Mideast solar ambitions are on track

Last year I wrote in Al Jazeera about the prospects of solar energy replacing oil in the Middle East. One year on, the commitment to such a transition is palpably real. By 2020, Kuwait and Oman aim to produce 10 per cent of their energy from renewables. Saudi Arabia alone aims to invest $109 billion on solar energy and acquire a third of its power from the sun by 2032.

But what practical challenges do Gulf countries face in such a transition? And what specific steps must be taken to overcome them?

Depleting finances

Initial interest in solar investment came at a time when exporting oil was profitable, but consuming it for domestic electricity generation was costly, making renewable energy an attractive domestic alternative. However, weaker oil prices make renewable investment costlier for oil-dependent GCC governments.

Gulf nations like Saudi Arabia are consequently continuing to consume fossils to cover most of their energy needs, but this too comes with considerable expense since it stretches production capacity. The most effective way to overcome this predicament is to address the consumption problem.

The consumption problem

The six GCC countries consume more energy than all of Africa, with unsustainable energy subsidies at the heart of the problem. Based on current projections, the region’s domestic fuel demands could double by 2024. According to some estimates, Saudi Arabia could become a net energy importer by 20302038, if current consumption rates persist!

This poses a major predicament; on the one hand the region is witnessing dwindling financial resources — partly because of domestic consumption. On the other hand, it must direct those dwindling financial reserves towards a clean energy transition to alleviate the strain of domestic consumption. And the longer Middle-Eastern countries wait, the more growing domestic consumption will strain national budgets.

An obvious solution is to reduce energy subsidies. This will bring some degree of price reflectivity and stabilise domestic consumption whilst simultaneously facilitating sustainable investment in solar. Despite the recent move by Saudi Arabia to increase oil prices domestically, subsidies remain a concern for all Middle Eastern countries. If domestic consumption is not reigned in then the Middle East could find itself in an intractable economic and energy crisis. Saudi Arabia’s recent price hike should ideally lead to neighbouring countries following suit.

Technical innovation and expertise

As the region begins to commission large pilot projects, newer technical and logistical challenges are emerging. Middle Eastern dust and sand storms could, for example, create major challenges to the efficiency and maintenance of solar energy infrastructure. What’s more, parts of the Middle East’s DNI (Direct Normal Irradiance), a measure of solar radiation, is significantly less than that of Spain and some southern US States. Previous Middle Eastern DNI measures were overestimated (by as much as 15 per cent in the case of the UAE). That means for any large scale solar energy projects in the region to be commercially viable, energy efficiency will be pivotal.

The role of the policy community

For the Middle East’s energy infrastructure to make a cleaner energy transition, a multinational resolve similar to that shown by institutions like the EU is required. Gulf subsidies have long reinforced an already powerful fossil fuel monopoly, just as happened to varying degrees elsewhere in the world. To reverse this trend in a region where energy policy is so politicised, top-down action that prioritises clean energy goals is necessary.

In summary, the journey towards a clean energy future is fraught with obstacles for the Gulf states, but provided the bitter short-term pill of reduced subsidies and increased clean-energy investment at challenging economic times can be swallowed, it will put the region in a strong long-term position — particularly after any rise in oil prices.

Dust and sandstorms could create challenges to the efficiency of solar energy infrastructure