Energy diversification in the Middle East: How to Double a Region’s Energy Resources Massimiliano Kolbea, Zohreh Ravaghi-Ardebilib aBaker Engineering and Risk Consultants, Inc. (BakerRisk), Houston, TX di Chimica, Materiali e Ingegneria Chimica, Politecnico di Milano, Milano, Italy bDipartimento Abstract Due to the favorable climatic conditions, the Middle East is considered as one of the best candidates for development and production of renewable (particularly solar) resources. Oil and gas has enriched the Middle Eastern economies for decades and provided a quick path to wealth and development. However, not all Middle Eastern countries have this natural abundance of oil and gas, nor does this resource exist equally everywhere in the regions which do have this abundance. Therefore, considerations must be made in the management of this nonrenewable energy source in tandem with the ever present renewable solar energy source in such a way so as to balance the energy production and consumption. In so doing we can protect, strengthen and grow the economics of the region's oil and gas industries which in many cases are by far the largest source of income for many Middle Eastern nations. The discussed solution has been be provided to propose the solution for required electrical energy demands and power generation management to indirectly assist the growth and promote stability in the oil and gas market of the region. In addition, a comparison of energy sources and power generation has been made with the highest energy consumers of the world, and how it relates to their consumption and production of energy. Keywords: Energy management, solar energy, photovoltaic, Middle East, MENA, oil and gas, electricity, supply and demand. 1. Introduction The Middle East is considered as one of the best candidates for development and production energy from renewable (particularly solar) resources. Oil and gas has provided the Middle Eastern economies with a quick path to wealth and development. It is estimated that during 80% of the year [1] these regions are exposed to tremendous quantities of solar radiation. In addition, the majority of these regions are desolate, unusable lands where many of the world's largest oil and gas reserves can be found beneath them. Solar radiation is above 8000 W-h/m2 at its peak [2] in Kuwait alone, and it can be mentioned as being the largest potential for solar power harnessing in this region. Consequently, benefiting from common solar technologies for power generation such as PV and concentrated solar power (CSP) plants taking into consideration the available geographic surface area and the need to generate the power without using the only real sellable commodity; crude oil. The UAE is considered as a second potential for solar radiation availability among the other six countries in the region with an average of 7000 W-h/m2 [2]; considering the large modern cities, commercial and industrial facilities harnessing solar power would significantly decrease the national consumption of oil and gas which could otherwise be sold as a commodity. Though the Middle East is ramping up the installation of CSP plants (The evidence of this, installation and operation of advanced alternative power plant; i.e., Al. Shams operating in the UAE as an holder of the world’s largest CSP plant in operation with the capacity of 100 MW), this goal would be a long term achievement for this region. On the other hand, the use of PV panels to capture solar energy and directly produce the electricity or energy for domestic, industrial and commercial buildings is completely tangible in the short term. Inasmuch, the idea to produce power for commercial buildings and facilities through PV solar panels should be strongly considered. PV cells in panels convert photons (light) to voltage (electricity)[4]; power produced from these panels in the form of DC by means of converters, it is then converted to AC, which is the most applicable form of energy in households and buildings. 2. The Potential of Region Qatar and Saudi Arabia possess vast fields of natural gas; however it is important to trade and export LNG in order to sustain the economies of these regions. Equally as important, the natural gas can be fractionated to produce NGL components for petrochemical feedstock which are later used in the production of polymers. These countries currently do not fully benefit from other durable sources of income (such as: agricultural, manufactured goods, food processing, etc.) in order to balance and sustain the national cash flows. Similarly, Kuwait, Oman and the UAE are richer in crude oil resources and cannot benefit as much from petrochemical feedstock from natural gas. Although, Saudi Arabia is plentiful in oil and gas, the produced oil is practically sustaining the economy, and a significant portion of the produced oil and gas is driven into the generation of power to supply facilities, buildings and desalination plants with electricity. Accordingly, Bahrain and Yemen are not as rich in oil and gas as other countries in this region and are therefore dependent in foreign energy supply for their sustainability. Fortunately, all of these regions are extremely rich in sunlight (and heat). Conversely, nearly all of these countries are extremely poor in fresh water resources. Ergo, it is necessary to generate power to not just produce the electricity but to run desalination plants to purify salt water into potable water as well as to run the next highest energy consumption devices; air conditioning and chilling systems. Potable water production from desalination and air conditioning/chilling are vital requirements for such climates and geographies given their need and scarcity. 