US$200bn investment required in renewable sector: MEED estimates

solar jamesmoran flickrMENA governments are increasingly turning to renewable energy to diversify energy sources and reduce carbon emissions. (Image source: James Moran/Flickr)The Middle East and North Africa (MENA) region is looking to develop more than 67 GW of clean energy projects that are currently at various stages of the design and study, according to Renewable Energy in the MENA Region 2017, a new report from MEED

The report 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.

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. In 2013, Abu Dhabi commissioned the region’s first utility scale solar plant, 100MW Shams 1 concentrated solar power (CSP) plant. Since then, 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 countries covered in-depth 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 10 years ago, almost all of the 12 countries analysed in the report have some form of renewable energy targets.

While the favourable conditions for implementing renewable energy in the MENA region have long been known, the push from governments to shore up energy security through diversification of fuel for power generation and the falling cost of technologies is driving the push towards major clean energy programmes.

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