Energy transition takes centre stage

Energy transition takes centre stage

26 Feb 2020

Meeting the world’s energy needs will form the central theme at Middle East Energy (MEE) 2020, which opens on 3 March in Dubai World Trade Centre (DWTC). Previously known as Middle East Electricity, the region’s largest gathering of buyers and sellers in the power industry has been rebranded for its 45th edition to reflect the rapidly changing energy sector.

Held under the patronage of the UAE’s Ministry of Energy, MEE will kick off with a high-level panel discussion on ‘Energy in transition – connecting the world through decarbonization and digitalisation’. Running from 3-5 March, the event is bringing together more than 1,100 exhibitors and more than 20,000 visitors to find solutions to meeting the world’s growing energy needs.

New era

The Middle East and North Africa’s power sector is undergoing an unprecedented transformation, with the shift towards renewable energy and digital innovation at the heart of ambitious energy diversification programmes. As governments seek to increase energy security and maximise returns from hydrocarbon resources, utilities are pressing ahead with some of the most ambitious renewable energy schemes in the world.

The bold steps being taken across the Middle East and North Africa to introduce clean energy are being led by the falling costs of clean energy, with the cost of installing PV solar and wind having fallen by more than 70 per cent over the last decade. The region has driven much of the sharp fall in tariffs for renewables projects, with the UAE, Saudi Arabia and Egypt all having set records for solar and wind power tariffs in the last five years.

Informa’s Energy & Utilities estimates that 130GW of clean energy projects are already planned in the Middle East and North Africa, which will require $300bn-plus of investment to successfully deliver.

While the fall in cost of physical components has been a major factor behind the decline of prices of renewable energy, the digitalisation of power infrastructure is expected to drive efficiency and reduce the costs of both clean and thermal energy production in the future. The global market for digilitalisation in the energy sector is expected to grow to $64bn by 2025, with the shift of focus from hardware to software expected to revoutionise the utilites sector.

In addition to increased sensors and data points from power plants and networks, internet of things (IoT) operating systems and artificial intelligence (AI) will play an increasingly important role in improving efficiency and reducing economic and carbon costs in the production and distribution of electricity.

Grid stability

The energy transition is not just about implementing new sources of power, however. For utilities to successfully navigate the path to sustainable energy production, balancing the introduction of renewable energy with efficient gas power will be vital to ensure stable and reliable grids.

The recent discovery of potentially one of the region’s largest gas reserves in the UAE, for example, will play a key part in the country securing energy self-sufficiency and boosting energy security in an era of increasing geopolitical and economic uncertainty.

Saudi Aramco’s recent announcement that it will invest $110bn in developing unconventional gas resources in Jafurah further illustrates the importance gas will play in meeting energy demands during the energy transition throughout the Middle East and beyond. Successfully integrating new intermittent renewable energy resources with conventional thermal resources will form a key part of discussions of MEE next week.

Establishing the correct regulatory environment and policies to support the energy transition is vital if grid stability is to be achieved and ambitious energy targets met. While large-scale utility projects will contribute the major share of the region’s clean energy capacity, the adoption of appropriate feed-in-tariff, net-metering and wheel-in agreements will be crucial if individuals and businesses are to play a role in the energy transition.

Delivering ambitious renewable energy targets is not the only target for the region’s utilities during the energy transition. In addition to attracting private investment to cover the capital cost, governments will seek to ensure that the transition towards new sources of energy will benefit local people through job creation and knowledge transfer.

With the energy transition set to offer significant challenges alongside lucrative opportunities, MEE will offer the opportunity for the public and private sectors to debate and find solutions to ensure they succeed in the new energy era.

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