FRIDAY 20 JANUARY, 2012 |
Solar PV Competitive With Oil And Gas In MENA Nations
With the cost of solar panels and associated equipment dropping rapidly while
gas prices have been rising, solar PV is now competitive with fossil fuel in many Middle East/North Africa (MENA)
countries for electricity generation.
According to a recent report from the Emirates Solar Industry Association (ESIA),
when oil or LNG prices are above US$13 /million British thermal units (MMBtu) or
around $80/barrel oil, solar PV projects become commercially viable - and
without subsidies. With solar PV pricing expected to fall further, it will then
become a case where harvesting clean energy from the sun becomes an even better
EISA also points out that in most MENA countries, electricity prices at the
consumption end are subsidised - through financial support of the generator or regulated prices
well below fuel import prices; or the price at which that fuel could be exported.
An example is Saudi Arabia, where oil is supplied to power plants for as little
as $2.70 a barrel. This presents an "opportunity cost" loss of around
$50 billion annually - over 10% of Saudi Arabia's nominal GDP.
Given such support, solar power is viewed as uncompetitive - but the loss to the
Saudi government and consequently its people through propping up fossil fuel
based power generation is massive. Removal of electricity subsidies, or extension of those subsidies to solar power,
would level the playing field says EISA.
EISA highlights the fact that† rooftop solar electricity generation fits in
well with demand patterns, particularly in the Gulf where air-conditioning dominates the demand
curve; much like what occurs in Australia during the summer months.†
As we mentioned in an article earlier this week, the impact
in relation peak load in Australia is substantial and
the electricity generated at those times by traditional generators isn't cheap - costing as much as $12.50
per kilowatt-hour wholesale. The hundreds of thousands of residential rooftop
solar arrays around the nation are helping to
rein in these costs
for all electricity users; whether they install solar
panels or not.
ESIA's report entitled "Sunrise In The Desert" can
be viewed here
ESIA is a non-profit NGO bringing together the regionís solar industry with a
goal of transforming the Middle Eastís massive solar potential into a commercially and environmentally viable
clean energy industry.
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