SolarQuarter Middle East- July August Issue 2020 (Launch Edition)

Empowering, Insightful, Engaging

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Insights WHAT MAKES

MIDDLE EAST POPULAR REGION FOR RE INVESTMENTS? EVITCEPSREP

What Is Driving the Middle East Solar Market?

INSIGHTS Emerging Growth Opportunities in The Middle East Solar Sector

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CONTENT NEWS

INSIGHTS

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Factors Driving Market Growth in The Middle East

Emerging Growth Opportunities in The Middle East Solar Sector

IN CONVERSATION

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10 DANIEL ZYWIETZ CEO Enerwhere

12 KAREL DE WINTER

YOGESH BHARDWAJ

General Manager Alsa Solar Systems

Managing Director, Asia Pacific, Middle East & Africa, Chint Solar Company Ltd.

PERSPECTIVE

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22 What Makes Middle East Popular Region For RE Investments

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What Is Driving the Middle East Solar Market?

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PG 37

SOLAR ENERGY

MIDDLE EAST NEWS UNDER THE SPOTLIGHT

OMAN POWER AND WATER PROCUREMENT COMPANY (OPWP) ISSUES RFP FOR 1000 MW IPP SOLAR PROJECTS Oman Power and Water Procurement Company (OPWP) issued an RFP to all prequalified bidders for a competitive tender for two Independent Power Projects (IPP).

Nine energy project developer/developer consortiums are said to be competing for the Manah Solar I and Manah Solar II IPPs which will offer an aggregate capacity of 1GW. OPWP states that the project will be the largest renewable energy venture when it will be fully operational in 2023.

For the implementation of the two IPPs an area of over 1,200 hectares has been reserved in the Wilayat of Manah. The companies participating in the tender process include Acwa Power; Jinko Power; Marubeni, Power Construction Corporation of China and Total Solar International, along with consortiums of Abu Dhabi Future Energy Company (Masdar) and EDF Renewables; Eni/Softbank Energy; Korea Western Power Company/Hanyang Corporation/Solar Reserve Limited and Nafath Renewable Energy; Tag Energy and Al Shanfari. The scope of work for successful bidders includes development, financing, design, engineering, construction, ownership, operation and maintenance of a 500 megawatt-peak (MWp) solar PV power plant. Oman wants renewables to contribute between 10% and 16% of the sultanate’s generating capacity in the main interconnected system (MIS) by 2025, which will total about 2,800MW.

USSBC RELEASES ECONOMIC BRIEF OF SAUDI ARABIA RENEWABLES The Saudi renewable energy sector’s promising future is built on a robust regulatory framework that coincides with initiatives that will allow it to flourish over the long-term. The creation of the NREP and the implementation of initiatives under the REPDO has provided needed clarity for domestic and international players, U.S.-Saudi Business Council stated. The ambitious plans by the government to grow its renewable energy mix will be spearheaded by multiple entities. The NREP through REPDO will deliver on the Kingdom’s broad Vision 2030 objectives. Additional entities that will be instrumental to the success of the sector include the King Abdullah City for Atomic and Renewable Energy (KA-Care), ECRA, and the Saudi Electricity Company (SEC). These entities will work together to advance the Kingdom’s renewable energy research, measurement, data acquisition, regulation, predevelopment, and tendering. Furthermore, this past April witnessed the launch of the Supreme Committee for Energy Mix Affairs, for Electricity Production and Enabling Renewable Energy. | MIDDLE EAST | JULY - AUG ISSUE 2020

BEE’AH TO INSTALL MIDDLE EAST’S FIRST SOLAR ENERGY LANDFILL PROJECT IN SHARJAH Bee’ah, Sharjah-based waste management company has recently stated that it will convert 47 hectares of Al Saja’a landfill area into a solar energy facility in Sharjah once the landfill is capped. This project will be able to generate over 42 megawatts of energy per year. In the first phase, 270,565 square metres of the landfill will be converted into a solar area with a projected output of 24 megawatts and in the second phase it will convert 200,099 square metres into a solar generation area which will produce another 16 megawatts. Salim Al Owais, chairman of Bee’ah said that “The UAE has made great strides in the development of renewable energy projects, and Bee’ah is keen to continue furthering its progress. This new landfill solar project is a remarkable landmark achievement for Bee’ah, as we continue to push boundaries of both waste management and clean energy as part of our overarching mission for sustainability”. Khaled Al Huraimel, group CEO of Bee’ah stated , “Bee’ah aims to make environmental sustainability a reality, and this investment to rejuvenate the Al Saja’a landfill for long-term solar infrastructure will help Sharjah attain its renewable energy targets, and reduce our dependence on fossil fuels. Our new solar plant project will help fuel the energy requirements for the Emirate, while showcasing how innovation can be utilised to continuously improve the quality of life for communities”.

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MIDDLE EAST NEWS

RCREEE AND FRIEDRICH-EBERT-STIFTUNG (FES) REGIONAL CLIMATE AND ENERGY PROJECT MENA SIGN A NEW MOU RCREEE is very pleased to join forces with Friedrich-Ebert-Stiftung (FES) Regional Climate and Energy Project MENA building the capacities of public sector female professionals. The two parties signed an MOU, late July 2020, in an attempt to increase the share of women working and advancing in the sustainable energy field in the MENA region. RCREEE with the support of FES Regional Climate and Energy Project MENA will be organizing tailored training programs dedicated to public sector female employees on ‘Advanced Renewable Energy’ and ‘Green Financing’ topics and will be launched in Egypt. Accordingly, the training programs aim to equip female professionals with the knowledge and skills required to understand RE projects development and implementation in terms of feasibility studies, regulatory frameworks and procurement. Also, they will provide the needed knowledge to understand green finance fundamentals and its relation to the sustainable development goals and how to access climate and sustainable energy finance.

Scheduled to start by the end of August 2020, the training programs are targeting mid-career and senior female professionals to support their career advancement.

ENOC GROUP RECOGNISED FOR CLEAN ENERGY EFFORTS ENOC Group recently won the coveted 2020 Energy Management Insight Award by Clean Energy Ministerial, a global forum of 25 countries and the European Commission designed to promote sustainable policies and programmes to advance clean energy.

ENOC Group was recognised for the implementation of ISO 50001, a global standard to better manage retail operations energy use from energy policies, design, procurement, maintenance and daily operations. ENOC Group highlighted the successful integration of energy resource management into various business systems to better manage resources, sustain achieved savings, and continuously improve energy performance. Energy efficiency is a core element of ENOC Group and is a huge part of the Group’s dayto-day operations. The Group has launched various initiatives such as the utilisation of photovoltaic solar panels at more than 22 service stations, vapor recovery systems, installing LED lights and signage, and incorporating programmable thermostat and variable refrigerant flow in air conditioning.

| MIDDLE EAST | JULY - AUG ISSUE 2020

DEWA RECORDS A PEAK LOAD INCREASE OF 6.6% HE Saeed Mohammed Al Tayer, MD & CEO of Dubai Electricity and Water Authority (DEWA), has announced a rise in the peak load of electricity to 9074 MW in Dubai this year to date, compared to 8516 MW in 2019, recording an extra 558 MW, and an increase of 6.6 %. This is the highest recorded increase since 2012. “In line with our vision as a globally leading sustainable innovative corporation, we seek to secure uninterrupted and stable supplies of electricity and water, and we support the vision and strategic plans of the Government of Dubai to achieve comprehensive and sustainable development in the Emirate. This increase in the peak load is a testimony to the boost of social and economic activities in Dubai. DEWA has an installed capacity of 11,700MW of electricity and 470 MIG of water per day,” said Al Tayer. DEWA has reduced losses in electricity transmission and distribution networks to 3.2%, compared to 67% recorded in Europe and the USA. Water network losses decreased to 6.6%, compared to 15% in North America. DEWA achieved a new world record in electricity Customer Minutes Lost (CML) per year. DEWA recorded 1.86 minutes, in Dubai, compared to around 15 minutes recorded by leading electricity companies in the European Union, added Al Tayer.

