Energy

Maritime oil routes

Published

1 year ago

February 10, 2022

Giancarlo Elia Valori

The ways of oil shipping

There are three types of oil shipping classification. The first is according to the way the ship operates, including regular and non-scheduled routes. Regular (scheduled) routes are mainly used to transport general merchandise and refer to specific ships. They go to specific ports at fixed dates and operate passenger and freight activities at standard freight rates.

Non-scheduled routes refer to temporarily selected routes based on freight transport needs. Vessels, sailing schedules, and ports of call are not fixed. These are routes that primarily operate bulk, and low-cost freight transport activities.

The second type is based on classifying by distance, including ocean and coastal routes. Ocean routes refer to long-distance maritime routes and ships that cross the great seas from the Far East to Europe and the Americas and vice versa.

The third type is based on classifying according to navigation, including Atlantic, Pacific, Indian Ocean routes and global routes as such.

Oil routes

Here are the main oil shipping routes.

West Asia (Strait of Hormuz) – Arabian Sea – Indian Ocean – Strait of Malacca / Strait of Lombok (60 kilometres long, 40 kilometres wide and 250 metres deep) – East Asian countries (People’s Republic of China, Japan, South Korea, etc.). The largest seaborne flows come from Middle East’s crude oil in the Persian Gulf. This route is the best way for East Asian countries to import crude oil.

I. West Asia (Strait of Hormuz) – Arabian Sea – Indian Ocean – East Africa – Strait of Mozambique – Cape of Good Hope – Atlantic Ocean – Western Europe / East coasts of the Americas. The water depth along the route has practically no restrictions on the type of ships and both supertankers (Very Large Crude Carriers) and mega-tankers (Ultra Large Crude Carriers) can sail freely.

II. Persian Gulf – Strait of Hormuz – Arabian Sea – Gulf of Aden – Bāb al-Mandab – Red Sea – Suez Canal – Mediterranean Sea – Strait of Gibraltar – Atlantic Ocean – Northern Europe – North America’s East Coast. Unlike the second route mentioned above, this one has a shorter shipping time, but due to the shallow draft of the Suez Canal, it is difficult for large ships to pass through and the cargo capacity is relatively small.

III. North African Mediterranean Sea – Strait of Gibraltar – Northern European countries (Antwerp, Rotterdam, etc.). Crude oil from Libya and other North African countries is mainly transported along this route.

IV. Atlantic route to Western Europe and North America.

V. West Africa via the Cape of Good Hope to East Asian countries.

VI. West Africa – Strait of Malacca – Taiwan Strait – mainland China. This route is used to transport crude oil from Angola, Nigeria and other West African countries to China.

VII. Caribbean route: Latin America – Panama Canal – American coast of the North Atlantic.

VIII. Route from the North Sea and South America to China, via the Cape of Good Hope.

IX. The East Coast of the Americas crosses the Atlantic Ocean, rounds the Cape of Good Hope and heads for East Asia’s countries; the West Coast crosses the Pacific Ocean and heads for Asia.

X. Route from South-East Asia to East Asia. This route is mainly for short-distance transport. The ships used are mainly Panamax tankers (ships whose size enables them to pass through the locks of the Panama Canal).

The geopolitical strongholds of Straits, Canals and Channels

Strategic maritime transport oil fortresses are an important part of global energy and geopolitical security. Let us take a closer look at them.

1. The Strait of Hormuz lies between Oman and Iran, connecting the Persian Gulf, the Gulf of Oman and the Arabian Sea (30 kilometres wide, with an average depth of 80 metres). It is one of the most important routes in the world. In 2020, it recorded an oil trade volume of 18 million barrels per day, accounting for almost 50% of the total volume of oil trade by sea for that year. According to BP Energy data, Qatar exported 3.7 trillion cubic feet of liquefied natural gas (LNG) through the Strait in 2016, accounting for over 30% of the world’s LNG trade.

2. Located between Indonesia, Malaysia and Singapore, the Strait of Malacca is a major transport route connecting the Indian Ocean, the South China Sea and the Pacific Ocean. The Strait is approximately 930 kilometres long, with a minimum width of 38 kilometres and an average depth of 25 metres. The number of oil tankers entering the South China Sea (from Singapore to neighbouring Taiwan) through the Strait of Malacca is three times that of the Suez Canal and five times that of the Panama Canal. It is the maritime lifeline of Asian countries. The Strait of Malacca is the shortest route connecting the Middle East and Asian markets including China, Japan, Korea and the whole Pacific. Oil shipments through the Strait rose to 16 million barrels per day in 2016, up from 14.5 in 2011, with crude oil accounting for 85 to 90 per cent, making it the second busiest outpost in the world.

