• Leader/government tell the people what needs to be done.• Maintain rigid codes of belief and behaviour • Security is an important element in individual motivation

Implications on Solar energy:

• Difficult to change consumption habit• They must understand the issues rotating around the current source of energies and the need

to adopt new technologies to secure energy

What is the forecast growth in energy demands in the UAE?

• UAE GDP growth vs. power generation

• UAE Gas consumption in power generation vs. Total production

• Expo 2020 ($30B Investments)

Why solar energy might be attractive to the UAE?• Energy security and diversification • Gas shortage• Environmental (No. 6 CO2)• Growing economy• Solar radiation are very high

• Oil prices• Geopolitical reasons

What could change this?

18

The questions answered by the primary research was seeking to shed light on two focus areas:

1. The end user consumer readiness of the UAE to adopt solar energy grid connected

solutions & factors affecting him.

2. What is delaying the UAE from engaging the public to adopt solar Energy?

Primary research - GOAL

19

Are you paying a high electricity bill?

Primary research results: General Survey Are you aware of solar energy, if yes, What do you know about

the uses of solar energy?Are you willing invest in a solution that would reduce your cost of the electricity bill?

Are you aware that solar energy solution can offer you major reductions in your consumptions of electricity?

Would cost be considered the first decisive factor when considering solar energy grid solutions?

How much are you willing to pay for such a solution?

20

• Solar is a disruptive technology for the energy sector in UAE

• Cheap access to oil offers gov. time advantage

• Fracking is a potential threat to solar

Primary research results: Interviews

21

• Only 3 interviews

• Lack of major government officials from other Emirates especially Abu

Dhabi

• Only 130 consumers completed the surveys

• Surveys only filled by Dubai residents

Limitations of primary research results

ConclusionRegulations

Environment

Infrastructure

Culture

Growth

23

• Apply mixed policies.

• Solar farms for public investors

• Increase the eco-awareness.

• Reduce electricity subsidizing

• Privatization of power utilities

• Subsidize solar energy solutions

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