Saad Al Doseri, Partner and Head of Litigation and Dispute Resolution, and Maryam Alhashemi, Associate, explore the initiatives introduced by the statutorily constituted Sustainable Energy Authority (SEA) and its sustainability advancements. They further address the potential legal ramifications and compare the initiatives to other international protocols.
Abolishing energy poverty and avoiding calamitous climate change will require a global effort towards low-carbon energy sources. Bahrain’s Vision 2030 outlines measures to protect the natural environment, reduce carbon emissions, minimize pollution, and promote sustainable energy. Bahrain’s future looks sustainably bright with its solar energy industry, with new technologies already in place. Furthermore, the SEA, – which was constituted by Legislative Decree 87 of 2019, designs energy efficiency policies and promotes renewable energy technologies that support Bahrain’s long-term climate action and environmental protection ambitions. Endorsed by Bahrain’s Cabinet and monitored by the SEA, the National Energy Efficiency Action Plan (NEEAP) and the National Renewable Energy Action Plan (NREAP) set national energy efficiency and national renewable energy 2025 targets of 6% and 5%, respectively, with the NREAP target increasing to 10% by 2035. Given that electricity production is the world’s number one source of greenhouse gases, the utilisation of renewable energy is imperative for the betterment of our environment. Accordingly, the SEA was a result of a joint initiative between the Office of the Minister of Electricity and Water Affairs and the United Nations Development Program (UNDP).
In attempts to bridge existing legal disparities within Bahrain’s energy sector, the SEA aims to draft and propose unified and sustainable energy policies pursuant to the Legislative Decree 87 of 2019, to ensure that Bahrain undertakes the appropriate measures where necessary.
The SEA Action Plans
Intending to reach a total national renewable energy target of 15% by 2035, the Action Plans incorporate both Bahrain’s 2030 Economic Vision launched in 2008 by His Majesty King Hamad bin Isa Al Khalifa and the Sustainable Development Goals 2030 carried out by the United Nations General Assembly.
The NREAP intends to optimise domestic gas resources, reduce gas emissions and electricity peak demands, and enhance the economy’s competitiveness. Accordingly, the SEA has proposed three policies to attract private sector investments:
- Policy 1 (Net Metering Scheme): Involves the commission of a Net Metering scheme by the Kingdom’s Government intending to enable consumers to generate on-site and grid-connected electricity derived from renewable energy sources. Given that retail electricity prices are prone to proliferation, consumers will hence be able to enjoy reduced electricity bills through on-site power generation. They can credit the excess electricity fed back to the grid against future consumption.
- Policy 2 (Tender-based Feed-in Tariff Scheme): Allows the adoption of a tender-based feed-in tariff scheme that provides renewable energy developers and large electricity customers with a long-term purchase guarantee of electricity from renewable sources at a pre-determined price.
- Policy 3 (Renewable Energy Mandate): In attempts to reduce electricity bills, the third policy pertains to the implementation of Renewable Energy Mandates. The policy will require all new buildings and real estate developments to source a certain minimum percentage of energy from renewable sources (such as roof-top PV, building-integrated PV, solar water heaters, and urban wind systems).
In addition to saving BHD 1.6 million annually, the policies mentioned are likely to attract more than BHD 140 million of investment and reduce greenhouse emissions by 392,000 tonnes of CO2 per year.
The NEEAP introduces several initiatives depending on the economic sector to reduce Bahrain’s reliance on imported energy, prolong the lifetime of the domestic gas resources, and optimise its lucrative value.
To improve energy efficiency in the residential and commercial sectors, the following initiatives were proposed, noting that some have been adopted and are in the implementation phase:
- Green Building Initiatives: Aims to reduce the energy demand of buildings by establishing a green building certification programme to promote the construction of more resource-efficient buildings.
- Building Energy Labelling: Aims to minimise energy consumption by constructing energy performance labels for buildings.
- Building Energy Efficiency Code: Aims to reduce energy demand in buildings by initiating comprehensive mandatory energy-efficiency specifications for new building constructions and renovation of existing buildings.
- District Cooling: Aims to propose a regulatory framework concerning the expansion and revitalisation of the existing capacity of district cooling.