3. The Singapore Strait follows the Malacca Strait to the southeast: it is 114 kilometres long and 16 kilometres wide, with an average depth of 22 metres. It forms a natural bottleneck in shipping, thus increasing the possibilities of ship collisions or oil spills. It has also become one of the last active areas for pirates. If the Strait of Malacca were to close, almost half of the world’s ships should get around Indonesia. This would affect global transport capacity, thus increasing transport costs and putting upward pressure on global energy prices. The volume of crude oil transported through the Malacca Strait accounts for approximately 15% of global consumption.

4. The Suez Canal is located in Egypt and connects the Red Sea and the Mediterranean Sea. It is a strategic route for oil and natural gas from the Persian Gulf to European and North American markets. It is the border between Asia and Africa and the most direct water passage between Asia and Africa and Europe. The total length of the canal is 193.3 kilometres; the width of the parallel canals is 205-225 metres, and the average depth is 22 metres. The maximum tonnage passing through it is 210,000 tons. According to the company Kpler-Leading Commodity Data & Analytics Solutions, 1.74 million barrels per day (bpd) of the 39.2 million bpd of crude oil imported by sea in 2020 passed through the Suez Canal. Due to depth limits, the Suez Canal cannot be crossed by super- and mega-tankers. When the Suez Canal Authority extended the depth of the canal to 66 feet in 2010, Suezmax ships – i.e. the ships whose size allows their passage through the Suez Canal – were created. It celebrated its 150th anniversary in 2019. Most of the oil flows passing through the Suez Canal goes north to European and North American markets, and south to Asian markets. Oil exports from the Persian Gulf countries account for 84% of the flows northwards. Russia’s oil exports account for 17% of the southbound flows, followed by Turkey, Algeria and Libya, which together account for 12% of the southbound flows. Total flows through the Suez Canal have been steadily growing since 2009, with increases in 2015 and 2016 reflecting increased OPEC production and exports. The 200-mile Suez-Mediterranean Transport Pipeline (Sumed) – inaugurated in 1977 and built by the Italian companies Saipem and Snamprogetti (ENI Group) and by Finsider’s Montubi and Cimi – transports crude oil from the Red Sea to the Mediterranean. The pipeline’s total capacity is 2.34 million barrels per day. When ships cannot navigate the Suez Canal, the Sumed pipeline is the only alternative route that can transport oil from the Red Sea to the Mediterranean. If the Sumed pipeline were to close, tankers should be diverted to the Cape of Good Hope at the southern tip of Africa, adding thousands of miles to shipments from Saudi Arabia to Europe and up to the United States of America.

5. The Strait called Bāb al-Mandab – meaning in Arabic the “Gate of Lamentation” or the “Gate of Tears” – is a maritime fortress between the Horn of Africa and the Middle East and a strategic link between the Mediterranean and the Indian Ocean. Located between Yemen, Djibouti and Eritrea, the Strait connects the Red Sea, the Gulf of Aden and the Arabian Sea. The Strait is approximately 26-32 kilometres wide and has a maximum depth of 310 metres, with some volcanic islands scattered between them. The island of Perim divides the Strait into two channels, the smaller of which, on the Asian side – known as Alexander’s Strait – is about 3.2 kilometres wide and 30 metres deep. The larger channel – known as Dakt al-Mayun – is on the African side, with a width of about 28.8 kilometres and a water depth of 323 metres, and it is hard to navigate because of the numerous reefs and rapids. As seen above, most of the oil exports from the Persian Gulf come through the Suez Canal and the Sumed pipeline via the Bāb al-Mandab Strait. In 2018, some 6.2 million barrels per day of crude oil and refined similar products passed through the Bāb al-Mandab Strait to Europe, the United States of America, up from 5.1 million barrels per day in 2014. In July 2018, two Saudi supertankers were attacked by Yemen’s Shia Houthi rebels (Ansar Allah), thus suspending oil shipments in the Red Sea, and raising market concerns about the safety of transport in the Bāb al-Mandab Strait. This communication crossing has become an important route for general maritime traffic also between the Pacific, Indian and Atlantic oceans. Some call it the strategic heartland of the world, as it is a busy sea route: the area is also a haunt for Somali pirates.

