Frost & Sullivan forecast concentrated solar power (CSP) to grow at a CAGR of approximately 40 percent.
The Gulf Cooperation Council (GCC) region holds 25 GW of renewable energy potential by 2020, the California-based international business consulting firm Frost & Sullivan estimated in its recently released white paper “The Future for ‘Green’ in the GCC’s Energy Sector”.
The report focuses on the potential for renewables and smart grids in the GCC, noting that even the region’s significant fossil fuel resources will not be able to meet escalating demand.
“Utilizing oil and gas alone, or diesel, has been an option to manage peak loads; however, it is not a long-term solution to meet energy demands,” noted Abhay Bhargava, head of Frost & Sullivan’s Energy & Power Systems Practice.
“The demand-supply gap and abundant availability of sunlight as a resource in the GCC has led to solar power being considered as a viable energy source to meet emerging needs. In order to cater to peak loads, the GCC governments have proposed new projects to mitigate aging power infrastructure and support new diversification plans.”
Frost & Sullivan said that the region has 22.5 percent of the world’s proven natural gas reserves and 35 percent of its oil reserves. However, it said that this is not expected to match the pace of escalating demand in coming years.
The paper also citd the need for a “focused approach” to create an environment that can nurture the growth of renewable energy and smart grids. It also said that region-specific research and development (R&D) is both needed and lacking.
The company added that while nuclear energy is an option, it considers this technology not to be feasible in the coming decade.
The global energy mix is set to change with high growth anticipated for various renewable technologies.
In the period 2010-2020, Frost & Sullivan forecast wind energy to grow at a compound annual growth rate (CAGR) of 16-20 percent, solar photovoltaic (PV)-based generation to grow at a CAGR of 25 per cent, and concentrated solar power (CSP) to grow at a CAGR of approximately 40 percent.
Some key factors expediting this growth include heavy incentivization of renewables by nations, enhanced bankability of renewable projects, and technology advancements that have resulted in enhanced efficiency and reduced costs.
While the GCC is fast making strides toward adoption of renewable energy, a customized and focused approach can create an environment that can further nurture its growth. Intermittency is a major issue with renewables, which is likely to hinder renewable sources from taking on the role of base load power generation.
Renewables, through underlying benefits of employment opportunities, increased export potential of hydrocarbons, enhanced industrial development, and reduced dependence on fossil fuels, can prove to be the one key stabilizing factor that can support the GCC’s plans for accelerated development, it added.