OPEC changing its spots?

You know that renewable energy is here to stay when the biggest beneficiaries of the current carbon-addiction start chanting the renewable mantra.

While the big daddy of oil, Saudi Arabia was going the Jatropha route is old news, more and more members of the OPEC cartel are going in for renewable technologies.

On the biofuel front, while UAE is looking to the jojoba, a small desert plant to make biodiesel for domestic consumption, Saudi intends to export its jatropha-based biodiesel. Venezuela is joining the ethanol rush in South America, while Indonesia hopes indigenous ethanol will restore it to the status of a petroleum exporter.

On the solar power front, the Abu Dhabi has big plans in the UAE. To start with, it is setting up a 100 MW solar power plant for $350 mn, which will come on line by 2009, and power 10,000 homes. This will be the first solar power plant in the Gulf. Beyond this one plant though, Abu Dhabi intends to put big money into the development and commercialization of clean energy technologies, starting with the setting up of a bachelor-level research center in collaboration with the Massachusetts Institute of Technology, and also a special economic zone for the clean energy industry.

Why are the oil cartel members going the renewable route?

With countries like Venezuela and Indonesia at least the strategy seems to be to use either locally produced or imported biofuels, while maintaining their status as oil exporters. This might reflect a strategy among the oil cartel members to use their ill-gotten oil wealth to go renewable themselves while selling oil to the rest of the world for as long as they can. For this might also mean that the rumors that oil production in these countries has peaked have some truth in them, or at least that the figures of uninterrupted supply for several decades is not correct. Or it could just mean that as renewables are getting more and more competitive, they are becoming an option whose time has come, for whoever can afford them.

At the very least, this represents an admittance by the oil cartel that it may never again be able to price oil to undercut renewable energy options. And that sure is a positive thought.