In his inaugural speech at the last World Future Energy Summit in Abu Dhabi, Sultan Al-Jaber, UAE Minister of State and chairman of Masdar, said: "Renewable energy is a critical component for building a sustainable future and has today changed from an expensive alternative to a competitive technology of choice." That day, the oil price dropped to $40 per barrel, after declining from $120 a few months earlier and a record of $143 in August 2008. When a minister in a key oil-producing state takes such a stance at the time, it must express a radical shift in energy markets. Renewable energies have grown up from a dreaming child into an adult and have become an indispensable component of the energy mix, irrespective of fluctuations in oil prices.

While I was listening to Al-Jaber's speech, I recalled a report I wrote in 1978 about harnessing solar energy, at the beginning of my work for t the United Nations Environment Program (UNEP) in 1978. During a visit to Saudi Arabia and Kuwait my task was to discuss the use of solar energy in water desalination through small-size plants. At the time, climate change wasn't on the international agenda; solar energy was simply promoted as a renewable energy that could be endlessly exploited by the Arab world, compared to depletable fossil fuels, which should be conserved and efficiently used, not only in producing energy but also in making thousands of other useful materials.

Since then, some of the region's countries launched research programs in solar energy, but in most cases the programs remained experimental because it was cheaper and easier to produce energy from domestically available oil. However, serious threats emanating from climate change in the form of CO2 emissions gave renewable energies, especially solar and wind energy, a major boost in the last two decades. In the last five years some Arab countries started to produce power from solar energy at large commercial scale, especially in the UAE, Morocco, and Egypt.

Nevertheless, investments in renewable energies increased with increasing oil prices because renewable energies have become economically feasible and vice versa. This affected renewable energy stocks - some stocks plummeted when oil prices fell in 2008. Ironically, the recent dramatic decrease in oil prices didn't have a negative impact on commitment to renewable energy. This development heralds a new era, characterized by replacing the term "alternative energy" by "renewable energy," making it part of a balanced mix of energies, which takes into consideration environmental, economic and social concerns.

This new reality was underscored by the fifth session of the International Renewable Energy Agency (IRENA), which was held in Abu Dhabi with 150 states participating. IRENA's annual report said the cost of generating power from renewable energy sources had dropped below the cost of fossil fuels in many parts of the world. Solar photovoltaicsare leading the cost decline, with solar photovoltaic costs falling 50 percent between 2010 and 2014. This has allowed for higher production vis-à-vis investments, which have reached unprecedented numbers in many countries. China said it invested more than $56 billion in renewable energies in 2013, out of a total of $214 billion invested worldwide in the sector that year. Renewable energy productivity introduced by China that year only surpassed that of the country's new fossil and nuclear energy projects combined.

In 2014, renewables were the world's energy source with the fastest growth rate, as they garnered $310 billion in investments. This growth reflected business opportunities provided by renewable energies, alongside higher worldwide demand on power. Today, 22 percent of China's energy mix is attributable to power generated from renewable sources. The country aims to reach 32 percent within the next 10 years. In Mexico, power generated by renewable energy currently amounts to 15 percent of the total, with a target of 35 percent in 2024.

Many success stories were told at IRENA's meeting, in which the Arab region wasn't absent. Dubai Electricity and Water Authority said it reached an agreement with Saudi Arabia's ACWA Power to build a 200-Megawatt solar power station. Interestingly, this station will operate on purely commercial terms, without subsidies. In addition, the station will sell power for less than 6 cents per kilowatts-hour. In comparison, the production cost in stations operating with traditional fuels in most of the region's countries is double. Asked if the company feared collapse because of this project in light of the spectacular fall of oil prices, ACWA Power CEO Paddy Padmanathan said: "We promise you to continue to build stations that sell solar energy for lower prices year after year." The Water Desalination Corporation in Saudi Arabia revealed that it signed an agreement to build a water desalination station run by solar power. The station, with an output of 60,000 cubic meters daily, is the beginning for disseminating this technology. Announcing in the conference that it considers full reliance on oil in desalination a suicide, its president said: "I'm honored to be part of the renewable energy era."

At IRENA assembly, IKEA, the international furniture and home appliances corporation, said that by 2020 power supply to all of its sites, including showrooms and warehouses, will come from rooftop solar panels. It will sell ready to install solar power systems for rooftops in all stores, with the same ease that consumers today assemble beds or tables from IKEA. In recent decades, IKEA changed game rules in furniture sales by bringing furniture to all people with good quality and affordable prices. Today, many people expect IKEA to play a key role in changing the game rules of renewable energy, by bringing plug-and-play solar solutions to the masses.

Participants in Masdar and IRENA's meetings concluded with the conviction that renewable energy has become a fact and a necessary economic choice, no matter how oil prices rise or fall, because investments in renewable energy are stable and their returns are not affected by market volatility.

nsaab@afedonline.org
www.najibsaab.com