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The Solar Power Issue in the GCC Countries

The Solar Power Issue in the GCC Countries

Introduction

The United Arab Emirates is a member state of the Gulf Cooperation Council (GCC). These countries are known to have the greatest energy reserves in the world. As of 2012, these gulf nations held over approximately 37.5 percent of the global supply of oil (Dargin, 2010). The Shams 1 project is based on the use of concentrated solar power, which is essential in today’s world as it helps in the provision of electricity needed for lighting, heating water, cooking, and charging batteries among other important uses. This paper will focus on the causes of the Shams 1 project, its effects on the political, economic and social spheres of the UAE, other Gulf countries and the whole world, as well as its environmental impact.

Causes of Shams 1

One of the reasons that has led to the development of Shams 1 is that the United Arab Emirates has always had a vision of the need for renewable energy sources that will account for at least seven percent of its total electric power generation capacity by 2020. Therefore, it motivated the country to look for ways of achieving the vision and implement the Shams 1 project. Secondly, in spite of the UAE holding the world’s fifth largest gas reserves amounting to 6.4 trillion cubic meters, Abu Dhabi has developed what can be referred to as a ‘paradoxical shortage of gas’ (Krane, 2012). It can be a result of an increasing demand for electricity. Even with the increased energy production and imported Qatari gas through the Dolphin natural gas pipeline, the county’s domestic gas demand always exceeds the available supply substantially. Although the UAE, Qatar and Kuwait are the world’s largest consumers of primary energy and electricity per capita, exceeding consumption rates in other countries in the Middle East and North Africa, the need for extra electricity is caused by the absence of alternative supply options. Thus, oil and natural gas produced locally can be excluded from the main revenue generated in the export markets. In turn, with alternative sources of energy, oil and gas can be used in houses for domestic energy generation. The Shams 1 project is therefore essential in catering for the demand for excess energy sources needed to generate electricity. The project was seen as a strategy to prolong the life and maximize the value of hydro carbon reserves, while reducing reliance on a single energy source (Krane, 2012).

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It is worth noting that an increase in the demand for energy and electricity in the UAE is due to the country’s rapid economic and demographic growth. In 2010, the UAE National Human Resources Development and Employment Authority announced that the country’s population doubles approximately every 8.7 years. It is largely due to expatriate workforce getting into the country. It was a large figure as compared to the rate at which the world population increased within five years. By 2010, the country’s population had reached 8.19 million and continued to grow at a robust rate despite the global economic crisis (Dargin, 2010). This huge population therefore increased the demand for the already scarce natural gas and oil reserves.

Intense climate changes, growing affluence and consumption rates have also been blamed for an increase in electricity needs. Vain efforts of UAE nationals have generally topped this list with their preferences and passion for large houses, many of which lack basic conservation materials, such as building insulation, thermal pane windows and control technology. It has led to extra dependence on energy consumption. In 2006, Abu Dhabi utilities regulator found out that its residential customers had consumed an annual average of 41,000 kilowatt-hours (KWh) of electricity, which exceeded the average American consumption rate of 11,500 KWh three times in 2010 (Krane, 2012). Thus for the reasons above, the Shams 1 project was essential if not necessary to be implemented by the UAE.

Political Consequences of Shams 1

Shams 1 is a highly publicized investment, which has improved the UAE regime’s international image, bringing critical acclaim to the country as a leader in clean energy, despite its cemented status as a key OPEC oil producer implying that it is one of the most polluted countries. Shams 1 can also be said to be prestigious in political circles for the rentier monarchy with a very important source of domestic legitimacy. It is because a mild form of autocratic rule in the Gulf monarchies has empowered citizens and made governments sensitive to policies that can challenge welfare benefits. This sensitivity has been increased by the Internet social media and the perceived effectiveness of these tools in launching popular uprisings. It makes the monarch and government scarier for antagonizing its citizens. The following question arises: if the government should provide electricity at a discount to its national, why will it choose a solar renewable energy project like Shams 1, which is definitely going to be more expensive? The answer is that Abu Dhabi and the UAE at large want to present Abu Dhabi, its largest Emirate, as a responsible member of the international community, which means taking a publicized action to deal with a climate change issue. The international community will obviously applaud Abu Dhabi’s embrace of the ‘green agenda’, and the monarch or the government will gain an advantage. Local people on their part will enjoy an increased supply of electricity and the satisfaction of being governed by the regime that has an international respect. Thus, Shams 1 is said to be Abu Dhabi’s alternative inexhaustible energy project that can be considered as an attempt to increase the reigning Al-Nahyan family’s political legitimacy to maintain control beyond the oil era (Luomi, 2009).

Social Consequences of Shams 1

The Shams 1 program provides an opportunity for the largest Emirate of the UAE and the technological city of Abu Dhabi to develop into a new world model of city portability. It is because benefits of this program include providing a combination of transportation, social interaction and commerce, while at the same time eliminating unnecessarily evil traffic jams, carbon emissions and urban heat islands (Dargin, 2014). It would attract a lot of investors and people to settle in Abu Dhabi. Therefore, Shams 1 can increase social welfare, infrastructure and development rates greatly and improve social interaction to a new level. It can be rightly said that this project has helped propound the notion that the world is a global village. The fact that Shams 1 has made Abu Dhabi a clean and green city, as the project uses clean and renewable energy, has led to people moving to Abu Dhabi to settle there.

