Please activate JavaScript!
Please install Adobe Flash Player, click here for download

REN21 10 Years Report

32 prices, as well as threats to exports. A landmark think-piece by Chatham House in late 2011 flagged that Saudi Arabia could become a net importer of oil by 2038 if domestic consumption continued to increase at the same rate. Renewables are furthermore seen as a way to increase eco- nomic diversification, generate new employment opportunities, promote technology transfer, and build local and national value chains. n RENEWABLE ENERGY POLICY DEVELOPMENT The renewable energy policy landscape in the MENA region has undergone a dramatic shift since 2004, when only four countries had renewable energy policies and/or targets. Today, 18 out of the 21 countries in the region have set renewable energy targets. Most targets are technology-specific, focussing on solar PV, CSP and wind capacity, or shares of renewables in electricity supply. If realised, existing targets would result in over 100 GW in installed capacity in the MENA region by 2030. To achieve this, more and more countries have started to enact support policies. Over the last decade, the number of countries with incentive schemes has increased five-fold from three in 2004 (Algeria, Malta, and Israel) to 15 in 2014. While the early adopters focused on FIT tariffs and tax reduction instruments, the breadth of policy instruments has increased. However, FIT tariffs and tax reduction are still among the most popular support mechanisms in addition to tendering and public investment. Local content requirements have recently emerged, with Saudi Arabia calling for 85% to support employment and industrial development. n DEPLOYMENT OF RENEWABLES Over the past decade hydropower and traditional biomass for cooking and heating have been the dominant renewable energy sources in the region, but wind, PV and CSP have recently emerged as the three preferred technologies. Power generation from non-hydropower renewables more than doubled between 2008 and 2011 to reach 3 TWh and outpaced growth in conven- tional energy sources. This trend is expected to continue in the foreseeable future with over 7.5 GW in renewable energy (par- ticularly wind and solar) projects in the pipeline as of April 2013. Among non-hydro renewables, wind energy is the most common source of renewable electricity in the region with more than 1 GW installed capacity and an average annual growth rate of 27%. Wind power capacity increased fourfold between 2005 and 2010. Compared to wind, the share of solar energy technologies in the region is still modest. However solar PV, CSP, and solar water heating (SWH) systems have been expanding rapidly in the region. Solar PV is an integral part of energy plans in almost all MENA countries, and the average annual growth rate of solar PV production was at least 112% between 2008 and 2011. CSP, while not as widespread, can be found in Algeria, Egypt, Iran, Morocco Saudi Arabia, and the UAE. SWH already plays an important role in the region; in 2012 there was about 9 million m2 of capacity installed. Among the least exploited sources in the region are geothermal power, modern biomass power, and biofuels. n MILESTONES OF THE PAST DECADE In 2009, the UAE kicked off the renewable energy trend in the Gulf with a 10 MW PV project. This marked the beginning of a phase of intensive wind and solar energy deployment. Wind energy expanded notably in Egypt, Morocco, and Tunisia, while Tunisia’s PROSOL and other SWH programmes in Mediterranean countries saw the cost-effective roll-out of non-hydro renew- ables. In 2013 the United Arab Emirates inaugurated the world’s then-largest CSP plant, the 100 MW Shams 1. In terms of poli- cies and targets, Morocco has stood out for its successful renew- able policy framework, which resulted in 200 MW of wind being completed in 2013 and major interest in CSP tenders. Jordan has activated its feed-in-tariff, which has seen nearly 200 MW of projects announced in the last year. In 2013, Saudi Arabia also announced a target of 54 GW of renewable electric capacity by 2032, which gained global attention. Of equal note, Algeria met its target of installing 10 MW of additional wind capacity in 2013. Notably, the 168-country International Renewable Energy Agency (IRENA) also opened its doors in Abu Dhabi in 2009, officially coming into being in April 2011. n MAIN CHALLENGES FOR RENEWABLES In addition to the political instability in the region following the Arab Spring, awareness of renewable energy cost-competitive- ness and fossil fuel subsidies are key barriers to accelerated deployment of renewables. Many energy companies and con- sumers have minimal experience with renewables and/or only see the subsidized price of fossil fuels (rather than the actual net cost to the government and economy), encouraging continued investment in more expensive oil and gas-fired generation. Despite a challenging political climate in parts of the region, some countries are reevaluating or reforming existing energy subsidy. The success of tariff and integrated planning reforms, in addition to greater public awareness, will have a significant impact on the future of renewable energy policy and deployment in the MENA region.

Pages Overview