Mena region’s renewables surge to prompt US$200bn investment on infrastructure

An unprecedented surge of renewable energy projects in the Middle East and North Africa (Mena) region will need more than US$200 billion worth of investment in the coming years, according to a new report from business intelligence service Meed.

More than 67 gigawatts (GW) of clean energy projects are currently at the design and study stage within the region, which will also necessitate a significant expansion and upgrade of existing power 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,” said Meed in its Renewable Energy in the Mena Region 2017 report, published yesterday.

While the region has been slow to adopt renewable energy in the past due to its large hydrocarbon reserves, there has been a significant shift over the past five years, with more to come.

After the launch of Abu Dhabi’s 100 megawatt (MW) Shams 1 plant, the region’s first utility scale solar facility, the dramatic fall in the cost of photovoltaic (PV) solar in recent years has led to the launch of some of the world’s largest solar projects in the region, supported by the submission of record low tariffs.

These include a 300MW solar project in Saudi Arabia, announced in April, and a 200MW solar project from the Dubai Electricity and Water Authority.

Meed’s survey of 12 Mena countries found that total installed generating capacity in 2015 was 271,761MW, with just over 7 per cent of this figure derived from renewable energy. Much of this capacity derive from hydropower, with only Morocco in North Africa and Abu Dhabi and Dubai in the UAE commissioning 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,” the report added.

Saudi Arabia, for example, is currently under way with its first round of the National Renewable Energy Programme, which will tender more than 700MW of solar and wind projects this year. This is part of the kingdom’s plan to generate 9.5GW within six years.

In March, the International Renewable Energy Agency (Irena) said the UAE leads the region in renewable energy, producing 139MW, up from 134MW in 2015.

Irena, which is based in Abu Dhabi, said that 2016 was the strongest year for new renewable capacity around the world, which was up by 161GW. The agency estimated that by the end of last year, global capacity reached 2,006GW, with solar energy showing especially strong growth.