While much of the discussion about the Middle East’s economic prospects continues to revolve around the 25 May Opec meeting in Vienna and the continuation of production cuts, the region’s utilities are moving ahead with plans to reduce reliance on hydrocarbons for power production. 

When the oil price began to fall in 2014, many predicted lower public revenues and a plentiful supply of reduced-value hydrocarbons would result in the shelving of more expensive renewables projects. However, the sharp drop in the price of photovoltaic (PV) solar since 2015 has resulted in tariffs for large renewables schemes falling to below the comparable value of thermal fossil-fuel plants.

The capacities of renewables projects are also increasing, with the award of a deal for a 1.2GW PV plant in Abu Dhabi in 2017 an example of this.

In recent weeks, contracts have been signed for various roles on solar schemes in Egypt and Saudi Arabia, and Riyadh has issued tender documents for its first utility-scale solar plant under its ambitious National Renewable Energy Programme.

While the rapid fall in the cost of renewables has encouraged utilities to pursue clean energy, the drive to boost energy diversification has also led to plans to develop coal-fired plants. The recent submission of consultancy bids for a major coal plant in Oman followed closely after MEED reported that the UAE was planning another large coal generation facility.

With the majority of governments grappling to secure gas imports to meet rising power demand, the push for alternative fuels will form an increasingly important part of the energy landscape across the Middle East and North Africa.