According to news reports reaching here, the Minister Responsible for Financial Affairs, Darwish bin Ismail Al Balushi, yesterday said that the government is looking at reconsidering local fuel sale, in view of the fact that government support has reached OMR1 billion in the 2012 annual budget.
The minister was quoted as saying that current prices have been determined since the 1980s, when global oil prices did not cross $25 per barrel. He also indicated that since then no changes have been made on local fuel prices, except for prices of diesel in 2006. Since the 1980s, global oil prices have jumped at least four-times.
Oman sells petrol super grade for 120 baisas per litre, 114 baisas a litre for regular and 146 per litre for diesel in the capital area. However, it slightly varies beyond 100 kilometres from capital area.
Al Balushi added that the diesel smuggling issue has become a real concern for the Omani government, especially due to financial burden, time, and effort to watch and detain violators, which causes an additional burden on institutions concerned.
It was earlier reported that a panel is looking into revamping subsidy in such a way to get the benefits to the deserving income group, like other countries in the world. This follows a recommendation from the Majlis Al Shura.
The comprehensive study will suggest implications of the present subsidy system and alternatives for directly channelising it to the deserving groups. The present subsidy benefits are enjoyed by all sections of the society and the idea is to confine it to eligible groups. The total subsidies on all these are expected to touch an alarming level of OMR1.3 billion this year. This fund can be used by the government for other purposes, including youth training or investment projects that could generate new employment.
International Monetary Fund (IMF) has been calling on Oman, along with other GCC countries, to reduce subsidy in a move to prudently manage state resources. Countries in the Middle East and North Africa (Mena) region are spending $200 billion on general subsidies and there is a need to curb this spending.
According to IMF, these subsidies are not an efficient way of helping the poor, because the bulk of the spending is going to people who consume more energy, who are generally better off.

© Times of Oman 2013

He said total water consumption in the Kingdom crossed eight million cubic meters for the first time.
“This is equal to nearly 800,000 10-ton water tank trucks,” he said while emphasizing the need to rationalize consumption of water.
Al-Hussayen said about 60 percent of the Kingdom’s water supply comes from desalination plants on its Red Sea and Arabian Gulf coasts while the rest comes from underground water wells.
“All regions have reported record consumption of water,” the minister said.
Jeddah’s consumption is more than 1.2 million cubic meters per day, which translates to per capita use of more than 300 liters per day.
Al-Hussayen said his ministry has launched a nationwide campaign to reduce water consumption by 30 percent through free distribution of devices that would help reduce consumption.
He also stressed the importance of preserving the country’s underground water resources.
Saudi Arabia has been producing desalinated water since 1927, with output jumping from 300,000 cubic meters per day to more than five million cubic meters.
The Kingdom is the world leader in this field, producing almost 20 percent of global production.

The forecast expansion, which includes Jordan, will require loans and export credits, said Vahid Fotuhi, president of the Dubai-based Emirates Solar Industry Association.
Governments across the Middle East and North Africa consider sun and wind energy as crucial for meeting the needs of growing populations and economies, with Saudi Arabia leading the way.
Saudi Arabia plans to invest more than $100 billion to generate about 41,000 megawatts from solar energy, or a third of its total power output, by 2032. That compares with about 16 megawatts of solar capacity today, a level that places the kingdom behind Egypt, Morocco, Algeria and the UAE, according to Bloomberg New Energy Finance.
Abu Dhabi National Energy, a conventional energy-producer known as Taqa, raised about $4 billion in loans this year and in 2012. The $2.5 billion in revolving credits it arranged in December include a three-year credit priced at 75 basis points more than the London interbank offered rate, and a five-year component priced at 100 basis points more than the Libor benchmark, data compiled by Bloomberg show.
Abengoa Solar, a partner in an Abu Dhabi sun-power plant, borrowed $142 million at 175 basis points more than Libor, according to data compiled by Bloomberg. Costs are even higher for First Solar Inc. (FSLR), the largest US solar manufacturer and builder of Dubai’s first solar electricity plant, which arranged a $431 million secured letter of credit at 225 basis points more than Libor, data gathered by Bloomberg show.
Oil producers want to develop renewables to conserve more crude for export, while countries relying on imported fuel see local green power as a cheaper alternative. State support for utilities and a growth in regional power demand of about 5 percent a year mean companies such as Abu Dhabi National Energy Co. (TAQA) can borrow at rates that are 100 basis points, or 1 percentage point, lower than Spain’s Abengoa Solar SA.
Lenders may hesitate to continue funding the massive expansion as commercial banks seek to limit exposure to renewables projects, said Steve Mercieca, the Dubai-based chief executive officer of the Clean Energy Business Council. Governments should encourage the availability of Islamic bonds (sukuk) to help finance solar facilities under construction, he said.

