Monday, August 16, 2010

Hot Topic: Solar Energy

Oman, like its GCC neighbors, is well known for its abundant oil and natural gas resources.  What is perhaps less well known is that the Sultanate is also poised to become a leading player in the next great natural resource boom: solar energy. 
This article provides background on Oman’s plans and potential for harnessing solar energy.  In a future post, we will discuss some of the important legal issues that may come to the fore as Oman moves ahead in its solar development initiatives.

Solar energy has been on the agenda in Oman for quite some time.  The use of solar systems for special industrial purposes – such as powering telecommunications and monitoring equipment in  the Sultanate’s remote desert and mountain areas – dates back to the early 1990s.  More recently, the Government has begun to focus on the potential for large, commercial-scale solar projects, both to help diversify the national economy and to meet growing domestic energy needs.  A comprehensive report on renewable energy issued by Oman’s Authority for Electricity Regulation in 2008 (the “AER Report”) identified solar power as one of the Sultanate’s top prospective energy sources for the coming decades.

Over the past few weeks, we have witnessed the clearest signs yet that Oman’s potential as a solar energy producer soon will be realized.  Oman’s Public Authority for Electricity and Water (the “PAEW”), which is overseeing the formulation of a national strategy for solar energy development, has been working with a consortium of international consultants to determine the size, location, and type of solar technology to be used in Oman’s first large-scale solar power plant.  According to recent press reports, the feasibility study is near completion, and the PAEW soon will announce the details of the project and launch a competitive process for bidders to design, develop, finance, and operate the plant. 

Looking toward the Future
As we await further details of Oman’s solar plans, it is easy to be optimistic about the Sultanate’s potential to be a major producer – and perhaps someday an exporter – of solar energy.  As noted in the AER Report, which analyzed solar radiation data collected over a five-year period, Oman’s solar energy density ranks among the highest in the world.  The AER Report estimated that, theoretically, it would be possible to produce sufficient electricity to satisfy all of Oman’s electricity consumption at present levels by utilizing 280 square kilometers of desert (0.1% of the Sultanate’s total land area) for solar collectors.

Building solar power generation capabilities could yield a variety of benefits for the Sultanate.  First, the bolstering of Oman’s overall energy resources clearly would help to meet growing domestic electricity needs.  Second, the partial fulfillment of domestic energy needs through solar power may allow Oman to export more of its oil and natural gas, which would generate additional revenue.  Third, advancing the development of renewable, environmentally friendly energy sources would allow the Sultanate to take a leadership role in the global community.  And  finally, acquiring expertise in “green” technology may be something that the Omani tourism industry could tap into – hotels featuring eco-friendly technology would nicely complement the stunning natural beauty of their surroundings, and could enhance Oman’s appeal as an upscale, eco-friendly travel destination.

Potential Technologies
According to the recent news reports, it is likely that Oman’s initial large-scale solar projects will utilize some form of concentrated solar power (“CSP”) technology.  CSP systems use a group of mirrors to focus a large area of sunlight onto a smaller collecting surface.  The collecting surface is usually mounted on a tower surrounded by an array of mirrors, or inside a parabolic trough composed of mirrors.  The collected heat is used to turn a heating medium (such as water or molten salt) into steam, which powers a turbine to produce electricity.  An alternative technology is to use photovoltaic cells, which absorb solar radiation and directly turn it into electricity via the excitement of electron particles.