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MENA outlook shows positive growth

With energy demand in the MENA region set for annual growth of 6.4% through 2022, the sector faces the dual challenge of meeting demand while moving to low-carbon systems, according to the Energy & Utilities Market Outlook Report 2020, produced by Informa Markets, organiser of Middle East Energy.

This article first appeared in ESI Africa Issue 2-2020.
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Middle East Energy 2020 once again reaffirmed its status as a global energy platform and underlined Dubai’s position as a gateway to the future for an industry in the midst of transformative change with a series of energetic and enlightening discussions, coupled with powerful insights from the sector’s luminaries during its three-day run at Dubai World Trade Centre on 3-5 March 2020.

While industry innovators showcased the latest industry breakthroughs on the main exhibition floor, discussion on how to chart the future of energy was met with vigour during three days of high-profile dialogue with industry change-makers agreeing that the Middle East region is primed to lead the charge against the global challenge.

“Our participation at Middle East Energy (MEE) was an eye-opener for us as a company on the latest energy generation and trading products. Our goal was to obtain industry-specific solutions that are relevant to our core business and MEE’s well-curated programme and exhaustive speaker list helped us do just that, throwing up a number of key leads,” said Charles Wainaina, the chief procurement officer at Kenya Electricity Generating Company Limited.

According to Wainaina, there has been a paradigm shift in energy generation sources with increased focus and investment on renewable energy, that being geothermal, wind, solar and biomass. “In my view, this trend to harness more renewable energy is informed by the fact that hydroelectric power generation, which has been the predominant energy source, has proved quite unreliable in Africa due to shrinking water resources, exacerbated by climate change. Similarly, mass burning of fossil fuels for power generation such as coal, diesel and gasoline is considered environmentally unfriendly due to pollution, carbon emissions, and is also costly for Africa’s economies which are largely constrained,” he explained.

The Kenyan official said much more could be done to reap the benefits of Africa’s natural resources. “Research shows that Africa is rich in renewable energy sources such as wind, solar and geothermal, yet they are vastly underused,” he said. “These sources have proven to be more reliable, cheap and sustainable, and with the increased industrialisation in Africa, governments are keen on ensuring provision of competitively priced energy as an economic catalyst to sustain industrialisation and manufacturing. In addition, renewable energy sources are less polluting to the environment as they involve fewer carbon emissions and as such, governments are focused on cutting emissions while increasing energy access to both citizens and investors.”

Wainaina’s comments come as the African Development Bank Group says the 54 countries that make up the continent need an average annual investment of between $29-39 billion until 2025 to realise its ‘New Deal – Energy for Africa’. The New Deal aims to boost the number of African households who have access to electricity. Currently only between 35%-45% of the continent’s population have a power connection.

The general consensus was that while clean energy targets and policies are driving desire for change across the Middle East and North Africa (MENA) region from a government level, progressive private sector entities – energy services companies, technology leaders and financial institutions – have an increasingly important role to play, according to several industry experts attending the conference and exhibition.

“There is a huge desire to support customers who are into low carbon initiatives and banks are also actively helping customers to transition to low carbon alternatives. 20 years ago, this was not a focus area but now it very much is with almost 177 billion bonds present globally in sustainable initiatives,” said Pri McNair, the regional head of client coverage at MENAT, HSBC. With investment in renewable energy investment across MENA on track to surpass $35 billion annually by the end of 2020, McNair outlined how banks such as HSBC are now placing a greater focus on finance solutions for renewable initiatives.

McNair added: “We have what we call green bonds – it is absolutely not dependant on scale or size. If you meet certain principles, you can avail of the financing. The principles are simple: Is it a green project, are you going to use the proceeds for that project, do you have a decent monitoring framework? As long as you fulfil these requirements, you will get the financing. It is available in the UAE. The size of your project doesn’t matter.”

Meanwhile, Nasser Saidi, the Chairman of the Clean Energy Business Council in the region, added that with financing available and an abundance of renewable energy sources, such as solar, the MENA region is primed to make the switch from energy consumers to exporters, adding that ending subsidies would result in greater innovation.

“No subsidies would mean there is enhanced revenues, which can be put back into renewable energy sources, research and development of renewable energy technologies. The removal of subsidies will also attract the private sector, having a direct impact on energy efficiency, which will be a crucial aspect in the years to come,” Saidi told Middle East Energy delegates.

Pradeep Kumar Singh, the assistant business development director at Etihad Energy Services Company (ESCO), pointed out that in 2018, there were only three energy services operators in the market but thanks to effective government policies there are now more than 30 companies driving energy efficiency. Singh added: “The government is taking very aggressive steps to reduce the overall carbon footprint, and the results are visible.”

The free-to-attend conference series and the main exhibition, a technology showcase spread across the event’s five product sectors – power generation, renewables, transmission & distribution, energy conservation & management, and digitalisation – drew a strong response with visitors thronging the various pavilions and stalls.

“Middle East Energy is extremely useful in terms of gathering crucial insights into the industry. Networking with the right people and having access to the latest technological innovations in the industry are two other big benefits of being here. My responsibility is promoting the dissemination of renewable and efficient energy in the region and Middle East Energy is a very important stop in understanding the extent of focus on these aspects in the region,” said Mohammed Dabbas, the senior advisor for the Arab Renewable Energy Commission.

Middle East Energy 2020 also hosted the seventh edition of Future Generation – the ultimate engineering competition, which gives university students a unique opportunity to showcase their innovative projects. The competition is split into two categories, these being postgraduate and undergraduate.

The theme for this year was ‘Future Cities – Digitalisation, Mobility and Sustainability’. American University of Sharjah, with its project titled Cooperative Energy Management System for a Micro-WEN Network with Power-to-Gas Energy Storage, was crowned postgraduate winner.

Birla Institute of Technology’s project Solar Rover was the undergraduate winner. This innovative projects aims to shift the focus to solar-powered machines, while rectifying the issue of shadows on machines, which affect their performance.

“We were grateful to have our final year project selected as a part of this year’s Future Generation competition, and ecstatic to be declared winners amongst a host of other impressive projects,” exclaimed Prince Nathaniel Timothy and Amal Thambi Thrikkukaran of the Birla Institute of Technology.

“This competition has been a great launch pad for us as we have been approached by many companies who have shown an interest in collaborating.” American University of Sharjah’s project, Cooperative Energy Management System for a Micro-WEN Network with Power-to-Gas Energy Storage, works toward building an energy system that is predominantly or fully renewable for a micro-WEN (micro Water Energy Nexus), and is aimed at remote rural communities that don’t have access to a stable electric grid. ESI

Middle East Energy returns for its 46th edition from 21-23 March 2021, under the patronage of HH Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, Dubai Deputy Ruler and hosted by the UAE Ministry of Energy.