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Understanding Complex Systems
Hassan Qudrat-Ullah
Aymen A. Kayal Editors
Climate Change
and Energy
Dynamics in
the Middle East
Modeling and Simulation-Based
Solutions
Springer Complexity
Springer Complexity is an interdisciplinary program publishing the best research and
academic-level teaching on both fundamental and applied aspects of complex systems—
cutting across all traditional disciplines of the natural and life sciences, engineering,
economics, medicine, neuroscience, social and computer science.
Complex Systems are systems that comprise many interacting parts with the ability to
generate a new quality of macroscopic collective behavior the manifestations of which are the
spontaneous formation of distinctive temporal, spatial or functional structures. Models of
such systems can be successfully mapped onto quite diverse “real-life” situations like the
climate, the coherent emission of light from lasers, chemical reaction-diffusion systems,
biological cellular networks, the dynamics of stock markets and of the internet, earthquake
statistics and prediction, freeway traffic, the human brain, or the formation of opinions in
social systems, to name just some of the popular applications.
Although their scope and methodologies overlap somewhat, one can distinguish the
following main concepts and tools: self-organization, nonlinear dynamics, synergetics,
turbulence, dynamical systems, catastrophes, instabilities, stochastic processes, chaos, graphs
and networks, cellular automata, adaptive systems, genetic algorithms and computational
intelligence.
The three major book publication platforms of the Springer Complexity program are the
monograph series “Understanding Complex Systems” focusing on the various applications of
complexity, the “Springer Series in Synergetics”, which is devoted to the quantitative
theoretical and methodological foundations, and the “Springer Briefs in Complexity” which
are concise and topical working reports, case studies, surveys, essays and lecture notes of
relevance to the field. In addition to the books in these two core series, the program also
incorporates individual titles ranging from textbooks to major reference works.
This Springer imprint is published by the registered company Springer Nature Switzerland AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
To My Grandfather
Raja Munawwar Khan (late)
—Hassan Qudrat-Ullah
Global climate change and global warming has the potential to severely impact both
the production and consumption of energy across the globe. The Middle East region
with even slightly warmer weather can result in an increased demand of energy
(e.g., for more air conditioning use and energy-intensive methods for water supply),
lower labor productivity (e.g., relatively few hours are available during the day), and
less supply of energy (e.g., hydro generation can suffer due to none or less avail-
ability of water due to rising temperature). The potential imbalance of energy
demand and supply can often lead to rising electricity costs and power outages
which, in turn, can have severe impact on the socioeconomic welfare of the popula-
tion of these countries. Although more sunny days can help in harnessing solar
power, the predominant use of fossil-based electricity generation by this region and
the resulting environmental emissions are major concerns to be addressed.
Consequently, for the decision-makers, to better understand the sustainable produc-
tion and consumption of energy and the related socioeconomic dynamics requires a
systematic and integrated approach. Modelling and simulation in general and sys-
tem dynamics and optimization modelling in particular have the capabilities to deal
with the complexity of climate change and energy dynamics. Therefore, the primary
aim of this book is to present, in the context of the Middle East region, the latest
decision-making tools, techniques, and insightful and innovative solutions that the
decision-makers can utilize to overcome the challenges that their energy systems
face. Furthermore, we hope to encourage further theoretical and empirical research
that perhaps may be interwoven by the works presented herein and in advancing
new methodological perspectives to include multilevel and cross-level analysis to
better understand the dynamics of sustainability-focused supply chains.
Unified by the common goal of making better decisions in the sustainable pro-
duction and consumption of energy, we invited potential authors to submit and
showcase their work related to the major theme of this book, Climate Change and
Energy Dynamics in the Middle East. In addition to relevance of their work to the
Middle East, we sought both theoretical (only state-of-the-art reviews) and empiri-
cal chapters with a focus on system dynamics, econometric, optimization, and
conceptual modelling. It is our hope that this book will stimulate a new way of
vii
viii Preface
Content Overview
The integrating theme of this book is modelling-based solutions to deal with dynam-
ics of climate change and energy domains. The book contains five parts. Part I
presents the introduction and preview of Climate Change and Energy Dynamics in
the Middle East. Part II of this book, “Dynamic Modelling in Service of Climate
Change and Energy Decisions,” examines the dynamic modelling-based approaches
to better understand the dynamics of climate change and energy-related issues in the
Middle East. Five state-of-the-art applications of dynamic modelling include
Socioeconomic and Environmental Implications of Renewable Energy Integrity in
Oman: Scenario Modelling Using System Dynamics Approach, Energy and
Emissions Modelling for Climate Change Mitigation from Road Transportation in
the Middle East: A Case Study from Lebanon, Climate Change and Energy Decision
Aid Systems for the Case of Egypt, Control Strategy and Impact of Meshed DC
Micro-Grid in the Middle East, and The Energy-Water-Health Nexus Under Climate
Change in the United Arab Emirates – Impacts and Implications. Part III of this
book, “Understanding the Dynamics of Climate Change and Energy Using
Optimization and Econometric Modelling,” showcases four unique contributions
addressing the challenges of climate change and energy dynamics utilizing optimiz-
ing and econometric modelling approaches: (i) Leapfrogging to Sustainability:
Utility-Scale Renewable Energy and Battery Storage Integration – Exposing the
Opportunities Through the Lebanese Power System, (ii) Climate Change and
Energy Dynamics in the Middle East: Challenges and Solutions, (iii) Greenhouse
Gases Emissions and Alternative Energy in the Middle East, and (iv) Quantitative
Analysis Methods Used in Modelling Power Systems and Climate Change for Saudi
Arabia. Part IV of this book highlights the role of conceptual modelling in a better
understanding of climate change and the energy dynamics of the Middle East. In
this category, we have two chapters: (i) Transformation Toward Clean Energy in the
Middle East: A Multi-Level Perspective and (ii) Global CO2 Capture and Storage
Methods and the New Approach to Reduce Emission for Geothermal Power Plants
with High CO2 Emission: Turkey Case Study.
