Kuwait plans 2000 MW of renewable energy

Kuwait Towers at Sunset. Image courtesy of www.itinerarist.com
Kuwait citizens use more energy per capita than 90 percent of the world’s nations. Kuwait Towers at Sunset. Image courtesy of: www.itinerarist.com

by John Brian Shannon

Kuwait will invest USD 100 billion on its domestic energy sector over the next 5 years, and some of that spending is earmarked for renewable energy.

Kuwait has embarked on its first renewable energy project and will now be able to export the oil that would have been used to  produce domestic electricity. Solar and wind will produce 70MW for the GCC nation by September, 2016. And by 2030, 15% of Kuwait’s total energy mix will be powered by renewable energy according to a new government policy.

Phase I of the country’s first renewable energy project is already underway and it will be in the form of a 70 MW hybrid power plant with PV-solar, thermal solar, and small wind power, set to come online by Q3 of 2016, in Shagaya, Kuwait – near its border with Iraq and Saudi Arabia.

By 2030 the 2000 MW renewable energy plant will be fully operational and the project will save Kuwait 12.5 million barrels of oil (BOe) per year — and power 100,000 Kuwaiti homes.

Saving 12.5 million barrels (BOe) per year will allow Kuwait to export that same amount of oil at the going rate. (12.5 million barrels of crude oil, is about equal to four of the largest and most modern, fully-loaded supertankers, the TI-class double-hulled supertanker)

Oil prices have been hovering around the USD 80.–100. mark recently, but this will certainly rise and some energy experts see oil rising as high as USD 250. per barrel, mid-century.

For demonstration purposes only, if those four supertanker loads of ‘saved oil’ is priced near today’s USD 90. per barrel ($90. x 12.5 million barrels per year) it means Kuwait will rake in an extra USD 1.12 billion, per year, every year, due to this renewable energy project.

If the oil price shoots up as expected, the government will see even greater benefits. By the time oil hits USD 180. per barrel, this 3-Phase project should be complete — allowing Kuwait to take in USD 2.25 billion, per year, every year, due to this renewable energy project.

Separate from all of the foregoing, is the additional income that could be garnered from those ‘saved’ 12.5 million barrels per year — IF Kuwait  added some value to that crude oil by refining it into valuable products before exporting it, instead of merely exporting it as raw crude oil. Gasoline, diesel, aviation fuel, plastics and synthetic rubber, are all examples of value-added products that can be made from crude oil.

At that point, the relatively small amount of 12.5 million barrels per year could become worth much more than crude oil sold for USD 1 or 2 billion per year. Instead, when sold as finished fuels or plastics, it becomes many billions of dollars contributing to the national GDP of Kuwait.

To extrapolate this further, Kuwait must take out of their yearly oil and gas production, a total of 126 million BOe (barrels-of-oil-equivalent) per year, to power their national electricity grid power grid which has a total capacity of 14,000 MW.

Based on USD 90. per barrel, with 126 million barrels (BOe) saved: If Kuwait switched completely to renewable energy, and instead, exported all the crude oil and gas it burns to produce domestic electricity, yearly GDP could increase by USD 11.3 billion.

Based on USD 180. per barrel, with 126 million barrels (BOe) saved: If Kuwait switched completely to renewable energy, and instead, exported all the crude oil and gas it burns to produce domestic electricity, yearly GDP could increase by USD 22.6 billion.

Based on value-added products made from crude oil, with 126 million barrels (BOe) saved: If Kuwait switched completely to renewable energy, and instead, refined all the oil and gas it burns to produce domestic electricity, yearly GDP could increase by USD 56.7 billion, or more.

Only now, with the recent combination of high crude oil prices and the dramatic fall in the cost of renewable energy has it made economic sense for OPEC nations to consider the switch to renewable energy.

Simply put, OPEC nations can make more money by exporting their oil – instead of burning it to produce electricity for domestic consumption.

Adding value to the ‘saved’ crude oil, means that OPEC nations have the opportunity to make money many times over, when compared to simply exporting raw crude product.

Embracing this new vision can work miracles for GCC economies, which are blessed with plentiful sunshine and wind resources, and already have the technology to refine their crude oil, thereby adding value to the resource, while creating thousands of jobs for the region’s chronically under-employed youth.

Cleaner air for GCC citizens, billions more dollars via value-added exports, and a lower unemployment rate among region’s youth. Now that’s something to celebrate!

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Note:  Kuwait pumps 2.8 million barrels of crude oil daily, totaling 1.02 billion barrels of crude per year. — Salem al-Hajraf, head of energy research at the Kuwait Institute for Scientific Research

Note:  Construction phases are as follows:

  • Phase I – 70 MW.
  • Phase II – 930 MW.
  • Phase III – 1000 MW.
JOHN BRIAN SHANNON

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A Match made in Heaven: Solar power and Water desalination

by John Brian Shannon

The nations of the Persian Gulf and Arabian Gulf are blessed to have access to unfathomable amounts of sunlight and salt water. With growing populations and scarce water reserves, governments, public or privately-held power companies and water utilities can capitalize on these national assets — when the economics work.

