www.pwc.com
Renewable Energy in MENA
– Why and How?
Hannes Reinisch
Senior Manager,
Renewable Energy and Sustainability Advisory, PwC
MEED Renewable Energy Conference –
September 2012
Renewable Energy in MENA
– Why and How?
1. What makes the Middle East special for Renewable Energy?
2. The big question: Renewables vs. Oil & Gas vs. Nuclear?
3. The untapped supply: larger and smarter Grids
4. Plus: A sneak preview of the UAE Solar Survey 2012
(Report to be published in October 2012 in collaboration with ESIA
PwCIL
2
Renewable Energy in MENA
– Why and How?
1. What makes the Middle East special for Renewable Energy?
2. The big question: Renewables vs. Oil & Gas vs. Nuclear?
3. The untapped supply: larger and smarter Grids
4. Plus: A sneak preview of the UAE Solar Survey 2012
(Report to be published in October 2012 in collaboration with ESIA
PwCIL
3
1. What makes the Middle East Special?
A few contextual points
• More Power Needed – Stark Electricity Demand Growth
• Cheap Electricity...is becoming more and more expensive
• We have plenty of Sunshine
• Each MENA country is different
PwCIL
4
More Power Needed –
Jordan
Kuwait
Stark Electricity Demand Growth
Saudi Arabia
Dubai
Abu Dhabi
KSA
PwCIL
2020
50TWh
14GW
45GW
UAE
Oman
7-11% year on year
Today
Qatar
Egypt
2030
110TWh
=120%
23GW
=66%
65GW
=44%
121GW
=175%
5
Electricity is cheap in parts of MENA
PwCIL
MENA
Avg. Prices ($cents/KWh)
UAE lowest
0.8
Saudi Arabia
1.3
Qatar
2.2
Tunisia
Rest of
World
Avg. Prices
($cents/KWh)
4.7
Germany
up to 35
Algeria
4.8
Spain
27
UAE highest
8
Australia
25
Kuwait
7
UK
21
Bahrain
8
California
16
Morocco
up to 19
China
9
Jordan
up to 45
Slide 6
Cheap electricity is....
...becoming more and more expensive
Opportunity Cost of subsidised electricity :
=
f
( Oil/Gas Market Price, Population, Electricity Price, etc.)
Foregone
export
revenues
PwCIL
Local power
demand
OIL & GAS
EXPORTING
COUNTRIES
(un) collected
electricity
revenues
Slide 7
Cheap electricity is....
...becoming more and more expensive
Opportunity Cost of subsidised electricity :
=
f
( Oil/Gas Market Price, Population, Electricity Price, etc.)
Import
expenditure
PwCIL
Local power
demand
OIL & GAS
IMPORTING
COUNTRIES
(un) collected
electricity
revenues
Slide 8
Cheap electricity is....
...becoming more and more expensive
Opportunity Cost of subsidised electricity :
=
f
( Oil/Gas Market Price, Population, Electricity Price, etc.)
Inefficiencies
and wasteful
consumer
behaviour
PwCIL
Slide 9
We have plenty of sunshine
PwCIL
10
More sunshine means lower Levelised Cost of Electricity (LCOE)
LCOE
Technology A
Technology B
900
PwCIL
1200
1800
2500
11
Yield/Insolation
How much exactly – best to measure locally
• Satellite-based data vs.
measurement on the ground
• Dust
• Aerosols in atmosphere
• Temperature
• Data history
• Measurement frequency
Regional monitoring station at the Masdar Institute
PwCIL
12
Yield measurement at a site
MENA
•Plenty of Demand for Power
•Plenty of Oil & Gas
•Plenty of Renewable Energy Resources
•Plenty of Carbon Emissions
PwCIL
13
Target markets for MENA solar
Source: ‘Sunrise in the Desert – Solar becomes commercially viable in MENA’ –
Emirates Solar Industry Association White Paper by Robin Mills, January 2012, Copyright 2012. All rights reserved
PwCIL
January 2012
14
Renewable Energy in MENA
– Why and How?
1. What makes the Middle East special for Renewable Energy?
2. The big question: Renewables vs. Oil & Gas vs. Nuclear?
3. The untapped supply: larger and smarter Grids
4. Plus: A sneak preview of the UAE Solar Survey 2012
(Report to be published in October 2012 in collaboration with ESIA
PwCIL
15
Renewables OR Fossil Fuels?
VS.
Oil & Gas
PwCIL
PV
CSP
Wind
Slide 16
Complements – not Substitutes
OC LNG
CC LNG
CC ‘cheap’ Gas
CC ‘cheapest’ Gas
Generation mix with/without solar power (July)
Source: ‘Sunrise in the Desert – Solar becomes commercially viable in MENA’
Emirates Solar Industry Association White Paper by Robin Mills, January 2012
Copyright 2012. All rights reserved
PwCIL
January 2012
Slide 17
Complements – not Substitutes
Solar PV
OC LNG
CC LNG
CC ‘cheap’ Gas
CC ‘cheapest’ Gas
Generation mix with/without solar power (July)
Source: ‘Sunrise in the Desert – Solar becomes commercially viable in MENA’
Emirates Solar Industry Association White Paper by Robin Mills, January 2012
Copyright 2012. All rights reserved
PwCIL
January 2012
Slide 18
Renewables OR Nuclear Energy?
