Solar and wind are the UAE's most competitive energy sources

A new report reveals that solar and wind power may now be the cheapest sources of new energy supply in the United Arab Emirates, with the country set to achieve a 10% share of renewable energy in its total energy supply by 2030. The report is one of the first three country analyses under the International Renewable Energy Agency’s (IRENA) REmap 2030 project, which evaluates how the world can meet the United Nations’ goal of doubling the global share of renewable energy by 2030.

The ‘Renewable Energy Prospects: United Arab Emirates’ report is a joint effort of IRENA, the Masdar Institute and the UAE Ministry of Foreign Affairs’ Directorate of Energy and Climate Change. It marks the country’s first public comparison of different energy technology costs and potentials, citing sharp declines in renewable energy costs - as well as rising costs for natural gas as domestic production declines - as the key drivers for renewable energy’s financial attractiveness.

The report finds that solar PV costs have fallen by 80% since 2008, while the cost of new gas supplies in the UAE has grown from under $2.5/MMBtu in 2010 to $6-8/MMBtu for domestic production and $10-18/MMBtu for imports today. 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.

The report further states that a 10% share of renewable energy in the UAE’s total energy supply - and almost 25% in the power sector - could result in energy system savings of $7 billion annually by 2030. And while solar and wind are still challenged by intermittency, which will require natural gas to fill gaps in output, the savings from generating solar power during the daytime are so great that they could justify 17,500 MW of PV in the UAE by 2030, up from around 40 MW today.

“The UAE made an early bet on energy diversification,” said His Excellency Dr Thani Ahmad Al Zeyoudi, the UAE’s permanent representative to IRENA and the director of Energy and Climate Change at the Ministry of Foreign Affairs. “We are investing broadly and letting technologies compete to produce the optimal supply mix. 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.”

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