Closing the Strait would enable oil tankers from the Persian Gulf to reach the Suez Canal or the Sumed pipeline and then divert southwards to the southern tip of Africa. This would greatly increase transport time and costs.

6. The Turkish Straits, which include the Bosporus and the Dardanelles, separate Asia from Europe. The Bosphorus (from the Greek: “cattle strait” or “Ox-ford”) is a 31 kilometres long, 700 metres wide and 121 metres deep waterway connecting the Black Sea to the Sea of Marmara. The Dardanelles (the ancient Hellespont, known in Turkish as Strait of Çanakkale) is a 61 kilometres long waterway, with a 1.2 minimum width and an average depth of 60 metres. It connects the Sea of Marmara to the Aegean and the Mediterranean Sea. Both waterways supply Western and Southern Europe with oil from Russia and other Eurasian countries, including Azerbaijan and Kazakhstan. An estimated 2.4 million barrels per day of crude oil and oil products sailed through the Turkish Straits in 2016, over 80% of which was crude oil. Oil shipments through the Turkish Straits declined from the 2.9 million barrels per day recorded in 2011. Traffic through the two Straits has been steadily declining over the past decade. Oil shipments are likely to increase in the future as Kazakhstan’s crude production increases, since the country exports more crude oil through the Black Sea. The Turkish Straits are among the world’s most difficult waterways, with some 48,000 ships passing through them each year, making the area one of the world’s busiest maritime strongholds. Traffic congestion is indeed causing problems for oil tankers.

7. The Panama Canal is a vital route linking the Pacific Ocean, the Caribbean Sea and the Atlantic Ocean. The Canal is 82 kilometres long, 90/150-240/300 metres wide and 12 metres deep at most. The aforementioned Panamax cargo ships can usually carry 65-80,000 tonnes but, due to the Canal’s draft limit, its maximum cargo capacity is limited to about 52,500 tonnes and the rest of the cargo is transhipped.

Over 12,525 ships passed through the Panama Canal in 2021, carrying 287,486,205 tonnes of cargo. Alternative sea routes to the Panama Canal include the Strait of Magellan, Cape Horn and the Drake Strait at the southern tip of South America, but such choices would significantly increase transit time and costs. Although oil and petroleum products accounted for 30.1% of the main goods flowing through the Panama Canal in 2021, it is not an important route for such shipments. Northbound (Pacific to Atlantic) oil and refined products on this route account for a mere 6.9% of all cargo shipments; while 42.7% of refined and unrefined oil was shipped south from the Atlantic to the Pacific last year.

8. The Denmark Strait is the channel linking the Baltic Sea and the North Sea. It is 480 kilometres long and 290 kilometres wide at its narrowest point. It is an important route for Russian oil exports to Europe. In 2016 some 3.2 million barrels of oil products flowed through the Denmark Strait every day. After opening the port of Primorsk in 2005, Russia shifted most of its oil exports to Baltic ports. Primorsk’s oil exports through the Denmark Strait accounted for almost half of total exports in 2011, but fell to 32% in 2016. Small amounts of oil from Norway and the UK (less than 50,000 barrels per day) also flow eastwards through the Strait to Scandinavian markets.

9. The Cape of Good Hope lies at the southern tip of South Africa and is a major transit point for global tanker traffic. Crude oil shipments around the Cape of Good Hope account for about 9% of all oil traded by sea. The US Energy Information Administration estimated that the oil flows rounding the Cape of Good Hope in 2016 were about 5.8 million barrels per day, accounting for almost 9% of global seaborne trade. The Cape of Good Hope is another alternative route for ships sailing westwards to bypass the Gulf of Aden, Bāb al-Mandab and the Suez Canal, but with increased cost and transit time.

As can be inferred from the analysis above, blocking one of these fortresses is sufficient to harm a country or a well-defined geopolitical area. In such a case, thalassocracy would have more chances than a tellurocracy that disregards forward-looking alliances in view of probable scenario crises.

Energy

African Countries Embarking on Nuclear Technologies Must Adopt the IAEA Approach Framework

Published

1 day ago

June 1, 2023

Kester Kenn Klomegah

With energy for both domestic and industrial use still in deep deficit, a number of African countries are looking to install nuclear plants as part of the energy mix. But the two principal setbacks encountered are (i) getting through the pre-installation technical stages or processes, (ii) identifying sources of finance for the construction and (iii) dealing with nuclear waste and employment of well-trained staff.

