Solar Power in UAE: An Interview with Laurent Longuet of Siraj Power

Solar Power in UAE: An Interview with Laurent Longuet of Siraj Power
Laurent Longuet, CEO Siraj Power.

SirajPower is devoted to net metering and is the only company in Dubai that is licensed and certified to offer under the same umbrella both EPC, O&M and financing solutions. Since the official launch of its operations in Dubai in January 2016, SirajPower has secured a total of 50 MWp of solar rooftop projects under a lease scheme. The expertise developed from this activity and the projects being implemented by the company have positioned SirajPower as the leader for distributed solar solutions in the UAE.

REM discussed ongoing developments in greater depth with Siraj Power CEO Laurent Longuet.

Can you give me a bit of background about yourself and the company

The company is SirajPower, which we founded back in 2015. It’s a company owned by a prominent family in Dubai and many businesses were initially set up by some prominent local families and we belong to one of these groups of companies. SirajPower was founded with the object of proposing to commercial and industrial companies some solutions to adopt solar energy, to reduce their carbon footprint and in the meantime to reduce their electricity expenses. Electricity is costly in Dubai, and it is important for a lot of industrial and commercial companies to remain competitive and find some sources for cheap electricity. With SirajPower, our objective is to bring them a solution to become more sustainable in their operations. Secondly, we help them achieve savings on their operational expenses. This is the main objective of the company. We started in Dubai, but we definitely aim to be a Green Champion in this field in the Middle East.

As far as I am concerned, I have been working in the renewable energy sector for more than ten years, and ten years in renewable energy is like five hundred years in any other industry probably. As a veteran in this field, I worked in different countries and regions across the world such as Nigeria, in Europe, in Iran, and in the energy sector in general. I have been involved in the development of prominent projects and businesses in the renewable energy sector in the Middle East.

Who are your main clients?

Our clients are literally all the companies that, first, have a roof big enough to accommodate our systems, and secondly, an electricity consumption that is sufficient to use the electricity that can be produced from their roof. Today we have clients from different industry sectors. They are engaging in very competitive international competition, so they are very enthusiastic about saving energy. We work as well with some companies in the food industry. For instance, we work with a company importing foods into the UAE, they have a cold store and therefore use a lot of electricity. We work with industrial companies also - we have some companies producing PVC pipes for the construction industry in the region. We work with some distribution companies and retail companies, such as Danube or Landmark – they have shops under different brand names in the UAE - and also provide solar power solutions to some clients in the residential sector. We recently engaged with a school in Dubai where we are currently installing a solar system on the roof and producing a significant share of electricity from this. So you can see it goes from pure industrial companies to schools, accommodation, residential, literally anyone with a roof with electricity consumption.

What kind of analytics and monitoring tools do you use with your solar plants?

This is definitely a challenge. The systems we currently own, operate and which are producing electricity, more than a hundred of these systems are running in Dubai, so it’s all around the city in different locations and at any point in time we need to make sure that these systems produce as much energy as possible so that we generate electricity savings for our clients and revenue, so we need a very significant amount of analytics. To do so, we are completely cloud-based. With cloud-based solutions we have megawatts or gigawatts of data flowing from the different sites to the cloud, going to a database located on some remote servers. To do the analytics we have some standard algorithms to monitor performance. We have also implemented some artificial intelligence algorithms to be able to detect any abnormalities and to help us better operate our systems. These advanced analytics and advanced technology and tools which we have implemented are fully part of the picture. You cannot today work in our business without putting these monitoring tools into the picture.

What is the current situation with regard to the solar sector in Dubai and the solar market throughout the wider region?

The region has started to shift to renewable energy probably a bit later than some other regions, but what we have seen over the last few years is a very strong acceleration of this shift. The largest solar projects in the world are being built in the region in Dubai, in Abu Dhabi and in Saudi Arabia. This shift is now very swift and very strong and it’s a one-way ticket. Although the region is still very rich with hydrocarbons, most of the countries in the region have realised as well the benefits of producing electricity without carbon emissions at a low cost and that’s what we can do with solar, and to a certain extent with wind, even if you also produce oil and gas. That’s why we’ve seen this shift.

