RE: renewable energy is the sector that will deliver outstanding returns LONGTERM22 May 2021 23:00
At the same time, new technologies, such as green hydrogen, are catching the eye of policymakers and investors.
While the Middle East lags major markets such as China, Europe and the US in the scale of renewables investment, the world’s largest and cheapest solar projects are now found in Saudi Arabia, Abu Dhabi and Dubai.While Egypt, Jordan and Morocco have built significant renewable energy capacity.
The region’s ambition is to be a hub for the development of renewable energy and alternative fuels.
With about 28GW of renewable energy production capacity installed across the Middle East and North Africa (Mena), of which by far the biggest component is hydropower with 21GW, renewable energy represents only 7 per cent of the region’s power generation capacity. But with electricity demand rising at about 5 per cent a year, and with a shortage of readily available natural gas supplies, expanding renewables capacity is one of the top policy priorities for governments in the region.
Boosted by falling technology costs and the drive to reduce carbon dioxide emissions, most countries are planning and procuring solar and wind projects.Across the region, governments have set ambitious clean energy targets, with Dubai the most aggressive, aiming for 75 per cent of its energy to come from clean sources by 2050.
At the start of 2021, about 98GW of new renewable energy generation capacity was planned across the region, with 39GW of additional capacity due to come on stream by 2025.
Over the past 12 months, the desire for a ‘green’ recovery from the economic impact of the Covid-19 pandemic has provided impetus for a wave of ventures and projects to produce hydrogen fuel in the Middle East. In particular, tapping the region’s abundant supply of low-cost solar energy to sustainably produce ‘green’ hydrogen from water is generating huge interest from governments and investors.
Hydrogen is the latest alternative fuel to emerge in the Middle East’s renewable energy journey and in many ways is in a similar place to the one held by solar and wind energy a decade ago.As with solar ten years ago, hydrogen fuel in 2021 is expensive to produce compared with fossil fuels, and there is only a limited market for the low-carbon fuel.
But solar energy production costs have tumbled over the past decade, while regulatory changes have reduced the commercial risk of investing in renewables. It is a trend that will continue, and which is supporting the region’s energy diversification as new technology emerges making clean fuels commercially and technologically viable.
Written by MEED, the Middle East market experts within the Group, "Middle East Renewables 2021" provides a comprehensive country-by-country guide to the Middle East’s renewable energy sector with in-depth analysis of investments, policy and legislative frameworks, and the projects planned and under way. The report a valuable asset for anyone doing business in the Middle East energy
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