Even when the economics don’t work, human beings still need water! Growing cities need water for domestic use and industry needs water to produce the goods that we buy, or that they export.

The question for Oman is; How much of Oman’s oil and gas is burning up at desal plants — instead of being exported to add to Oman’s GDP?

In previous decades, the power-hungry desalination plants widely-used throughout the Middle East were powered by electricity created from burning vast amounts of fossil fuel. The economics barely worked when the oil prices were low – but now, with oil once more approaching $100. per barrel, they are costing a king’s ransom to operate. Even oil-rich kingdoms are feeling the pinch nowadays.

A cogent case can be made for adopting alternative energy to power existing and future desalination plants – thereby allowing that oil and gas to be sold at export instead of being burned up. Why burn your money?

At $96.80/barrel for oil (April 2/13) and the natural gas price passing $4.08/MMBtu (April 2/13) the annual fuel cost to produce electricity with fossil fuel is unimaginably high. Really, you don’t want to know.

Fossil fuel exports power the economies of rapidly growing Middle East and North Africa (MENA) nations. Each barrel of oil burned for local desal operations, is one less barrel contributing to the national GDP. A similar situation is at play with regards to natural gas in Oman and the other GCC nations.

Modern solar power plants, such as Masdar’s Shams 1 solar power plant can produce 100 megawatts of clean power for 30-years or more, powered only by sunshine. These modern electrical energy power plants are powerful enough to run; (1) a desalination plant, with enough energy surplus to run (2) a nearby town, or (3) a rural areaor, perhaps all three!

There are two basic types of solar power;

  • Photovoltaic solar, properly called ‘PV-solar’ or ‘PV-solar modules’. The solar panels only produce power when the Sun is shining. Which is fine, because the highest electrical demand occurs during daylight hours.
  • Thermal solar, known as ‘Concentrated Solar Power’ or ‘CSP’ produce power 24 hours a day, by storing excess daytime heat in liquids such as molten salt or oil, to run a steam turbine/electricity generator.

PV-solar (panels) have increased efficiency from their 1980’s-era, 11% efficiency rating — to today’s +33% efficiency rating units. Panels with much higher efficiency ratings (perhaps as high as 100%) will hit the market within 20-years. And through all this, PV-solar panel prices have been falling dramatically, to the point that PV-solar utility-scale power plants are now price-competitive with other kinds of power – assuming similar subsidy levels are in place.

Solar Bonus

As PV-efficiency continues to increase through the next few years, just as it has been doing thus far, PV-solar ‘scaling up’ will be very easy. For example, solar panels are size-standardized, so simply unbolting the ‘old’ 11% efficiency panels and replacing them with the ‘new’ 22% efficiency panels, effectively doubles the power output of the solar power plant — practically overnight! (e.g.; 100 MW to 200 MW)

A few years later, when PV-efficiency increases, those (by then) ‘old’ 22% panels can be replaced with ‘new’ 45% efficiency panels – thereby doubling (again!) the total output of the solar power plant. The ‘old’ solar panels will still work fine, and they can be sold to developing nations, or traded-in against the cost of the new panels, just the same way you would trade your old car for a new one.

In fact, PV-solar power now costs less than comparable coal-fired power — and that’s not factoring in the costly ‘externalities’ of coal-fired electrical power generation, which range from huge water usage by coal-fired power plants, to toxic airborne emissions, to adverse health effects on citizens – which prematurely killed 1.2 million people in 2007-2010, in China alone!

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PV-solar power now costs less than comparable coal-fired power

CSP solar technology has advanced remarkably and several different designs have proven themselves viable in Spain, the United States and the UAE, although CSP costs are still high when compared to PV-solar and conventional power. This is changing as CSP production ramps up around the world. The one great advantage of CSP solar, is that these power plants produce power 24-hours per day, 365-days per year – and, no harmful emissions.

“Holding nearly half of the world’s renewable energy potential, the Middle East and North Africa are poised for unprecedented growth in renewable energy.” — Masdar

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Masdar’s Shams 1 Concentrated Solar Power (CSP) 100 megawatt power plant near Abu Dhabi. image courtesy: Masdar

“The inauguration of Shams 1 is a breakthrough for renewable energy development in the Middle East. With the demand for energy rising exponentially, the region is undergoing a major transformation in how it generates electricity. In fact, the Middle East is poised for major investments in renewables, and Shams 1 proves the economic and environmental advantage of deploying large-scale solar projects.” — His Excellency Dr. Sultan Ahmed Al Jaber, CEO of Masdar. (Read Masdar Shams 1 Press Release here)

It’s safe to say that MENA nations should be planning a long-term switch to solar energy, starting with PV-solar now, and CSP solar starting within the next ten years.

Financing these new, pollution-free power plants could be assisted by GCC government investment (sovereign wealth funds) financed through increased oil and gas exports – as oil and gas will be ‘freed-up’ for sale to international buyers.

It must be said that in areas of the country that make the switch from fossil fuel to solar, the cost of externalities will fall and residents will notice better health and enhanced ‘quality of life’ due to lower airborne emission levels and governments will notice lower health care costs. Not to mention plenty of clean, low-cost water for citizens and industry.

JOHN BRIAN SHANNON

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