VS.
Nuclear
PwCIL
PV
CSP
Wind
Slide 19
Solar PV OR Solar CSP OR Wind?
VS.
PV
PwCIL
VS.
CSP
Wind
Slide 20
...Renewables OR AND Other Energy Sources
+
Oil & Gas
+
Nuclear
+
PV
+
CSP
Wind
Complements – not Substitutes (for now...)
PwCIL
Slide 21
A low(er)-carbon Energy Mix
Jordan 2020: 10%
Dubai 2030:5%
Kuwait 2020:10%
RE
Egypt 2020: 20%
KSA 2032: 16-22%
PwCIL
Abu Dhabi 2020 :7%
22
Complements – not Substitutes
2032
SOLAR PV
SOLAR CSP
Hydrocarbons
Nuclear + Geothermal + Waste-to-Energy
Source: KACARE presentation at 4th Saudi Energy Forum (May 2012)
PwCIL
Slide 23
Renewable Energy in MENA
– Why and How?
1. What makes the Middle East special for Renewable Energy?
2. The big question: Renewables vs. Oil & Gas vs. Nuclear?
3. The untapped supply: larger and smarter Grids
4. Plus: A sneak preview of the UAE Solar Survey 2012
(Report to be published in October 2012 in collaboration with ESIA
PwCIL
24
...Renewables OR AND Other Energy Sources
+
Oil & Gas
PwCIL
+
Nuclear
+
PV
+
CSP
Wind
Slide 25
...Renewables OR AND Other Energy Sources
+
Oil & Gas
+
Nuclear
+
PV
+
CSP
Wind
+
Trade
PwCIL
Slide 26
Supply Efficiency and Renewable shares rise
as grids become larger and smarter
UAE
KSA
GCC Interconnection
PwCIL
EU-MENA Grid Integration
27
Larger and Smarter Grids connect demand and supply
across national and international borders
•
LESS underutilised peaking plants
•
LESS storage requirements for RE
•
MORE harvesting of Renewable Sources for local power demand
•
MORE export revenues from freed-up oil & gas
•
MORE export revenues from exported electricity
•
MORE economic diversification in new generation and transmission
PwCIL
28
Renewable Energy in MENA
– Why and How?
1. What makes the Middle East special for Renewable Energy?
2. The big question: Renewables vs. Oil & Gas vs. Nuclear?
3. The untapped supply: larger and smarter Grids
4. Plus: A sneak preview of the UAE Solar Survey 2012
(Report to be published in October 2012 in collaboration with ESIA
PwCIL
29
UAE Solar Survey 2012
October 2012
• Initiative by ESIA and PwC in collaboration with
the UAE Federal Government
• Over
100
survey
respondents
provided
commentary and insights over a period of 6
weeks.
• 76% were based in the UAE, the majority
considered themselves to have either ‘expert
knowledge’ or ‘good knowledge’ of the solar
Industry, both globally and in the UAE.
• Most had 3-10 years’ experience in the Global
Solar Industry. A significant number of
respondents were senior executive level.
• Representation
from
government,
project
engineering and solar technology developers and
Industry Consultants.
PwCIL
30
“How quickly will
the market
develop?”
“What are the
challenges solar
in the UAE?
“What sectors will
drive further
development of
solar projects?”
“What are the issues
in funding and
financing solar
developments?”
“What can the
government do to
drive growth in the
solar industry?”
“Which Solar
technologies are
best suited for
the UAE?”
“How can UAE
nationals benefit
from the current
growth in renewable
energy?”
PwCIL
“What are the
challenges for
research and
developing human
capital?”
“What is the best
incentive system
to support the
solar industry?”
31
Q8: Which applications do you think will drive further development of solar
projects in the UAE?
Integration of solar into new construction
58
Installation onto existing solar rooftops
54
Heating / cooling of industrial processes
47
Replacement of diesel
46
Replacement of gas for electricity generation
41
Desalination
38
Electric vehicles and their charging stations
14
Other*
Integration into new construction
13
0
10
20
30
40
50
60
70
Example: Al Bateen School Abu Dhabi,
(Photo Courtesy of Environmena)
PwCIL
Thank you
Hannes Reinisch
Senior Manager,
Renewable Energy and Sustainability Advisory, PwC
ESIA Research and Policy Committee Member
PwCIL
Slide 33
Jordan
Kuwait
PwC Middle East Centre of Excellence for
Renewable Energy, Cleantech and Sustainability
Meet the Team
Q
a
t
a
r
Egypt
Saudi
Arabia
UAE
Oman
Hannes Reinisch
Paul Navratil
COE Coordinator
Lead Partner for Energy - Middle East
paul.navratil@ae.pwc.com
Senior Manager, Renewable Energy and
Sustainable Development
hannes.reinisch@ae.pwc.com Mobile: +971 50 9009 513
Dr. Anil Khurana
Mohammed Salem
Partner, PwC’s PRTM Management Consulting
anil.khurana@ae.pwc.com
Partner, Climate Change and Sustainability
mohammed.t.salem@ae.pwc.com
Bernhard Haider
Maarten Wolfs
Director, Finance & Procuement
maarten.wolfs@ae.pwc.com
Partner – Power & Utilities
Smart Grid and Renewable Energy
bernhard.haider@ps.pwc.com
Nathan Clute
Jakub Zielkiewicz
Manager, Climate Change and Carbon
jakub.zielkiewicz@ae.pwc.com
Tania Abu Zeid
Consultant, COE support
tania.a.zeid@ae.pwc.com
Director, Clean technology
investment & deployment strategies
nathan.clute@ae.pwc.com
Emily Manuel
Assistant Manager, Renewables & Power
emily.manuel@ae.pwc.com
Global Members of ME COE
Gus Schellekens
Director, Renewable Energy Expert
PwCIL
gus.schellekens@uk.pwc.com
Andrew Thurley
Director, Director - Public Sector
Sustainability
andrew.thurley@uk.pwc.com
PwC Middle East Centre of Excellence
for Renewable Energy, Cleantech and Sustainability
•
We recognize a growing pace of change in the Middle East
•
Launched this Centre of Excellence in December 2010.
