Solar Set To Surge
BMI View: News that a 100MW CSP solar plant has been completed in the UAE reinforces our constructive outlook for the solar sector, not just in the UAE, but the wider Gulf region - where exploiting solar power is rising up many political agendas. We also expect Masdar Clean Energy to undertake a greater number of renewable energy projects (particularly solar) across the region, capitalising on the growth potential on offer.
The 100-megawatt (MW) concentrated solar plant (CSP), known as Shams 1, was completed in March 2013, at a cost of around US$600mn. The project has taken the developers (Masdar, Total and Abengoa ) three years to build and is reportedly one of the largest CSP plants in the world. A number of other solar projects are also in the pipe line, including the first, 13MW phase of the planned 1,000MW Mohammed bin Rashid al-Maktoum Solar Park, e xpected to be completed in 2013. It was also announced in March, that Proventus Renewables signed a memorandum of understanding with a Dubai company for the construction of a 5MW project in Al Dhaidh .
These developments fall in line with the country's wider energy strategy to expand its, as of yet, underdeveloped renewables industry. A move driven by the ever growing demand for electricity and the opportunity-costs associated with traditional energy resources. As such, the Abu Dhabi government is committed to generating 7% of the total power in the emirate from renewables by 2020, and Dubai aims to generate at least 5% of its energy from renewables by 2030.
We have long-held a constructive outlook for UAE's solar sector, and in fact the wider Gulf region. The UAE, Saudi Arabia and Qatar have all shown a keen interest in exploiting renewable energy sources for power generation and we believe that strong political conviction will help drive the growth of the renewables industry and a relatively good track record for power projects ( see our online service, February 25, 'Colossal Renewables Target Supports Sanguine Outlook', and December 3 2012, 'Eyes On Solar'). In light of this, we have forecast an average annual growth rate of 30.7% between 2013 and 2022 for solar capacity, reaching nearly 2GW of installed capacity by the end of our ten-year forecast period.
|Solar On The Up|
|Solar Generation (TWh) And Capacity (MW), 2012-2022|
We also expect Masdar to undertake a greater number of renewable energy projects (particularly solar) now that the Shams 1 project is completed ( see our online service, February 5, 'Masdar Solar Projects: More To Follow' ) . In January 2013, the company announced that it would be launching a renewable-powered desalination pilot plant in the UAE, with the aim of reaching commercial scale by 2020 ( see our online service, January 21 2013, 'Sun Shines On Desalination' ). Masdar is also waiting for approval from the executive council of Abu Dhabi for the construction of the 100MW Noor 1 photovoltaic plant. Besides these solar energy projects, the company is also set to award a construction contract for a wind turbine on Sir Bani Yas Island, which will have a power generation capacity of 30MW.