The Dhafra solar power plant near Abu Dhabi. Solar photovoltaic power in the Middle East has achieved very low costs. Bloomberg
The Dhafra solar power plant near Abu Dhabi. Solar photovoltaic power in the Middle East has achieved very low costs. Bloomberg
The Dhafra solar power plant near Abu Dhabi. Solar photovoltaic power in the Middle East has achieved very low costs. Bloomberg
The Dhafra solar power plant near Abu Dhabi. Solar photovoltaic power in the Middle East has achieved very low costs. Bloomberg

Battery storage allows the sun to shine in the day and at night


Robin Mills
  • English
  • Arabic

Critics of renewable energy love to point out that the “wind doesn’t always blow and the sun doesn’t always shine”.

After decades of research by scientists confirming this observation, Abu Dhabi has the solution. Its giant solar and battery combination will provide electricity day and night, summer and winter.

The project was announced at Abu Dhabi Sustainability Week last week, by Dr Sultan Al Jaber, the UAE’s Minister of Industry and Advanced Technology. Located at Al Azeezah south of Abu Dhabi city, Masdar and Emirates Water and Electricity Company will together develop the project, costing $6 billion. It combines 5.2 gigawatts of solar power with 19 gigawatt-hours of battery storage. It should be able to output a steady 1 gigawatt, which it could keep up for 19 hours in conditions of zero Sun.

Solar photovoltaic power in the Middle East has achieved startlingly low costs. Ewec’s Al Dhafra project was awarded in April 2020 at 4.97 fils (1.35 US cents) per kilowatt-hour, at the time the lowest in the world. This was the cheapest electricity generation from any source globally. In contrast, the US’s target was to reach 3 US cents per kilowatt-hour by 2030.

But even in the sunny Gulf, solar power achieves a capacity factor of only about 20-25 per cent – that is, the ratio of a plant’s average output over a year to its stated maximum. Generation is zero at night, lower in the shorter days and in winter, falls when ambient temperatures are high, and is reduced at times by clouds, haze, dust and sandstorms.

A back-of-the-envelope calculation suggests that the system at Al Azeezah could deliver reliable baseload power at about 6 US cents per kilowatt-hour over a 20-year operating life. That is already cheaper than nuclear power, another large-scale, low-carbon option for baseload. And costs will fall further as solar, and in particular batteries, enjoy further declines in purchase prices.

It is also cheaper than conventional generation with natural gas, except in areas with very low gas prices. And the long-term use of natural gas is not possible within the UAE’s net-zero carbon target, unless teamed with carbon capture and storage, which would raise its cost.

The solar-plus-storage combo compares favourably with the 7.3 cents per kilowatt-hour that the Dubai Electricity and Water Authority (Dewa) achieved for its concentrating solar plant in 2017. That plant uses molten salts to store heat so it can also provide night-time electricity, for up to 15 hours.

Solar with storage in the Gulf has the advantage of matching well to demand patterns. Air-conditioning accounts for up to 70 per cent of the UAE’s electricity use during summer. With enough storage to get through the night, solar can cover much of national demand. This is in contrast to other heavy users of solar power in northern Europe, such as the Netherlands and Germany, where peak electricity demand for heating comes during the short daylight hours of winter.

Another option for long-term energy storage is pumped hydropower, where water is sent to a higher reservoir behind a dam when electricity is in surplus, then allowed to flow to lower levels through a turbine at times of deficit.

Dewa’s pumped hydroelectric centre at Hatta, with 250 megawatts of capacity and six hours of storage, is expected to be completed by the end of the first half of this year.

At its recent energy summit, Ras Al Khaimah also revealed plans for a massive, 5 gigawatt pumped hydroelectric plant with up to 12 hours of storage in its mountains.

Finally, other renewable options such as wind, geothermal and waste combustion generate independently of solar output and complement it.

While lithium-ion batteries are the most familiar today, they may not be the main long-term option. Other chemistries, such as sodium-ion, and different concepts entirely, such as flow batteries using metal salts, may eventually have advantages of lower cost, safety, large scale or avoidance of scarce materials.

All these methods have their place. Batteries and other energy storage options do not just hold electricity for future use. They have other functions such as stabilising the grid in case of surges of demand or the sudden power cut of a generating unit and keeping the frequency of its alternating current within standard levels to avoid damaging equipment or causing blackouts. Batteries close to consumers help ease the burden on power lines at times of high demand. These different storage and grid technologies contribute in various ways to stable, reliable electricity.