- Minimum Energy Performance Standards (MEPS) and Labelling for Lighting, Air Conditioning, and Appliances: Previously implemented under Ministerial Decree No 31 of 2017, this policy takes a step further and aims to extend the provision by reducing consumption of energy performance in labelling for lighting, air conditioning, and other appliances.
In regards to the public sector, the following initiatives were proposed:
- Governmental Building Energy Management: Aims to target energy efficiency in Government buildings by establishing an energy management system, re-directing the public sector to understand and reduce their energy use, and commit to savings.
- Government Building Lighting Replacement: Aims to ameliorate the energy efficiency of lighting in government premises. It is crucial to note that the use of energy-efficient bulbs became mandatory effective 13 February 2014.
- Street Lighting Refurbishment: Aims to enhance energy efficiency in street lighting by installing LEDs instead of high-pressure sodium bulbs.
- Green Public Procurement: Aims to improve energy efficiency in the government sector by requiring public institutions to express their preference for energy-efficient and sustainable goods and services.
The NEEAP further recommends the following initiative for the Industry Sector:
- Implementing the Industry Programme: Aims to coordinate energy-efficiency activities through informative exchanges to facilitate energy collection and saving data between entities and the SEA.
With regards to the electricity supply sector, four initiatives are recommended:
- Electricity Production Efficiency Programme: Aims to improve the efficiency where natural gas is converted into electricity by, amongst other things, reducing the reliance on the lease-efficient power plants, utilising aggregated demand reduction and using real-time tariffs to utilise the existing capacity.
- Transmission and Distribution Efficiency Programme: Aims to promote energy efficiency by conducting a dynamic rating line, and undertaking a feasibility study into the use of capacitor banks and battery storage in the managerial system.
- Power Factor Correction Programme: Aims to enhance efficiency in the power supply system under Ministerial Order No 4/2011, which requires the overall power factor for customer electrical installations to not be less than 0.9.
- Smart Metering: Aims to reduce electricity peak demand by installing smart meters for high consumers and new developments followed by government, commercial and residential users.
In relation to the transportation sector:
- The Transport Subsidy Reform: Aims to minimise the subsidisation of transport fuel to optimise efficient consumption of energy.
- The Vehicle Efficiency Standards and Labelling: Aims to introduce minimum energy performance standards and labelling for all vehicles with higher fuel efficiencies.
With respect to cross-sectoral initiatives, the initiatives proposed are relevant to multiple sectors and include the following:
- Electricity Subsidy Reform: Aims to increase electricity tariff to maximise efficient consumption of electricity gradually.
- Raising Awareness & Information Dissemination: Aims to enforce a more comprehensive energy efficiency behaviour by elucidating to consumers the importance and advantages of energy efficiency.
- Training for Market Actors: Aims to enforce EE training for marker actors to increase and develop EE initiatives.
- Institutional Infrastructure: Aims to consolidate the current institutional infrastructure to successfully achieve Bahrain’s national energy efficiency target, noting that multiple ministries are involved in implementing this initiative.
Amongst other achievements, the initiatives under the NEEAP may result in avoided investments of BHD 172 million in electricity generation and an anticipated financial impact of BHD 230 million after deducting the cost of implementation. Despite increased energy consumption resulting from the Covid-19 pandemic, Bahrain reached its 6 percent energy efficiency target in 2019, six years ahead of schedule. According to the SEA, Bahrain’s energy efficiency will improve as government ministries implement the NEEAP, primarily through a new green building code permit for all new construction. Bahrain will have to produce 280 megawatts of electricity from renewables by 2025, increasing to 710 megawatts by 2035, to meet the country’s renewable energy targets. Bahrain will also rely primarily on solar, wind, and waste to energy power generation to reduce carbon emissions and achieve national renewable energy targets.
For more information relating to the technicalities of the Action Plans, please refer to the SEA’s website at https://www.sea.gov.bh/.
Advancements made pursuant to the Action Plans
Since the introduction of the action plans in 2016, president of the SEA, Dr Abdulhussain bin Ali Mirza has chaired around 23 meetings reviewing the progress of their implementation.