The International Atomic Energy Agency (IAEA) sets the principles and conditions for the facilities of a major nuclear power programme and for the choice of construction sites to att the technical aspects aimed at ensuring nuclear safety.

It sets requirements for controlling dangerous release of radioactive materials, in case of an unexpected catastrophic incident or crisis, for instance an attack of any kind from or against the plant, targeting the reactors, risky fuel storage and any other critical sabotage on the infrastructure.

The Chernobyl disaster in Ukraine and Fukushima in Japan, remind the world of the human and environmental costs of nuclear power accidents. Millions of people are still suffering from radiation and radiation related diseases till today.

Records show many African countries opting for building nuclear plants in order to find long-shelf solutions to chronic power shortages. Several agreements with Russia has not materialised primarily due to lack of funds. With training our research shows that since 2010 hundreds of students from Algeria, Ghana, Egypt, Zambia, Kenya, Nigeria, Tanzania, Uganda, Ethiopia and South Africa have received nuclear and related education at leading Russian educational institutions.

Adopting nuclear energy is a long process. Here is an example from Ghana. Under Nana Addo Dankwa Akufo-Addo’s administration, the roadmap of the nuclear power programme was planned to commence construction by 2023 and inject nuclear energy into the grip by 2030. Last May, Ghana completed phase two of nuclear power infrastructure development. As part of efforts to become a climate-resilient and zero-carbon energy country, Ghana has completed Phase II of the Nuclear Power Project, which includes the approval of a site for a nuclear power facility.

Deputy Energy Minister, Andrew Kofi Egyapa Mercer, announced this during a symposium on nuclear power infrastructure development. “We have currently received approval for the acquisition of our preferred and backup nuclear to host Ghana’s first nuclear power plant. And meeting our energy demand is necessary to sustain our industrial and economic growth, which is required for a middle-income economy,” he stated.

Mercer noted that the world is shifting to greener energy sources, and nuclear power is expected to be a significant source of energy. As a result, Ghana cannot afford to be left out of the global drive for energy security. “The world is migrating to cleaner sources of energy and nuclear is envisaged to be a critical source of energy. Ghana can therefore not be left out in this global search for energy security,” he added.

In 2022, President Akufo-Addo integrated nuclear technology into the country’s power generation mix. The president explained that this was consistent with the global collective commitment to the long-term availability of power and the peaceful use of nuclear energy for the benefit of society, to accelerate industrialization, and to push economic progress.

The Director of the Nuclear Power Institute, Professor Seth Kofi Debrah, says developing an attitude of consistency will aid in the nuclear plant process to become successful. The long term plan was evident when Ghana began its nuclear energy journey in the 1960’s until it was truncated. Ghana is anticipated to completely switch to nuclear energy by the year 2070, however, this will cost $581 billion.

Ghana’s nuclear programme has justified the need for alternate baseload power for industrialisation, limited hydro sources, postulated decline of gas, tariff reduction for industries, desalination, employment creation and climate change commitments.

Prof. Debrah said four candidate sites were initially selected for the construction of the nuclear power plant and after further studies by Ghanaian researchers, the team ranked the sites to settle on the first and the second being a backup. “We need approval report from the regulator by the end of Phase II. We also want to have a site evaluation report for construction permit at the end of Phase II. Construction will start at the end of Phase II,” he said.

Prof. Debrah said the team was working on a report on the preferred vendors and was hopeful that the report would be completed and submitted for consideration by Cabinet. It was necessary for the country to add nuclear energy to its energy portfolio to become a baseload energy source to support massive industrialisation in the wake of the dwindling traditional energy sources.

As of 2021, hydro accounted for 38 percent of the country’s energy generation portfolio whiles thermal accounted for 60 per cent (making it the baseload). Solar and biomass contributed 1 per cent each to the energy mix. Experts have raised concerns about the cost of power from thermal sources and there are fears that electricity prices may continue to go up if the country did not adopt cheaper energy sources. It is estimated that 40 per cent of the production cost of industries goes into electricity tariffs.

South Africa could not pursue its nuclear power simply because of the opacity in the deals signed by the former President Jacob Zuma with Russia. There is only one nuclear power plant on the entire African continent, namely, Koeberg nuclear power station in South Africa. Commissioned in 1984, Koeberg provides nearly 2,000 megawatts, which is about 5% of installed electricity generation in South Africa.