3. Energy Diversification If we look at the feasibility of establishing renewable resource assets in certain developing regions such as hydro, solar and wind we quickly can begin crossing out options depending on which regions we are matching up. Of the three power generation modes, hydro power is by far the most utilized and mature, being employed in large scales in several countries. However hydro power plants require enormous and continuous supplies and flows of water usually in the form of large rivers or dams. Wind power, although becoming a mature technology is nonetheless a costly mode of power generation and requires a great deal of infrastructure in order for it to be generating appreciable quantities of power. In most instances land based wind farms are subject to sporadic wind forces and as such to not produce a base load. However, solar power employs no moving parts and its production is far less dependent on the weather due to the advances in the collection and storing technologies. Solar power generation is carried out via two methods; photovoltaic (PV) or concentrated solar power (CSP). The former employs silicon based wafers that generate an electric current through the light agitation of solar cells, whereas the latter utilizes the light/heat from solar radiation and focuses it on a point to boil a working fluid which is then used to heat water, produce steam and drive a turbine [6]. Clearly, in regions with abundant rivers hydro power is the solution, in regions with fewer rivers but strong coastal winds, windmill power generation is favorable. However, in regions such as North Africa and the Middle East, solar power is the answer to a clean and perpetual energy source. There is of course no perfect solution, as mentioned earlier; energy resources are dependent on the geography and geology of a region. In the case of oil and gas, clearly geology is the main factor, whereas geography with renewables plays to the advantage of a nation. However, the question in the minds of everyone involved in the exploration and production of oil and gas is; when will this nonrenewable energy source run out? The quest for renewable, cheap and abundant energy then begins. By definition, these resources will be abundant and perpetual but will they produce enough energy and in an efficient manner so as to satisfy sustained economic growth for nations? Whether it constitutes a nation’s main source of revenue or helps fuel their industry, the world is dependent on oil and gas, for transportation, petrochemicals and derived products. By looking at the statistic’s report of large oil and gas companies, it can be seen that the reserve to production ratio (R/P) is either stabilizing or trending towards depletion in items of yearly throughput especially for the Middle East regions. [5] Figure 1. Reserves to production ratio of oil (R/P) by year: 1982 to 2012 [5] 4. Energy Management of a Region Nowadays, to manage the energy practically the law of “supply and demand” is developed with the functionality of "consumption without production" [3]. The concept of consumption without production is a norm found throughout the entire globalized economy. Therefore, it is evidently the failed approach which, is realized its claim not just on the surplus-value of the individual factoryowner or enterprise but on the entire social product. Hence, the produced oil and gas which would practically be the main true source of income in the country, is being used as a commodity as well as being charged to sustain the power production and infrastructure of the country. However, being nearly completely dependent on one source of income is economically just as risky; markets can shift towards diversities and no longer require your product or worse still customers can find a cheaper closer supply of said product. In this case, strategy and master planning become paramount as not only are you required to solve the problem of maximizing your profits from a single product but you would immediately require to research whether or not you can invest in infrastructure from your current incomes in order to diversify your position. The goal of any corporation is to continue to make money from their products and to of course invest and expand their portfolio or industry so as to increase profits. Similarly, it needs to consider sustainability, which is the measure and delicate balance between the economic, environmental and social health of a community, a nation or even all the world. As a matter of fact, the developing nations of the Middle East mostly attempt to overcome the country’s needs under circumstance and not even as an absolute entity. Not foreseeing the future of these energy resources in these export dependent regions can be an economic error, and we seldom confront the reality of our future constraints. In general, if the economy might be considered in a simple and comprehensive balance statement based on supply, demand, consumption and production, it might be stated that the summation of supply and production should be equal with the accumulation of demand and consumption. Obviously to grow an economy according to this simple concept, the amount of supply and production should be always greater that demand and consumption to guarantee growth and all for margins of error. Obviously, controlling the demand and consumption, and therefore predicting it is almost impossible to accurately determine due to the varieties in human needs, the population and culture of the nation. Thus, the factor which might provide economic assurance is the growth in supply and production, especially in a region like the Middle East where agriculture production, forestry, fisheries, land management, and also commodities are scarce and the solution is to compensate the sustainability. In addition, oil and gas is in fact a finite source of income and in short order a new source will be required if these economies are to grow and maintain or improve their status. Although oil and gas are to become a future scarcity, fresh water is already a scarcity in these regions; harnessing solar power and developing this technology as part of the infrastructure to the Middle Eastern region is a logical next step in the quest for sustainability and