Achieving reliable, low-cost and continuous electricity from solar plus battery storage has three important implications.

First, as President Sheikh Mohamed said, it is “a significant step on the UAE’s journey towards net zero”.

Second, it will help to power new businesses in the UAE. These could include large industrial users, such as aluminium smelting. Some of these already buy certified low-carbon nuclear and solar electricity from Ewec and Dewa. It can expand to cover data centres, an exploding sector for both investment and electricity use, as artificial intelligence booms.

Third, it will mean the end of oil burning in the power sector in the Middle East, and the steady reduction in gas. The UAE’s gas consumption for power has already dropped significantly, mostly because of the start-up of the Barakah nuclear plant, and improved efficiency.

Saudi Arabia plans to phase out oil in favour of a mix of renewables and gas. Oman, Jordan, Egypt and Morocco are among other regional countries forging ahead with solar and wind power. Those suffering electricity crises, such as Lebanon, Yemen, Syria, Iran, Iraq and Libya can tap into solar. The gas saved from power generation can be used in industries such as petrochemicals, or converted to clean products such as “blue” hydrogen and ammonia.

This advance is crucial for the future demand for gas, the supply and cost of low-carbon electricity, and the region’s industrial competitiveness. Other sunny regions with abundant land can benefit similarly.

In the Gulf, the sun will shine even at night.

Robin M. Mills is chief executive of Qamar Energy, and author of The Myth of the Oil Crisis

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What should do investors do now?

What does the S&P 500's new all-time high mean for the average investor? 

Should I be euphoric?

No. It's fine to be pleased about hearty returns on your investments. But it's not a good idea to tie your emotions closely to the ups and downs of the stock market. You'll get tired fast. This market moment comes on the heels of last year's nosedive. And it's not the first or last time the stock market will make a dramatic move.

So what happened?

It's more about what happened last year. Many of the concerns that triggered that plunge towards the end of last have largely been quelled. The US and China are slowly moving toward a trade agreement. The Federal Reserve has indicated it likely will not raise rates at all in 2019 after seven recent increases. And those changes, along with some strong earnings reports and broader healthy economic indicators, have fueled some optimism in stock markets.

"The panic in the fourth quarter was based mostly on fears," says Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management Company. "The fundamentals have mostly held up, while the fears have gone away and the fears were based mostly on emotion."

Should I buy? Should I sell?

Maybe. It depends on what your long-term investment plan is. The best advice is usually the same no matter the day — determine your financial goals, make a plan to reach them and stick to it.

"I would encourage (investors) not to overreact to highs, just as I would encourage them not to overreact to the lows of December," Mr Schutte says.

All the same, there are some situations in which you should consider taking action. If you think you can't live through another low like last year, the time to get out is now. If the balance of assets in your portfolio is out of whack thanks to the rise of the stock market, make adjustments. And if you need your money in the next five to 10 years, it shouldn't be in stocks anyhow. But for most people, it's also a good time to just leave things be.

Resist the urge to abandon the diversification of your portfolio, Mr Schutte cautions. It may be tempting to shed other investments that aren't performing as well, such as some international stocks, but diversification is designed to help steady your performance over time.

Will the rally last?

No one knows for sure. But David Bailin, chief investment officer at Citi Private Bank, expects the US market could move up 5 per cent to 7 per cent more over the next nine to 12 months, provided the Fed doesn't raise rates and earnings growth exceeds current expectations. We are in a late cycle market, a period when US equities have historically done very well, but volatility also rises, he says.

"This phase can last six months to several years, but it's important clients remain invested and not try to prematurely position for a contraction of the market," Mr Bailin says. "Doing so would risk missing out on important portfolio returns."

What vitamins do we know are beneficial for living in the UAE

Vitamin D: Highly relevant in the UAE due to limited sun exposure; supports bone health, immunity and mood.Vitamin B12: Important for nerve health and energy production, especially for vegetarians, vegans and individuals with absorption issues.Iron: Useful only when deficiency or anaemia is confirmed; helps reduce fatigue and support immunity.Omega-3 (EPA/DHA): Supports heart health and reduces inflammation, especially for those who consume little fish.

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In numbers: China in Dubai

The number of Chinese people living in Dubai: An estimated 200,000

Number of Chinese people in International City: Almost 50,000

Daily visitors to Dragon Mart in 2018/19: 120,000

Daily visitors to Dragon Mart in 2010: 20,000

Percentage increase in visitors in eight years: 500 per cent

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Updated: January 26, 2025, 6:04 AM