The South Africa $76 billion deal with the Russians to build a nuclear power plant collapsed along with the Government of Jacob Zuma that negotiated the deal in secrecy, in fact when such corporate projects have to be discussed by the parliament and necessarily have to pass through international tendering process. Russia and South Africa concluded an intergovernmental agreement on strategic partnership in the nuclear sphere in 2014. The agreement provided in particular for construction of up to eight NPP power units.

Rwanda’s annual budget stands at US$3 billion while the construction of the nuclear power plant would cost not less than US$9 billion which is equivalent to Rwanda’s entire gross domestic product. Talks are underway on the construction of a nuclear power plant in Burundi, Ethiopia, Ghana, Mozambique, Nigeria, Tanzania and Zambia.

Shadreck Luwita, Zambian Ambassador to the Russian Federation, informed that the processes of design, feasibility study and approvals regarding the project have almost been concluded. The site of the project is yet to be designated as it is equally a process and it is envisaged that construction should commence, in earnest, not later than the second half of 2018.

In addition, he affirmed that the Russians envisaged technology transfer in the development of this massive project by way of manpower development capacity. For now, there are only a few Zambian nationals, who are studying nuclear science in one of the Russian universities in Moscow.

The Zambian Government hopes that upon commissioning of this project, excess power generated from this plant could be made available for export to neighbouring countries under the Southern African Development Community Power Pool framework arrangement.

In the case of Egypt, the agreement was signed in 2015, and it was only in 2022 that Russia granted a load of $25 billion for the four plants. The total cost of construction is fixed at $30 billion. El-Dabaa is the first nuclear power plant in Egypt and the first major project of Rosatom in Africa. After several years of delay, however, Rosatom began laying the concretes for the El Dabaa units. According to the project estimates by Rosatom, construction of all four NPP units is planned for completion by 2028-2029.

Many other African countries are already working on joining the atomic club in one form or another, whether it be the construction of a Nuclear Power Plant or a research reactor or the development of nuclear infrastructure or the training of professional personnel. Russia has agreements with Algeria (2014), Ghana (2015), Egypt (2015), Ethiopia (2019), Republic of Congo (2019), Nigeria (2012, 2016), Rwanda (2018), South Africa (2004), Sudan (2017), Tunisia (2016), Uganda (2019) and Zambia (2016). Memoranda of Understanding (MOUs) were signed with Kenya in 2016 and Morocco in 2017.

A nuclear power program is a complex undertaking that requires meticulous planning, preparation, and investment in time, institutions, and human resources. The development of such a program does not happen overnight and can take several years to implement. All countries, which embark on the path towards the peaceful use of nuclear technologies, do so by adopting the IAEA Milestone Approach framework.

In conclusion, African countries considering adding nuclear power to the energy mix to enhance economic development and provide a stable and affordable supply of electricity for the people must have the necessary funds and be ready to pass through step-by-step technical procedures. Alternatively, the renewable energy potential is enormous in Africa. Grand Inga are the world’s largest proposed hydropower scheme.

It is a grand vision to develop a continent-wide power system. Grand Inga 3, expected to have an electricity-generating capacity of about 40,000 megawatts – which is nearly twice as much as the 20 largest nuclear power stations. Another great resources is the Grand Ethiopian Renaissance Dam on the Blue Nile River in Ethiopia under construction since 2011. Researchers and Experts strongly believe and further estimate that the cost of building nuclear power does not make any sense, when compared to the cost of building renewables or other sources of energy, by pulling all those financial resources together in the continent, to solve energy shortages across Africa.

Energy

Strategic Partnership Opportunities among ASEAN countries towards Renewable Energy

Published

3 days ago

May 31, 2023

Irdina Batrisyia Riza Adami

Quoting from Singapore’s Prime Minister, Lee Hsien Loong, during his plenary speech at the 42nd ASEAN Summit in Labuan Bajo (Wednesday, May 10, 2023), which promotes other ASEAN countries to have a joint power grid (based on an article published by Channel News Asia). This statement is highlighted after the success made by the Lao PDR-Thailand-Malaysia-Singapore project in supplying renewable energy. In recent years, the importance of renewable energy has become increasingly apparent as countries worldwide seek to reduce their carbon footprint and address the impacts of climate change. The ASEAN region, comprising ten Southeast Asian countries, is no exception towards the movement. As a region with a rapidly growing energy demand, ASEAN countries are looking to renewable energy as a critical solution to address their energy needs while mitigating climate change by shifting towards renewable energy. In this context, strategic partnership opportunities among ASEAN countries can be crucial in accelerating the Sustainable Energy Transitions Initiative.

