The Glasgow Climate Pact was the first climate agreement to explicitly commit to the reduction of coal usage, a key element of which is the urgent reduction of greenhouse gases. Since this agreement, the geopolitical landscape of decarbonisation has changed – while many countries have indeed made commitments, those pledges vary significantly in degree.
The Middle East, for example, is now rethinking its focus on decarbonisation. The Gulf Cooperation Council (GCC), the socio-political union between Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, has historically been home to some of the fastest-growing economies in the world due mostly to hydrocarbon export revenues.
As a new chapter in the fight against climate change unfolds in the Middle East, it must take stock of its unique properties if it wants to remain a global energy leader. Patrik Farkas, Market Development Manager at Wärtsilä Energy’s Middle East operations, has been thinking about how the region can use these properties to successfully pivot towards a 100% renewable future.
“According to the World Bank, five of the six countries in the GCC are among the top 10 largest CO2-emitting countries on a per-capita basis (GHG emissions of all world countries, 2021 report),” says Farkas. “So, the emission reduction potential is huge. I don’t think it’s an overstatement to say that, after the pandemic, decarbonisation will be the global battle that unites nations to action to avoid an even bigger
disaster.”
At the time of writing, 150 countries have submitted new nationally determined contributions (NDC) targets. Of the GCC countries, half have pledged net-zero targets and all six have pledged to make at least some sort of renewable energy integration effort. The UAE is the first from both the GCC and the Organization of the Petroleum Exporting Countries (OPEC) that aims for a net-zero carbon economy by 2050. This is a key milestone as there has now been a first mover in the GCC, followed by Saudi Arabia, Oman and Bahrain.
| Country | 2020 total CO2 emission(million tons) | 2020 CO2 emission per capita (tons) | Climate goal |
|---|---|---|---|
| Bahrain | 36.67 | 21.60 | By 2025: 5% renewable energy generation, 6% reduction in energy consumption By 2035: 10% renewable energy generation By 2060: net-zero emissions |
| Kuwait | 89.97 | 20.91 | By 2035: reduce GHG emissions by 7.4% relative to business as usual By 2030: 15% of peak electricity demand from renewable energy sources |
| Oman | 87.05 | 16.90 | By 2023: 11% VRE By 2030: 7% reduction in carbon emissions, 30% renewable energy generation By 2040: 35-39% renewable energy generation |
| Qatar | 99.49 | 35.64 | By 2030: 25% reduction in GHG emissions, 20% of electricity from solar PV |
| Saudi Arabia | 588.81 | 16.96 | By 2030: 50% electricity from VRE By 2060: net-zero emissions |
| United Arab Emirates | 203.14 | 20.70 | By 2030: 23.5% Greenhouse Gas (GHG) emission reduction By 2050: net-zero emissions |
The climate goals of the Gulf Cooperation Council (GCC)
Though all six countries now have decarbonisation goals, the region’s power generation is still dominated by fossil fuels. The solar and wind energy penetration of the GCC region is less than half of the global average. However, countries are projected to deploy nearly 50 GW of new renewable capacity by the end of the decade. The GCC’s ambitions have therefore taken a significant step forward, but there is room for more action.
“The penetration of renewables is under 5% in most of the GCC countries,” says Farkas. “The current 4-5 GW renewable energy capacity represents only 3% of the region’s aggregated peak demand. By 2030, renewable deployment could see a 13-fold growth and solar and wind generation can make up to 30-50% of the peak load”.
The Middle East is a key player in the global energy market and has been for decades due to its supply of oil. But even though oil is projected to last for 80 more years in the Middle East, the rest of the world is projected to have much less supply left. This means that as the global energy landscape shifts, it will become increasingly difficult to bring them to market. Fortunately, the unique properties of the region present an opportunity for it to pivot towards decarbonisation without risking that status.
Decarbonisation is a complex process that requires careful planning. In a decarbonised economy, renewables are the backbone of the power supply, so good weather conditions are crucial for adequate and consistent supply. There must also be enough land available for large solar parks or wind farms, and transmission infrastructure must be sufficient and reliable without being so expensive that it disincentivises investment.
