Tuesday, March 29, 2016

Oman Looking Past Its Oil Economy to Solar -- Note to Venezuela

This neighborhood in Muscat, Oman, has tremendous potential for solar
energy development. Click for photo credit.
Reuters published an interesting article yesterday highlighting how Oman, a major oil producing nation, is looking past its oil economy toward the development of residential solar. Solar energy production makes a tremendous amount of sense given its desert setting.

For decades Oman has been one of the most interesting oil producing states in that it has always looked at oil as a temporary economic boom. The country has invested heavily in education and in diversifying its economy in stark contrast to other oil producing states. Oman's movement into solar is not especially a surprise given that it is one of the more future thinking states in the region.

The Oman example stands in stark contrast to Venezuela. This country heavily subsidizes gasoline consumption making Venezuela the highest greenhouse gas producer in Latin America. It produces 45 tons per person of greenhouse gases per year compared with the world average of 8.9. Even with all of this energy consumption, it has a highly irregular electrical system. It's major source of electricity is hydroelectric power. However, due to regular droughts, the electrical system of the country is beset with blackouts. Just last week the President of the Venezuela, Nicolas Maduro, gave the country the week off to try to save electricity and reduce the demand on the grid. It didn't work and the country is now facing significant problems as the major hydroelectric dams are likely to run out of water in the next week or two. The failure to diversify its renewable energy options, particularly given that everyone knows Venezuela can expect significant regular droughts that impact hydroelectric generation, is a case study in poor energy planning.

Oman serves as a good example of how, even with energy abundance, one must plan for the future.

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