New Era: Renewable Energy Beyond Distributed Generation and Utility Scale!

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Doc. Ref.: Article-Dec-2017-New Era
New Era: Renewable Energy Beyond Distributed Generation and Utility Scale!
The past few years have witnessed an accelerated transformation in the renewable energy power
generation business sector. A few notable achievements include unprecedent year on year growth in
installed capacity as well as record breaking prices. The Dii mission of emission free power supply is no
longer a dream nor a distant target, but rather a path for the medium term. This transformation is taking
place in a global manner, from China to India, Southeast Asia, UAE, KSA, Jordan, Africa, North America,
Latin America, Australia, and beyond.
So, how did we get here? Simply put! Firstly, innovation in technology coupled with mega manufacturing
scale lead to significant decline in project CAPEX cost. Secondly, as technology and solutions mature,
major de-risking took place leading to better and faster bankability. Thirdly, the economic benefits are
clearer than ever as developers’ competition coupled with development financing availability resulted in
kWh rates being cheaper than fossil generation. Fourthly, the environmental benefit became the icing on
the cake.
In the MENA region, tendered local utility scale renewable energy projects continue to be the driving force
in terms of installed & projected capacity. Distributed generation is gaining interest and catching up
modestly with programs in Dubai and upcoming in KSA and Oman, to name a few. As renewable energy
economic benefits are now crystal clear, a new trend is emerging and would usher a new era. This is similar
to what developed countries in Europe and North America realized many years where electricity
generation and trading became a cross border business model that was based on security of supply and
price competitiveness. A new business case for renewable energy beyond local distributed generation and
local utility scale is emerging. How is That? Well, the MENA region benefits from existing cross border grid
interconnections, like GCCIA and others as depicted the below grid topologies.
GCC

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Doc. Ref.: Article-Dec-2017-New Era
MENA
Before rushing and investing in new local grid infrastructure to accommodate new local renewable energy
capacity, the existing cross border interconnecting grid infrastructure can be leveraged to interconnect
major renewable energy capacity. In other words, renewable energy projects sites would follow the
existing grid infrastructure and not vice versa, at least initially. Site selection would also be optimized using
available renewable energy resource and terrain assessment GIS tools. The key driver of such proposition
is PCI (Project of Common Interest) amongst concerned states who will share the economic benefits of
such projects. Of course, challenges for such proposition may and will exist, such as technical, financial
and legal. These challenges can be mitigated and turned into opportunities. There are enough mature
technical solutions on the markets today! Financing solutions and appetite exist and examples are plenty.
Legal solutions on cross border grid interconnections have been negotiated previously and these
templates could be tweaked easily for renewable energy variants.
Finally, a new era for renewable energy is imminent and its future is bright! Dii’s mission “emission free”
is being realized through expertise, talent, innovation, and accelerated development.
Fadi Maalouf
Director IPP & EPC
Renewable Energy