MENA needs $200bn in­vest­ment in re­new­able sec­tor in the short term

Muscat Daily - - BUSINESS -

Dubai, UAE - The Mid­dle East and North Africa (MENA) re­gion is em­bark­ing on an un­prece­dented pro­gramme to de­velop re­new­able en­ergy, with more than 67GW of clean en­ergy projects at var­i­ous stages of the de­sign and study stage, ac­cord­ing to Re­new­able En­ergy in MENA Re­gion 2017 re­port re­leased by busi­ness in­tel­li­gence ser­vice MEED. MEED es­ti­mates that this will re­quire in­vest­ment up­wards of US$200bn, in ad­di­tion to the ex­pan­sion and up­grad­ing of ex­ist­ing net­works to fa­cil­i­tate the ex­tra ca­pac­ity.

The pipe­line of re­new­able en­ergy projects will in­crease fur­ther in the next five years as gov­ern­ments seek to meet the rapidly grow­ing de­mand for power through im­ple­ment­ing am­bi­tious re­new­able en­ergy pro­grammes, ac­cord­ing to a press re­lease is­sued by MEED.

Un­sur­pris­ingly due to the re­gion’s sig­nif­i­cant hy­dro­car­bon re­serves, the Mid­dle East has been slow to adopt re­new­able en­ergy. How­ever, this has started to change sig­nif­i­cantly over the past five years, the re­port said.

The dra­matic fall in the cost of pho­to­voltaic (PV) so­lar has re­sulted in re­gional util­i­ties launch­ing some of the world’s largest so­lar projects, which have been sup­ported by the sub­mis­sion of record low tar­iffs.

In the 12 MENA coun­tries cov­ered by the re­port, to­tal in­stalled gen­er­at­ing ca­pac­ity in 2015 was 271,761MW, with just over seven per cent of this com­ing from re­new­able en­ergy ca­pac­ity. How­ever, the vast ma­jor­ity of this ca­pac­ity is hy­dropower, with only Morocco in North Africa and Abu Dhabi and Dubai in UAE hav­ing com­mis­sioned so­lar projects with ca­pac­i­ties greater than 100MW.

This is set to change sig­nif­i­cantly in the com­ing years, with the record-low tar­iffs be­ing achieved for util­ity-scale re­new­ables projects through­out the re­gion chang­ing the per­cep­tions of gov­ern­ments and util­i­ties to­wards re­new­able en­ergy. From al­most an ab­sence of re­new­able en­ergy ten years ago, al­most all of the 12 coun­tries an­a­lysed in the re­port have some form of re­new­able en­ergy tar­gets.

A key driver be­hind the push for en­ergy diver­si­fi­ca­tion in the MENA re­gion is the sharp growth in de­mand for gas. With in­creased ef­fi­ciency and lower emis­sions than other fos­sil fu­els, gas has be­come the favoured fuel for power gen­er­a­tion across the re­gion over the past two decades. While new al­ter­na­tives such as nu­clear and coal are be­ing ex­plored and a hand­ful of projects be­ing im­ple­mented across the re­gion, re­new­able en­ergy is quickly emerg­ing as the pre­ferred al­ter­na­tive to con­ven­tional oil and gas fired plants.

The re­port added the fall in oil price has re­sulted in an in­creased drive for pri­vate sec­tor par­tic­i­pa­tion in the re­gion’s util­i­ties mar­kets. The move to­wards the in­de­pen­dent power pro­ducer (IPP) and in­de­pen­dent wa­ter and power pro­ducer (IWPP) model has en­abled some of the largest in­ter­na­tional de­vel­op­ers to bid com­pet­i­tively and sub­mit some of the low­est prices in the world for re­new­able en­ergy projects.

While much of the fo­cus of the re­gion’s re­new­ables mar­ket to date has been on large-scale util­ity so­lar and wind projects, if the re­gion is to achieve some of its most am­bi­tious long term goals the suc­cess­ful de­ploy­ment of small-scale re­new­able ini­tia­tives is quite vi­tal, ac­cord­ing to MEED’s re­port.

Newspapers in English

Newspapers from Oman

© PressReader. All rights reserved.