Middle East and North Africa
When it comes to renewable energy, water and wind have been the driving forces in the Middle East and North Africa (Mena) region until now. In the future, however, it increasingly looks like solar power will fuel growth in the sector.
According to the Abu Dhabi-based International Renewable Energy Agency (Irena), between 2008 and 2011, alternative power generation in the region more than doubled to reach almost 3 terawatt hours (TWh), excluding hydropower. If hydroelectricity is included, there is now more than 19GW of renewable energy generating capacity. This capacity is growing far faster than those of conventional energy sources.
Hydroelectric power accounts for the vast majority of the total, with 17.6GW of capacity, most of which is in Iran and Egypt, although Iraq, Morocco and Syria also have sizeable amounts of installed capacity. Wind is the second-largest source of alternative energy, with more than 1GW of installed capacity, most of which is spread across Egypt, Morocco, Tunisia and Iran.
Growing far faster than either of these sources is solar power, including both photovoltaic (PV) and concentrated solar power (CSP) plants. In an Irena study issued earlier this summer, called the Mena Renewable Status Report, the organisation says the average annual growth rate of electricity generated from PV sources was at least 112 per cent between 2008 and 2011. Every country now has at least some PV capacity, led by the UAE, Egypt and Morocco.
As of April 2013, there were 106 renewables projects in the pipeline in the Middle East and North Africa
However, PV is now being overtaken by CSP as a source of solar power, as a new generation of larger plants is developed. The Shams 1 project in Abu Dhabi became the largest CSP plant in the world when it began operating in March. With a generating capacity of 100MW, the facility is bigger than all the PV plants across the region put together and more than doubles the amount of CSP capacity in the Mena region.
Just four other countries have any CSP facilities, with 25MW of capacity in Algeria, 20MW each in Egypt and Morocco, and 17MW in Iran. But the plentiful sunshine experienced across the region is a resource that could be exploited by many others.
Alongside those main sources of renewable energy are biomass and waste-to-energy plants in Qatar, Jordan and the UAE, as well as a small geothermal facility in the Palestinian territories.
Many more renewable energy plants are planned to be built in the coming years. According to Irena, as of April this year, there were 106 alternative energy projects in the pipeline, which amounts to a total generating capacity of 7.5GW. The vast majority of these are wind and solar facilities, but the figures do not include all the plans set out by governments that have yet to be translated into specific schemes.
|New investment in renewable energy ($m)|
However, the new capacity that has been announced is just a fraction of the energy needs of the region. In 2011, power generation reached about 1,200 TWh in the Mena region, with the share of renewable energy about 3.3 per cent. But those raw numbers mask some impressive results in particular countries. The renewables share in Morocco, Lebanon, and Tunisia was 33 per cent, 12 per cent and 6 per cent respectively in 2012.
One reason why governments are keen to develop more alternative energy plants is the growth in demand for electricity. Between 2007 and 2010, power demand increased by 14.9 per cent across the region, with oil exporting countries accounting for an above-average increase of 15.3 per cent, compared with 10.5 per cent for oil importing countries. The rise is due to a mixture of population growth and widespread subsidies that encourage high electricity usage levels.
Although they are poorer, oil importing countries have taken the lead on renewable energy. However, these days most Mena governments are taking the issue more seriously. Evidence of that can be found in the creation of Gulf institutions such as Masdar in the UAE and King Abdullah City for Atomic & Renewable Energy (Ka-Care) in Saudi Arabia. Other entities are based in North Africa, including the Regional Centre for Renewable Energy & Energy Efficiency in Egypt, and the Mediterranean Renewable Energy Centre in Tunisia.
Setting alternative energy targets
In addition, all the countries of the region have now set themselves some sort of formal alternative energy target, compared with just five countries in 2007. Most of these prioritise solar power. If all the targets were to be achieved, it would result in 50GW of new renewables capacity by 2020, rising to 107GW by 2030. Even if these targets are not met in full, the advances that are made should be significant.
The ambitions vary considerably from country to country. Algeria is aiming for 40 per cent of its electricity to come from renewable sources by 2030, while Palestinian, Kuwaiti and Omani authorities are aiming for a 10 per cent share by 2020. Qatar is hoping for a 2 per cent renewables share by 2020.
Other governments have set targets based on generating specific amounts of energy from different sources. Egypt, for example, has a plan to generate 2.8GW of CSP energy and 700MW of PV power by 2027, while Iraq is aiming for 400MW of wind and solar capacity by 2016 and Yemen has set a target of 400MW of wind power and 6MW of biomass energy by 2025.
The most ambitious plans, however, have been formulated in Saudi Arabia. Ka-Care has recommended that half of the kingdoms energy needs should come from non-fossil fuels by 2032, a target described in the Irena report as staggering. Some 25GW is due to come from CSP plants by that date, with a further 16GW from PV, 9GW from wind, 3GW from waste-to-energy and 1GW from geothermal sources. In addition, nuclear power plants are expected to supply 17.6GW of energy.
Renewable energy: An attractive alternative
Riyadhs reasons for wanting to develop renewable energy are common to most of the oil producing states. The cost of subsidising domestic power consumption is becoming a burden for even the richest Gulf countries, while at the same time they lose the opportunity to sell their oil or gas at full market prices. Greater fuel efficiency would be one way to tackle the problem, but few regimes are willing to cut subsidies given the public opposition it would create and the consequent risk of political instability. Replacing fossil fuels with renewable energy is an attractive alternative.
A few years back, the [Saudi] government did some soul searching and arrived at the conclusion that continuing to provide fuel on a subsidised basis to the power sector to provide electricity would destroy value, says an energy industry executive in Riyadh. They have more to gain by relying on renewable resources and realising a better market price for the oil and gas saved.
A significant proportion of power generation in the next 20 years will involve the replacement of fossil fuels with alternative sources, primarily solar but also complemented slightly by nuclear and other renewables such as wind and geothermal.
For energy importing countries, there are other motivations. Developing domestic power sources will offer a welcome respite from the vagaries of international energy markets and could also help create new industries and thus job opportunities. Technologies such as solar energy can also prove to be a relatively cheap way of providing electricity to more remote rural areas where extending the national grid could be prohibitively expensive. At the moment, some 20 million people around the region still lack access to power.
Heavy investment into renewable energy
That is not to say the expansion of renewable energy comes cheaply; in most cases, it involves heavy investment, particularly given the fact that countries are developing the technology on a scale not often seen before. New investment in renewables in the region totalled $2.9bn in 2012, according to Irena, some 40 per cent more than a year earlier. As governments move ahead with their alternative energy ambitions, that figure is only going to rise.
In the longer term, there should be benefits for all concerned. The oil-rich countries should start to earn more from oil exports, while those lacking large oil and gas fields should see an improvement in their trade balance as energy import bills fall. The real benefit, however, will accrue to those countries that manage to develop an indigenous renewables industry that can export its skills around the rest of the region and to the wider world.