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MIDDLE EAST NEWS

GCCIA AWARDS 3 YEAR CONTRACT TO HITACHI ABB POWER GRIDS FOR NEW RELCARE SOLUTION Hitachi ABB Power Grids has launched a new reliability-based service solution, RelCare, which has been selected by Gulf Cooperation Council Interconnection Authority (GCCIA). GCCIA will become the first customer of the RelCare service. As part of their three-year agreement with Hitachi ABB Power Grids, GCCIA will use the RelCare solution to remotely monitor the maintenance of all their substations across the six Gulf countries. The solution will enable GCCIA to improve the operational performance and enhance the reliability of their network system. GCCIA will leverage Hitachi ABB Power Grids’ technology and expertise to increase the operational efficiency of its 400 kV network, running over 1200km with a maximum interconnection power of 1200 MW. The partnership will cover eight large 400 kV substations that integrate more than 3,000 assets, consisting of 30 different asset types. RelCare combines state-of-the-art asset management software with service partnership models, enabling asset and operation and maintenance managers to optimize the performance, yield and protection of their crucial systems through their entire lifecycle.

KUWAIT TO TAKE FINAL DECISION ON SHEGAYA RE PARK Kuwait will take the final decision on the Shegaya Renewable Energy Park in two weeks, a senior official at the Ministry of Electricity and Water, (MEW) Kuwait said to ZAWYA. Eng. Ahmed M Alazemi, Renewable Energy Projects Specialist at MEW also stated that “The final decision on the Shegaya Renewable Energy Park will be made in two weeks. The project is not cancelled but converted from an EPC (engineering, procurement and construction) to a PPP (public private partnership) project and is now handled by the Kuwait Authority for Private Partnership (KAPP) along with MEW. Shegaya Phase 2 named Al Dibdiba, will be a 1500 MW Alternating Current photovoltaic (PV) project which will be developed under a 25 year PPA (power purchase agreement). Phase three named Al Abrag, will be tendered in several packages which will be a mixed technology project consisting of a minimum of 200 MW concentrated solar power, 1200 Mwac PV and 100 MW wind, Alazemi concluded. The 4 GW Shegaya Park is spread over an area of 58 square kilometres and is being developed in 3 phases.

| MIDDLE EAST | JULY - AUG ISSUE 2020

OMAN EXTENDS BID SUBMISSION FOR ITS HYBRID IPP PROJECT Oman has extended the commercial bid submission deadline for its hybrid solar-diesel independent power plant project to the first week of October 2020, a source close to the project stated to ZAWYA. Earlier known as Rural Area Electricity Company was promoted by Tanweer which involved the development of hybrid solar photovoltaic-diesel power plants at 11 sites across Oman. “The tender for the contract to develop hybrid solardiesel IPP project was issued on 16 March 2020 with bids submission deadline of 27 July, which was extended to August 17 and subsequently to the first week of October,” the source said to Zawya Projects, adding that the project completion is scheduled for fourth quarter 2023. According to a report by Zawya Projects, Seven consortiums and five standalone bidders were prequalified for this project. The source added that Bahwan Engineering Company, Altaaqa Global, Jinko Solar, Alawi Tunsi & Bros Co, Alfanar and Aggreko have been shortlisted for the project’s engineering, procurement and construction contract.

PG 10

MIDDLE EAST NEWS

DUBAI INTERNATIONAL ACADEMIC CITY, DUBAI OUTSOURCE CITY COMPLETES TWO SOLAR PV CARPORTS Dubai International Academic City and Dubai Outsource City, part of TECOM Group, have jointly announced the successful completion of work on two solar PV carports that will generate 4.25 GWh of clean electricity annually — enough to power 350 homes. They are the first solar PV carports commissioned for the business communities and fall within the purview of a sustainability partnership between the Group and Enova, a regional leader in integrated energy and multitechnical services. While reinforcing Dubai’s ongoing commitment to developing state-of-the-art, sustainable infrastructure, the projects will boost energy efficiency and provide renewable electricity to the Group’s business communities.

With the installation of 4,170 photovoltaic panels (PV panels), the 1.6 MWp solar carport in Dubai Outsource City will meet 98 per cent of the community’s energy requirements and cut 1,250 tonnes of carbon dioxide emissions annually. Collectively, the two projects boast more than 7,000 solar panels and span a total area of over 14,000 square metres. Dubai International Academic City and Dubai Outsource City are committed to reducing energy consumption and promoting the responsible use of natural resources by developing renewable energy infrastructure, conserving water, increasing recycling and reducing waste generation as part of a group-wide sustainability drive.

Q2 POWER PLANT TENDER ACTIVITY FOR MIDDLE EAST DOWN BY 23% There were 30 power plant tenders announced in the Middle East and Africa region in Q2 2020, marking a drop of 23% over the last 12-month average of 39, according to GlobalData’s power industry tenders database. Power Plant stood at first place when compared with other power tender categories in the Middle East and Africa region in Q2 2020 with 30 tenders and a 33.3% share, followed by T&D Project with 23 tenders and a 25.6% share and T&D Equipment with 19 tenders and a 21.1% share during the quarter. Looking at power plant tenders by the type of technology in the Middle East and Africa region, solar accounted for 17 tenders with a 54.8% share, followed by thermal with six tenders and a 19.4% share and hydro with six tenders and a 19.4% share. Solar is top technology for Middle East and Africa power plant tenders in Q2 2020

MASDAR ACQUIRES 50% STAKE IN 1.6 GW RE PORTFOLIO

AZELIO SIGNS AGREEMENT WITH ALEC ENERGY TO SET UP RENEWABLE ENERGY STORAGE SITE

EDF Renewables North America and Masdar, one of the world’s leading clean energy developers and a subsidiary of Mubadala Investment Company announced Masdar’s second strategic investment in the United States (US) in a deal with EDF Renewables North America that will see it acquire a 50 % stake in a 1.6-gigawatt (GW) clean-energy portfolio. Under the terms of the agreement, Masdar has acquired a 50 % interest in three utility-scale wind farms in Nebraska and Texas totalling 815 megawatts (MW), and five photovoltaic (PV) solar projects in California – two of which include battery energy storage systems – totalling 689 MW of solar and 75 MW of lithium-ion battery energy storage. The 243 MW Coyote wind project is located in Scurry County, Texas; the 273 MW Las Majadas wind project is in Willacy County, Texas; and the 300 MW Milligan 1 wind project is in Saline County, Nebraska. All three wind projects are currently under construction and expected to begin commercial operations in the fourth quarter of 2020.

Azelio will install a verification project in Abu Dhabi in Q3 2020 together with Masdar and Khalifa University. The purpose of the installation is to evaluate Azelio’s energy storage technology for inclusion in the Masdar product portfolio for current and future renewable energy projects. An agreement has now been signed with ALEC Energy to set up the Azelio project site in Masdar city, Abu Dhabi. The preparation for Azelio’s energy storage installation in Abu Dhabi is progressing according to plan.

| MIDDLE EAST | JULY - AUG ISSUE 2020

PG 10

INCONVERSATION

DANIEL ZYWIETZ CEO ENERWHERE The Solar Sector is growing at a fast pace in the Middle East Market.

The Middle East, an oil powered economy is now realising the benefits of renewable energy. The current trends show that the renewable energy landscape is rapidly evolving and significant developments have taken place in the Middle East region.

Enerwhere was founded in 2012 by a powerful encounter between the strong will to solve a complex energy problem through innovative technology and business model, and the conviction that a solar revolution was much needed in the GCC countries. Today, Enerwhere is one of the largest solar contractors under DEWA’ Shams Dubai programme, and has a large project pipeline in the UAE, Oman, Nigeria, and numerous countries in Africa. SolarQuarter interviewed Daniel Zywietz, CEO of Enerwhere to find out their experience in the Middle East solar market, technological trends shaping up, and much more.

Let’s begin with a glimpse of your company’s presence and offerings?

Enerwhere is the world’s first distributed solar utility and one of the leading installers of solar & battery solutions in the Middle East. Our 100+ staff serve commercial & industrial customers from offices in Dubai, Abu Dhabi and Nigeria, with offices in the pipeline across the Middle East & Africa.

