Bahrain Raises Its Renewable Energy Game

Newly discovered offshore tight oil and natural gas are pushing the kingdom of Bahrain toward fossil fuel; however, the government has expressed its commitment to continue developing renewable energy.
Bahrain Raises Its Renewable Energy Game

In April 2018, the kingdom of Bahrain discovered nearly 80 billion barrels of tight oil and deep gas resources off the coast of the country. Amounting close to Russia’s entire proven oil reserves, development of these resources would bring massive windfall profits for the kingdom at a time when it faces a budget deficit of 2.7 million USD, forecast to hit 11.9 percent of a gross domestic product by the end of 2018.

While the Bahraini government has welcomed the new discovery of oil and gas deposits, the country’s officials have stressed that they remain committed to renewable energy – a relatively new sector that they have been actively propping up in recent years. According to Bahrain’s Minister of Industry, Commerce and Tourism, Zayed Al Zayani, profits generated from the development of oil and gas should push the kingdom to advance diversification of its economy and energy resources.

Currently, Bahrain gets all its electricity from natural gas. Given that the county has one of the highest per capita use of electricity and an expected annual growth in demand of 6 percent, the country’s leaders started seeing diversification to non-fossil fuel energy sources as a path toward more affordable and sustainable long-term energy supply security. According to Dr. Abdul Hussain Ali Mirza, Bahrain’s Minister of Electricity and Water Affairs, low prices of electricity in places such as Abu Dhabi with 2.40 cents per kilowatt-hour (kWh) and in Mexico where a bid for solar tender was 1.69 cents per kWh illustrate that solar power can be cheaper than domestically generated electricity from combined cycle gas-fired plants in Bahrain.

To integrate more renewables to Bahrain’s energy mix, the country’s leadership has set targets. First, the country plans to achieve 6-percent energy efficiency (meaning using less energy, thereby cutting its costs, but gaining the same amount of useful output from the same energy services) by 2025. Second, it has established renewable energy targets of 5 percent of the country’s total power generation by 2025 and 10 percent by 2035. Indeed, renewable energy is attractive to all Gulf Cooperation Council members (which is made up of Kuwait, Bahrain, Qatar, Oman, United Arab Emirates, and Saudi Arabia), as the cost of solar technology and kWh production in these countries has fallen significantly in recent years.

Apart from economic calculations, Bahrain is also motivated by environmental concerns in its energy diversification drive. It has made national and international commitments to environmental preservation and sustainable growth. For example, Economic Vision 2030 aims to safeguard the country’s environment by “directing investments to technologies that reduce carbon emissions, minimize pollution, and promote the sourcing of more sustainable energy.” Bahrain’s Government Action Plan of 2015-2018 envisions “improving the efficiency and water consumption and reduce waste; finding new sources of renewable energy to meet the growing demand in Bahrain.”

As a signatory of the Paris Climate Agreement, this Middle Eastern island nation is also committed to cutting greenhouse gas emissions. It submitted its first Nationally Determined Contribution (NDC) in December 2016 as part of its commitment to the Paris Agreement. The NDC specifies the actions that Bahrain will take to tackle climate change in terms of adaptation and mitigation. Energy efficiency, renewable energy, carbon capture and storage, water conservation, sustainable urban development, and cultivation and planting of mangroves to rehabilitate coastal areas are integral parts of Bahrain’s climate mitigation goals.

With no prior structure to implement renewable energy projects, Bahrain has only recently established an institutional framework and relevant policies to develop this new sector. Created in 2014 in partnership with the United Nations Development Programme, the Sustainable Energy Unit (SEU) in Bahrain is the main body in charge of devising sustainable energy policies and promoting renewable energy and energy efficiency in the country. SEU came up with two key sustainable energy policy goals for Bahrain, which were endorsed by the country’s leadership – the National Energy Efficiency Action Plan (NEEAP) and the National Renewable Energy Action Plan (NREAP). SEU also provides guidance on energy industry regulations and legal and institutional expertise as well as raising public awareness about energy efficiency.

On September 13, 2018, Dr. Abdul Hussain Ali Mirza stated in an e-seminar, organized by the U.S. Embassy in Bahrain, that his country was in the process of implementing a number of renewable energy projects under NREAP. These projects include required use of solar energy in government buildings and new housing projects, construction of large-scale solar farms on available land and selected landfill sites, renewable energy use in infrastructure projects, such as airports and causeways, development of onshore and offshore wind farms, and approving waste-to-energy projects. According to Dr. Mirza, 550 government buildings, schools, and hospitals are now part of a tender to install solar energy systems. Further, Bahrain opened its first solar panel assembly plant in January 2017.

To boost energy efficiency, since 2017, Bahrain has introduced new specifications and labeling for air-conditioning, installation of smart meters, and a required use of LED lighting in all government buildings. In addition, a Green Building Code, aimed at raising energy efficiency standards, will be launched by the end of 2018. Dr. Mirza noted that all vehicles in his country will be eventually required to bear labels showing energy efficiency. Answering the author’s question whether Bahrain is also considering developing battery storage technology to mitigate power fluctuations from the inherently intermittent nature of renewable energy sources, such as sun and wind, Mr. Alexander Al Samahiji, Acting Director of SEU, responded that because Bahrain’s power grid is always using all the generated power, including renewables, a storage system was not a top priority at this time. With a population of a little more than 1 million people, Bahrain’s electricity consumption per capita has been higher than all other members of the Gulf Cooperation Council. Air conditioning alone accounts for about 50 percent of the total annual residential electricity consumption and about 45 percent of the commercial sector’s annual use in Bahrain.

To meet the 5-percent renewable energy goal by 2025, the government introduced net metering in 2018, with a tender-based feed-in tariff, which supports long-term contracts and guaranteed pricing for the cost of production of renewable energy, while a renewable energy mandate for new buildings is currently in progress. Net metering allows energy producers to generate their own electricity from renewable energy sources and transfer any excess power to the public utility grid. While Bahrain’s goal of meeting 5-percent of its electricity production from renewable energy by 2025 may seem modest, reaching that target would translate to about 480 Gigawatt hours of clean energy per year, annual monetary savings of 4.2 million USD, and bringing more than 376 million USD in new investments, according to SEU.

For a country with a nascent renewable energy industry, the milestone of achieving this target and associated financial savings will encourage further growth of this sector. For Dr. Mirza and Dr. Al Samahiji, attracting foreign investment, teaching the Bahraini workforce new skills to develop the renewable energy sector, and learning from world best practices to harness the country’s renewable potential would be the next steps toward hitting the national clean energy goal.

The Bahraini government is keen on building on the free trade agreement with the U.S. and the existing economic partnership to attract American investors to develop the country’s renewable energy sector. According to Dr. Mirza, “there are good business opportunities for American companies in Bahrain. American investments are protected under the Bahraini law.”