strengthening the region's economies and providing them with more abundant and cheaper access to fresh water (given that desalination is the only real source of fresh water in the region and such an energy intensive process as well). In addition, the procedure of power generation from PV solar resources can even be managed individually by the building's owners, industrial administrators and for commercial constructers to collect and provide the power units and their installations along with the tie-in to the electrical grid. Such a movement for using PV panels or CSP plants could potentially drive the GDP of a typical Middle Eastern country significantly. Therefore, it might solve the environmental issues and consequently, avoid the local use of natural gas to run power plants and divert local high consumption of oil and gas to the market for sale outside the country and so, increase the rate of cash flows into the country. Hence, energy management in these countries is going to necessarily employ the concept of diversity in energy production to compensate the energy requirements and replace the use of petroleum-to-electricity methods in favor of solar-to-electricity. Moreover, keeping a relatively low cost of oil and gas production stationary in constant-dollar terms for countries specialized in producing oil for export maintains the attractiveness of these regions for foreign investors. Unfortunately, this also discourages investments in other sectors of these nations thus they become import dependent. After which, possibilities to develop modern multi-branched economies capable of self-reliantly feeding the local populations are reduced [3]. 5. Strategy and Solution Not all Middle Eastern countries have a natural abundance of oil and gas, nor does this resource exist equally everywhere in the region. Saudi Arabian oil reserves are conservatively estimated at 267 billion barrels whereas its southern neighbor Oman has proven reserves of about 5.5 billion barrels [7]. Therefore, considerations must be made in the management of this nonrenewable energy source and to maximize the derived profits in tandem with the ever present renewable solar energy source in such a way so as to balance the energy production and consumption. Harnessing solar power has the ability to protect, strengthen and grow the MENA economics of the oil and gas industries which in many cases are by far the largest source of income for many Middle Eastern nations. Currently, MENA nations such as Algeria, Qatar and Saudi Arabia possess vast fields of oil and natural gas; both exports are essential in order to sustain the economies of these regions given the lack of agriculture, high tech manufacturing or other commodities. In the past couple of decades western economies grew in energy consumption and costs and as a result production costs increased. This led to the growth in the Middle Eastern petrochemical industry where the locally produced natural gas gets fractionated to produce NGL components for petrochemical feedstock which are later used in the production of polymers. Similarly, Kuwait, Oman and the United Arab Emirates are richer in crude oil rather than gas resources and cannot benefit as much from petrochemical feedstock and thus, manufacturing growth is nowhere near Qatar and Saudi levels. Saudi Arabia is plentiful in oil and gas, however the produced oil is practically sustaining the economy, and a significant portion of the produced gas is driven into the generation of power to supply facilities, buildings and desalination plants and the country as a whole. Finally, Bahrain and Yemen are unfortunately not as abundant in oil and gas reserves as other countries in this region and are therefore strongly dependent in foreign energy supply for their sustainability. There is one source of energy which all of the MENA nations are endowed with; all of these regions are extremely rich in sunlight (and heat). Conversely nearly all of these countries lack in fresh water resources. Ergo, it is necessary to generate power to not just supply a nation’s industry but to operate crucial services such as desalination plants to purify salt water into fresh water as well as operate other high energy consumption devices such air conditioning and cooling systems for commercial and public centers. Potable water production from desalination and air conditioning/chilling are especially energy intensive and vital processes for such hot climates and geographies given their need and scarcity. Therefore, financial support to subsidize and start the early moderate-risk stages of these plans is recommended. Due to this, political decisions should be motivated to finance and develop alternative energies yet practical sources. Practically speaking, the path to creating plain yet substantial power productions using PV solar panels is far more obtainable than once thought due to increased size of cities, industrial and commercial centers and the growth in individual home ownership. If it is simply considered public and industrial facilities including the petrochemical sites, malls and hotels, all typically hold a large area nearby as parking lots (public car parks) which typically equipped with awnings and shading structures with strong metal frames (see red outlines in Figure 2) Figure 2. Car parks typical in most MENA cities (left) an application of a solar panel car park (right). As can be seen from the typical car parks these structures are generally very large and solid made with steel framing and covered with solid material used for protecting the cars from the sun's radiation. By making decision to the optimum utilization of these vast area structures (clearly capable of holding significant loads) and installing PV solar panels on the roof instead of inefficient materials, large radiation gathering surfaces can be created. With rough estimation average area of car parks such as the one above in fact can yield over 2000m 2, with assumption of average efficiency 170 W/m2 