"ENERWHERE IS THE WORLD’S FIRST DISTRIBUTED SOLAR UTILITY AND ONE OF THE LEADING INSTALLERS OF SOLAR & BATTERY SOLUTIONS IN THE MIDDLE EAST." Our key offerings are: Power-as-a-Service for commercial & industrial customers who currently rely on diesel generators. We use our proprietary transportable solarhybrid mini-grids, to dramatically reduce fuel consumption, emissions and costs compared to conventional diesel generators, while increasing reliability. This service is available on contracts from 6 months up to 15 years.

Turnkey design, installation and O&M services for commercial & industrial-scale solar systems, particularly those on large industrial roofs (e.g. factories & warehouses). We are one of the leading certified solar contractors under DEWA’s Shams Dubai Initiative, with installed capacity of more than 30 MWp in the UAE.

Tell us about some innovative and exciting projects executed by Enerwhere.

Enerwhere has constructed the largest solar rooftop installation in the Middle East at the Mai

| MIDDLE EAST | JULY - AUG ISSUE 2020

Dubai water-bottling factory and adjacent Ghaffath water reservoir in Al Qudra, Dubai.

The installation has a capacity of 18.1 MWp, spans a combined rooftop area of 136,000 m2 and won a MESIA award for Best Industrial Solar Project of the Year.

Enerwhere has constructed the first solar rooftop plant in the Middle East with 100% robotic maintenance at Masterbaker in Technopark, Dubai. The 1 MWp installation is the first of its kind in UAE, with 34 robots automatically cleaning the solar panel multiple times per day, removing dust and increasing the electricity production of the system.

Enerwhere has installed the Middle East’s first floating solar system off Nurai island, Abu Dhabi. This near-shore installation is also one of the first in the world to be installed on saltwater, which was necessary as there wasn’t sufficient space on the island to install more solar – so Enerwhere expanded it’s hybrid system with additional solar capacity on the water.

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Enerwhere provides renewable energy on a rental basis, using solar-hybrid mini-grids. Tell us more about this offering?

Enerwhere was founded as a solar rental company with the aim of reducing the fuel consumption of diesel generators. After deploying our first projects in 2014, we realized that most people didn't know how to operate the solar equipment, so we shifted our business model from renting out equipment to a utility model, where we provide power and cooling as a service. Our proprietary solar-hybrid mini-grids generate reliable power 24/7 while saving 30-50% of emissions and 10-15% of costs compared to conventional diesel generators.

During the day, as much as possible of the energy is coming from solar, while high-efficiency generators cover night loads and other periods with limited sunshine. With battery costs coming down we are now starting to add storage capacity to our systems to further increase solar share and system

When it comes to solar asset management, what are the steps taken by the O&M team to increase performance while improving the lifecycle of the project?

Solar asset management across the world starts with a set of basic objectives and tasks for the asset management and O&M teams, including: Monitoring plant KPIs, typically using dashboards (e.g. energy generation, performance ratio, availability, etc.)

Incident reporting & documentation (e.g. strings with low performance, no production, etc.), Preventive maintenance (typically monthly or quarterly) Cleaning This last activity is actually the one with the largest direct impact on daily production of a solar plant in the Middle East, as soiling rates can be as high as 1% per

day, leading to production losses of more than 20% per month. Most commercial-scale solar plants in the Middle East are still cleaned 100% manually. This has the obvious advantage of being very flexible, however, even in a low labor cost environment weekly cleaning gets expensive, with quality also being an issue (cleaning quality & productivity are typically much lower in summer than in winter). We are hence rapidly expanding the use of robotic cleaning systems, which are more expensive up front and require a lot more technical sophistication from the O&M team but have the big advantage of producing reliable and reproducible results every day of the year, whether it’s 25°C or 45°C outside.

What do you think about the solar sector in the Middle East? In your view what is needed to strengthen the growth of the solar sector in the Middle East?

The solar sector in the Middle East has experienced a tremendous growth over the last 12 years that I have been working here. When I started out, the largest solar plant in the entire region, a 10 MWp PV system at Masdar City, was just being planned. Today, the largest solar plants exceed 1 GWp, with multiple GWp installed and even more in the development pipeline.

That is an enormous amount of progress in a very short time, and I am glad to have been part of this industry during such a period of such amazing growth.

Looking forward, there are a few things that could help to ensure that this growth continues. In the past, with a few exceptions, the boom has largely been driven by utility-scale projects, as they were the easiest to fit into the existing large-scale procurement and financing structures. This works well while solar penetration on the grid is low but as transmission grids are filling up with solar power, the location and timing of additional solar energy on the grid will start to matter more and more.

| MIDDLE EAST | JULY - AUG ISSUE 2020

Going forward, locating solar new solar capacity close to end customers (e.g. on industrial rooftops, car parking shades, exhibition halls, etc.) and pairing it with battery storage will make a lot of sense , particularly for commercial & industrial customers with a daytime peak (residential is more difficult, as the peak load tends to be in the evenings). This will help reduce overall system costs and actually increase reliability, particularly if the grid regulations allow certain sections of the grid to separate into mini-grids in times of stress or outages.

What are some of the big challenges in project execution in the Middle East?

In our experience, at least in the commercial- and industrial segment, the challenges tend to be more on the commercial side, with very long (18+ month) lead times, non-standardized financing and cumbersome permitting. All of these are improving but this is where some of the biggest improvement potential (also in terms of cost reduction) still lies.

What major tech trends due see shaping the future of the solar sector in 2020 - 21?

The addition of storage is likely to be by far the biggest change in the solar sector in the coming years.

Not all of this will happen in the near-term, as grid regulations in the Middle East don’t currently remunerate the value that storage can bring to the grid – but with rising solar penetration (several countries will soon be exceeding 30% of winter daytime load) and falling battery costs, every utility will soon want storage for additional stability, reliability & flexibility. So watch this space!

Enerwhere has constructed the first solar rooftop plant in the Middle East with 100% robotic maintenance at Masterbaker in Technopark, Dubai."

PG 11

INCONVERSATION

KAREL DE WINTER GENERAL MANAGER ALSA SOLAR SYSTEMS The Solar Industry has gained enormous progress in the Middle East region’s energy mix. The region is steadily undertaking large solar projects and adding phases to their solar program.

The Middle East Solar Industry Association (MESIA) says energy investment in the Middle East and North Africa (MENA) region could hit $1 trillion in the 201923 period.

ALSA Solar has completed over 100 projects in the UAE, MiddleEast and North Africa. Let us understand from Karel De Winter, General Manager - Alsa Solar Systems, its contribution to the solar development in the MENA region. what is needed to strengthen the growth of the solar sector in the Middle East.

Let’s begin with a glimpse of your company’s presence and offerings?

Alsa Solar system LLC is one of the pioneering Solar Integrators in the UAE and has executed various iconic projects that served as reference points for the nascent solar market.

With a focus on Commercial and Industrial systems, we offer the best cost, time, quality solution in line with the client requirements and goals. Another specialty is off grid and hybrid systems on which multiple projects have been completed. Recently we also see an uptake of residential systems in the UAE where we maximize the value offered to the client.

"ALSA SOLAR SYSTEM LLC IS ONE OF THE PIONEERING SOLAR INTEGRATORS IN THE UAE AND HAS EXECUTED VARIOUS ICONIC PROJECTS." What is your company outlook for 2025?

While it is extremely difficult to forecast under current circumstances, we do know that a solar system offers one of the most cost-effective ways to reduce operations costs and to strengthen the competitive advantage of businesses.

So we are confident in the continued growth of the solar business and in the value that is being offered to our clients. Solar has come a long way and is now extremely cost-effective to build, thus becoming a standard normal way to generate your own energy and save big on electricity costs.

We expect an accelerated growth – post the initial covid19 scare – as companies explore the most efficient ways to reduce costs.

| MIDDLE EAST | JULY - AUG ISSUE 2020

A word about your recent successful contributions to this industry? What has been your biggest challenge so far?