Renewable Energy Opportunities in the ASEAN Region

The ASEAN region has diverse renewable energy resources, including solar, wind, hydro, geothermal, and biomass. According to the International Renewable Energy Agency (IRENA) in 2018, wind energy is potentially growing in the Philippines, Indonesia and Vietnam because the wind speeds are between six to seven metres per second. On the other hand, IRENA and ACE (2016) highlighted geothermal potential in Indonesia and the Philippines. Besides, Indonesia, the Philippines and Singapore also have opportunities to explore ocean energy since the geography position is an archipelago (ASEAN RESP, 2016).

However, despite the potential of these resources, the region still relies heavily on fossil fuels, particularly coal, to meet its energy needs. According to the study “The ASEAN Climate and Energy Paradox” by I.Overland, H. F. Sagbakken, H. Chan, M. Merdekawati, B.Suryadi, N. A. Utama & R. Vakulchuk, the energy demand from fossil fuels between 2000 to 2018 resulted to 85% while the share of renewable energy in the energy mix remained. This reliance on fossil fuels contributes to climate change and exposes the region to energy security risks and price volatility. As a result, there is a growing recognition among ASEAN countries that renewable energy can play a critical role in reducing dependence on fossil fuels and achieving sustainable energy systems.

Countries Strategic Partnership

ASEAN countries can accelerate the deployment of renewable energy technologies and overcome common challenges. Some countries have already made significant progress in developing their renewable energy sectors, while others are still in the early stages of deployment. By working together, countries can learn from each other’s experiences and leverage their strengths to achieve renewable energy goals.

The unprecedented COVID-19 pandemic has highlighted the importance of resilience and sustainability in the energy sector. The pandemic has disrupted energy supply chains, and more demand for renewable energy will rise in 2020. The key players in the energy sector should form more strategic partnerships to encourage energy trading in response to the high demand for electricity across the region in the future.

As a result, strategic partnerships among ASEAN countries can help accelerate the transition to renewable energy and create a more resilient energy system that can withstand future shocks. In February 2023, the Electricity Generating Authority of Thailand (EGAT) and Tenaga Nasional Berhad (TNB) entered into a Memorandum of Understanding (MoU) to conduct a feasibility study to enhance the interconnection of the power grid between Peninsular Malaysia and Thailand.

Benefits of Building Strategic Alliance

The development of regional energy infrastructure can significantly impact regional energy infrastructure development. Establishing interconnectors and cross-border electricity trading can enable ASEAN countries to share renewable energy resources and optimise their use. This can address the issue of intermittency, which is a common challenge for renewable energy sources. Through diversification of renewable energy sources and sharing resources, ASEAN countries can create a more stable and resilient energy system by diversifying renewable energy sources and sharing resources.

In addition to sharing knowledge and infrastructure, strategic partnerships create opportunities for joint investments in renewable energy projects. By pooling their resources and expertise, ASEAN countries can undertake more significant and complex projects which require more work executions and upskill their employees through tacit knowledge. Most of the electricity firms in the ASEAN region are state-owned companies and require endless government support. For instance, governments can collaborate to develop large-scale renewable energy projects, requiring substantial capital investment and technical expertise. Joint assets can attract private sector investment and reduce the financial risks associated with renewable energy projects.

A strategic partnership can promote the adoption of policies and regulations that support the growth of renewable energy. ASEAN countries can develop common standards and rules for deploying renewable energy technologies, such as feed-in tariffs and tax credits. ASEAN countries can create a more predictable and stable policy environment for renewable energy investment.

Future of Renewable Energy

Other than the potential benefits of strategic partnerships, ASEAN countries may need to construct more institutional mechanisms to facilitate regional cooperation on renewable energy. There are existing platforms for cooperation among ASEAN countries, such as the ASEAN Centre for Energy and the ASEAN Power Grid. These platforms are more targeted initiatives. ASEAN countries shall also focus on renewable energy and facilitate collaboration among relevant stakeholders, including government agencies, industry players, and civil society organisations.

One notable initiative is the recent launch of the ASEAN Catalytic Green Finance Facility (ACGF), which aims to mobilise private sector investment for green infrastructure projects in the ASEAN region. The ACGF, which the Asian Development Bank (ADB) supports, will provide loans and technical assistance to project developers and financial institutions to support the development of renewable energy and energy efficiency projects. This initiative is an example of how strategic partnerships between governments and international organisations can help to catalyse private sector investment in renewable energy. According to ADB’s website, realising the shortfall of green infrastructure at $100 billion per year, private capital should consider grasping the opportunities to fill the gap to accelerate renewable energy growth.