Finally, Part V of this book overviews the key insights and learning points as well
as the future research avenues contained in this book.
Preface ix
Acknowledgments
We would like to thank everyone, mentioned herein or not, for their continued sup-
port in helping to bring this book project to completion. Most importantly, I am
sincerely grateful to the contributing authors of this book. Their support of this
endeavor enabled us to platform the collective lessons presented in the book. We
also acknowledge the work and knowledge of the members of our review panel. My
thanks also go to all the people at Springer, USA, especially Christopher and
HoYing with whom we corresponded for their advice and facilitation in the produc-
tion of this book. I would like to thank Taub Jeffrey, Chandhini Kuppusamy, and the
production team from Springer for their help in the final production of this book. We
are grateful to my families for their encouragement and support throughout this
endeavor.
Finally, the editors would like to acknowledge the financial support provided by
the Deanship of Scientific Research (DSR) at King Fahd University of Petroleum &
Minerals (KFUPM) for funding this work through project No. BW171006.
Part I Introduction
1 Introduction: Climate Change and Energy Dynamics
in the Middle East ������������������������������������������������������������������������������������ 3
Hassan Qudrat-Ullah and Aymen A. Kayal
xi
xii Contents
Part V Finally
13 Finally: Key Insights and Future Research for Better
Understanding of Climate Change and Energy Dynamics ������������������ 361
Aymen A. Kayal
Abstract The use of modeling and simulation-based solutions for a better under-
standing of climate change and energy dynamics has seen phenomenal growth dur-
ing the past several decades. The primary focus of this modeling activity has been
to study energy-economy interactions and impacts. On the other hand, we are wit-
nessing a global trend in climate change mitigation efforts, increasingly focusing on
the sustainable supply of energy. These renewed concerns about climate change and
global warming pose unique modeling challenges. Therefore, the primary aim of
this book is to disseminate the roles and applications of various modeling approaches
aimed at improving the usefulness of energy policy models in public decision-
making in the context of the Middle East. In this chapter, we present the preview of
11 unique contributions we have in this volume.
1 Introduction
Global climate change and global warming have the potential to severely impact
both the production and consumption of energy across the globe. In the Middle
East region, even slightly warmer weather can result in an increased demand for
energy (e.g., for more air conditioning use and energy-intensive methods for water
supply), lower labor productivity (e.g., relatively few hours is available during the
day), and less supply of energy (e.g., hydro generation can suffer due to none or
1.1 Methodology
In our call for contributions on “Climate Change and Energy Dynamics of the
Middle East,” we went through various email lists of professional bodies. We
also posted the call for chapters at the message boards of a few international
conferences on the related topics. Personal invitations were sent to target authors
as well. We received 17 “one-page” abstracts as the expression of interests. Based
on the initial screening by our review panel, the authors of 14 chapters were
invited to submit the complete chapter. All 14 chapters received from the con-
tributors went through a double-blind process. The reports from the independent
reviewers were sent to the authors to address the issues and incorporate the sug-
gestions made by the reviewers. Only 11 chapters made it to the final stage of
acceptance. The final versions of these 11 chapters have been edited and included
in this volume.