There have been multiple challenges from permitting limitations, increased low cost competition and establishing an expert knowledge base in the UAE, however I would say that building the confidence in solar as a genuine reliable and competitive addition to the Commercial and Industrial toolbox is our biggest and ongoing achievement.

Once clients get confronted with the savings realized, the “why did we not do this earlier” is often heard.

We’re also happy that our efforts and iconic projects have set mouths talking so the spread of solar as a solution has been accelerated in the economy.

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Are we seeing a major push towards better & smarter technology in the solar sector?

Definitively, if one looks at the PV panel efficiencies and the amazing new products that are getting launches, one can only be optimistic about the value proposition to the client and the strong drive that exists in the industry for innovation and growth.

While solar is not rocket science, the modular nature of the systems and the ease by which they can be integrated into existing systems are key drivers for an accelerated uptake and acceptance by many more clients.

Where do you see the Solar Energy industry poised for the next 10 years? What are your growth plans for the Indian market?

Alsa Solar does not currently have plans to enter the Indian market, but is actively looking for cooperation partners with whom to link up to use the volume advantages of india and to offer the GCC hinterland as a sales area.

As mentioned before we expect very strong growth in the solar industry. The entry barriers are low, the economics make sense, the first steps and references are in place.

We see strong growth across the board in residential, commercial & industrial as well as utility scale.

What do you think about the solar sector in the Middle east?

In your view what is needed to strengthen the growth of the solar sector in the Middle East?

The Middle East has often been seen as a region slow to adopt new technologies, but we have seen an amazing effort and initiative by DEWA, the Dubai utility to take the lead and establish solar in its rightful place in the region. With solar energy beaming down on a daily basis it would be a sin against human intelligence not to drive this industry forward. It just makes so much sense.

To strengthen the growth, there is still a big mountain of work to spread the word of what solar can do‌The utilities play a major role in this as without a legal framework any growth may be stumped. And finally education and training of an expert knowledge base is to be done. Solar is to be taught in Arabic so many more people can get access to it.

The solar industry in the GCC and MENA is set for incredible growth as it is a very cost effective way to modernize and make competitive the industries that consume a lot of energy. | MIDDLE EAST | JULY - AUG ISSUE 2020

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INCONVERSATION

YOGESH BHARDWAJ MANAGING DIRECTOR, ASIA PACIFIC, MIDDLE EAST & AFRICA CHINT SOLAR COMPANY LTD. Chint Electric Co., Ltd. has been exploring the Saudi Market for many years as the core market of the Middle East. Chint Electric has continuously improved its comprehensive strength, and has made steady progress in the Saudi market in the past years. It has successfully provided multiple distribution transformers and medium and low voltage complete sets of equipment for Saline Water Conversion Corporation (SWCC) and power transformers to Saudi Arabia Steel Company.

Furthermore, Chint Electric Co., Ltd. has been successfully qualified multiple mediumvoltage electrical equipment by Saudi Electricity Company (SEC) in 2018, and qualified as the only Power Transformer supplier from China. At the beginning of this year, Chint Electric Co., Ltd. got millions US$ of order for Fuse and Insulator from SEC and the electrical products will be served in the Saudi national grid soon.Yogesh Bhardwaj, Managing Director Asia Pacific, Middle East & Africa, throws light on the recent development made by the company, recent solar sector technological advancement and how the solar sector in the Middle East region is gaining significance.

Can you brief our readers about the services CHINT provides?

Chint Solar is Solar Division of Chint group, the Chint Group is

"CHINT HAS BEEN ONE OF THE MOST INNOVATIVE ORGANIZATION AND VERY UNIQUE IN THE WHOLE VALUE CHAIN OF THE SOLAR" Top 5 Private Sector Industrial enterprise in China and has provided millions of customers with most reliable solutions with highest quality Product & technical support for close to 40 years. With products being sold in over 140 countries and regions, the group’s global reach makes it one of the most comprehensive Electrical & Solar enterprises globally.

capacitor; to HV cables, for both high-and low-voltage transmission as well as data communication & control; fuses to Smart meters, Energy management such as AMR and Smart Grid portfolio for complete electrical & PV Solar solution including the Storage for residential, commercial, Large ground mounted, and large Industrial applications.

Chint group, this is one of the most diversified groups with highvolume manufacturing of various electrical & electronic equipment, components, and tools. The product portfolio ranges from LV & MV switchgear, transformers; such as the Chint T&D’s complete range of transformers from standard distribution 11 kV transformer to HV transformers up to 765 kV along with complete T&D solution offering including GIS, Protection, Control, Automation & MV / HV

What have been some of the recent developments at your organisation?

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Chint has been one of the most innovative organization and very unique in the whole value Chain of the Solar, in fact Chint is the Only organization, which has All Product & technology, does EPC, does development of large IPP globally, one of the largest O&M and the largest Roof top installer globally.

Chint Solar officially announced in

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May 2020 that the maximum production efficiency of bifacial Mono PERC cells has reached 23.21% and the Average efficiency was 23.04%, leading the industry in mass production efficiency with new Gallium doped wafer technology.

Presently Chint is 5GW of the production and expanding another 2GW with the large wafer technology.

Highlight some of the significant technology advancements to improve performance efficiencies and save on costs?

In the recent PV Modules evaluation report by PVEL DNV GL released in May 2020 for all leading manufacturers and CHINT Solar Modules are the TOP performing modules on All counts.

customer spared across large geography. As Chint is the largest residential Roof top organization also and has more than 400,000 rooftops under our maintenance, here also an extensive use of the AI is being used for any of the support at the remotest corner of any large country / geography.

How has the last financial year been for your company? What expectations do you have from next financial year?

Chint Solar is the listed entity in China along with its Electrical switchgear division and in the last year we had revenue of US$ 4.33 Bn with the Total assets of close to US$ 8.0 Bn.

In the recent PV Modules evaluation report by PVEL DNV GL released in May 2020 for all leading manufacturers and CHINT Solar Modules are the TOP performing modules on All counts."

PV Evolution Labs (PVEL) and DNV GL have done an extensive testing for 2020 PV Module Reliability report and have done all the accelerated IEC 61215 electrical safety tests, for all the IEC 61215 specified norms by 2 x or 3 x times.

PVEL & DNV GL looked at Four historical reliability tests and New Test for PAN file for the tested Modules, so all manufacturers were tested on 5 Counts for different type of Modules on Thermal Cycling, Dump Heat, Dynamic Mechanical Load, PID and Pan Files.

How can advanced data analytics aid in cost reduction and improvement of operations and maintenance of the solar projects?

Chint has been pioneer in the deploying the latest technology for the operation and maintenance, Chint has 7GW of the Operations & Maintenance Contracts under our belt across 10 countries and expending, we have been using the Artificial intelligence for preventive & corrective maintenance coupled with the large cloud based AI solution to serve a large pool of Ground mounted, C&I and residential | MIDDLE EAST | JULY - AUG ISSUE 2020

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INSIGHTS

EMERGING GROWTH OPPORTUNITIES IN THE MIDDLE EAST SOLAR SECTOR Solar power is poised for significant growth over the upcoming few decades.

According to the International Renewable Energy Agency (IRENA), by 2050 solar photovoltaics will be the second-largest source of power, just behind wind power and leading the way for the transformation of the global electricity sector. In IRENA’s report titled ‘Future of Solar Photovoltaic’, it forecasts that photovoltaics will generate 25% of all global electricity needs by 2050.

Under the directives of the wise leadership, the UAE has in place a comprehensive strategy to keep pace with global efforts to increase renewable and clean energy by 2050. In 2017, the UAE launched the UAE Energy Strategy 2050, the first unified energy strategy in the country based on supply and demand. The strategy aims to increase the contribution of clean energy in the total energy mix to 50% by 2050. | MIDDLE EAST | JULY - AUG ISSUE 2020

According to the International Renewable Energy Agency (IRENA), by 2050 solar photovoltaics will be the second-largest source of power.

"The strategy aims to increase the contribution of clean energy in the total energy mix to 50% by 2050."