The development of offshore wind projects requires significant technical and financial resources. Countries can address these challenges through strategic partnerships by pooling resources and expertise to develop large-scale offshore wind projects. For instance, several countries, such as Vietnam, Thailand, and the Philippines, are exploring offshore wind’s potential as a key renewable energy source. Based on the article published by Nikkei Asia entitled “Vietnam Offshore Wind Power Sparks Influx of Foreign Investment”, during the COP26 United Nations Climate Summit 2021 in Glasgow, the Vietnamese Prime Minister, Pham Minh Chinh mentioned the government’s commitment to shifting to renewable energy through the wind power in which accounts for about 5% of energy on a power generation capacity at the moment and the government plan to raise till 30% by 2025 despite the challenges faced.

In conclusion, strategic partnerships among ASEAN countries towards renewable energy have the potential to accelerate the transition to a low-carbon energy future, promote regional energy security, and support sustainable economic development. However, realising this potential requires more institutional coordination, financial resources and inclusive stakeholders’ involvement to address the future landscape of renewable energy. By working together and leveraging their strengths, ASEAN countries can create a more sustainable energy future that benefits people and the planet.

Energy

Role of Renewable Energy in Mitigating Climate Change as part of Saudi Vision 2030

Published

5 days ago

May 28, 2023

Ahmed Shaheer

Growing up in Saudi Arabia between the first and third decade of the 21st century, I, like most others, was aware of the slow yet noticeable changes in the Saudi climate over the years. The curse of climate change became apparent, with rain getting intense and flash floods ravaging coastal cities frequently. I was in Jeddah during the 2009 flash floods and witnessed firsthand the horrors the locals went through, with 122 dead and more than 350 never to be found again. Such a harrowing change in climate in a short span is concerning for the public as well as the policymakers who have begun to look for solutions, particularly in renewable energy.

The kingdom is part of some of the countries that are most vulnerable to climate change. Saudi Arabia has an acute water shortage issue that poses a threat to its people and the environment. Besides water scarcity, the kingdom is also a potential victim of rising sea levels (a 3mm increase per year), with about 210,000 people at risk of flooding by 2050. Temperature rises are also a concern for the Saudis, studies predict an increase between 3 to 4.2 degrees Celsius of daily surface mean temperature in the long run. According to The Climate and Atmosphere Research Center, about 600 million people in the Middle East and North Africa are at risk of heat exhaustion and heart attacks due to heat waves by the start of the next century. Extreme rainfall is also a potentially lethal impact of climate change on Saudi Arabia, as evident by the 2009 and 2018 flash floods. Precipitation in the kingdom is anticipated to increase by around 23%-41% in the long run due to climate change, which only aggravates existing issues.

Since Saudi Arabia depends on oil for its income, any factors affecting it will affect the economy and the people. Due to changes in trends, oil demand is constantly decreasing due to the increased popularity of green energy, causing oil prices to fluctuate since 2014. Studies show that the kingdom must keep about 68% of its oil reserves and 85% of its fossil fuels untouched to keep warming below 1.5 – 2 degrees Celsius. Moreover, the Middle East must abandon 40% of its oil and 60% of its natural gas reserves. Since the kingdom relies on oil for most of its income, such measures will prove detrimental to its economy and ultimately its people.

Therefore, in 2016, the kingdom announced plans for Vision 2030, which aimed to curtail many of the issues surrounding climate change using renewable energies. For this purpose, the Saudi Green Initiative was launched in 2016 and aimed to eliminate emissions by 2060. The kingdom plans to invest more than $100 billion into the project to achieve its objectives. However, there is reasonable doubt about these goals, which may sound overly ambitious. As the country continues to receive criticism from the Climate Change Performance Index which gives it an average ranking of 62nd. Therefore, there is considerable risk involved as the country is currently not on track with the Paris Agreement’s 1.5-degree Celsius limit.

During the past seven years, Saudi Arabia has invested approximately $400 billion into renewable energy, with plans to invest an additional $30 billion in the next two years. As part of Vision 2030, the government plans to achieve renewable and sustainable energy projects for 9.5 GW of RnSE (Renewable and Sustainable Energy). However, energy demand is projected to rise to 120 GW by 2032, which is much more than what is currently being worked on. The government plans to invest in solar, wind, and hydropower energy to achieve its energy demands and mitigate climate change.

