AS OIL rich countries, Brunei Darussalam and the United Arab Emirates (UAE) utilise oil and gas as a primary source in their energy mix and strongly rely their economy on it.
However, the global energy transition towards more sustainable energy production has also influenced Brunei and the UAE in designing their energy roadmap.
Brunei aims to increase the deployment of its renewable energy (RE) up to 10 per cent in 2035 as conveyed in its Vision 2035, while the UAE plans to increase RE shares in the energy mix to 50 per cent according to its Energy Strategy 2050.
Looking at the similarities between both economies and shared vision towards more sustainable energy future, let us examine their progress in running towards their RE target.
The UAE shows great ambition in RE development, motivated by the significant growth of population and rising energy demand. Looking at its progress, UAE has made an amazing progress and recently set the world record of commencing the world’s largest single solar plant – the Noor Abu Dhabi.
It will have a capacity of 1.18 GW, which will reduce one million metric tonnes CO2 or equivalent with pulling 200,000 cars off the road at the same time.
It is worth to note that all the development towards RE done by UAE is mostly funded from the government’s pocket sourced from oil, which shows that it is part of the effort of UAE to reduce its dependency on oil and diverse the energy mix with renewable.
Sharing the similarity in its economy and energy resource, Brunei could learn a lot from UAE in how to pave the initial step to be less dependent from oil and realise their target in RE.
Considering to Brunei Energy White Paper, the commitments for Brunei towards RE mostly originate from its concerns on energy security. The Brunei Government sets up three strategic goals to achieve its vision in 2035.
The first objective is to improve its upstream/downstream of oil. The second objective is to ensure the development of sustainable energy, while the third objective is to maximise economic development through the energy industry.
To ensure the development of sustainable energy, the Brunei Government has committed to increase its RE, specifically solar PV.
Brunei also planned to develop the Temburong Smart City where this city is projected to become the ‘Green Jewel of Brunei’ and would be powered mostly from solar. However, to date, Brunei has only installed 1.2 MW solar as a pilot project.
It is safe to say that the deployment of RE is still at an early stage. However, there are specific steps that Brunei could take to accelerate this and play a bigger role with sustainable energy in the ASEAN region.
Brunei could follow the lesson from the UAE in how they are using its oil revenue to support the ambitious target of renewables and assist the RE market to be fully developed.
Currently, 73 per cent GDP of Brunei is still from oil revenues.
It is better for Brunei to start allocating a certain portion of this to support RE and welcome investors while oil production is at its peak. This is so that Brunei could enjoy the smooth transition to RE and reduce its dependency on oil and gas sector.
Brunei should be aware that costs of RE technologies have been gradually decreasing in the past decade and the country could benefit from it if they set the right RE framework now.
Recent data by IRENA shows that the global RE cost, especially solar, will go down rapidly by 2020 in the range of USD0.3/kWh. This is a clear sign that RE is getting more and more competitive than oil and gas. Brunei should also consider taking the momentum and shifting its oil-subsidy to support the growth of RE market initially and attract foreign investment.
By taking a leap in RE and leverage its financial resource of being an oil-rich country, Brunei could actually play a bigger role in ASEAN energy transition.
Just like what UAE did, Brunei can also contribute to the RE investment in other ASEAN member countries by collaborating with them.
Brunei may be small in terms of area, but it still has the opportunity to support the region in achieving its 23 per cent RE target in energy mix in 2025.
As an effort to further realise this, the Brunei Government has made a good start by restructuring the Ministry of Energy, Manpower and Industry (MEMI) since July last year. Previously serving as the Energy and Industry Department at the Prime Minister’s Office (EIDPMO), the new ministry is mandated to foresee the country’s energy, industry and manpower as its core roles.
Brunei has the potential to increase its RE effort and show its seriousness in deploying RE in the country like UAE did by having a dedicated ministry.
Marking this July 31 as the one-year journey of the ministry, more progress and innovation is expected to be carried out to spur the growth of RE in years to come.
This blog post originally appeared in Borneo Bulletin, 27 July 2019.