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It also seeks to increase consumption efficiency of individuals and corporates by 40%.

Dubai Electricity and Water Authority (DEWA) is working to achieve the wise leadership’s directives and vision by anticipating the future of energy and launching major projects to increase the share of renewable energy in the energy mix. Among these projects is the Mohammed bin Rashid Al Maktoum Solar Park, the largest single-site solar park in the world using the Independent Power Producer (IPP) model. The Solar Park has a planned capacity of 5,000 MW by 2030 and investments up to AED 50 billion. The share of clean energy in Dubai’s energy mix is currently around 9%. This exceeded the goal set in the Dubai Clean Energy Strategy 2050 to provide 7% of Dubai’s total power output from clean energy by 2020 and 75% by 2050.

The 13MW 1st phase of the solar park became operational in 2013 using photovoltaic solar panels. It contributes to reducing over 15,000 tonnes of carbon emissions annually.

The 200MW photovoltaic 2nd phase was commissioned in 2017. It provides clean energy to 50,000 residences in Dubai and reduces 214,000 tonnes of carbon emissions annually. The 3rd phase has a capacity of 800MW, and is the first of its kind in the Middle East and North Africa to use an advanced single-axis solar tracking system to increase energy production.

The 4th phase of the solar park is the world’s largest single-site investment project that combines Concentrated Solar Power (CSP) and photovoltaic technology with a capacity of 950MW using IPP model. It will use 700MW from CSP; 600MW from a parabolic basin complex and 100MW from a solar tower; and 250MW from photovoltaic solar panels. The project will feature the tallest solar tower in the world at 260 metres. It will also have the biggest global thermal storage capacity of 15 hours, allowing for energy availability around the clock.

The 5th phase will have a capacity of 900MW using photovoltaic solar panels, to provide clean energy to 270,000 residences in Dubai. This will reduce 1.18 million tonnes of carbon emissions annually. The project will use the latest solar photovoltaic bifacial technologies, with Single Axis Tracking to increase energy production. It will be commissioned in stages starting from Q3 of 2021.

There are several research projects underway to accelerate future market growth through exploring innovative solar technologies. To keep pace with these projects, DEWA’s R&D centre at the Mohammed bin Rashid Al Maktoum Solar Park collaborates with several prestigious local and international academic institutions to develop joint research in renewable and alternative energy.

The R&D centre highlights four major operational areas: electricity generation from solar and clean energy, integration of smart grids, energy efficiency, and water. It is the only centre in the UAE that focuses on renewable energy, smart grid technologies, and energy efficiency. It includes the largest testing facilities in the UAE for photovoltaics and issuing compliance certificates.

This transformation towards clean energy sources will lead to decreased cost of solar photovoltaic installations around the world. According to IRENA, the levelized cost of electricity (LCOE) for solar PV is already competitive compared to all fossil fuel generation sources. Globally, the LCOE for solar PV will continue to fall from an average of USD 0.085 per kilowatt-hour (kWh) in 2018 to between USD 0.02 to 0.08/kWh by 2030 and between USD 0.014 to 0.05/kWh by 2050.

Increased use of solar power will also meet the ambitious climate action targets. It is expected to reduce global emissions by 21% in 2050. Dubai net CO2 emissions have already achieved an astounding 19% reduction when compared to the business-as-usual scenario and 10% below the Carbon Abatement Strategy 2021 target to reduce carbon emissions by 16% by 2021.

We strive to preserve those gains and maintain Dubai’s leading position in this area by adopting innovative energy projects and global partnerships.

"The 4th phase of the solar park is the world’s largest single-site investment project that combines Concentrated Solar Power (CSP) and photovoltaic technology with a capacity of 950MW using IPP model."

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AUTHOR : HE SAEED MOHAMMED AL TAYER

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PERSPECTIVE

WHAT MAKES MIDDLE EAST POPULAR REGION FOR RE INVESTMENTS

Renewables have an important role to play in the Middle East sustainable energy transition. It should be considered with a broader framework of socio-economic development of the region, with the ripple effect of renewables deployment throughout society by economic growth and diversification, job creation, improved balance of trade as well as bolstered water security.

VIKAS BANSAL Head – International Business Development Sterling and Wilson Solar

The Middle East has a very strong resource potential despite of which, as of 2015, nearly 80 percent of nonhydro renewable energy growth was concentrated in only four of the 22 Member States, with renewables constituting only six percent of total installed power generation capacity.

However, current trends show that the renewable energy landscape is rapidly evolving and significant developments have taken place. Furthermore, the ambitious targets set by all countries of the region are expected to translate into a combined 80 GW of renewable capacity by 2030 based on national plans to fulfill the countries’ ambitions, the establishment of policy, regulatory, technical and economic frameworks enabling the scaled-up deployment of renewables will be indispensable.

Let us understand from the industry insiders, what makes the Middle East a popular region for RE investments.

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The Middle East is the second most popular region for renewable energy investments after North America, as per a recent study conducted by a popular UK based renewable law firm. In the past decade, there has been a cumulative investment of more than $12 bn in renewables in the MENA region, making it a hotspot in Global Renewable Energy Deployments. As per APICORP, there will be an investment of $71.4 bn in renewables between 2019-2023, an increase of nearly six times.

NEED FOR RENEWABLES IN MENA Home to more than half of the world's crude oil reserves, the Middle East accelerated its interest towards renewables, when the crude oil prices plunged to its lowest level in 2015-16. The Government’s pursuit to develop alternative economies to crude oil, focused on reducing the domestic oil consumption (subsidized) and increasing exports. The lookout for cheaper sources of energy to address the spurt in economic and infrastructural activities, real estate development and growth of energy-intensive industries have significantly driven the push towards renewables. Today, renewable energy, primarily Solar, had become the cheapest source of energy in the region.

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AMBITIOUS BUT SUSTAINABLE RENEWABLE ENERGY TARGETS

PIONEER IN ADOPTING NEW TECHNOLOGY

Almost all the countries in MENA have set ambitious targets for renewables ranging from 5% to 45% of either their installed capacity or energy mix. These targets set by all countries within the region are expected to translate into a combined 80-90 GW of renewable capacity addition by 2030. Such huge potential with a clear timeframe attracts investors who would want to create an operating hub in MENA in the near future.

The MENA region has been a front runner in adopting new technology. Various new solutions, including bifacial modules, half-cut cells, heterojunction cells, organic thin film and robotic cleaning, have been introduced.

The Noor Abu Dhabi project is the largest plant in the world to adopt Robotic Cleaning.

The Noor Midlet projects in Morocco and DEWA in Dubai have showcased the benefits of CSP plants and thermal storage to the world. There has been active research and development in Floating Solar PV plants as well.

Access to competitive EPCs and world-class engineering consultants Geographically, the Middle East is a connecting hub between Europe and Asia.

Access to low cost and high-quality resources from India and other Asian countries makes installation cost the lowest in the world. This coupled with the historic presence of worldclass engineering consultancy companies due to the oil boom has proven to be a potent mix for explosive growth of renewables in the region.

It is also important to note that, in 2019, competition on the EPC front has led to highly competitive CAPEX in many large-scale solar projects. Such CAPEX is specially offered by state-owned Chinese EPC players to grab a bigger market share in this attractive market. It will be interesting to see which of these projects will perform at the expected level and will last for 30 years.

GOVERNMENT PARTICIPATION AND THE DEVELOPMENT OF THE PPP MODEL

The PPP model is very successful in the GWscale projects by EWEC, Abu Dhabi and billion-dollar investments in the projects by DEWA, Dubai. The scale and transparency in the bids attracted some of the largest IPP’s in the world towards the region. The Noor Energy Solar Park in Abu Dhabi, Mohammed Bin Rashid Al Maktoum Solar Park in Dubai, Benban Solar Park in Egypt and Noor Midlet Projects in Morocco are some of the success stories of renewable deployments through active government participation. The PPP model is now set to become a favoured instrument for green financing.

