While comparing with countries in Europe, Smith said that tapping into solar energy would be more dependable in the country, where radiation levels in summer months are more reliable and predictable.
He added that integrating renewable energy generation is more achievable and realistic in the UAE region since it "is relatively low and does not present a real problem for assimilation into the network."
"By way of comparison, the European Union has a 2020 target of 20 per cent of all energy consumption from renewable sources, necessitating a capacity far above this level in order to meet overall consumption," Smith said, adding that challenges exist in European nations, "where there are higher proportions of renewable energy in the overall energy mix and less reliable sources of solar and wind based renewable energy generation – an issue the UAE doesn’t have to contend with."
Renewable energy, particularly solar and wind are expected to contribute to almost 15.7 per cent of the world’s energy by 2030 and global spending is projected to hit $7 trillion during this period. Of this, GCC countries combined are looking at an increase of 10 – 18 per cent annually between 2012 and 2020 on installed renewable capacity.
According to the World Energy Council, the GCC countries are witnessing soaring power demand, with the sector growing at the rate of 9-10 per cent annually. The energy council adds that the region will require 100gigawatts of additional power over the next year to meet the increasing demand, which needs $50 billion worth of investments in new power generational capacity and $20bn in water desalination processes.
"The power sector in the region has seen exponential growth, with demand for electrical power set to triple over the next 25 years," it says in its latest report.
Dubai Solar Park to help diversify energy sources
Particularly in the UAE, solar power is likely to form the bulk of the proposed capacity of renewable energy, Smith says, after Abu Dhabi announced that it targets a 7 per cent power generation capacity from renewable sources by 2020. Dubai has also put an ambitious target of 5 per cent, by the year 2030.
"The abundance of renewable energy sources, particularly solar, in the UAE means the country is ideally positioned to capitalise on next generation smart power applications," Smith said.
Seeking to capitalise on solar energy, Dubai presented plans for a 1,000 megawatt project during the Abu Dhabi World Future Energy Summit, at a cost of $3.2bn. The Dubai’s Supreme Council of Energy said the Mohammed Bin Rashid Al Maktoum Solar Park would help to diversify sources of energy specifically by using renewable energy to conserve resources and protect the environment from pollution.
The Council revealed that Dubai has almost run out of its own oil, as the current output stands at around 50,000-70,000 barrels per day (bpd), down from a peak over 400,000 bpd in 1991.
"The Solar Park therefore, will significantly enhance our efforts to achieve sustainable development, which is the cornerstone of our projects to achieve prosperity for everyone, for generations to come," said the Council’s Vice Chairman, Saeed Mohammed Al Tayer said.
Last year, the energy council unveiled its "Integrated Energy Strategy 2030" programme, which proposes that Dubai aims to use solar energy to generate 5 per cent of its total power supply by 2030.
Besides solar, the strategy seeks to diversify Dubai’s power generation matrix to include clean coal providing 12 per cent, nuclear energy 12 per cent and natural gas – 71 per cent. At present the emirate generates 99 per cent of its electricity from natural gas and the remaining one per cent from fuel oil.
Coast of solar photovoltaic panels drop in 2012
Speaking during the energy event in Abu Dhabi, Jose Alberich, the vice president of AT Kearney Middle East, attributed the huge potential in the upswing in solar power usage, to the sharp drop in price for photovoltaic panels.
AT Kearney recently carried out a study which found that the GCC countries were amongst the most attractive for large-scale deployment of new solar photovoltaic generation capacities. The report stated that "by 2020, photovoltaic could become more competitive than traditional gas or oil fuelled peak power demand."
"The cost of PV now is competitive and therefore looking ahead this year, it is reassuring to see massive opportunities, with ambitious new projects being proposed," Alberich said.
Last year, Alberich said, the cost of solar PVs was inhibitive, and this led to a drop in renewable energy projects globally, which plunged 12 per cent in the first quarter of 2011, while potential investment value dropped 42 per cent from $110bn in Q3 2011 to $64b in Q4 2011.
Figures in the EIC Monitor report, a quarterly study that tracks new projects in the global energy industry, also show that the fourth quarter of 2011 saw a drop in the number of new global energy and renewable energy development proposals compared to both the same period in 2010, and the third quarter of 2011.
"The total potential investment value of new energy projects in Q4 2011 is $260bn- down 48pct on Q3 2011, and down 9pct on Q4 2010, while the number of new projects is down 21pct compared to Q3 2011," it states.
The report cites the plans by Abu Dhabi’s Masdar to invest up to $5bn to construct concentrated solar power plants in Spain, the United States and the Middle East, saying this is "a testimony that the regional market is waking up to the potential of solar power in the region."
The UK led the way in the number of new projects with 39 new renewable energy projects potentially worth $8.2bn, while the US led the way in potential investment value with 20 new renewable energy projects valued at $8.8bn, according to the figures in the study.
"It will be interesting to view the results for Q1 2012 and to see if the number of projects proposed increases as they did in Q1 2011, following disappointing Q4 2010 figures, or whether we will continue to see a slowdown in proposals for new projects due in part to the current global economic conditions," the report states.