1 Introduction: Climate Change and Energy Dynamics in the Middle East 5
The chapters thus compiled are classified into five categories following the structure
of the book. The first category, the current one, presents the introduction and pre-
view of “Climate Change and Energy Dynamics of the Middle East.” The second
category examines the dynamic modeling-based approaches to better understand
the dynamics of climate change and energy-related issues in the Middle East. Five
state-of-the-art applications of dynamic modeling include Socio-economic and
Environmental Implications of Renewable Energy Integrity in Oman: Scenario
Modeling Using System Dynamics Approach; Energy and Emissions Modeling for
Climate Change Mitigation from Road Transportation in the Middle East: A Case
Study from Lebanon; Climate Change and Energy Decision Aid Systems for the
Case of Egypt; Control Strategy and Impact of Meshed DC Micro-grid in the Middle
East; and The Energy-Water-Health Nexus Under Climate Change in the United
Arab Emirates: Impacts and Implications.
The third category showcases four unique contributions addressing the chal-
lenges of climate change and energy dynamics utilizing optimizing and economet-
ric modeling approaches: (i) Leapfrogging to Sustainability: Utility-Scale Renewable
Energy and Battery Storage Integration – Exposing the Opportunities Through the
Lebanese Power System; (ii) Climate Change and Energy Dynamics in the Middle
East: Challenges and Solutions; (iii) Greenhouse Gas Emissions and Alternative
Energy in the Middle East; and (iv) Quantitative Analysis Methods Used in Modeling
Power Systems and Climate Change for Saudi Arabia. The fourth category in this
book highlights the role of conceptual modeling in a better understanding of climate
change and the energy dynamics of the Middle East. In this category, we have two
chapters (i) Transformation Toward Clean Energy in the Middle East: A Multilevel
Perspective and (ii) Global CO2 Capture and Storage Methods and the New
Approach to Reduce Emission for Geothermal Power Plants with High CO2
Emission: Turkey Case Study.
The final category, finally, overviews the key insights and learning points as well
as the future research avenues contained in this book.
boosting Oman’s economy as well as meeting domestic energy needs. They posit
that (i) the increasing domestic energy demands have created pressure on national
energy supplies and made the search for alternative energy sources such as
renewables ever more important and (ii) socioeconomic and environmental
implications of RE, which could boost its uptake. Using system dynamics
approach, they develop three RE integrity scenarios – i.e., (i) business-as-usual,
(ii) moderate, and (iii) advanced and ambitious. By examining these scenarios’
long-term implications on economy, society, and environment, they found (i)
that, under moderate, advanced, and ambitious scenarios, new renewable energy
jobs can be created by 2040, (ii) natural gas consumption for electricity genera-
tion was estimated to decline by more than 60% by 2040 compared to the busi-
ness-as-usual scenario, and (iii) if no renewables are considered in the future
energy mix, however, the total CO2 emissions are expected to significantly rise by
2040 compared to 2010.
Continuing the use of system dynamics modeling, Marc Hadad and Charbel
Mansour (in press), in Chap. 3, provide an assessment framework and a case study
of the potential savings in energy use and CO2 emissions from alternative fuel vehi-
cle technologies compared to existing conventional vehicles, including the dynamic
modeling of different mitigation strategies at the fleet level. They did their case
study in an urban area of Lebanon’s Greater Beirut Area which has one of the most
unsustainable road transport systems in the region. The developed framework high-
lights the need to account for real-world driving and weather conditions since poor
roads, congested traffic, and extreme weather conditions common in the developing
countries of the Middle East can reduce the benefits of these vehicles. In their
results, they show that:
• Introducing micro-hybrid vehicles to make up 35% of the fleet in 2040 reduces
energy use and emissions by 19% compared to the business-as-usual scenario,
thereby stabilizing growth trends in 2040 as compared to 2010 figures.
• The addition of 10% hybrid electric vehicles by 2040 to the first strategy leads to
11% additional savings compared to 2010.
They allude to future research by highlighting the need to incentivize cleaner fuel
vehicles and to systematically explore additional strategies for reducing energy con-
sumption and emissions in road transportation.
1 Introduction: Climate Change and Energy Dynamics in the Middle East 7
In Chap. 4, “Climate Change and Energy Decision Aid Systems for the Case of
Egypt,” Aya Sedky Adly (in press) demonstrates the use of “TIMES” energy model.
She argues that “the growth of energy production and consumption is strongly
affecting and being affected by climate change in many aspects. In warmer coun-
tries, such as Egypt, climate change is expected to have an even larger impact on
different energy forms demand. However, since economic, technical, and environ-
mental energy concerns change from country to another, addressing the impact of
both current climate and future climate changes on demand should be worked out
by decision makers by the country policies and geographical conditions.” She
addresses the research question: how should experts best characterize such uncer-
tainties for decision-makers of climate change scenarios including changes in mean
climate characteristics as well as changes in the frequency and duration of weather
events in Egypt? She presents with a modeling-based decision aid in developing
climate action plans and selecting the most suitable mechanisms in correspondence
to energy demands.
