The potential of the solar industry in the Middle East and North Africa (MENA) has always been obvious — huge amounts of sunshine coupled with vast tracts of open space — but the primacy of the oil & gas sector always seemed to hold it back. That is, until now.

Across the MENA region, 2019 was a breakthrough year. According to the Middle East Solar Industry Association (Mesia), about 3GW of solar was installed across the region — mainly in Saudi Arabia, the United Arab Emirates (UAE) and Egypt — more than doubling the cumulative capacity of 2.93GW installed by the end of 2018.

And annual installations are only going to grow, with a further 17.4GW of utility-scale projects in the pipeline across a wide range of MENA nations, including Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Qatar, Morocco, Oman, Pakistan, Saudi Arabia, Tunisia and the UAE.

Of these, 2.82GW are under construction, a further 2.2GW have been awarded in recent tenders, with a further 4.6GW of projects announced. Another 800MW is said to be “in development”, with an additional 3.6GW of tenders expected to be announced in Abu Dhabi and Saudi Arabia in the coming months.

And this does not include distributed solar — residential, commercial and industrial — which is also beginning to take off in several MENA countries.

“The industry is clearly picking up very strongly; we’re seeing one tender after another,” Mesia general secretary Martine Mamlouk tells Recharge. “By 2030, two thirds of the growth of the energy sector will be met by renewables.”

Many countries in the region have now set out clear renewables policies and targets (see section below), with Mamlouk explaining that MENA nations are now embracing solar power for three reasons: 1) The ultra-low prices being seen in the region (see box below) — which have fallen below the levelised cost of energy of new gas-fired power plants; 2) A move in several oil-rich countries to diversify their economies away from a reliance on hydrocarbons; and 3) The desire to reduce greenhouse gas emissions.

Nations such as Saudi Arabia and the UAE have realised that it will be cheaper to power their economies primarily with renewables than to rely on oil- or gas-fired generation, thus freeing up a greater proportion of their hydrocarbons for export.

“[Conventional power] plants have a certain lifespan, so what is probably going to happen is that some [fossil-fuel] plants will be replaced at the end of their lifetimes by renewable energy projects — especially in countries that still have plants, desalination plants in particular, powered by crude oil like Saudi Arabia. And where governments, such as in the UAE or Saudi Arabia, want more efficient power plants and less CO₂ emissions.”

She explains that the UAE, where she lives, has a long-standing culture of being environmentally conscious, but that oil production continues to be vital for the country’s development. “They want to find a middle ground where they preserve economic growth while reducing their carbon footprint,” she says.

Mamlouk also points out that rapidly developing states such as the UAE are also dependent on electricity for their survival due to the harsh climate of the Gulf. The extreme heat makes air conditioning vital for seven or eight months of the year, and with a scarcity of naturally occurring drinking water, desalination is essential — 70% of the power in the UAE is used for water desalination and cooling. For this reason, “there is a real concern about energy security”, she says, adding that the country will therefore probably always keep gas-fired power plants on line.

“Continuity and back-up is even more important here as in other regions of the world when it comes to formulate the right energy mix, Mamlouk explains.

“Even if they have a lot of renewables, I think they will always keep some capacity of conventional gas thermal plants, because you never know what happens if you have a problem with a nuclear reactor or have a big storm that might abruptly reduce your solar power output or even damage panels.”

A reliance on a large share of intermittent renewable energy will obviously require a lot of energy storage.

“You’re seeing more and more projects which have a storage component. The last large solar PV tender in Abu Dhabi included a requirement of 300MW storage capacity,” she points out.

Therefore, in the longer term, green hydrogen could play a major role in some MENA states.

“Green hydrogen — for countries like Saudi Arabia or the UAE — [is] a clear objective in order to integrate a large share of solar, as it can provide a a large amount of long-term storage capacity. It will also allow these countries to maintain their roles as net energy exporters in the long term,” Mamlouk explains, adding that green H₂ could be exported to clean-energy -hungry countries such as Japan and South Korea, while also being a “solution to get unlimited clean energy in the long term”.

The Middle East’s first electrolyser — a 1.25MW Siemens unit to be powered by solar energy — is due to be up and running by October at the Expo 2020 event in Dubai.

Notable national policies and projects

Saudi Arabia’s 2030 Vision programme to reduce the country’s dependency on oil revenues includes plans to diversify its energy mix and develop significant amounts of renewable energy.