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MOVE FROM CCGT TO PEAKER PLANTS

The MENA region primarily depends on combined cycle gas turbine (CCGT) power plants for base load power generation. With the increase in low cost renewables in the energy mix, the need to maintain stability of the grid, will push for more Energy Storage as Peaker plants. With the fast-declining cost of Solar PV & Energy Storage and the compelling low tariffs derived from the recent auctions, there will be more renewable coupled storage plants. This paradigm shift in the energy mix opens a huge potential for renewables in this region.

ACCESS TO LOW COST OF CAPITAL

The geographical advantage and easing of global financial conditions have provided this region great access to low-cost capital, in turn, reducing costs, and consequently tariffs. Apart from conventional loans, bonds and equity schemes, the multitude of financing options now available to energy developers include green bonds, Sukuk or Islamic bonds, and cryptocurrencies. Even countries with lower ratings like Egypt and Jordan are able to raise project debt through DFIs like IFC, EBRD, EIB which are quite active in ME. AN OPTIMISTIC OUTLOOK

According to the Middle East Solar Industry Association (MESIA), the region is expected to need at least 267 GW of additional power generation capacity by 2030, an increase of 66 percent from today’s levels. The sun is shining bright on the MENA region's energy horizon, and the future looks increasingly sunny.

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FIVE OUT OF TEN COUNTRIES WITH THE HIGHEST SOLAR ENERGY POTENTIAL IN THE WORLD ARE SITUATED IN THE MIDDLE EAST.”

ARIF AGA Director SgurrEnergy

The growing economies across the globe need increased sources of energy to support development in the region. Fossil fuels and other conventional forms of energy sources have been instrumental in leading the energy race in the last century. However, with increased consumption, the need for renewable energy resources have become critical to sustain the pace of growth and development across the world.

Renewable Energy investments are primarily made in regions qualifying certain criteria that makes them viable in the long run i.e. approximately 30 years at the minimum. The Middle East region has one of the highest oil reserves and is also blessed with exceptionally good solar irradiation throughout the year. The region’s love for technology, financial capabilities and futuristic vision of their leaders makes it a perfect destination for renewable energy investments. Considering the record-breaking low prices of solar in the Middle East region and availability of huge renewable energy resources, the region has been consistently ranked the most favorable destination for current and future investment.

Five out of ten countries with the highest solar energy potential in the world are situated in the Middle East.

The leaders in this region have mobilized large scale solar projects to support their ambitious renewable energy plans in this decade. Saudi Arabia, United Arab Emirates have been leading this renewable energy transformation and other oil rich nations have been following suit. Supportive energy policies from the governments have ensured stability and reliability of investments made in the past decade.

Businesses in the Asia-Pacific regions are the biggest investors in the Middle East energy transition projects. Global investors have confidence in the lowcarbon potential in the region with some of the largest solar projects underway in the UAE, Algeria and Morocco. Solar has been the most favored renewable power generation source followed by hydroelectric and biomass. Solar PV technology is cost effective, reliable and can be made available anywhere.

SgurrEnergy’s experience in the MENA region include the recent solar projects: a 30MW in Ukraine, 50MW in Ben Ban Solar Park, Egypt, 40MW in Jordan, 10MW in Saudi Arabia and many more.

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DERIN THOMAS JOSEN Director of Operations Dutronix

Traditionally, the Middle East has been heavily dependent on generation of electricity from fossil fuels especially due to its abundance in the region.

Although the Middle Eastern countries were always blessed with abundant renewable resources making it suitable for solar, concentrated solar power (CSP), geothermal, biomass, and in some cases wind plants, the political and economic advantage few countries had from oil and gas always drove investments to that sector.

In recent years though, there has been a shift towards Renewable Energy to an extent where the region can be termed as a ‘hotspot’ owing to aggressive and ambitious energy targets set by the countries which has empowered the drive and commitment to move away from hydrocarbon fuels to alternative and sustainable sources to meets its energy demands.

These targets have led to a massive effort in reducing carbon emissions leading to the surge in investments which resulted in mega solar plants, record low solar tariff prices and development of innovative products and solutions to maximize the returns providing investors, developers, and contractors a lucrative market to operate in.

The coronavirus crisis in addition to low oil prices will undoubtedly have a daunting impact on the economy and the renewable sector will be no exception to it.

While the ongoing projects are expected to be delayed by a few months, new projects may face a slow down before being awarded mainly due to caution exercised by investors. IPP projects will continue to rise post corona especially in the distributed solar space as Governments and private customers will shy away from making direct investments. Saudi Arabia, UAE, Egypt and Jordan are among the leaders in the region who have large upcoming investments planned out and will be driving the growth in this industry.

IPP’s will look to broaden their current strong and established supply chain to avoid over dependence on select countries allowing them to mitigate future risks of a supply chain crisis which was seen at the beginning of the current pandemic. Even during the lockdown period there was positive news on technology advancements which will further bring the overall project costs down yielding better returns for some while offering competitive advantages to others.

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As investors continue to look at ways to maximize production with the available area in addition to increasing the amount of energy produced over a day, storage technologies will begin to play a crucial role since recent advancements make it commercially viable especially in hybrid projects.

While the current lockdown had brought the energy demand to an all-time low raising concerns on energy investments, as countries ease restrictions and lockdowns lifted, the demand will soon reach back to pre-corona time providing all the more reasons for countries and investors to stay committed to their energy goals and investments.

With changing Government policies, growing energy demands, better project returns and lower costs, the Middle East is on track to take advantage of the abundant resources it has and will continue to attract large investments giving the confidence to current and new investors. While the coronavirus did dent the economy, the nations are resilient and will overcome the current crisis with the energy sector leading the way for their speedy recovery.

As investors continue to look at ways to maximize production with the available area in addition to increasing the amount of energy produced over a day, storage technologies will begin to play a crucial role since recent advancements make it commercially viable especially in hybrid projects."

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INSIGHTS

FACTORS DRIVING MARKET GROWTH IN THE MIDDLE EAST Strong commitment by the leadership of any country is one of the biggest factors driving growth of Renewables and this has recently been proven true

by Dubai Government where they have exceeded the Renewables Target for 2020 (Achieved 9% against 7% Target). Congratulations DEWA on this big achievement! We are confident that under the able leadership of HH Sheikh Khalifa bin Zayed Al Nahyan and HH Mohammed Bin Rashid Al Maktoum, UAE will far exceed their Clean Energy Targets of 44% share by 2050.

We have seen similar commitment from Saudi Arab, which has set a goal of adding ~60 GW of Renewables by 2030 and has adopted a well-defined, transparent and competitive bidding process. REPDO has already run 2 rounds of bids and the process for 3rd round is currently on-going.

Other GCC nations are still in nascent stages of development but considering the price attractiveness of solar, they are also expected to significantly ramp up the plans and provide a clear predictable development path ahead.

Egypt, the most populous among all Middle East countries, is well on track towards its 42% Renewables Target by 2035. They have successfully commissioned one of the largest Solar parks in the region (1.8 GW Benban Solar Park) with funding support from EBRD and other Multilateral agencies and expect construction to soon begin on Kom Ombo Solar Projects where EETC has already signed 400 MW of PPA with ACWA Power and AMEA Power.

ATTRACTIVENESS OF ARAB WORLD IN RENEWABLE ENERGY SPACE: With the World’ s Largest Solar Park (Al Dafra in Abu Dhabi) achieving World’ s lowest Solar Power Tariff at 1. 35 Cents USD/KWh, Arab World in the Middle East Region is fast gaining traction in Renewable Energy Space. The top three markets of this region (UAE, Egypt and Saudi) with combined installed and under installation capacity of around 7 GW account for > 75% of the total market share. While UAE is expected to continue adding 1 to 1. 5 GW of capacity per annum for the next few years, global investors are eyeing Saudi Arab as a maj or contributor to solar capacity addition in the coming years to fuel its energy transition and become the central Industrial Hub for the Middle East Region.

