Even with oil prices falling there is still demand for renewables
Three facts jump out in this article from today’s FT, which speculates on the impact of lower oil prices on the market for electric cars. The first is that the UAE is building a solar farm in Dubai which will supply electricity at $0.06/kWh which is 2-3 cents lower than the cost of electricity from the emirate’s gas powered stations. Given that the UAE has access to some of the cheapest gas in the world, this shows the potential for PV generation without the need for subsidy.
Secondly, we were astonished to read that over a fifth of global electricity generation was produced by renewable sources last year and thirdly, that half of new electrical generation capacity added since 2011 has come from renewable technologies.
The fact that it is a Saudi company which is building the solar plant in Dubai is especially interesting, given the kingdom’s reliance on oil exports. It’s a fact that the oil rich middle east is one of the best places in the world to generate electricity from solar energy. They have huge tracts of otherwise useless land and high levels of reliable sunshine. Couple this with a massive domestic demand for electricity - life in Dubai without air conditioning would be unbearable for most ex-pats - and this scheme makes perfect sense.