The region has an abundance of solar and wind resources, and these are expected to attract a significant amount of investment once political stability is established and / or restored.
A review of each of the region’s countries is proposed :
The country’s solar potential being of the greatest as Algeria has an abundance of the resource coupled with a legislative framework for the renewable energy sector as one of the most progressive in the MENA region should have taken it into better situation but, delays in implementation have stunted the growth of renewable energy’s proportion of the country’s energy supply.
Algeria remains nevertheless committed to its ambitious targets of 20% of energy supply from Renewable Energy Sources (RES) by 2030 and it has publicly stated that it will be investing no less than $120 billion into renewable energy projects.
Wind energy potential however is relatively low, yet several small-scale wind projects with capacities of 10MW to 20MW are planned to be constructed over the next three years, mostly near the northern coastline.
Egypt remains a relatively new market with significant amount of potential and ambitious targets. It is also seeking to derive 20% of its energy from renewable sources by 2020 mostly through wind (12%), hydro and solar Photovoltaic (PV) panels (8%).
It is agreed that an electricity sector reform, a modern grid infrastructure, proposed Feed-in Tariffs and a renewable energy fund would lay a significant foundation for further growth in the renewable energy sector.
Renewable energy interest in Israel is largely driven by energy security concerns as the country seeks to diversify away from reliance on coal and gas.
However, internal bureaucratic hurdles and poor grid infrastructure have previously hindered availability of significant development of renewable energy through the excellent natural solar resources.
It is estimated that 60MW of solar PV and wind were to be constructed in 2012. As solar technology costs continue to reduce, Israel has approved a 240MW CSP plant, which was expected to become operational in 2014.
Jordan is a net energy importer with limited oil and gas reserves. As a result, the Jordanian Government outlined a commitment to develop and construct 600MW of solar and 600MW of wind over the next decade.
In mid-2011, the Government invited companies to submit proposals for renewable energy generation projects to meet the Government’s renewable energy target of 1.8GW by 2020. Proposals were received, and the Government is currently reviewing and laying down an appropriate investment incentive mechanism that would allow and support the development and construction of these projects.
Without any domestic coal or oil reserves and energy demand expected to double by 2020, the country is actively seeking alternatives to meet its current and future energy needs. A target to generate 42% of electricity from RES by 2020 demonstrates the necessity and commitment to diversify its energy supply.
Despite no FIT or subsidies, the Moroccan Government has privatized the energy sector that helped encourage private and foreign investment into renewable energy projects. Furthermore some other reforms are planned with the breakup of the monopoly of the state utility, ‘Office National de l’Electricité’.
Being the only country connected to the European grid, Morocco has a great ambition and therefore a good opportunity to transform itself into a net energy exporter. The country’s excellent solar and significant wind resources support the case for the country to become an energy provider to Europe.
In the MENA region, solar resource in Oman is one of the highest in the world with the potential to supply all of its current energy demand. It has been the pioneer of liberalizing electricity markets, implementing regulatory reform and privatization in the mid-1990s.
Oman also benefits from a well-established Public Private Partnership (PPP) regime through which significant international investment has been deployed. The country’s approach to renewable energy has however limited Government initiatives and backing.
Onshore wind development is limited due to permitting availability and grid restrictions, yet small projects have been approved and are under construction with the potential to increase wind capacity to 750MW.
In Saudi Arabia, the economic case for renewable is predicted to extending the life of its oil fields and export earnings, at the same time as meeting rapidly increasing power demand.
During 2011, Saudi Arabia announced a $100 billion spending commitment across nuclear and renewable energy aimed at achieving their target of 10% by 2020.
King Abdullah City for Atomic and Renewable Energy (KACARE) is part of this initiative. The centralized state-owned utility will provide the required stability and support to the pioneering renewable energy projects.
As part of introducing a new law for renewable energy, the Government is planning to adopt a solar energy FIT similar to what has been seen across Europe. Yet, no comprehensive technical or economic feasibility studies have been performed so far.
The Tunisian Government nurtures ambitious targets in the renewable energy sector, although there is currently no FIT or renewable energy incentive scheme in place.
Tax incentives and subsidies are used to encourage development and construction although different legislative, regulatory and financial barriers hinder the development of for instance the country’s attractive wind potential.
However, investment and expansion are required to develop and increase the grid to meet solar and wind targets. Interconnections with Algeria, Libya and European countries will be required and are currently being planned.
United Arab Emirates
The UAE has entered the renewable energy scene later than some, but has made it without leaving anyone doubting its commitment. However dealing with some remnant administrative inefficiencies, and with an aim to be a leader in renewable energy in the region, the UAE is presently reviewing and determining multiple incentive structures to encourage investment.
More specifically, Abu Dhabi emirate has committed $15 billion to meet 7% by 2020 and in spectacular fashion, has committed to planning and constructing the $22 billion Masdar City whose brief was to solely rely on renewable energy to be a “zero carbon” and “zero waste” urban community.
Meanwhile, Dubai currently produces 4.5 MW of energy through solar plants but it is targeting to meet 1% of its energy requirements through solar technologies by 2020, and to arrive at 5% by the end of the following decade.