Here comes the sun: A focus on enterprise creation and export promotion in solar technology

The Qatari government has set targets for the economic diversification of the country that will rely heavily on the expansion of the industrial and manufacturing base. The first tendrils of this new growth are beginning to emerge, nowhere more clearly than in the nascent plans for an alternative energy cluster. Qatar plans to invest in all stages of the production of solar technologies in its drive to diversify its energy sources with more green and sustainable energy.

PURSUING RENEWABLES: The government is working to lessen its dependence on hydrocarbons, focusing on the manufacturing base as an engine for growth. According to the National Development Strategy 2011-16, published by the General Secretariat for Development Planning, the government is hoping to reduce hydrocarbons’ share in total output to 42% by 2016. This will require a diversification of the industrial base, with the national strategy noting that Qatar exported 1630 products in 2008, 98% of them linked to the hydrocarbons sector and energy-intensive industries, compared to Singapore’s 4950 products. The government’s plan to bolster this number is to move up the value chain and into high-tech areas. The first evidence of this policy has started to emerge in the field of renewable energy, and 2011 witnessed Qatar’s first steps into developing a solar technology industry.

POLYSILICON: In October 2011 Qatar Solar Technologies (QST ec), a joint venture between Qatar Foundation (QF), SolarWorld and the Qatar Development Bank, signed an engineering, procurement and construction contract with the India-based global construction company Punj Lloyd to build a $1bn high-grade polysilicon plant in Ras Laffan Industrial City. Polysilicon is one of the key components of solar cells. The plant will have the capacity to produce 8000 tonnes per year in the first phase, with the potential to expand to 45,000 tonnes and move up the solar equipment value chain. The production will be sold in the international market and in the future used locally for the manufacture of solar modules. Though polysilicon production is considered to have reached a point of oversupply and international prices are low, according to reports by Bloomberg and others, Qatar could be positioned to weather the storm better than other producers. The firm also plans to move downstream and potentially back upstream as well into metallurgical-grade silicon.

DEMAND: Globally, from 2000 to 2011 energy generated by solar photovoltaic sources rose from 1.5 GW to 67 GW, averaging higher than 50% growth annually over the past five years, according to the International Energy Agency. Khalid Klefeekh Al Hajri, chairman and CEO of QST ec, said: “We anticipate increasing demand in Qatar and in neighbouring countries for solar modules and technologies within the next decade.

Already in Qatar we are seeing growth within the solar industry, with a number of new projects coming on-line or being announced that are utilising solar energy. Across the region we are seeing solar used for power generation on buildings and desalination, and now it is being looked at for cooling and other uses.”

Solar energy could complement the energy generated by natural gas. “Across the GCC our peak electricity demand is in the middle of the day, when our air conditioners are keeping us cool, and it is during this time that solar energy is most effective,” said Al Hajri.

“The use of solar power alongside gas will help preserve and protect the country’s natural resources.”

In Qatar, some large projects are already using solar sources. For example, the Qatar National Food Securities Programme is looking at using solar energy to power its desalination plants, and the 2022 World Cup will be carbon-neutral, partly by relying on solar energy for its air-conditioned stadiums.

As such, the renewable energy sector may begin to emerge as a high-tech cluster supporting Qatar’s overall diversification plans and the region’s growing demand for more sustainable technologies. Such a government-led drive into solar technologies could support and diversify the manufacturing base, and there could be scope for smaller private sector players as well.