Using dynamic modeling with Matlab/Simulink, Barara et al. (in press) posit
that “the installation of Micro-grid provide as a viable solution to the problem
of energy efficiency and environmental in the world, this is especially true for
countries in the Middle East which have an abundance of natural sunlight. The
interest is due to several advantages in comparison to AC Micro-grids regarding
efficiency, a minimum number of devices, no need for frequency/phase control,
modularity and reliability. Moreover, it enables easy integration of renewable
energy resources, particularly photovoltaic ones.” In their study, they target
meshed DC micro-grid, while most of the literature papers concern radial DC
micro-grids wherein in meshed DC grids, the control strategy of current or
power becomes a critical issue, particularly if a modular and generic solution is
researched. Their study focuses on the use of smart nodes controlling the power
flow in the grid. They conclude that reduced scale tests based on dSPACE
DS1103 have been provided to validate experimentally the proposed control
scheme.
8 H. Qudrat-Ullah and A. A. Kayal
Dougherty et al. (in press), in this final chapter of this section Chap. 6, apply
scenario-based approach and climate change modeling at the regional spatial scale
to address energy-water-health nexus. They assert that “Climate change poses seri-
ous energy, water and health challenges for the United Arab Emirates (UAE). While
closely interconnected, the development of sustainable energy, water, and health
policies has typically been viewed as independent, sector-specific planning chal-
lenges. However, changing demographics, a rapidly growing economy, dependence
on desalination, and worsening air quality – all taking place as climate change
unfolds – suggest a need for a more integrated approach to risk management.
Accounting for the interactions between an ‘energy-water-health nexus’ is one way
to ensure that development strategies are considered within a framework that
addresses the range of potential tradeoffs, risks, and synergies.” They addressed the
energy-water-health nexus under a changing climate by undertaking research activi-
ties as part of the Local, National, and Regional Climate Change Programme
(LNRCCP) of the Abu Dhabi Global Environmental Data Initiative (AGEDI) where
climate change modeling at the regional spatial scale (Arabian Peninsula; Arabian
Gulf) was first carried out to establish the atmospheric and marine physical condi-
tions that will underlie energy, water, and health challenges in the future. They used
the results of this modeling as inputs to an analysis of policies that account for link-
ages across the energy-water nexus on the one hand and the energy-health nexus on
the other. They present the key results as:
• That climate change will render an extreme hyper-arid climate even more so,
while the waters of the Arabian Gulf will experience heightened salinity, chang-
ing circulation patterns, and higher temperatures as desalination activities
intensify.
• That energy efficiency and renewable energy can lead to significant reductions in
annual greenhouse gas (GHG) emissions at negative to modest societal cost
while leading to substantial decreases in premature mortality and health care
facility visits in the urban environment.
In the opening chapter of this section, the authors, Ahmad Diab et al. (in press),
present the Lebanese power system as a case in point to showcase the importance of
shifting the foundations of conventional thinking in power system planning into a
new paradigm where renewable energy is adopted as priority choice. They studied
the technical and economic feasibility of wind farms, solar PV, and battery energy
storage systems. Using HOMER Pro-based simulations to optimize for the lowest
cost of electricity, they show that:
• Incorporating utility-scale renewable energy systems and battery energy storage
can decrease the overall levelized cost of electricity (LCOE) to $c7/kWh.
• Without the integration of considerable storage capacity, an economic limit of
approximately 20–25% renewable energy penetration is reached.
They performed sensitivity analysis while adopting various values for the cost
of natural gas and internalizing the social cost of carbon. Their results confirmed
(i) a positive correlation between the cost of carbon and the price of natural gas
on the one hand and system renewable energy fraction on the other and (ii) intro-
ducing demand-side management and increased grid flexibility also showed a
high level of sensitivity to both system LCOE and the renewable energy
fraction.
Applying an optimization model, HOMER Pro software, Nandi et al. (in press), in
Chap. 8, share an analysis of solar wind hybrid power plant in an area of Egypt.
They identify the issue and set the goal of their study as, “to model and simulate a
hybrid power system based on renewable which may solve the problems regarding
the power generation due to climate change.” They conducted case studies taking
the real-time data regarding renewable energy and also the load data of the areas.
They posit that optimization of the hybrid model using those real-time data will
give us an idea about to what extent there will be the generation of power, the
actual cost that will be required to set up the hybrid power plant, and most impor-
tantly the per unit cost of energy consumption.
10 H. Qudrat-Ullah and A. A. Kayal
In Chap. 10, the final chapter of this section, Kayal and Al-Khars (in press) show-
case a state-of-the-art review of the applications of the quantitative methods in
studying the power systems and climate change dynamics for Saudi Arabia. They
provide the background of the study and their main results as:
The relationship between energy consumption, as well as economic growth and emission
reduction, is considered sustainable development, and it has been the subject of intense
research in the last couple of decades. The authors believed that balancing emission reduc-
tion while satisfying growing energy demand is an important issue for both policymakers
and researchers alike in the Kingdom of Saudi Arabia (KSA). This seriousness in sustain-
able development in KSA should be evident in the literature through the increasing number
of articles found in top journals related to the area. In order to ascertain our assumptions,
the authors of this chapter conducted a sample review of publications that focused on quan-
titative modeling of the dynamics of both power and environment aspects in Saudi Arabia.
