Rebalancing the energy mix – a historic opportunity

The recent publication of BP’s annual statistical review of energy contained the surprising statistic that renewable energy accounted for 40 percent of the growth in primary energy in 2019, mainly due to the development of wind and solar. 

While 84 percent of global primary energy still came from coal, oil and gas last year, the BP report once again prompts the question: have fossil fuels finally had their day as the world’s primary energy source? BP, as one of the world’s oil majors, has taken a surprising stand, with plans to achieve net zero carbon emissions as a company by 2050. It also recently wrote off up to $17.5 billion after lowering its oil price expectations through to 2050. 

The collapse in energy demand due to COVID-19 has undoubtably speeded this shift away from fossil fuels. OPEC forecasts a contraction of 9.5 million bpd year-on-year, with carbon emissions falling by 2.6 gigatons in 2020 as a result according to the IEA. Not surprisingly, a recent S&P Global report therefore describes 2020 as a ‘crucial’ year for renewables. S&P is generally bullish about the prospects for continued growth but warns that national stimulus plans will likely prioritise employment and direct support measures to the economy over green growth – especially in China and emerging markets. These doubts are offset, however, by continued strong investor appetite and declining costs of production. 

These reports all make the case for a continued surge in renewable energy. And thankfully, here in the UAE, we have a government that is determined to be on the right side of history. The UAE Energy Strategy aims to increase the contribution of clean energy to 50 percent by 2050 and reduce carbon footprint of power generation by 70 percent and has already made long-term investments in renewable energy infrastructure. The Mohammed bin Rashid Al Maktoum Solar Park is expected to be the largest generator of solar energy in the world from a single location, with a capacity to 5000 MW by 2030. And in Abu Dhabi, the Al Dhafra Solar PV project will increase Abu Dhabi’s solar power capacity to about 3.2 GW. 

Adding to the clean energy mix, the first of four reactors at Barakah, the Arab world’s first nuclear power plant, is now operating at 50 percent capacity. The station consists of four units that will supply 5,600 megawatts of energy – enough to meet 25 per cent of the country’s electricity needs. It will help prevent the release of 21 million tonnes of carbon emissions each year. 

As a sustainability pioneer, Bee’ah supports these initiatives and is taking steps to contribute to this greener energy mix. Next year, we will launch the UAE’s first Waste-to-Energy plant in Sharjah which will produce around 30 megawatts of energy, and displace almost 450,000 tonnes of CO2 emissions per year. This facility will also help us achieve 100 percent waste diversion in Sharjah, allowing us to repurpose Al Saja’a landfill into a 42 MW solar energy facility.

We do this because there is an environmental imperative to speed the transition to renewables. And as we plan for global economic recovery, this is a crucial moment to seize the opportunity and ensure that renewables continue to grow and carbon emissions fall as a result, which is our only hope of fulfilling the Paris Agreement pledge to keep global warming below 2 degrees Celsius.