“The Saudi market already has an attractive framework for building and funding traditional power plants, and liquidity is ample in local banks,” Mercieca said. “Appetite is going to be substantial” for the funding of such projects, he said.
“If you see a rising population and rising energy demand, that really helps the risk profile,” Amol Shitole, a credit analyst with SJS Markets Ltd. in Bangalore, India, said. Projects that can pair local companies with international power-plant developers already known to lenders will have “strong support from banks,” he added.
Renewables investment in the Middle East and North Africa rose 40 percent last year to $2.9 billion, according to the International Renewable Energy Agency.

The world’s top oil exporter aims to install 23.9 gigawatts (GW) of renewable power capacity by 2020 and 54.1 GW by 2032, it said in the roadmap, which would make Saudi Arabia one of the world’s main producers of renewable electricity.

In 2011 global installed capacity for photovoltaic (PV) solar power, the most common solar technology, was 69.4 GW, the BP Statistical Review of World Energy 2012 said.

The kingdom says it has crude output capacity of 12.5 million barrels a day, but domestic oil consumption is rising quickly and may start to cut into the amount of energy available for export.

The King Abdullah City for Atomic and Renewable Energy (KACARE), the government department responsible for the programme, last year published its vision for a long-term energy mix that relied on big contributions from solar and nuclear energy.

KACARE said in its roadmap, a white paper published on Wednesday, that it aims to issue a request for prequalification for the first rewewable plants within two months, a final tender within three months and to award contracts within a year.

It said the initial contracts would be part of an “introductory” procurement round of 500-800 megawatts, but that it would launch two more tenders within three years for 7 GW of installed capacity. It said 5.1 GW would be installed in the first five years.

Saudi Arabia wants most of the new renewable energy capacity to come from two solar power technologies, but is also seeking to generate electricity from wind, geothermal and waste-to-energy projects.

KACARE specified that in the first two bidding rounds after the introductory procurement round, it wanted 2.4 GW of PV solar energy capacity and 2.1 GW of solar thermal capacity.

Renewable power developers will have 20-year contracts to sell electricity to a new government body that will in turn sell it on to the national grid.

New projects will have minimum requirements for local content and the employment of Saudi nationals, KACARE said, and developers must contribute to a Saudi research and development programme for renewable energy.

The initial tendering process for the first projects this year aims to determine the cost of installing major renewable plants in Saudi Arabia to set a pricing structure for future bidding rounds, it said.

“Air-conditioned buildings account for 70 percent of power consumption during this period,” said Minister of Water and Electricity (MOW&E) Abdullah Al Hussein citing a study.

The minister spoke at the opening of the first Saudi Heating, Ventilation and Air-conditioning Conference (SHVAC-2013) that kicked off here yesterday at Al-Faisaliah Hotel.

“This is the cause of the great disparity between peak loads during the short duration of the summer and the rest of the months of the year when it exceeds the peak load in summer by more than 100 percent in mild weather condition,” said the Minister Al Hussein.

The event was attended by Prince Abdulaziz bin Salman, assistant minister of petroleum and mineral resources for petroleum affairs; Tawfiq Al-Rabiah, minister of commerce and industry; and Mohammed Al-Suwayel, president of King Abdulaziz City for Science and Technology in addition to regional and international leaders in energy-efficiency.