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INVESTORS AND DEVELOPERS FROM JAPAN, EUROPE, USA, INDIA AND CHINA ARE ACTIVELY PURSUING OPPORTUNITIES IN MANY OF THE STABLE COUNTRIES IN MENA REGION DUE TO THE FOLLOWING KEY FACTORS: Robust and Transparent Bidding Mechanism with IPP experience Availability of Cheaper and Long Tenor Debt for Credit Worthy Nations (with a spread of 1 to 1.5% over LIBOR) Bankable PPA structures with full Non-Recourse Funding (PPAs are backed by State Entities or Sovereign Guarantees) No hassles of Land Buying or Electrical System Connectivity (being taken care by Host Government) Availability of big size projects (The Largest Project in the region, Al Dhafra is expected to be >1 Bn USD) PG 20

WHAT IS DRIVING ENERGY TRANSITION AND CREATION OF RENEWABLE ENERGY OPPORTUNITIES: Geopolitical factors like oil price war between Saudi and Russia, growing environmental concerns worldwide and fast depleting energy resources are forcing Arab Nations to make a calculated shift towards Non-Oil based industries in last few years and this change is expected to be sped up by recent impact of Covid 19 which saw record lowest levels of oil prices in the history of mankind. The epidemic has not only impacted the oil revenue but many other important revenue earning sectors like Tourism & Hospitality, Aviation and associated industries leading to economic stress in the region.

Among all available options in Non-Oil based industries, Renewable Energy and Battery storage become the top choice of Policy Formulators due to following reasons: World’ s lowest Solar Tariffs in the region are giving way for following big business opportunities: Dispatchable Renewable Power at Affordable Cost Tariff from Hybrid Solar + Battery based Proj ects is now expected to reach grid parity in the region fueling further growth of renewables. Dubai, which has already aimed for 75% of its power to come from Renewables by 2050, may now possibly accelerate the target.

Affordable Production of Green Hydrogen Middle East region with its lowest Solar Tariffs and strong connectivity with the world economies, can become a global production hub for Green Hydrogen, a clean fuel expected to replace oil in coming years. We may expect some action around this possibility sooner than expected.

Energy Security Availability of dispatchable power at affordable cost coupled with thin population density and large land parcels in the desert will help achieve Energy Security for the region and thus help them preserve oil for alternate uses.

Food Security UAE, Saudi and many other regions in the Middle East currently import a large share of the food, vegetables and fruits from the neighboring countries due to shortage of cultivable land. Indoor Hydroponics, run by cheap Renewable Electricity (electricity being >70% of the Operation Expense in Hydroponics) is expected to drive a Green Revolution in the Middle East making them self-reliant in food production. World’ s Largest Hydroponics Farm is currently under construction in UAE.

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Water Security Affordable Solar Power is expected to power the RO Desalination proj ects of the future, thus making drinking water available at affordable cost by utilizing abundant sea water. Various desalination bids invited by Saudi and UAE government have already seen sizable involvement of Solar Power to provide a competitive edge to bidders.

Transition to Electric Vehicles Affordable Solar Power is making a strong case for Electric Vehicles powered by Solar+Battery+Grid Combination in future.

Possibilities of Exporting Cheaper Electricity to Europe by utilizing Abundant Solar Radiations and land mass (Time to revisit Desertec Plan) Clearly there are big opportunities in Renewables and Battery space in the Middle East Region, and en-cashing them will require bold measures similar to the recent announcements of post-corona stimulus packages by Germany, keeping >30% towards the development of a green economy. Given a tough fiscal and economic environment ahead amid Covid-19 crisis and oil price war, leaders need to prioritize financial resources and must accelerate growth in the direction of a green economy.

The views presented by the writer are personal

AUTHOR : MANISH SINGHAL, DIRECTOR - SOLAR PV SOLUTIONS, ACWA POWER

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PERSPECTIVE

WHAT IS DRIVING THE MIDDLE EAST SOLAR MARKET?

The Middle-East solar power market is expected to grow at a CAGR of more than 10.02% over the period of 2020-2025. Factors such as supportive government policies and increasing efforts to meet power demand using renewable energy sources and to decrease dependency on fossils are expected to be the significant contributors to drive the market.

Solar PV projects at utility-scale have been growing in the entire Middle-East, with massive acceptance in all counties. Many ambitious photovoltaic projects are lined up in the forecast period and are expected to drive the solar market in the coming years. The upcoming solar power projects along with the use of hybrid power solutions in this region can create immense opportunities for the solar power market in the near future. Saudi Arabia is expected to witness significant demand, owing to the number of on-going and upcoming projects over the forecast period.

Here’re some views and suggestions from the industry stakeholders on the Factors Driving Market Growth In The Middle East

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DR. KEYUR GANDHI Co-founder & CTO, Apollo Energy Analytics (Helios IoT Systems Pvt. Ltd.)

The MEA region, which is well-known for its oil and natural gas reserves, has now been under tremendous limelight for its ambitious renewable energy growth in the last 5 years. Almost all the countries in the MEA are actively and aggressively tapping into renewable energy, especially the solar photovoltaic power generation. Some of the top driving factors leading to market growth are as follows: Daytime Energy Demands and Supply – The countries’ energy demands peak during the daytime with a contested demand at light. The solar PV generation sector can cater to those peak energy demands very effectively as the power from the sun can be efficiently harnessed to mitigate such power demands.

Clean and Renewable Energy Initiative – The climate changes and awareness of generating clean power using renewable energy sources has paramount impact on the governmental responsibilities. They are thus striving to drive both, the state-owned power companies and private IPPs to invest in renewable energies.

High Power Density Zones – As the MEA region greatly benefits from the abundant solar power zones which are one of the highest in the world.

This gives the best Levelized Cost of Energy (LCOE) for the

solar power plant. As the weather in the MEA region stays sunny and clear most of the time, the power generation becomes very reliable throughout the year.

Financial Benefits – The cost of setting up and Operations and Maintenance (O&M) of renewable power generation is reducing incrementally on an annual basis and is almost at par with other conventional energy sources. The LCOE matrix, which plays an important role in determining the financial success of any energy project has been proven for the solar industry, resulting in adaptation of renewable energy into the mainstream power sector.

Technology Improvement for large scale production – There is a constant improvement in the technology in the renewable sector, which is driven by innovations by global OEM companies.

This innovation has led to increase in efficiency and reliability of assets at a large-scale production, which is not seen in other energy sectors.

Analytics Driven Approach – There are significant improvements in the processes of O&M and asset management of the renewable assets using an analytics and data driven approach. This allows the market to be more versatile and always on their toes to keep improving the reliability and cost of setup and operating the renewable assets.

The renewable energy sector is expected to significantly grow in the MEA region over next decades owing to the critical factors and initiatives driven by clean energy demand, government policy, reducing dependence on fossil fuels and importantly rapid advancements in OEM product technology and digital technologies like IoT and digital twin.

SHOBIT RAI Director, Prozeal Infra Engineering (P) Ltd.

Middle East specially the 5 countries like Dubai, Oman, Saudi Arabia and Jordan has been picking up quite well in last 5 years on account of many factors such as Huge increase in Power demand, oil producing countries targeting to become sustainable and wants to preserve oil and gas reserves as most of this countries either generate power from Diesel or Natural Gas. The Middle East as a region also has good solar radiation which is why even large IPPs are keen to develop large solar farms. There are plenty of

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opportunities also on the Distributed Rooftop markets where solar can be installed on large rooftops of warehouses, factories and other buildings as some of the countries like Dubai, Oman, Jordan also allows to sell power to the grid through Net metering. The innovation of new technologies and the upcoming solar power projects, along with the use of hybrid power solutions in this region, can create immense opportunities for the distributed solar power generation market in the near future.

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RAJARAM PAI Business Leader – South Asia & Middle East, DuPont Photovoltaic Solutions

2030 laying the foundation for achieving a clean energy future by 2030. UAE has prepared a blue-print through various charters for achieving 50% share of energy through clean sources by 2050.

Oil economics has been traditionally synonymous with the Middle East. However, with the softening of global oil prices led by an overall demand contraction, the Middle East is keen to conserve and export its oil reserves efficiently. This resource preservation mindset combined with a global drive to switch to non-polluting, non-fossilized, sustainable sources has made the region swerve its energy charter to explore renewable options including solar.

