(MENAFN- Gulf Times) While governments in the region have long relied on oil- and gas-fired power plants to add capacity, efforts to diversify the power mix are gaining momentum with renewable energy and nuclear at the forefront, Apicorp Energy Research has said in a new report.
Nonetheless, countries such as Morocco still depend on coal for much of their power generation, and construction of the GCC's first coal-fired power plant is in progress in the UAE. Studies are also underway in Egypt to add significant coal capacity, Apicorp said.
'There are several reasons governments are looking at coal, but the most important is to diversify the energy mix and enhance energy security. Despite this, coal is likely to play only a marginal role in the future of the region's power sector, the report said.
According to Apicorp, coal continues to be the dominant fuel in the global power mix. As of 2014, its share represented 41%, whereas gas and renewables amounted to 22% and 6%. This is an increase compared to the year 2000, when coal stood at 39%, and gas and renewables at 18% and 2%.
As the global community substitutes coal with gas and renewable energy to meet its climate change commitments, a downward trend of the share of coal in electricity generation is almost inevitable, the report said.
Middle East and North Africa countries — with the exception of Morocco — do not consume coal in their power sectors. Coal was never really part of governments' strategies to tackle demand growth, due to the very low coal reserves in the region.
These countries have been relying on oil and gas-fired power plants to meet most of their demand needs. The oil and gas rich GCC region depends on its vast cheap-to-extract resources, while energy poor countries in the region have relied on fuel imports to feed their plants, Apicorp reported.
However, the substantial growth in demand for electricity and the resulting strain on existing capacity has forced governments in the region to diversify their energy mix, and in some cases coal has started to feature in their planning, it added.
Apicorp said there are several reasons which justify the decision to include coal in the power mix.
First, despite Mena countries' conviction that gas should play the dominant role in adding generation capacity, supply uncertainty in some countries and expensive-to-extract gas in others are forcing governments to diversify their sources of electricity.
Second, although the regional momentum is with renewable energy, it will take many years to add significant capacity to increase its share in the power mix. Coal plants are a highly-reliable source of baseload capacity, making them a good complement to renewable sources. Additionally, coal prices have declined over the past decade, and whilst there has been a recovery more recently, demand is still weak.
Third, the technology is improving. According to estimates, 80% of coal plants globally are sub-critical and have efficiencies between 25-37%. Environmental and efficiency concerns and rising global commitments to tackle climate change have driven coal efficiency standards to improve.
Development of new technology such as the advanced ultra-supercritical pulverised coal combustion is allowing efficiencies rates of 50%, with 15% reduction in CO2 emissions compared with supercritical technology, Apicorp said.
For Mena countries, Apicorp said that adding capacity quickly to meet demand is pivotal. Governments will continue to prioritise natural gas and renewables in power generation.
'But the fact is that energy security concerns are rising amidst higher uncertainty, and energy diversification is at the top of policymakers' agenda. While this will push some governments to re-consider coal in their energy mix, coal is not likely to play a significant role in the region's power mix, the report said.
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