Abu Dhabi: The UAE can achieve energy system savings of $1.9 billion (Dh6.98 billion) annually by 2030 by producing a 10 per cent share of renewable energy in its total energy supply and almost 25 per cent in the power sector, according to a new report.

If the health and environmental benefits of clean energy are also included, they could amount to additional annual net savings of $1-$3.7 billion by 2030.

The report, titled ‘The Renewable Energy Prospects: UAE’, was released on Tuesday evening by the International Renewable Energy Agency (Irena), Masdar Institute, and the UAE Ministry of Foreign Affairs, marking the country’s first public comparison of different energy technology costs and potentials.

“The UAE’s strategy of innovation and diversification has placed it at the fulcrum of the massive transformation of the global energy landscape that has already begun,” said Adnan Z. Ameen, Irena director-general, at a ceremony to launch the report at the Emirates Centre for Strategic Studies and Research (ECSSR) in the presence of senior UAE officials.

Dr Fred Moavenzadeh, President of Masdar Institute, the graduate-level clean-tech university, said: “This report is an eye-opener.”

The report also reinforces the idea that green power also makes financial sense.

Dr Thani Al Zeyoudi, the UAE’s Permanent Representative to Irena and the Director of Energy and Climate Change at the Ministry of Foreign Affairs, said: “As this report shows, there is now a clear financial case for renewables even before we consider benefits like energy security, emissions, and job creation.”

The report cites sharp declines in renewable energy costs in the UAE and rising costs for natural gas — as domestic production declines and the country turns to more expensive imported sources — as the key drivers for renewable energy’s financial attractiveness.

Cheapest sources

Solar and wind may now be the cheapest sources of new energy supply in the UAE, according to the report.

Local solar PV (Photo voltaic) costs, for instance, have fallen by 80 per cent since 2008. The solar costs are poised to decrease even further. In January, the tender for the second phase of Mohammad Bin Rashid Solar Park in Dubai was awarded to the lowest bidder for under 6 cents per kilowatt hour for a 25-year fixed contract. This is the lowest solar price ever achieved worldwide.

Regarding the rising costs of natural gas, the report said the cost of new gas supplies in the UAE has grown from under $2.5/MMBtu (Dh9.18/million British thermal units) in 2010 to $6-8/MMBtu for domestic production and $10-18/MMBtu for imports today, even after the recent decline of oil and LNG prices.

The report estimates that solar, wind, and waste-to-energy are preferable for power generation when new gas is above $8/MMBtu — making them immediately competitive in the UAE, where natural gas supplies almost 100 per cent of power.

Roadmap

The report is one of the first three country analyses under Irena’s REmap 2030 project, which evaluates how the world can meet the United Nations’ Sustainable Energy for All goal of doubling the global share of renewable energy by 2030.

The project maps how renewable energy can grow in the power, industry, buildings, and transport sectors.

Solar and wind, the report notes, are still challenged by intermittency which will require natural gas to fill gaps in output.

However, the savings from generating solar during the daytime, instead of consuming gas, are so great that they could justify 17,500 megawatts of PV in the UAE by 2030, up from around 40MW today.