•
Based in Abu Dhabi and linked with experts across the region and our wider global network.
•
While covering the entire ME region, current focus countries are
UAE, KSA, Qatar, Kuwait, Oman, Jordan and Egypt.
•
Our Advisory services cover Strategy, Policy, Technology and Financing for
•
Climate Change Mitigation and Adaptation
•
Green Growth and Sustainable Development
•
Energy Diversification and Renewable Energy (Focus: Solar)
•
Energy Efficiency and Demand Side Management
•
Smart Grid and Smart Metering
•
Corporate Sustainability (Economic, Social, Environmental)
•
Green Supply Chain
PwCIL
Jordan
Kuwait
Qatar
Egypt
Saudi Arabia
UAE
Oman
35
PwC - Introduction
• 163,000 people in 163 countries across our network
share their thinking, experience and solutions to develop fresh
perspectives and practical advice.
• providing industry-focused assurance, tax and advisory
services
• We are independent from manufacturers or integrators
Our Global Power & Utilities
Centre of Excellence
Smart Grids and Smart Meters
Renewable and cleaner energy
Nuclear energy
Deals
Capital projects & infrastructure
Asset management & performance
improvement
 Industry regulation
 Financial reporting and assurance
 Energy trading & risk management






PwC in the Middle Easy
 Established for over 40 years
 Over 2,500 people
 Offices in:






Bahrain,
Egypt,
Iraq
Jordan
Kuwait
Lebanon






Libya
Oman
Palestine
Qatar,
Saudi Arabia
United Arab Emirates
36
About ESIA
The Emirates Solar Industry Association (ESIA) is a non-profit, non-governmental organization that brings together the region’s solar industry. Our goal is to
transform the Middle East’s vast solar potential into a commercially and environmentally viable solution for the region’s growing electricity demand.
ESIA provides its members with services such as educational workshops, networking functions and special reports on breakthrough solar innovations. We also
provide assistance to international companies seeking to expand their solar operations in the Middle East. The association is currently working on initiatives that
bring together leaders from the policy sector, academia, and the private sector. The monthly ESIA newsletter goes out to over 1,200 readers in the Middle East
renewable energy space – the largest of its kind.
About The Author
Robin Mills is the Head of Consulting at Manaar, the Dubai-based energy consultancy providing business advice and operations management consulting services
for private and government energy companies in the Middle East. Until October 2011, he was the Petroleum Economics Manager at Emirates National Oil
Company. From 2006-2008, he was Senior Evaluation Manager at Dubai Energy and before that, had a variety of economic and geological roles during his eight
years with Shell. Robin has published two books, "The Myth of the Oil Crisis: Overcoming the Challenges of Depletion, Geopolitics and Global Warming" (Praeger
Publishers, 2008) and “Capturing Carbon” (Columbia, 2011), and features widely in MENA and international media on energy and environmental issues. He holds
an MS in Geological Sciences from Cambridge University.
About PwC
PwC firms help organisations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with close to 169,000 people who are
committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com.
Established in the Middle East for 40 years, there are PwC firms in Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman, the Palestinian territories, Qatar,
Saudi Arabia and the United Arab Emirates, with around 2,500 people. (www.pwc.com/middle-east) © 2012 PricewaterhouseCoopers. All rights reserved.
"PwC" is the brand under which member firms of PricewaterhouseCoopers International Limited (PwCIL) operate and provide services. Together, these firms form
the PwC network. Each firm in the network is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any
services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional
judgment or bind them in any way.
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the
information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the
accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, the authors and distributors do not accept or assume
any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this
publication or for any decision based on it.
Copyright 2012. All rights reserved.
“PwC” refers to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the
PwC network. Each member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to
clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind
them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member
firm’s professional judgment or bind another member firm or PwCIL in any way.
"ESIA" refers to the Emirates Solar Industry Association, non-profit industry group based in the UAE.