I must say that today I am very convinced that within the next few years the share of electricity produced by renewables in the UAE will be much higher than we can see today in many regions of the world. It’s very impressive, the speed at which this is growing now. More specifically, today, with the market conditions caused by the outbreak of the global pandemic, I have not seen any change. Of course, for a month or two, when everyone was confined, things were slower than before, but since then we have started to operate as usual, and on the contrary, we see some acceleration. People have realised that to survive they need to save energy and reduce their emissions, and solar is a great solution. Secondly, we have all realised as well, that with the risks from globalisation and all, we need to be resilient. Everyone needs to have a ‘Plan B’ and to be able to produce their own energy or their own medicines. We see now a lot of countries rebuilding their pharmaceutical industries to avoid the risk of depending on foreign countries, and with energy it is the same. A lot of countries or a lot of companies have started to realise that to be resilient, generating their own energy is crucial. Especially with distributed solar solutions, when you have your electricity produced from your roof for example, it is more substantial than if you depend on some gas produced some 5,000 kilometres away or oil and gas produced on the other side of the ocean. I think that as well adds some continuity to this acceleration we have seen over recent months.

In Europe, renewable energy is intermittent, so given that solar can only be produced during the day, do you have any infrastructure providing backup, such as energy storage or other technology that supports it?

I think this is very interesting, but to a certain extent it is not a problem for today. It is a problem for tomorrow or the day after tomorrow. When you start in a country like the UAE ten years ago with a low percentage of renewables, your problem is not to think of what you will do today, it is a question to think about when you have 40-50 percent of energy coming from alternative sources. At this point today, we don’t have to bring in such solutions. Probably in 2-4 years' time maybe. In the UAE actually, the government has started to think about this and there are some pilot projects being implemented to test some solutions, but it is not yet a focus.

Another good reason why it is not a major challenge in the UAE today is that the consumption of electricity is mostly driven by air conditioning. We are in a country where, especially on sunny days, the temperature is very high so the electricity consumption is very much driven by the need for air conditioning. We need AC when the temperature is high and the temperature is of course high when it is sunny and when it is sunny we produce electricity.

This is something that is probably very different from what is happening in Europe. In France or UK, when it is sunny, on a good day in July for instance, there is no electricity consumption but you do need the electricity in January when the temperature is very cold and when the sun is not highly visible. In the UAE it is totally different. We need electricity when there is a lot of sun, so the match between the consumption and solar production makes the situation very different in the UAE.

This being said, in the years to come, with solar penetration with mixed energy in the UAE has increased, then this will become something to be addressed and there are already some technologies - mixed solar with wind for example. You can have some gas plants where solar technologies are available. You can also have a stepped process, in which you use a water dam when you need some electricity, you use the water to produce electricity. Storage is another solution. Hydrogen is becoming competitive as well. So there are a lot of innovations and I am highly convinced that this solution will become available as we need them in the region.

Which countries does SirajPower have a presence in besides UAE?

We started in the UAE five years ago because it’s the most natural country in terms of generation. It is a country where electricity is no longer subsidised or where solar is no longer competitive. We see similar contexts and trends happening in countries such as the Sultanate of Oman and in Saudi Arabia. Those are two countries with a lot of potential where we are currently setting up projects there.

UAE is still a major oil-producing country – how much political will is there to change this situation and transition to renewables given what we now know about climate change, and what are the main barriers to such a transition?

Today, especially in this region, there is no cheaper way to produce electricity than to use solar, so for a country like the UAE, there is no rationale for using oil or gas to produce electricity. Why? When can they get much more value out of it by exporting this oil and gas? Or, to use oil and gas to manufacture high-value products? Even when you produce oil or gas, in any case, the cheapest way to produce electricity is solar, so this is something that the leadership of this country have realised for a long time now and that is why they have invested heavily into solar in the region, because they want to save the oil and gas for other uses. This is primarily about the economy. Simple mathematics.

