While Qatar may be rich in fossil fuels, the small Gulf state also has ample amounts of the world’s most elemental energy source: sunlight. Paige McClanahan reports.
Fresh off of playing host to the latest round of international climate negotiations in December 2012, Qatar is investing heavily in renewable energy projects, particularly solar power. Last year saw the announcement of a US$1bn project to develop cutting-edge, desert-friendly components of solar-powered technology. A second mega project, a solar energy plant that is expected to cost between US$10bn and US$20bn, will be looking for bidders this year and next.
Qatar and other Gulf nations “have enough solar and wind potential to generate electricity that could meet all their needs without using the oil and gas wealth”, Raghavan Seetharaman, the CEO of Doha Bank Group, said at the 2012 World Energy Forum, held in Dubai in October. “Many [Gulf Co-operation Council] member countries have proposed a minimum target of 5% energy procurement from renewable energy sources by 2020,” Seetharaman added. “In line with this, projects are now underway with more than 9,000MW either under construction or in planning stages – dominated by solar and wind energy.”
Qatar, which is the world’s largest exporter of liquefied natural gas, aims to produce 16% of its electricity from renewable sources, primarily solar energy, by 2018. That is no small feat given that there are currently no renewable power plants – solar or otherwise – in operation in Qatar. Indeed, the country has the highest per-capita greenhouse gas emissions of any nation in the world. To achieve its renewable energy target, the country needs to work quickly.
Qatar Solar Technologies
One major project is already well underway. Qatar Solar Technologies (QSTec) is in the process of constructing a US$1bn plant that will produce polysilicon, one of the essential components of efficient solar energy technologies. The plant is being built on 120 hectares of land located about 80km north of Doha in Ras Laffan Industrial City. The plant will initially produce 8,000 metric tonnes of polysilicon per year, although annual production is eventually expected to reach more than five times that amount.
QSTec is a joint venture between the Qatar Foundation, a private charity (70%); SolarWorld, a German company (29%); and the Qatar Development Bank (1%). The construction of the polysilicon production plant was made possible by US$1bn in financing from Masraf Al Rayan, an Islamic lender based in Qatar; the deal was announced in May 2012.
QSTec predicts that the first stage of the project will be completed by the fourth quarter of 2013. But they won’t
be stopping there; the company has big plans for the future.
“The growth in the demand for solar applications and technologies can only expand in Qatar, the region, and the world, yet will preserve our natural resources at the same time,” Khalid Klefeekh Al Hajri, the chairman and CEO of QSTec, said in a statement. “The interest displayed in QSTec by the local financial community demonstrates the economic strength of Qatar and we are proud to say that we are able to finance major projects like QSTec from the Qatari banking sector.”
Major solar plant in the works
The QSTec project is a big one, but it pales in comparison to the huge solar generation plant that the Qatari government hopes to build in the next five years.
“We need to diversify our energy mix,” Fahad Bin Mohammed al-Attiya, Qatar’s lead organiser of the Doha climate negotiations, said in December, according to a report from Reuters. “We are working on a project to develop 1,800MW of solar power… that will be 16% of our total electrical output.”
The government estimates that the massive solar power project could cost up to US$20bn to build. The electricity it generates will be used primarily to run the desalination plants that produce the majority of Qatar’s drinking water.
The government will be looking for bids for the solar project in 2013 and 2014. It hopes that the plant, which may be the biggest solar power facility in the world, will be up and running by 2018.
“It will be developed in a concession format, there’ll be blocks,” al-Attiya said.
Even as those projects get up and running, Qatar is continuing to see more investment pour into its renewable energy sector.
Chevron, the California-based energy giant, is investing US$10mn in the Centre for Sustainable Energy Efficiency (CSEE), which is housed within the Qatar Science and Technology Park. GreenGulf Inc., a Qatari clean technology firm, has also chipped in US$10mn in financing for the CSEE. The centre, which opened in March 2011, focuses on developing solar technologies that will work well in Qatar’s desert climate.
Financing for clean technology research in Qatar has also come from multinationals such as General Electric, ConocoPhillips and Shell.
But solar power is just the beginning. With its electricity consumption set to grow by more than 5% a year in the near future, Qatar is looking to find a host of renewable sources to boost its domestic power supply.
“Qatar – the host nation of the 2022 Fifa World Cup – has proposed to develop and implement artificial cloud technology as a way of cooling off stadiums from the desert country’s scorching summer,” Seetharaman, Doha Bank’s CEO, said at the World Energy Forum in October.
“It is expected that by 2017, the revamped Khalifa Stadium will be carbon-neutral, powered and climate-controlled entirely by solar energy, serving as a precedent for Qatar’s 2022 World Cup event infrastructure.”
Solar power, wind power, cloud cooling, and other clean technologies will be the subjects of discussion at the fourth annual Qatar Alternative Energy Investors Summit. The meeting, which is being organised by the Qatar Environment and Energy Research Institute (QEERI), will be held in Doha on March 24 and 25.
Qatar is not the only Gulf country that is actively working to reduce its reliance on fossil fuels. Saudi Arabia, Dubai and Abu Dhabi have also announced ambitious renewable energy targets, and are in the process of constructing renewable energy plants.
According to the latest renewable energy country attractiveness indices from Ernst & Young, published in November 2012, Saudi Arabia and the United Arab Emirates (UAE) are the two Gulf countries to watch on renewable energy. Saudi Arabia and the UAE were the only two countries from the region to make it onto the consulting firm’s list of the top 40 most attractive countries for renewable energy worldwide.
“Saudi has quickly made it onto the list of focus markets for investors and technology providers, with the government announcing its ambitious US$109bn plan to install 41GW of solar and 9GW of wind capacity by 2032,” the report said, adding: “The financing environment is also accommodating, with local banks being fairly liquid based on an average loans-to-deposit ratio of 80%.”
“The UAE presents strong evidence of its commitment to delivering the renewable energy and carbon reduction targets,” the report said.
“Both local and international banks seem to have an appetite to fund renewable energy projects in the UAE,” it added, noting that BNP Paribas, Société Générale and the National Bank of Abu Dhabi had recently made investments in a major solar project in the country.