UAE has been the regional leader since their initial investment into a grid-connected solar plant (10MW) at Masdar City in 2009. Dedicated investments into their solar projects have observed an exponential 12X rise between 2008-18. The Gulf Cooperation Council (GCC) countries are collectively keen on establishing ~7GW by the mid-2020s that can generate trillion dollars of investment into Renewables over the next few years.

Over the past decade, the Middle East region has leveraged its positives of abundant sunshine, available land and a strong investment community to focus on solar PV development across its member countries. Many countries including UAE, Saudi Arabia, Jordan and Oman have been leading the growth charge through mega scale and distributed projects.

In conclusion, solar presents tremendous potential for the region, and development of large utility scale projects bears testament to the significant importance placed on renewable energy generation by member Middle Eastern countries. The proliferation of installations and significant increase in the unit project sizes underline the need for establishing selfsufficiency through local resource development, larger regional manufacturing hubs and research capabilities. Appropriate storage technologies, distributed development and seamless grid integration with conventional generation are the other aspects that will require focus and prove to be increasingly beneficial for the region.

Several successful initiatives to drive solar led growth have been launched through a regionally aligned intent on establishing a sustainable future and backed by a well-articulated vision and strategy. One such has been the Pan-Arab Renewable Strategy

ALVIN SHI Managing Director, Sungrow MENA region

The Middle East is the emerging solar hub with ample sunshine. Local governments set up ambitious renewable energy goals in a bid to support the global decarbonization and meet the growing electricity demand.

The PPA model is a driving force for the local development of utility-scale plants while cuts to electricity tariffs in markets such as the UAE, Jordan, Oman and Saudi Arabia have played a role as well, backed by the establishment of supportive regulatory frameworks, particularly for wheeling and net metering.

The recent bid prices in Middle Eastern countries have repeatedly fallen below 2 US cents/kWh, indicating one of the lowest PV power prices in the world. The low off-taking price requires a minimized LCOE, which poses tremendous challenges to the PV system solution. | MIDDLE EAST | JULY - AUG ISSUE 2020

Technologically, the 1500V outdoor central inverters are the preferred solutions to tackle a magnitude of demand as it comes with easy transportation and O&M, high DC/AC ratio, durability in harsh conditions, enabling a lower system cost and higher yields. It’s expected that the new shipment is among 0.5GW3.5GW on average during 2020-2024. Sungrow’s upgraded 1500V 6.25MW turnkey solution, featuring a 40-ft container design and IP65 optimal protection capability, is an ideal match for the Middle East.

Technologically, the 1500V outdoor central inverters are the preferred solutions to tackle a magnitude of demand as it comes with easy transportation and O&M, high DC/AC ratio, durability in harsh conditions, enabling a lower system cost and higher yields.

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G.SRINATH Business Development (Solar), Avant-Garde

In the Middle East and North Africa (MENA) region, with the increased industrial activity and drive towards renewable energy is getting reflected in each country’s strategy. Continuous population growth and economic development has placed pressure on existing power assets and in some cases, created a significant gap between electricity production and demand. Affordable renewable energies in the region – mainly solar – have become an obvious solution. Renewable energy has been growing significantly and this trend will continue to increase as solar power prices reach grid parity. As renewable energy increases, grid capacity and stability challenges underline the importance of adequate storage solutions. CSP, PV and storage solutions are starting to enter the MENA region as seen in Morocco and the UAE supported by declining prices.

The total corporate funding in the global solar sector saw an 11% increase year-on-year at $109.4 billion in the first half of 2019. More than $2.6 trillion has been invested in renewable energy over the past decade. Global solar power capacity increased by more than 25 times in this decade, from 25 GW at the beginning of 2010 to 615+ GW by the end of 2019. Overall investment in the MENA energy sector could reach $1 trillion between 2019 and 2023, with the power sector accounting for the largest share of the spending at 36%. The unit rate for solar energy investment is reducing year-on-year with increased installed capacities, indicates cost effective renewable energy technologies are in place.

The trend in the MENA region has so far been towards the development of large utility scale

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projects. Combination of decreasing LCOE and latest technology have been enabled through competitive bidding. Solar PV is expected to remain the preferred option with growing contributions from CSP and storage projects Energy storage is set to emerge as a vital component for further renewable energy developments in the region. Large scale hybrid PV combined with CSP and storage projects may increasingly prove beneficial, as it has been the case with projects developed in Morocco. A similar approach is also observed in the UAE. Cost of storage remains an issue, but with decreasing prices, adoption of battery storage is expected to grow for utilities, residential, commercial and industrial consumers.

MESIA describes the UAE as a regional “front runner” for PV and it made undeniable progress last year. There is a significant demand for distributed generation projects, even more changes in regulatory policy to incentivize selfgeneration along with excess energy sale back to the utility grid are necessary for this market to take off. In the long run, it is a new distribution of role between utilities and decentralized production, between electricity producers and consumers that is coming up. Beyond self consumption, interaction will increase on the grid to balance the system with tools like net-metering systems, wheeling, etc., These trends will require more flexibility emphasizing the role of grid and demand side management and buffer storage capacity. They foster the development of innovative technologies. The industry is embracing these changes and is looking at a promising future for solar clean energy, which will drive the market growth in MENA.

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MAAHIR DANEWALE Vice President - Business Development, P V Diagnostics Pvt. Ltd.

Middle East has been proven to be a potential market for the solar industry where UAE, Egypt, Jordan, Morocco, and Iran are the major players. UAE is contributing to approx 58% of all utility-scale projects.

The market is expected to grow at a CAGR of more than 10.02% over the next 5 years. The driving factors behind this market growth are: Nurturing government policies - Regulatory approvals have been known to be bottlenecks for solar expansion in different geographies, however, the middle east has created efficient structures to streamline this process, several initiatives like FiT, single-window clearance of net metering of rooftop projects, etc. have created an environment conducive for rapid growth. Shams Dubai program launched in 2015 has been a big success with around 1300 rooftop installations with a total capacity of 125 MW. Anchor investors are middle east sovereign funds Investment is the core to rapid expansion and the Middle East market has attracted many global funds because the majority investor in all solar projects is the government This level of financial commitment from the government brings surety and assurance among external investors that the region has a strong commitment to contribute to the solar industry. The total investment in the renewable energy sector in the middle east is around USD 70 billion.

Geography and Climatic advantage - The climate in the Middle East is mostly consistent with only 2 seasons: Winter and Summer which are jokingly referred to as hot and hotter. Rainfall is almost nonexistent as most Middle Eastern countries consist of semi-arid and desert terrain. Therefore, this region has an abundance of solar energy which makes it an ideal geography of the solar industry expansion.

Sweihan IPP project of 1.17 GW commissioned in Abu Dhabi - one of the largest single-site PV solar plants.

Abu Dhabi’s Emirates Water & Electricity Company’s plan to construct a 2 GW solar project in Al Darah is expected to be completed by 2022 The fifth phase of Mohammad Bin Rashid Al Maktoum Solar Park, tender of 900 MW is secured

by ACWA in 2019, which is expected to be operational by mid-2021. It has 1013 MW of capacity in operation till date.

Benban solar park in Egypt has an operational capacity of 1650 MW with an annual production of 3.8 TWh. The electricity generation has increased from 2.4 TWh in 2014 to 4.8 TWh in 2019 from solar energy. The upcoming projects are expected to increase this generation significantly.

Conclusion The trend in the Middle East region has been towards the development of large-scale projects. The combination of the latest technology and decreasing LCOE has been possible through competitive bidding. Solar is expected to remain the preferred option (due to climatic conditions) with extensive support from the government.

Reduction in oil prices - The prices of oil have reduced to approx 70% since 2014 (post-pandemic).

Since the economy of this region highly depends on the oil market, it has now become a necessity for them to diversify their portfolio which again opens doors for renewable energy, especially solar due to the added advantage of resource availability.

Key PV projects to drive the market In 2019, MESIA announced an expectancy of at least $15 billion of solar power projects to enter operation in the next five years.

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