Analysis of the sample of articles understudy revealed an exponential increase in the use of
quantitative models for analyzing the integration of power generation and emission reduc-
tion dimensions in KSA. This growth indicates an increase in the propensity of research to
evolve from descriptive energy studies to systems modeling that focus more on KSA’s
energy mix and emission reduction.
1 Introduction: Climate Change and Energy Dynamics in the Middle East 11
Here, in Chap. 11, “Transformation Toward Clean Energy in the Middle East: A
Multilevel Perspective,” the author, Ismaeel (in press), contributes with an elegant
socio-technical change conceptual model for transformation toward clean energy in
the Middle East. First, he provides a background to the issue and then advances
sever assertions:
The global energy sector is going through a radical change of its well-established systems.
Global efforts to mitigate climate change effects, changes in the economics of Hydrocarbon
energy sources, and technological developments led to a global transition to renewable
energy sources. The Middle East region is not an exception. During the last decade, the
region witnessed the launch of successful renewable energy projects, especially in the elec-
tricity sector. They are mainly solar energy projects. The decline in the cost of solar panels
and the good potential for solar energy in the region, in addition to economic challenges
because of low oil prices and increasing population and urbanization, contributed to the
case of transformation toward clean energy in the region. However, this transformation is in
its early stages and requires careful planning and coordination of actions and policies from
various parties at different levels.
He concludes that (i) transformation toward clean energy in the Middle East is dis-
cussed as a socio-technical change and analyzed through the multi-level perspective
theoretical approach, and (ii) different factors affecting the transformation are iden-
tified at the three levels of landscape, regime, and niche that need to be coordinated
and aligned to ensure a successful transition.
4.2 lobal CO2 Capture and Storage Methods and the New
G
Approach to Reduce Emission for Geothermal Power
Plants with High CO2 Emission: Turkey Case Study
In the final chapter of this section, Chap. 12, Haklidir et al. (in press) present a case
study on global CO2 capture and storage methods. First, they provide the review of
current status CO2 gas production and capture in the world and Turkey and then
highlight the key issue as, “One of the general problems of the world is to the captur-
ing of CO2 gas and its storage or convert to another product, and it has been studying
by the researchers for a long time. One of the solutions may include biofuel produc-
tion from geothermal based CO2 in a high CO2 emission producer geothermal power
plant like Turkey, Italy countries.” They conclude with a new approach, “the concep-
tual design of the Helioculture process is applied to geothermal power plants to pro-
duce biofuel by CO2. A helioculture process is a new approach, and it is possible to
12 H. Qudrat-Ullah and A. A. Kayal
5 Finally
In the final chapter of this book, Chap. 13, Kayal and Al-Khars (in press) conclude
with key insights gleaned from the showcased contributions in this book. These
insights are presented in a three-thematic structure: environmental, economic, and
social. Then they present the future research avenues as highlighted by the authors
of the respective chapters. Both the researchers and the practitioner can get a quick
glimpse of this book by reading this finally.
6 Concluding Remarks
For this book project, we started our journey in search of “modeling approaches and
models” for a better understanding of climate change and energy dynamic in the Middle
East, the fossil energy hub of the world. In this quest, we are successful in presenting 11
unique contributions. With regard to the theme of “modeling approaches” for the cli-
mate change and energy dynamics, we have five leading contributions on “system
dynamics and dynamic methodology,” four unique applications of “optimization and
econometric models,” and two chapters using “conceptual modeling and case studies.”
Consistent with the objective of this volume “the in the context of the middle east,” we
have six state-of-the-art applications of system dynamics and agent-based models.
It is worth noting that most of the model-based contributions in this volume have
addressed “future research” explicitly. By utilizing the identified research gaps sum-
marized in the final chapter of this book, researchers in energy systems domain can
continue their research on important issues related to climate change and energy
dynamics.
References
Adly, A. (in press). Climate change and energy decision aid Systems for the Case of Egypt. In
H. Qudrat-Ullah & A. Kayal (Eds.), Climate change and energy dynamics in the Middle East.
New York: Springer.
Al-Sarihi, A., & Bello, A. (in press). Socio-economic and environmental implications of renewable
energy integrity in Oman: Scenario modeling using system dynamics approach. In H. Qudrat-
1 Introduction: Climate Change and Energy Dynamics in the Middle East 13
Ullah & A. Kayal (Eds.), Climate change and energy dynamics in the Middle East. New York:
Springer.