The GCC countries boast enviable solar conditions, large tracts of available land, modern transmission infrastructure, and a relatively low cost of capital. All of this add up to a competitive advantage on the global stage, so the first step of their pivot should be to leverage this advantage and deploy significant solar photovoltaic (PV) capacity. Wärtsilä has been exploring various capacity expansion scenarios to evaluate what other actions could boost decarbonisation without radically disrupting the generation mix.
“We have been developing a synthetic Middle East power system model to better understand the potential decarbonisation trajectories of the region,” says Farkas. “We have found that, until solar PV capacity reaches 20-25% of the peak load, solar generation will be absorbed by the current portfolio without major curtailment issues. But even until this point, energy storage technology can support decarbonisation of the system, mainly by providing emission-free ancillary services to the grid. Batteries can optimise operating reserves and displace thermal contingencies, leading to lower fossil fuel consumption and therefore lower overall system emissions.”
Once solar PV penetration has exceeded a critical mark, the next stage of the decarbonisation process is to store excess generation in appropriately sized batteries. Energy storage facilities can be added in multiple stages and across geographical boundaries to precisely meet capacity, which allows investors to benefit from the modularity and flexibility of the storage technology.
Since smart grids require energy at specific times, energy storage technology is a Swiss army knife for the power sector. They can switch between services almost indefinitely, which allows operators to capture multiple revenue streams, provided a proper rewarding system is in place or agreed on. Batteries can do multiple jobs concurrently and an operator can select whichever outcome has the highest value. “There is no such thing as a stranded battery,” says Farkas. “You will always find a job that your battery can do to improve the efficiency and resilience of your grid. And it improves grid resilience through the ability to react and balance quickly. It can supply a synthetic inertia response in fractions of a second, which prevents frequency problems before they have a chance to escalate.”
Interestingly, energy storage hasn’t yet broken ground in the Middle East. This can be explained by the relatively modest solar penetration of the region and by the overlapping electricity demand and solar production curves. There are some pilot energy storage facilities in the UAE and Qatar, but the scale of industry-wide expansion that has been achieved in the US, Europe, and Australia still lies in the future.
There is the potential for this to change, as more and more utilities are recognising the grid-level benefits batteries can deliver. Leading utilities in the Middle East, such as Emirates Water and Electricity Corporation (EWEC) or Saudi Electricity Corporation (SEC) made indications to add batteries for operating reserves in the coming years. These projects will break the ice for energy storage systems in the Gulf and deliver procurement, operation, and integration expertise for their users.
If traditional petro-states can transform their energy systems, other countries have no excuse.
In its Middle East model, Wärtsilä achieved 40% renewable energy penetration using only solar PV and reserve-provision batteries, but this level can be substantially improved through the utilisation of carbon-neutral or zero-carbon future fuels.
It’s currently unclear whether hydrogen (blue and green) or one of its vectors will be the ultimate energy carrier of the future, but in some form, hydrogen will be an inevitable component of the energy transition. Hydrogen is projected to cover 7% of global energy demand by 2050, and over 40 countries have adopted a hydrogen strategy because of its prospects for a carbon-free solution to the long-term energy storage challenge. In the Middle East, production and utilisation of hydrogen is a trending topic, and regional demand for hydrogen could grow by a factor of 10 by 2050.
Wärtsilä is actively developing the combustion process of clean fuels and testing various fuel types and blends to accelerate the energy transition. “Currently we can easily combust hydrogen blends up to 25% volumetric content, and our ambition is to have a pure hydrogen engine ready in the coming years,” says Farkas. “On the ammonia frontier, we are even further in the process. We are already testing ammonia blends up to 70% at an industrial site. We are dedicated to replicate a similar project in the Middle East by the COP28 Conference in November 2023, in Abu Dhabi.”
The first step on the climate journey can often be the hardest to make, which can help explain why many people feel that little to nothing has changed since the Paris Agreement. However, all six GCC countries now have decarbonisation targets, and while there is room for improvement, there are also opportunities that decarbonisation offers the Middle East. Adding solar PV, storage and using sustainable fuels will allow the Middle East to thrive in the future energy landscape.
“The Middle East and North African region are getting a great deal of industry spotlight now,” concludes Farkas, “and if traditional petro-states can transform their energy systems, other countries have no excuse."
