Renewable Capacity Set to Increase to 9 GW By End-2025: Rystad Energy Analysis

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The installed renewable capacity of the United Arab Emirates, which until recently was nearly non-existent, concluded 2020 at 2.3 gigawatts (GW), around 91% of which comprises of solar PV projects, a Rystad Energy analysis shows. Solar PV additions are going to pile up, especially from 2022, and drive the country’s total renewable capacity to an impressive 9 GW by the end of 2025.

Rystad Energy, evaluating activity in the country, expects solar PV capacity to reach 8.5 GW in the UAE by the end of 2025, being by far the technology that will contribute the most to diversifying its energy mix. The share of renewable energy in the UAE’s power generation mix is set to increase from 7% in 2020 to 21% in 2030, and to 44% by 2050.

Previous targets for 2020 have already been achieved, and a robust project development pipeline suggests that the 2030 target is within reach. It is too early to predict the achievability of the country’s 2050 target, but the resilience and determination shown by the UAE’s renewable sector amid Covid-19 will surely make it attractive for investors and developers alike. This, together with some of the world’s lowest power purchase agreement (PPA) prices, suggests that 2050 targets are well within reach.

Given the country’s current project pipeline, UAE’s renewable capacity is on track for an impressive compound annual growth rate (CAGR) of more than 31% towards 2025. Among the seven emirates that make up the UAE, the majority of renewable activity is concentrated in Abu Dhabi and Dubai, which together account for over 90% (8.2 GW) of total capacity in 2025.

Major projects expected to drive this growth include four solar farms, the Al Dhafra (2GW), Abu Dhabi PV3 (1500MW), MBR Phase IVa and IVb (950MW) and MBR Phase V (900MW), all of which are in various stages of development. The remaining 0.9 GW of capacity will come from projects in other emirates, such as Umm Al Quwain, Ras Al Khaimah and Sharjah.

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