Barara, M., Morel, H., Clerc, G., Jamma, M., Bevilacqua, P., & Zaoui, A. (in press). Control
Strategy and impact of Meshed DC micro-grid in the Middle East. In H. Qudrat-Ullah &
A. Kayal (Eds.), Climate change and energy dynamics in the Middle East. New York: Springer.
Diab, A., Harajli, H., & Ghaddar, N. (in press). Leapfrogging to Sustainability: Utility-Scale
Renewable Energy and Battery Storage Integration – Exposing the opportunities through the
Lebanese Power System. In H. Qudrat-Ullah & A. Kayal (Eds.), Climate change and energy
dynamics in the Middle East. New York: Springer.
Dougherty, W., Yates, D., Pereira, J., Monaghan, A., Steinhoff, D., Ferrero, B., Wainer, I., Flores-
Lopez, F., Galaitsi, S., Jucera, P., & Glavan, J. (in press). The Energy-Water-Health Nexus
under climate change in the United Arab Emirates – Impacts and Implications. In H. Qudrat-
Ullah & A. Kayal (Eds.), Climate change and energy dynamics in the Middle East. New York:
Springer.
Haddad, M., & Mansour, C. (in press). Energy and emissions modeling for climate change mitiga-
tion from road transportation in the Middle East: A case study from Lebanon. In H. Qudrat-
Ullah & A. Kayal (Eds.), Climate change and energy dynamics in the Middle East. New York:
Springer.
Haklidir, H., Baytar, K., & Kekevi, M. (in press). Global CO2 Capture & Storage Methods and
the new approach to reducing emission for geothermal power plants with high CO2 emission:
Turkey case study. In H. Qudrat-Ullah & A. Kayal (Eds.), Climate change and energy dynamics
in the Middle East. New York: Springer.
Ismaeel, M. (in press). Transformation toward clean energy in the Middle East: A multi-level per-
spective. In H. Qudrat-Ullah & A. Kayal (Eds.), Climate change and energy dynamics in the
Middle East. New York: Springer.
Kayal, A., & Al-Khars, M. (in press). Quantitative Analysis Methods Used in Modeling Power
Systems and Climate-Change for Saudi Arabia. In H. Qudrat-Ullah & A. Kayal (Eds.), Climate
change and energy dynamics in the Middle East. New York: Springer.
Nandi, C., Chakraborty, S., & Bhattacharjee, S. (in press). Climate change and energy dynamics
in the Middle East: Challenges & solutions. In H. Qudrat-Ullah & A. Kayal (Eds.), Climate
change and energy dynamics in the Middle East. New York: Springer.
Uğurlu, E. (in press). Greenhouse gases emissions and alternative energy in the Middle East. In
H. Qudrat-Ullah & A. Kayal (Eds.), Climate change and energy dynamics in the Middle East.
New York: Springer.
Part II
Dynamic Modelling in Service of Climate
Change and Energy Decisions
Chapter 2
Socio-economic and Environmental
Implications of Renewable Energy
Integrity in Oman: Scenario Modelling
Using System Dynamics Approach
Abstract Oil and gas resources have played crucial role in boosting Oman’s econ-
omy as well as meeting domestic energy needs. However, increasing domestic
energy demands have created pressure on national energy supplies and made the
search for alternative energy sources such as renewables ever more important.
Aware of this challenge, investors, researchers and government have developed few
renewable energy (RE) initiatives. However, RE accounts for less than 1% of total
power generation in Oman. Importantly, socio-economic and environmental impli-
cations of RE, which could boost its uptake, are still under-researched. Using sys-
tem dynamics approach, this chapter develops four RE integrity scenarios – i.e.
business-as-usual, moderate, advanced and ambitious – and examines its long-term
implications on economy, society and environment. The findings gained from long-
term energy scenario analysis reveal that, under moderate, advanced and ambitious
scenarios, new renewable energy jobs can be created by 2040 and natural gas con-
sumption for electricity generation was estimated to decline by more than 60% by
2040 compared to the business-as-usual scenario. If no renewables are considered
in the future energy mix, however, the total CO2 emissions are expected to signifi-
cantly rise by 2040 compared to 2010.
A. Al-Sarihi (*)
Centre for Environmental Policy, Imperial College London, London, UK
Arab Gulf States Institute in Washington, Washington, DC, USA
e-mail: aa16912@ic.ac.uk; aisha.alsarihi@agsiw.org
H. Bello
Centre for Environmental Policy, Imperial College London, London, UK
GSM London, London, UK
e-mail: hb2512@ic.ac.uk; hafiz.bello@gsmlondon.ac.uk
1 Introduction
Like its neighbouring countries of the Gulf Cooperation Council (GCC) – Bahrain,
Kuwait, Qatar, Saudi Arabia and the United Arab Emirates – Oman’s economy has
been highly reliant on oil and gas export revenues. Since their discovery, fossil fuel
resources, namely, oil and gas, have been accounting for nearly 99% of total energy
mix to meet the domestic energy needs. In recent years, however, the GCC states
have exhibited signs of unsustainable1 energy use such as energy security associated
with increasing domestic energy demands and increasing per capita carbon emis-
sions due to heavy reliance on fossil fuels. Despite GCC’s vast resources of renew-
able energy, the use of renewable energy in total electricity installed capacity did not
exceed 1% of total power capacity in 2014 (El-Katiri 2014; IRENA 2016).