Economic Consequences of Shams 1

The cost of implementing Shams 1 has affected the finances of the government of Abu Dhabi greatly, as the Emirate’s Ministry of Finance will have to subsidize the electricity project through a green payment to the Abu Dhabi’s Water and Electricity Authority (ADWEC). It has also been claimed that despite being a project meant to diversify energy sources reliance and make electricity available to the citizens through its provision by the government of Abu Dhabi, Shams 1 has actually led to the government offering an alternative electricity supply at a much higher average cost than the existing gas-fired system. The contribution to energy security made by the government of Abu Dhabi has been said to be inconsequential as the Emirate will be unable to reduce its dependence on imports of gas from Qatar (Krane, 2012).

Shams 1 has helped reduce fuel consumption rates by conventional power plants. It has consequently cut down carbon discharges and the burning of expensive back-up fuels. Thus, it is worth noting that from Shams 1, Abu Dhabi has managed to raise as much as $15 billion of public and confidential funds to invest in alternative energy-related businesses (Krane, 2012). Shams 1 has also led to an increase in the government’s subsidy burden. The cost of implementing the project was too high, and the price of electricity also increased. However, for the purpose of political prosperity, the government had to shoulder that increase to eliminate its negative effect on citizens. The only way the government could have reduced this burden was through increasing tariffs, but it did not choose that option. Therefore, its subsidy burden became high.

The project needs a lot of water to keep solar reflectors and panels clean. Water is also needed to cool generating turbines in the concentrated solar panel (CSP). Abu Dhabi is known to be in a desert and therefore has scarce water resources. The water available is also mostly saline. Therefore, delivering desalinated water to the project area requires significant costs. Besides, dust, extreme temperature variations and humidity do have an impact on the efficiency levels of the project. It therefore requires extra location-specific adaptation technologies, which result into an extremely high financial cost to be covered by the government of Abu Dhabi and the respective investors.

A potential economic consequence of Shams1 is that exports of solar-generated electricity can help maintain the region’s status as a global energy supplier beyond the oil era. However, proponents have speculated that huge amounts of the deployment of alternative energy like in case of the Shams 1 project can make gas and oil available for export in large volumes. Abu Dhabi wants to use the Shams 1 project to attract foreign investments and to transfer the technology from other countries to it, sufficient to diversify the renewable energy industry into a high-skill economic sector.

The Shams 1 project is said to bring technology skills to Abu Dhabi and the United Arab Emirates as a whole. The project will create jobs for nationals and expatriates or global citizens. These jobs will be in the field of engineering for technology experts. The project has also lead to the creation of new local industries and companies that deal with the field of renewable energy. Shams 1 has also acted as a safety net for the United Arab Emirates, especially Abu Dhabi, whereby if the oil reserves in the Emirates were to ever run out, no matter how improbable it seems, the UAE will still have enough electricity to maintain its modern economy (Krane, 2012).

Impacts of the Shams 1 Project on the GCC Region

The major effect of Shams 1 project on GCC region is the reduction of the use of gas and oil for energy. The development of the project will guarantee a successful implementation of the solar power in the region and will consume gas and oil for energy consumption. Modern natural resources are at the edge of exhaustion and this project will help big plants and smaller enterprises, business world and private houses use the renewable resources and therefore, reduce their expenses. People spend too much money on energy and the use of solar power distributed by the Shams 1 project is the first step on financial savings. Therefore, the development of the project will lead to the reduction of the expenses on energy in different sectors. Environment protection is another affect GCC regions should expect. Oil and gas production involve the processes, which pollute the environment and it leads to serious global problems. The development of the Shams 1 project can help protect the environment and to develop a program aimed at nature conservation. This is a very serious impact since the Gulf’s most populated countries are considered as the highest-polluted ones and the situation needs change (Katiri, 2014). Renewable energy deployment will guarantee the economy development in general since this industry will attract working people as the new working positions have already been created and will be created with the industry expansion. Therefore, Shams 1 project is going to affect GCC region is several directions, environmental, economical, and consumer.

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Effects of Shams 1 on the Environment

Currently, although the UAE among other Gulf countries is ranked first as the most polluted on the basis of countrywide mean pollution levels, the Shams 1 program will lead to the production of clean and feasible electrical energy for thousands of United Arab Emirates nationals. Shams 1 is said to be able to reduce 175,000 tons of carbon dioxide, which is equivalent to planting a million and a half trees or removing fifteen thousand cars from the roads of Abu Dhabi. According to the United Nations, the project helps in the reduction of greenhouse gas emissions. Besides, electricity will also be exported to neighboring Gulf nations, and it means that it will also lead to the reduction of air pollution in these countries, as the power is environmentally clean. Therefore, Shams 1 has more positive than negative effects. It is a feasible investment for Abu Dhabi and the UAE.

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