Qatar’s diverse economy looks beyond gas-richness to solar power

Qatar has signed a $470-million deal on Sunday to build its first solar energy plant, capable of meeting up to one-tenth of peak national power demand. How will it benefit the country in the long run?

Qatar

In an interesting development, Qatar, a gas-rich country, signed a $470-million deal on Sunday to build its first solar energy plant, capable of meeting up to one-tenth of peak national power demand.

The Al-Kharsaah plant, near the capital, is a 10-square-kilometre (4-sq-mile) joint venture with French and Japanese partners due for completion in 2022 ahead of the football World Cup. “Eight times the solar power pledged in the World Cup bid will be produced,” Energy Minister Saad al-Kaabi told a media briefing in Doha.

Qatar’s ruler, Emir Sheikh Tamim bin Hamad Al-Thani, vowed at the United Nations last year that the tournament would be carbon neutral, but gave little detail on how this would be achieved. “Production capacity will be around 800 megawatts and 10 percent of peak demand,” said Kaabi following a signing ceremony between Qatari state firms, France’s Total and Japan’s Marubeni.

“Eight-hundred megawatts will be the largest (solar power plant) built by Total,” said the French energy giant’s chief executive, Patrick Pouyanne.

By contrast, Abu Dhabi’s Sweihan plant, one of the world’s largest solar projects, produces 1,177 megawatts.

Read more: Qatar Chamber: A brief overview of its efforts and policies in 2019

The capital cost of the venture is 1.7 billion riyals ($470 million), Kaabi said, with state firms taking a 60-percent stake and foreign investors 40 percent.

Marubeni will take 51 percent of the minority holding, while Total will have 49 percent. “It’s a pilot project, you have to assess how successful it is,” added Kaabi.

Gulf States, heavily depend on oil and gas, have invested tens of billions of dollars in clean energy projects, mainly in solar and nuclear. But critics say many such projects are slow to get off the drawing board.

The United Arab Emirates said last week its first nuclear power plant would start operating within months after repeated delays to meet safety and regulatory conditions. The UAE will have the first operational nuclear reactor in the Arab world.

Saudi Arabia, the world’s top crude oil exporter, has said it plans to build up to 16 nuclear reactors, but the projects have yet to be materialized.

The State of Qatar has successfully dealt with the challenges posed by Arab countries as a result of ‘complete blockade’

Critics say the addiction to oil is hard to kick, particularly when supplies remain abundant and the high costs of investment in infrastructure needed to switch to renewables.

Qatar, an emerging regional power?

It is worth noting that on June 5, 2017, Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt severed diplomatic and trade relations with Qatar, closing land, air and sea links, as they accused Doha of supporting “terrorism” and their regional rival, Iran. Doha vehemently denies the charges and says the boycott aims to impinge on its sovereignty.

Interestingly, the State of Qatar has successfully dealt with the challenges posed by Arab countries as a result of ‘complete blockade’.

In May 2018, Qatar’s largest commercial bank, Qatar National Bank (QNB), reported that the country’s account surplus has widened to 6.4 percent of the gross domestic product in the fourth quarter.

Read more: How Did Qatar Overcome Obstacles Of Gulf Blockade?

In his speech, Sheikh Tamim said the country’s currency maintained its value despite various attempts aimed at dismantling it since the start of the Gulf diplomatic crisis.

The growth witnessed by Qatar’s economy in various sectors, including education, health, food, and agriculture, following the blockade are part of programs adopted by the state to diversify its economy. “We executed national programs that enhanced local production,” Sheikh Tamim said, referring specifically to the last three years.

Qatar has been making all possible efforts to strengthen its economy. In this regard, it is important to point out that Turkey and Qatar enjoy friendly and brotherly relations despite the latter’s blockade by Arab states since 2017. Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt accuse Qatar of supporting terrorism. Doha denies the charge and says the boycott aims to infringe on its sovereignty.

Trade between Qatar and Turkey is expected to have hit $2 billion in 2018, a Turkish official said, up 54 percent from the previous last year and underscoring Ankara’s solidified role as a top ally to Qatar amid a political rift in the Gulf region.

Read more: Qatar’s predicted absence in Gulf summit: regional tensions arise

Qatar-Turkey trade volume for the first 10 months of 2018, the latest data available, indicates $1.7 billion of total trade, higher than the $1.3 billion in all of 2017, a Turkish trade official told international media. That trade includes goods such as Turkish food and building materials to Qatar and Qatari liquefied natural gas and aluminum to Turkey.

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