The theme of sustainable development is gaining unprecedented levels of interest and importance around the world. The Middle East is home to some of the world’s largest oil exporters as well as some of the world’s largest carbon emitters. The region has taken on the responsibility of reducing greenhouse gases (GHG), and as a result, the countries in the region have set ambitious goals to encourage renewable energy and thereby minimize carbon emissions. To meet its environmental obligations and meet its rising energy needs, the region is diversifying its power generation energy mix by investing in renewables, especially solar energy. Due to ample solar resources, the area has substantial solar energy potential.
Attractive Investment Factors In The Middle East
Capabilities and opportunities are vast in the middle eastern regions as these areas fall directly under the sunny belt. Renewable energy investment is increasing in the Middle East. The rise in total energy needs is due to the region’s population growth and economic development. Around 26% of Middle Eastern investors said they were currently investing in the energy transformation, marking the area as the most common for current renewables investment, while some of the investors claim that they are considering investing in such an industry that has so much potential. Solar energy plays an important role in the Middle East and is expected to expand significantly in the coming years. Utility-scale solar projects account for the majority of installed renewable energy in the Middle East. As of 2019, the total installed solar capacity was 5583 MW.
With the concentration of polysilicon production in Qatar and Saudi Arabia, manufacturing of solar cells and assembling of solar panels become two important points of investment. Market opportunities have resulted in the development of various solar technologies, most notably Concentrated Solar Power (CSP). The area is home to some of the world’s largest current and planned CSP plants. Solar PV investments are projected to add the most value over the next five years, accounting for 67.4% of the opportunity size, led by solar CSP investments at 17.5%. In terms of technology, solar PV is expected to gain the most momentum followed by CSP over the next five years as compared to other options.
The Middle East’s renewable energy share is projected to more than triple from 5.6% in 2016 to 20.6% in 2035, with solar accounting for the majority of this increase. With capacity additions of more than 57.0 GW in the works, there are plenty of opportunities. Numerous investment opportunities emerge for renewable companies in this region as a result of this serious effort to promote renewables in the Middle Eastern states, as well as localization efforts by these countries as they move towards building well-diversified, non-oil based economies.
The Mohammed Bin Rashid Solar Park in the United Arab Emirates (UAE), for example, is the world’s largest concentrated solar power plant. Given the region’s vast renewable energy resources, it is no surprise that the Middle East and North Africa ranked so high in terms of the current and potential investment. Furthermore, the region’s record-breaking low solar prices make the technology extremely appealing to developers. By 2050, the region’s electricity demand is projected to triple. Over the forecast era, an increase in electricity demand is likely to fuel an increase in solar energy demand.
Saudi Arabia is also pursuing renewable energy growth. Saudi Arabia’s Vision 2030 demonstrates a transition toward clean energies and a reduction in the country’s reliance on oil revenue. Thanks to the government’s economic diversification programme, the solar sector is gaining a lot of attention. The government is putting a lot of money into solar power plants. The government of Saudi Arabia is also attempting to entice key global players to invest in its solar sector by offering a variety of incentives.
The Middle East is still weaning itself off of hydrocarbons, a phase that has been fraught with difficulties due to the high costs and political tensions associated with taking such a risky new path. The Middle Eastern solar industry is steadily gaining ground and attracting large streams of foreign and domestic investment, with the price of solar energy provision tumbling in the last ten years, bolstered by the proliferation of advanced solar technologies and expertise globally.