Under its National Renewable Energy Program (NREP), the country aims to install 27.3GW of renewable energy by 2023 and 58.7GW by 2030, with the latter figure including 40GW of PV, 16GW of wind and 2.7GW of concentrating solar power (CSP).

The first tender round of the NREP, in 2018, saw 300MW of PV and 400MW of wind awarded. A second round, now accepting bids, is offering a further 1.47GW of PV, while a third tender round is expected in early 2020, putting 730MW of solar and 850MW of wind up for grabs.

In the UAE, the government has announced an Energy Plan for 2050, which calls for 44% of its energy mix to come from renewable energy, with the remainder coming from natural gas (38%), “clean coal” (12%) and nuclear (6%) by mid-century. Notably, energy used in transport, cooling and industry is included in this target, and plans are advancing on encouraging electric vehicles in the two largest emirates, Abu Dhabi and Dubai.

As a key part of its plans, Dubai is building what is likely to be one of the world’s largest solar projects, the Mohammad Bin Rashid Al Maktoum CSP/PV complex, which is set to grow from 713MW today to 5GW by 2030. As part of this build-out, its 900MW fifth phase was awarded in November at a then-world-record low price of $16.93 per MWh.

Abu Dhabi currently operates the world’s largest solar project, the 1.78GW Noor array in the town of Sweihan. A 2GW solar park in the Al Dhafra region of Abu Dhabi is soon to the allocated and expected to be completed in Q1 2022, while a further tender of 2GW of solar is expected to be unveiled shortly. Mesia expects Abu Dhabi to aim for up to 6GW of additional capacity by 2026.

Also, the smaller, less-developed emirate of Ras Al Khaimah has launched a 300MW solar tender.

Under its Integrated Sustainable Energy Strategy, Egypt has set targets of 20% renewables in the national electricity mix by 2022 and 42% by 2035, the latter figure equating to 52GW of utility-scale and distributed renewables.

Egypt’s largest renewables project is the 1.8GW Benban solar park, of which 1.4GW has already been commissioned.

Competitive tenders saw solar prices fall to $27.50/MWh last October for the 200MW Kom Ombo plant, prompting the Egyptian Electricity Transmission Company (EETC) to declare that the ceiling price at future PV auctions would be $25/MWh.

Algeria is targeting 27% of its power mix to come from renewables by 2030 — and has broken that down into 13.58GW of PV, 5GW of wind, 2GW of solar thermal, 1GW of biomass and 15MW of geothermal.

Jordan wants to achieve 20% renewables in its energy mix by the end of this year — roughly 2.4GW. However, the government last year halted all new grid-connection licences while it studies how the grid can absorb more intermittent renewable energy.

Kuwait has set a target of installing 4.32GW of renewables by 2030 — almost half of which will come from the 2GW Shagaya hybrid project, which will be made up of 1.15GW of CSP, 700MW of PV and 150MW of wind. The small nation also has multiple distributed PV schemes under way.

Morocco is aiming to meet 42% of its energy needs from renewables by the end of this year, reaching 52% by 2030. Two PV/CSP/storage projects — the 2.2GW Noor Ouarzazate and the 1GW Noor Midelt — will together provide 38% of the country’s electricity. The country has a unique advantage in the MENA region in that it is able to export excess energy to Europe via two 700MW interconnectors to Spain.

Oman wants renewables to account for 30% of its energy mix — about 4.8GW — by 2030. The sultanate has already tendered for 1.7GW of solar, all of which is due to come on line by the end of 2022, while procurement of a further 2.6GW is in the pipeline.

Under its Renewable Energy Action Plan, Tunisia aims to meet 30% of its energy production from renewables, equating to 2.25GW.

In January, Qatar awarded the 800MW Al-Kharaah solar project to French oil giant Total and Japanese conglomerate Marubeni at a world-record low price of $15.67/MWh. The Gulf state’s first utility-scale renewables project is expected to deliver about 10% of the nation’s peak electricity demand, and will help meet its pledge for the 2022 FIFA World Cup, which it is hosting, to be carbon-neutral.

The tiny island state of Bahrain aims to achieve 10% renewable energy by 2035. With very little available land compared to its neighbours, it is focusing on small utility-scale projects and distributed PV. It aims to install 255MW by 2025 through net metering, while early last year, the country awarded a tender to build a 100MW PV plant on a landfill site in Askar. It is also examining the possibility of installing floating solar project off its coasts.

Transition

Middle East solar sector finally takes off as 3GW added in 2019