Rhein on Energy and Climate

For its energy supply, Humanity depends presently more on the Gulf countries than on any other part of the earth: one third of global oil and one fifth of gas reserves lie there; and production costs are lower than anywhere else.

This situation will not be sustainable:

  • The Gulf countries have to envisage a progressive depletion of their oil-gas reserves. In 50-100 years their reserves will come to an end, starting with oil. That may appear a long time, but the first oil crisis was only 40 years ago.
  • They need to set aside rising proportions of their production to satisfy the needs of their growing population and expanding industries.
  • Due to climate, life style and heavily subsidised prices, per capita consumption of oil/gas in the GCC is higher than anywhere than else.

In the past 50 years the Gulf countries have not made any efforts to reduce domestic oil and gas consumption. They had been too fixated on their huge mineral wealth and the accruing rents.

In the last few years, signs of change have appeared, starting in Abu Dhabi and more recently in Saudi Arabia:

  • Governments have started establishing targets for the share of renewable energy in their supply, however modest or non-binding these may have been.
  • Abu Dhabi has dared to step into nuclear energy. With the help of Korean know-how it will spend some $ 20 billion to build four nuclear reactors until 2020, designed to cover one quarter of its power needs, the remaining three quarters to be covered by solar, wind and gas.
  • Saudi Arabia is following suit. In September 2012, it has announced an ambitious 20-year development plan covering nuclear, solar and wind energy.

By 2032, it aims to cover one third of its fast rising electricity needs from solar installations and another 15 per cent from wind, geothermal and nuclear sources. If fully implemented, Saudi Arabia will become the biggest renewable energy producer in the Middle East and one of the biggest globally.

These programmes can only be the beginning. The Gulf countries possess ideal opportunities for solar energy generation, both PV and solar-thermal. With proper storage facilities they would not require oil/gas or nuclear energy for satisfying their power demand.

Indeed, solar insulation is among the best on earth, both as to the intensity and availability around the year. They have more than plenty of unused land for building huge solar power plants across the peninsula. Technologies for protecting and cleaning the panels/mirrors against/from sandstorms should not be difficult to develop and install.

An ambitious solar/wind strategy, combined with low-energy buildings and strict standards for curtailing excessive energy and water consumption should enable the region to become the Mecca of energy-efficiency and low CO2 emissions, provided far-sighted rulers put an end to subsidised gasoline and electricity rates take a bet on renewable power.

Without a radical shift in their energy policy, making fossil energy a scarce and expensive resource, GCC governments will not succeed in reducing their domestic fossil energy consumption. This will sooner or later make them unable to satisfy both domestic and international demand for oil and gas.

Such perspectives would be extremely worrying for the EU, which will continue to depend on oil and gas imports for several more decades, whatever the success of its energy strategy.

The EU therefore has a vital interest in the success of the policy shift towards renewable energy that the Gulf countries are engaging in and should offer its full support and cooperation.

Ideally, the Gulf countries should

  • establish long-term targets for the generation of solar and wind energy, with the aim of covering 80 per cent of their electricity consumption in 2050;
  • elaborate a strategy for reducing their energy consumption. To this end, prices must at least be doubled over the next 10-15 years, with a consistent strategy of taxation, strict energy efficiency standards for lighting, air conditioning, automobiles, power plants and above all buildings.

The forthcoming 18th world climate conference (COP 18) early December 2012 in Qatar will be an opportunity for deepening the GCC- EU dialogue on their respective energy and climate policies. It is crucial to have the Gulf countries as allies for a far-sighted sustainable energy strategy at the global level.

Eberhard Rhein, Brussels

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