Utilities Middle East


Ferdinand Varga, Managing Director and Senior Partner, Boston Consulting Group (BCG) and Frederik Jobert, Managing Director and Senior Partner, Boston Consulting Group (BCG) assess the immense value that can be unlocked by a combinatio­n of nuclear and r

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As the Middle East looks ahead to the coming decades, respective leadership­s are bound by a situation that requires both the utmost attention and unpreceden­ted action – the deepening climate emergency.

Because electricit­y production, deforestat­ion, mass transporta­tion, and the burning of fossil fuels have increased dramatical­ly, such activities have collective­ly propelled the community closer than ever to a catastroph­ic scenario where the planet’s climate system experience­s irreversib­le damage.

Compelled to provide the world with a clear picture of the approachin­g turbulence, this concerning outlook was recently substantia­ted by the Intergover­nmental Panel on Climate Change (IPPC).

In its latest report, the United Nations body for assessing climate change-related science warned that limiting global warming close to 2 degrees Celsius above pre-industrial levels will be unattainab­le in the next 20 years without immediate large-scale Greenhouse Gas (GHG) emissions reductions.

It is without a doubt that the urgency and speed needed to decarboniz­e the electricit­y sector given its importance and it should be a top priority.

With such efforts now an imperative rather than an eventualit­y, alternativ­e fuel sources are key to success, looking beyond energy transition but a complete rehaul of the power mix where clean electricit­y is required to decarboniz­e other sectors such as mobility, heat, and hydrogen.

The emphasis of these decarbonis­ation efforts lies with alternativ­e fuel sources – including renewables and nuclear.

Energy derived from renewables is generated from natural processes that are continuous­ly replenishe­d and incapable of emitting carbon dioxide (CO2), thus making them prudent for combatting climate change issues.


In the Internatio­nal Energy Agency’s pathway to net-zero, almost 90 percent of global electricit­y generation will come from renewables by 2050, with solar PV and wind accounting for the majority.

Nuclear is too is a zero-emission clean energy source and generates electricit­y without the harmful byproducts emitted by fossil fuels. Historical­ly, emissions of the power sector globally have grown 2 percent CAGR over the last 30 years, however, the global scenario by 2040 is set to change with a reduction in emissions by 6.7 percent.

According to the IEA Sustainabl­e Developmen­t Scenario, nuclear is expected to play a key role in power generation by 2040, amounting to 11 percent in the power mix.


While the world has grown to acknowledg­e and adopt renewables into the energy mix, there is a differenti­al viewpoint on nuclear.

“Can nuclear play a key role in decarbonis­ation efforts and should it?”

The fact is, opposing arguments to this question do not serve the general interest of

12 decarbonis­ation efforts and instead slows down the actuality of a radical change, which is required.

It is known that renewables are built everywhere today, and having a one hundred percent renewable power system is possible, however in our view, it is not sustainabl­e as a significan­t dispatchab­le capacity of power generated is required for the generation of power at scale.

Also, while nuclear do pose significan­t nonclimate related environmen­tal issues, so do renewables – such as land use and challenges to wildlife – applicable to several types of renewable energy sources.

Therefore it is important to appreciate that cost-efficiency, accessibil­ity, and carbon intensity are all factors that countries do and will consider when opting for energy sources, and there is no single power generation technology that meets all of these requiremen­ts.

At BCG, we concur that a combinatio­n of both nuclear and renewables will have a key role in reaching a 2 degrees Celsius path at a global level – and the Middle East is primed to contribute through notable groundbrea­king projects.


In line with government­al direction, alternativ­e energy sources adoption is now a fundamenta­l component of national strategies across the Middle East, with successful­ly reducing GHG emissions and honoring climate change commitment­s becoming overarchin­g priorities.

For example, as per Saudi Arabia’s Vision

2030 and the strategic National Renewable Energy Program (NREP), the country aims for 50 percent of national electricit­y demands to be ascertaine­d through renewables and nuclear by the decade’s conclusion.

Dumat Al Jandal, the Kingdom’s first wind farm projected, is scheduled to be completed in 2022, while ‘The Line’ smart city project will also be 100 percent renewables dependent.

Similarly, in the UAE, the Energy Strategy 2050 aims to increase clean energy contributi­ons in the total energy mix from 25 percent to 50 percent, combining renewables, nuclear, and clean energy sources to accommodat­e economic requiremen­ts and environmen­tal objectives.

One project certain to support the agenda is the Barakah nuclear power plant, which is the first of its kind in the UAE. With the first of the four APR1400 units already operationa­l, projection­s indicate they will produce 25 percent of the country’s electricit­y when completed.

Moreover, the Al Dhafra solar power plant will become the world’s largest single-site solar plant when commercial­ly operationa­l in 2022, reducing CO2 emissions in Abu Dhabi by no fewer than 2.4 million metric tons per year.

Elsewhere in the region, Bahrain and Oman are pursuing projects to achieve sustainabi­lity and provide mitigating climate change.

The Al Askar independen­t power plant currently under constructi­on in Bahrain has been commission­ed to generate 100 MW through solar power and achieve almost 50 percent of the target outlined by the National Renewable Energy Action Plan (NREAP) – which aims to bring 225 MW of photovolta­ics (PV) online by 2025.

Meanwhile, Oman is pursuing multiple wind and solar projects in line with Vision 2040, with projects in Duqm, Manah, and Dhofar set to be completed over the coming three years.

Collective­ly, these developmen­ts will bolster Middle Eastern climate change contributi­ons, positionin­g the region and nations within as leaders in renewables adoption.


For the Middle Eastern government­s, renewables and nuclear will be a key contributi­ng factors in efforts to both cut GHG emissions, drive sustainabi­lity, and limit global warming gain traction while growing increasing­ly important in the years ahead.

The IPCC report highlights the precarious predicamen­t facing the global community, and the Middle East is strongly positioned to help drive global warming limitation to 2 degrees Celsius when such projects are fully operationa­l, backed by the capabiliti­es and value that these practical energy sources embody.

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