for PV panels, the car park could generate over 340 kW of electrical power. The battery storage or even in some cases grid connections might be easily equipped in the facility to convert the collected energy and distribute to the nearby building. In the case of a typical refinery or petrochemical facility in the region (Figure 3), the car parks are even larger and potentially produce over 2 MW of power with the simple installation of PV solar panels. Figure 3. Industrial complex car park. Thus, the solar panel collection system would potentially provide all the required lighting or air conditioning for these buildings. It is worth noting that the energy management would not suffer from the logistics problem since it is a main part of the energy management. In several locations in the Arabian Peninsula there are petrochemical complexes such as the Jubail Industrial complex in Saudi Arabia that can have as many as 10 facilities (thus car parks) within one complex, with a total potential solar capacity of nearly 30MW. All this would be achievable with current technology and already existing infrastructure to support PV panel arrays. Figure 4. Commercial car park utilizing the car covers and placing PV panels above them. In fact, on an even larger scale within a typical Middle East city such as Manama in Bahrain, we can see a number of such car parks (Figure 2). Each car park is approximately 1200m2 of covered roof area, there are approximately 200 such car parks in the city and vicinity. Using an average PV panel efficiency of about 170W/m2 there is a potential power generation of nearly 41MW simply from outfitting the existing car parks with solar panels as can be seen in Figure 4. 6. Middle East vs. World: Productions and Consumptions As it is known, Canada for example is fortunate to have both hydrocarbon and hydro power resources and as a result is a net exporter of energy and will probably be so in perpetuity given its small population density; once its oil and gas reserves are depleted it can rely on hydro power for a long time to come, and the same can be said of several other nations such as Brazil, Norway and others. These nations have also been strategic in establishing their energy production in both renewable and nonrenewable sources and have over the last few decades spent billions in infrastructure in order to achieve their current status. In a certain sense, such countries are energy independent and self-sustaining, additionally, they are in the driver’s seat so to speak as they have what everyone else needs; cheap abundant energy. However, the problem of cheap, abundant energy is the issue all nations struggle to solve. According to the BP energy outlook and review in 2013, the net growth in emerging economy took place with considering two the highest population countries, i.e., China and India by nearly 90% of the net increasing in global energy consumption of the world. Renewable energy in power generation grew by an above-average 15.2%. Europe & Eurasia delivered the largest growth increment and continues to hold the largest regional share of the global total (accounting for 41.7% of the world total). Renewable energy accounted for a record 4.7% of global power generation, with an 8.2% share in Europe & Eurasia [5]. Interestingly enough from this data we can see that Canada, Brazil, Norway and Venezuela all generate the majority of their power through hydroelectric means and yet each one of these nations possess some of the highest ranking oil and gas reserves on the planet. Conversely Japan, India, China and the US which are historically known for their manufacturing rely heavily on their nonrenewable energy resources to provide the bulk of their power. As a result, these nations are scrambling to secure energy sources in every place they can in order to sustain either their economic growth or stability. 7. Conclusion Middle Eastern countries are generally reliant on oil and gas for their economies and have less consideration of supplementary energy sources. The best approach should be implemented with the integration of energy management which is almost a function of culture and background of this region. Considering the large capital currently produced from the sale of oil and gas from these regions, the existing technologies in solar power generation (PV and CSP) and available solar radiation in these regions, there is very little risk and high reward in the above mentioned solution for energy diversification and increasing the efficiency of energy management. For such countries where the production and consumption of oil and gas is the easiest path to solving domestic energy problems, reallocating the consumption of domestic reserves and utilizing the native renewable resource by use of PV panels needs to be considered. Additionally, financial considerations from governments to subsidize and initiate moderate-risk stages of this plan are suggested. This master planning of using current profits from oil and gas revenues to invest in already available PV panel applications will allow for a significant first step at energy independence and we will observe the progressive economic and practical preservation and reorganization of future of energy assets in this region. References 1) Gloabal Direct Normal Solar Radiation, Last access: September 2013.http://www.wri.org 2) Islam M.D., Kubo I., Ohadi M., Alili A.A., Measurement of solar energy radiation in Abu Dhabi,UAE., 2009, Applied Energy, 86:511-515. 3)Zatzman G., sustainable energy pricing, 2012, Library of Congress Cataloging-inPublication Data, ISBN 978-0-470-90163-2. 4) Ragescue R., Application of energy, 2013, InTech,ISBN:978 -953-51-0969-3. 5)BP statistical report review , 2o13. 6) Manenti F. and Ravaghi-Ardebili Z., Dynamic simulation of concentrating solar power plant and two-tanks direct thermal energy storage, 2013. Energy, 55:89-97. 7)Energy Information Administration, EIA, Last access: September 2013, http://www.eia.gov/countries/mena/.