The abundance of oil and gas resources has restricted the attention of investors,
researchers and governments to develop alternative energy sources such as renew-
ables. However, in recent years, research on the development and implication of
renewable energy in the GCC countries is continuously growing (Alawaji 2001;
Al-Karaghouli 2007; AER 2008; Bilen et al. 2008; Nalan et al. 2009; Chiu and
Chang 2009; Ghorashi and Rahimi 2011; Al-mulali 2011; Anagreh and Bataineh
2011; Bataineh and Dalalah 2013; El Fadel et al. 2013). One of the key challenges,
however, facing many of the regional countries is the lack of structured tool to aid a
systemic account of energy policy and planning. The only recognised tools that
have been attempted to aid energy planning in GCC countries are Long-range
Energy Alternatives Planning (LEAP) system (El Fadel et al. 2013), Energy-
Economy-Environment Modelling Laboratory (E3MLab) (Fragkos et al. 2013),
panel data analysis model (Al-mulali 2011; Arouri et al. 2012) and techno-economic
modelling of PV/battery systems (Al-Saqlawi 2017).
While some of these models are capable of giving valuable insights into analysis
of energy demand and supply in an economy, they are, however, not able to account
for the dynamics relating to connecting the power sector with society and the envi-
ronment, since they are largely based on a static economic modelling approach.
Indeed, Al-Saqlawi (2017) provided a systemic account of socio-economic and
environmental implications of renewable energy development in Oman. However,
the study was mainly focused on one technology type, i.e. solar photovoltaic (PV),
focused on the residential sector only and evaluated the socio-economic and envi-
ronmental implications against one point of time without extending to study the
long-term implications. Thus, this chapter investigates the intersection between
Oman’s electric power sector and economic, social and environmental domains. By
so doing, the chapter develops scenarios to assess the long-term implications of
renewable energy integrity in Oman’s future fuel mix particularly in the electric
power sector. System dynamics methodology is employed to build the scenarios and
to provide a systemic account for economic, social and environmental implications
of renewable energy uptake in Oman.
1
Sustainable development in this chapter refers to the definition in the Brundtland Commission
Report of 1987: development that meets the needs of the present without comprising the ability of
future generations to meet their needs (Brundtland 1987).
2 Socio-economic and Environmental Implications of Renewable Energy Integrity… 19
The evolution of Oman’s electric power system is highly correlated to the discover-
ies of oil and gas resources since the 1960s. The first power and desalination plant
was established in 1975 in Al Ghubra, with an initial capacity of 25.5 MW of elec-
tricity and 6 million gallons of desalinated water. The plant was initially fired by
diesel before its upgrade in 1980s. That upgrade converted the plant from diesel to
natural gas and increased the capacity to 294 MW and 12 million gallons of water.
In 1986, due to demand for water that outpaced supply, two new water units were
constructed to double the production capacity to 24 million gallons. Initially, the Al
Ghubra project principally supplied the capital city (Allen and Rigsbee 2000).
A new Ministry for Water and Electricity Regulation was established in 1978.
The new ministry extended the construction of power stations to areas beyond the
capital city, including some northern parts of Oman, building a 250 MW station to
serve the Rusayl Industrial Estate, the 26.5 MW Wadi Al Jizzi station serving resi-
dential sector and a 53 MW station serving a copper refinery and Sohar. Another 22
locations outside the capital city were also supplied with about 27 MW by diesel-
powered generation plants (Allen and Rigsbee 2000). The development of the
national grid in the 1990s connected the capital city with other distributed genera-
tion plants and led to the establishment of new power projects to meet growing
electricity and water demands.
In 2005, the Authority for Electricity Regulation was established to undertake
the regulation of the newly restructured electricity sector. Likewise, the Public
Authority for Electricity and Water was established to handle all of the sector’s legal
responsibilities, which were previously enacted by the Ministry for Water and
Electricity Regulation. Up to 2018, the Authority for Electricity Regulation regu-
lates the electricity sector under the new Sector Law, which was approved by the
Council of Ministers in 2004 to oversee the development of regulation and progres-
sive privatisation of the electricity and related water sectors (IBP Inc. 2015).