Are the countries in the region noticing a decline in the demand for fossil fuels then, as countries increasingly turn towards doing something about climate change?

Beyond the pure economy, there is the community, so countries like the UAE, well, I don’t want to enter into political discussions. It’s been known for some time now that they have political and economic influence. It is not a small country and they are not being ignored by the rest of the world. They are part of what is going on, they have some leaders who for years have been committed to participate in the fight against climate change. It is the headquarters for IRENA - International Renewable Energy Agency, based in Abu Dhabi – so they have shown their commitment and their willingness to be part of the climate fight. They are a member of the Paris Agreement and so this goes beyond just the economy. This is definitely something that is strong in Dubai, where the leader, Sheikh Mohammed bin Rashid Al Maktoum, has made a statement that in a country such as Dubai blessed with so much solar, he wants solar on all roofs and he has made this clear to all the PV companies in Dubai. They all have to organise themselves in a manner so that the roofs are covered by solar, because it makes sense. The economy is definitely part of the picture but it goes beyond purely the economy.

What impacts has covid-19 had on the generation and development of renewable energy in the region?

Today renewable energy is the cheapest way to produce electricity, plus it is the best way to save the planet. So when there is any negative impact on the economy, people are more interested in saving money. There is more interest in solar and more interest and participation in saving the planet with solar, so that is why I say it is a one-way ticket and we have seen that over the last 2-3 months. We have seen some big companies that they are in a rush to save on their energy bills. I am not saying that Covid is positive for solar, but the impact of this new crisis is pushing more people to consiser solar solutions.

You mentioned that electricity in the region is fairly expensive, to what degree is solar power making electricity in the region more affordable?

You can produce electricity today with solar at a cost that is much cheaper than any other source so this is a solution that will help to drive the electricity price down in the region, that is for sure. The world record for the lowest priced electricity is in Abu Dhabi, so now you get electricity for between 1 and 2 cents per kilowatt hour from solar in the region, so compared to gas or nuclear, it is five to ten times cheaper especially so if we continue driving down the cost of electricity in the region.

How do you see things developing over the next ten years or so?

We see two major options when it comes to solar. First, we believe we will see new, large, utility-scale power plants being developed in the region, because the electricity consumption continues to grow, and the countries love solar so utility-scale solar in the region will further develop. We believe as well that solar will continue developing because with solar you have the capability to produce your own electricity from your roof, - you don’t need to develop strong infrastructure when it is produced from your roof. So we believe this solution is highly viable.

We believe as well that distributed solar goes very well in conjunction with some other new technologies coming in – batteries, electric vehicles, hydrogen, and if you think about it, if you are a company and you have a fleet of vehicles, you have a roof, you can easily imagine that you can produce the electricity you need from your roof. If you have parking, you can produce from a cover with solar generating from your parking, you charge your electric vehicles and you can have some small, decentralised hydrogen plants that you use to fuel your trucks or other vehicles.

So I strongly believe that there will be more distributed solutions, and the combination of electric vehicles, hydrogen vehicles and solar is something we will see more and more of. It’s a good way as well, you were mentioning earlier the intermittent nature of solar, which is true, but this combination is a way to resolve this problem. If you imagine a country with a very significant number of electric vehicles or a high number of hydrogen plants etc, when you need electricity you can very easily use the electricity that is in the electric vehicles connected to the grid, you can dispatch from these vehicles to feed the grid and alternatively you charge the vehicles when you have electricity, and the same for hydrogen. So that’s a lot of solutions to fight the intermittent nature of solar.

A long time back when the decision was made to bring back IRENA into the country, the leadership had that in mind all along. They were persistent in making that decision 15 years ago and they are consistent in developing the regulatory framework and that is highly conducive to the development of renewables in the region where there is distributed solar, as we do, and the same with hydrogen because it is part of the picture. The key to success is not only to have distributed solutions but also to have a regulatory framework, so that is why it is happening in the UAE, and is successful, and from UAE I think it will expand to the rest of the region.

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