The latest developments in 2021 indicate that the launch of several pioneering solar energy projects has led to positive outcomes, namely the Bahrain International Circuit (BIC)’s tender to install solar energy systems on car park roads which produce around 3 megawatts of clean energy.
Additionally, Dr Mirza has signed an agreement with Yellow Door Energy Company to introduce the SEA-supported Majid Al Futtaim renewable energy project. The project entails installing the most extensive central solar energy system on Bahrain Mall with a maximum production capacity of 6.2 megawatts. Bahrain’s proposed renewable energy pipeline consists of solar, wind, and waste to energy technologies, with the SEA intending to capture the majority of Bahrain’s renewable energy mix from solar power.
The SEA is planning for a solar farm project on the Askar landfill, delivering 100 megawatts of renewable power. The body is also overseeing a 50-megawatt initiative to install solar panels on the roofs of hundreds of government-owned buildings. To address the problem of land scarcity for larger solar farms, the SEA is considering installing “floating solar” technologies to be deployed for power generation in Bahrain’s territorial waters. The SEA is also planning a waste heat recovery pilot programme, where excess heat generated by Aluminum Bahrain (Alba), the world’s largest single-site smelter outside of mainland China, can be captured and converted to electricity. Like other GCC states, over half of Bahrain’s annual electricity consumption is due to the extensive use of air conditioning because of the warm Gulf climate. As a result, Bahrain is looking to utilise the practice of “district cooling” to increase the efficiency of air conditioning by as much as 50%.
Bahrain generates approximately 2.6 kg of waste per person per day. To better manage solid waste challenges, Bahrain’s Ministry of Works is currently overseeing a project implemented by an international consultancy to analyse and determine waste materials available for recycling, conversion to agricultural products, or electricity production through incineration at the Askar landfill. Bahrain is also exploring options for international investment in plasma gasification (a process that converts waste into resalable byproducts, including hydrogen, electricity and construction materials).
The total number of renewable energy projects that have been implemented to date form more than 95% of the national renewable energy target.
Comparative Analysis with Foreign Legislation
To further highlight Bahrain’s eco-friendly awareness, it is imperative to consider the SEA’s Action Plans and their similarity to other proactive foreign initiatives.
The European Union
The European Union (EU) has introduced Directive 2018/2001 (RED2) on promoting the use of energy from renewable sources, parallel to the NEAP’s fourth initiative under the Residential and Commercial Sector (see above). Member states must include provisions for the integration and deployment of district cooling, amongst other things. The NEAP further requires real estate developers to undertake a cost-benefit analysis demonstrating why they cannot connect existing district cooling infrastructures.
The United Kingdom
Tantamount to initiative four under the industry sector and the NEEAP’s first policy (see above), the UK Department for Business, Energy, and Industrial Strategy (BEIS) has published the Energy White Paper which includes a term discussing the implementation of Smart Metering to render customer bills more precise.
Oman’s Ministerial Decision No 107/2018 and Bahrain’s Ministerial Decree No 31 of 2017 provides similar and comprehensive provisions related to the MEPS. The NEEAP’s fifth initiative under the Residential and Commercial Sector further intends to extend the existing implemented regulations to contribute to electricity consumption in air conditioning, labelling for lighting, and appliances.
Aside from economic motivations, Bahrain is also driven by environmental concerns in its energy diversification drive. It has made national and international commitments to environmental preservation and sustainable growth. For example, Economic Vision 2030 aims to safeguard the country’s environment by “directing investments to technologies that reduce carbon emissions, minimize pollution, and promote the sourcing of more sustainable energy.” Bahrain’s Government Action Plan of 2015-2018 envisions “improving the efficiency and water consumption and reducing waste; finding new sources of renewable energy to meet the growing demand in Bahrain.” As a signatory of the Paris Climate Agreement, Bahrain is also committed to cutting greenhouse gas emissions
In highlighting the SEA’s initiatives and proposed regulations, while comparing its action plans to those implemented in other countries, Bahrain’s regulatory steps towards conserving its natural resources are only ever-growing. Accordingly, it is apparent that Bahrain’s environmental stance is only progressive from here onwards.
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