Gulf region can spare scarce water and reserve lucrative hydrocarbons for export if it meets renewables targets in ‘Global Sunbelt’
By Alex Pashley
Why wouldn’t a region that holds almost a third of proven crude and a fifth of gas reserves keep the taps running?
To preserve vital water stocks and tap its choice solar potential, that’s why, says the International Renewable Energy Agency in a Wednesday report.
If Saudi Arabia and the five other Gulf Cooperation Council members make good on renewable energy targets, that would keep 400 million barrels of oil in the desert in 2030.
That’s a 25% cut on production forecasts, and would save 2.5 billion barrels over the period.
Tumbling costs mean solar photovoltaic cells, wind farms and waste burning are more economic than ever.
Commitments of 80GW of installed renewable energy capacity will reduce water consumption by 16%, create 200,000 jobs, and slash emissions 8%, according to the Abu Dhabi-based think tank’s calculations.
“The GCC region has long been a global leader in energy production and can further strengthen this role through the development of its vast renewable energy sources,” said director-general Adnan Amin.
In a parched region facing water shortages, renewable power doesn’t guzzle as much as fossil fuel industries. Making seawater drinkable in turn makes up a chunk of energy usage.
And depressed energy prices have strained national budgets, making the case for diversification.
Hydrocarbon exports – crude oil, natural gas and other petroleum products – contributed almost 80% of total government revenue in the GCC in 2013.
There’s another reason to arrest carbon emissions. Warmer temperatures and lower rainfall would boost demand for air conditioning and desalination in the water-stressed Gulf.
Deploying more renewables could free up fossil fuel supplies that generate more revenue in exports or used in the petrochemical industry.
But will it get there? There are concerns whether the targets are overly ambitious.
Saudi Arabia must boost its installed capacity of renewable power to over 29GW by 2030 and the UAE to over 33GW .
That requires growth rates of 6.5% over 2015-20, which would slightly fall in the years to 2030.
But the Kingdom, whose economy makes up half of the GCC’s GDP, already has pushed back targets to reach 54GW by 2032 by eight years.
Glada Lahn at London think tank Chatham House noted that revised date is more an “ambition”, than official target.
“Without the legal and regulatory framework, solar will just be the odd project here and there, commissioned by Saudi Aramco or other government entities,” she told Climate Home. “This is unlikely to bring the most cost-effective solutions for Saudi Arabia.”
She added: “Let’s see if the economic transformation plan due out in the next month or two will tackle the latter.”
With oil flooding the market, these are tough times for hydrocarbon producers – but that isn’t expected to damp renewable investment, which surged to new highs in 2015.
GCC countries can ensure their long-term prosperity by embracing clean energy, said IRENA’s Amin.
“The economic and social rationale for the energy transition in the GCC region has never been stronger.”