Saudi Arabia has immense potential for solar power, after the government’s testing through 46 weather stations across the country. It has a large surface area and lies in the Global Sunbelt. Through solar power, the kingdom plans to generate 42.7 GW of energy. In 2019, the kingdom connected the 300 MW Sakaka power plant, 10 MW Layla al-Aflaj power plant, and 50 MW Waad al-Shamal power plant to the rest of the country. Furthermore, the Saudis have shown interest in seven additional plants in Madinah, Rafha, al-Qurayyat, al-Faisaliah, Rabigh, Jeddah, and Mahd al-Dahab with a combined capacity of 1.52 GW. In 2020, further progress was made by embarking on four more plants with a total capacity of 1,200 MW. The Saudis have made promising progress in solar energy, as evidenced by the kingdom becoming the 6th largest in solar energy generation, with plans to generate a third of their energy from solar power. However, there are large sums of costs associated with solar panels, along with dealing with external factors such as high temperatures, dust, and humidity that reduce efficiency. It can also backfire and damage the environment by causing soil erosion. On the other hand, it has been argued that the benefits outweigh the drawbacks as it is renewable and produces zero air and water pollution, which is why the Saudi government should continue to explore this option with the same momentum they currently maintain as it provides the opportunity to explore other economic policies such as carbon taxes.

The kingdom has also invested in wind energy to generate 16 GW of energy. A $500 million wind project in Daumat al-Jandal was funded by the government in 2017. ARAMCO also installed two 2.75 MW plants in Turaif and Huraymila in 2017 and 2019. Aiming to exploit its wind potential, the kingdom intends to become one the largest wind energy markets in the next half of the century. However, it requires a constant volume of wind, which is projected to decrease in the kingdom. It can damage the environment by harming the land and killing birds. However, this drawback has been explored by researchers and newer models of wind turbines are more efficient at maximizing productivity and minimizing drawbacks. Moreover, the wind farms often add to the scenic beauty which can come in handy for the kingdom that is seeking to make tourism 65% of its GDP by 2030.

The kingdom currently relies on desalination plants to curb its water shortage, producing around 4 MCM per day. It seeks to increase the number to 8.5 MCM per day by 2025 with its 28 distillation plants to achieve climate objectives. The desalination plants can also be used to produce hydropower, particularly the Ras al Khair plant, as well as others such as the ones in Jubail, Khobar, al-Khafji, Jeddah, al-Shuaibah, Yanbu, and al-Shuqaiq. However, the kingdom faces drawbacks in maximizing hydropower production due to its unfriendly landscape for dams and the lack of water bodies. Moreover, the kingdom is a tribal society at heart in its vast deserts which retains the propensity of social conflicts between the government and the locals, as had happened in the Tabuk region between the state and Huwait tribe due to the construction of NEOM and The Line. Therefore, hydropower may not be a viable option for Saudi Arabia, but it is still a viable substitute.

Renewable energy will provide unsurmountable benefits to Saudi Arabia. Studies show that the GCC region can rid itself of almost one gigaton of carbon emissions and save around $87 billion in reserves. Renewable and sustainable energy will also create many jobs for Saudis, estimated to be 80,000 by 2030. It will also preserve the rapidly depleting oil reserves of the country and reduce carbon emissions by almost 3kgs for every m3 of produced water.

There are certain challenges and risks that the Saudis currently face. There is a lack of coordination between different institutions of the state to execute policies and collect data. This causes a gap in accessible knowledge and data, clouding analysis and making it difficult to measure progress. Professionals and academics must be aware of the intensity of climate change and that is not possible without concrete data produced by trustworthy sources such as government institutions. This could also result in the misallocation of funds and resources which hinder further progress as policymakers would have a low-resolution picture of the cost of operations. Therefore, organizations like King Abdulaziz City for Science and Technology (KACST), King Abdullah University of Science and Technology (KAUST), King Abdullah Petroleum Studies and Research Center (KAPSARC), King Abdullah City for Atomic and Renewable Energy (KACARE), and others, must increase collaboration, coordination, and integration to make data more readily available both to the government and the public. Moreover, it is not possible to counter climate change solely through national programs, neighboring countries in the Middle East also need to cooperate with the Saudis to collectively deal with the issue, however, that is not always possible due to domestic issues such as civil wars, terrorism, natural disasters, and so on. These issues will jeopardize any efforts toward a sustainable future and further worsen the impact of climate change in the Middle East.