The new electricity sector consists of three markets: the Main Interconnected
System (MIS), which serves the majority of customers residing in the northern part
of the county; the rural areas market, which serves rural areas in Oman; and the
Dhofar electricity market, which serves the southern part of Oman. Generation,
transmission and distribution companies were unbundled under the new electricity
market, except for those in the rural electricity market. Under the 2004 law, Oman
Power and Water Procurement Company (OPWP) is the only entity that buys
electricity from all licensed electricity generation companies under long-term con-
tracts of power purchase, which span 15 years on average, and sells bulk electricity
supplies to electricity distribution companies (AER 2008). The Oman electricity
distribution market has been monopolised by four licensed, state-owned electricity
distribution companies, i.e. Muscat, Majan, Mazoon and Dhofar, that have the right
to buy the bulk supply of electricity from OPWP in order to distribute electricity
20 A. Al-Sarihi and H. Bello
within their authorised areas. The legislation stipulates that the electricity distribu-
tion companies can only purchase their electricity from the OPWP (Royal Decree
78/2004 2004).
Electricity generation is characterised by high reliance on hydrocarbon-based
technologies such as open cycle gas turbine (OCGT) and closed cycle gas turbine
(CCGT). The main national grid, i.e. MIS, consists of a total of 11 plants, which
generate electricity from natural gas (OPWP 2015). Of those, five are operational
OCGT plants with a total generation capacity of 1945 MW and six are CCGT plants
with a total generation capacity of 5171 MW (OPWP 2015). The electricity genera-
tors purchase their gas requirements from the Ministry of Oil and Gas. The contri-
bution of natural gas in the fuel mix for electricity generation accounted for more
than 97% in 2011, while the diesel, which is used in off-grid plants to generate
electricity for rural areas or as backup for grid-connected plants during peak peri-
ods, contributed just less than 3% (Fig. 2.1) (AER 2011).
The high dependence on available natural gas and diesel resources to fire power
plants along with highly subsidised fossil fuel-based energy services such as elec-
tricity has created new challenges for Oman’s power sector. These include energy
security, economic vulnerability to oil prices and increasing greenhouse gas
emissions.
In a total area of 309,501 km2, the population of Oman almost doubled from 2.34
million in 2003 to 4.24 million in 2013 (World Bank 2013a). Population growth, the
semiarid environment of Oman, the need for air conditioning, the increase in the
standard of living, expansion of energy-intensive industrialization, introduction of
new households and infrastructure investments and highly subsidised electricity ser-
vices have been driving the annual growth of power demand by double digits.
Oman’s annual growth of power demand was projected to be 10% between 2013
2 Socio-economic and Environmental Implications of Renewable Energy Integrity… 21
and 2020 (OPWP 2014). Meanwhile, the peak power demand is expected to increase
at 11% annually in the same period. Since the 2005 market restructuring, the num-
ber of electricity accounts has increased by 116.6% (AER 2017), and electricity
supply in 2017 reached 32.3 TWh, 240% higher than in 2005 (Fig. 2.2). Residential
customers accounted for 46.0% of total supply in 2017, compared to a 55.2% share
in 2005. In return, natural gas used for electricity generation has increased from
104.4 billion Scf in 2000 to 295 billion Scf in 2015 (AER 2011; NCSI 2015), and
the domestic share of natural gas consumption by the power sector increased from
19.1% in 2000 to 21% in 2014 (NCSI 2015).
Due to the increasing demand on domestic natural gas supplies and because
Oman has very small oil and gas reserves compared with other gulf countries along
with the country’s long-term contracts and commitments to export natural gas,
Oman has already started to import natural gas from Qatar via the Dolphin pipeline
system since 2008 (EIA, US 2013). Further, Oman has signed a memorandum of
understanding with Iran to import gas. Oman’s crude oil reserve to production ratio
(R/P ratio) is equal to 14 years, and its natural gas R/P ratio is equal to 27 years
(IRENA 2016).
Furthermore, the increasing demands on oil and gas for power generation divert
the allocation of oil and gas commodity for local use rather than export. Giving
Oman’s narrow export profile characterised by high proportion of oil and gas, the
allocation of oil and gas for domestic use directly impacts Oman’s economy which
is highly reliant on oil and gas export revenues. This challenge is in line with the
economic vulnerability to oil price shocks. In other words, as oil prices rise, the
economic revenues go up and so governmental spending on salaries and invest-
ments. When the prices decline, and giving Oman’s narrow export profile, the state
budget is directly impacted and so the governmental spending. Austerity measures
to eliminate the negative effects of low oil prices, however, affect the employment
40000
35000
30000
25000
GWh
20000
15000
10000
5000
Year
Electricity Production Total Electricity consumption
Fig. 2.2 Dynamics of electricity production and consumption in Oman (1980–2017). (Source:
Author own with data from Statistical Year Book (NCSI 2012, 2015, 2018))
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