Stressing the need for a tangible solution to the problem, Al Hussein said, “This is challenging in terms of operational and financial burdens, because to provide electricity for such a short time, MOW&E has to build power plants of 5000 MW capacity to meet the summer needs.”

As a result, the ministry, jointly with Saudi Energy Efficiency Center and Researches (SEECR), will make thermal insulation mandatory in all new residential and commercial buildings in Riyadh followed by other cities.

Any building under construction not complying with the new Royal decree will not receive electric connection, the minister said.

This move will save 50 percent of the air-conditioning load and by using AC with high-efficiency will save around 40 GW in a year. Such a huge saving will bring down the electricity bill to around SR two billions annually, According to Al Hussein.

This will save for the national economy at least SR 7 billion annually. It will also lead to a decrease in fuel consumption by SR 30 million barrel in a year, he added. He said this also will lead to the decrease of fuel consumption to around 30 million barrel in a year.

Prince Abdulaziz said that the establishment of SEECR reflects the initiative to control the increasing consumption of energy. He said that one of the center’s main focus is to use the split AC. He said there are 12 percent growth sales of this type of AC every year.

Rapid economic development in recent decades has placed an unsustainable burden on the Kingdom’s domestic energy infrastructure. It is expected to worsen as the Kingdom’s economic expansion continues to gather pace.

To accommodate this growing demand, the Kingdom has earmarked SR 500 billion to increase production capacity of its power plants by nearly 90,000 megawatts (MW) in the coming decade.

“With an average daily sunshine time exceeding 9.5 hours, low cloud cover conditions and abundant free land space offer a great potential for construction of large-scale solar power plants,” stated a technical paper jointly presented by Ali Hamed al-Mulla and Pitta Govinda Rao of QP at the second Qatar Japan Environment symposium.

Qatar has solar irradiation levels with studies showing an annual rate of 1,858 kWh (kilowatt hour) per square metre/year, they said, adding though considerable seasonal variations exist between summer and winter months, large potential is available throughout the year. During the summer months of May to July, the potential is over 6 kWh per square metre per day, whereas during the winter months (December to February), it is about 3.5 to 4.4 kWh per square metre per day, the paper said, highlighting that the solar radiation data at Doha International Airport clearly demonstrate the availability of large potential for utilising solar energy in Qatar.

Suggesting the need for CSP, they said Qatar’s capability for producing electricity from CSP is “huge” as the incident solar radiation is higher than the threshold value.

However, land area requirements and maintenance cost for CSP is higher than the photo-voltaic (PV) panel techniques, al-Mulla and Rao said, adding on an average, four acres of land is required for producing 1MW (megawatt) of power through PV technology.

A United Nations Environment Programme study revealed that a minimum threshold value of 1,800 kWh per sq m per year of direct normal irradiance (DNI) is a prerequisite for CSP installations. Furthermore, it also found that places with DNI values of 2,000 kWh per sq m per year were found to be economically most feasible.

“DNI value of Qatar is about 2,008 kWh per sq m per year which clearly demonstrates the suitability for CSPs in Qatar. With global horizontal irradiance of 2,140 kWh per sq m per year, Qatar is also best suited for solar PV systems,” they said.

Despite the cost of PV electricity is 2.25 times to that of gas based electric power, Qatar is investing large amounts of money due to existence of large potential and social responsibility of meeting its sustainable development goals set under Qatar National Vision 2030.

Qatar Solar Technologies (QSTec) is building a brand new industry of solar energy in Qatar. QSTec, a joint venture between Qatar Foundation (70%), Solar World AG (29%) and Qatar Development Bank (1%) is building a poly silicon production plant in Ras Laffan Industrial City.

It is being built on a 1.2mn sq km land with $1bn cost, estimated to produce 8,000 metric tonnes per year (MTPY) of poly silicon with a design to expand its capacity. Eventually, more than 45,000 MTPY of poly silicon can be produced with the plant being designed seamlessly incorporate ingots, wafers, cells and modules.