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According to a latest report, renewable energy can benefit from the rising oil prices which is anticipated to reach $100 in oil producing nations. Since 2021, demand for energy has rose with high economic growth.
“Higher oil prices will provide incentives for Gulf countries to spend more on renewable energy investments, thanks to more profits, resulting in national budget surpluses. Renewables are part of Gulf countries’ plans to make their economies more sustainable,” says Dr Youssef Al-Shammari CEO of CMarkits and research fellow at Imperial College in London.
The Middle East region has focused on bringing new projects and policies for renewable energy. In 2019, solar target for 2023 was set at 20 GW and for 2030 it was set for 40 GW. In 2021 April, Saudi Arabia launched Sakaka renewable energy project.
In December 2021, Energy Minister of Saudi Arabia announced the investment of $101 billion in renewable energy by 2030 of the Middle East region. Saudi Arabia expects to have 50% of electricity generation from renewable sources by 2030.
“Vision 2030 aims to reach 60 GW from renewables. Renewables are a good strategy for Gulf countries to diversify their economies,” said Al-Shammari.
The UAE planned to invest $163 billion in renewable and clean energy by 2050 which is part of the country to meet the net-zero targets by 2050. Recently, first stage of the Mohammed bin Rashid Al Maktoum Solar park with 300 MW capacity was inaugurated and the total capacity of the park is estimated to be 5 GW by 2030.
Jessica Obeid, Senior Advisor at Azur Strategy said, “High revenues would enable investments in low carbon energy, provided the political will remains in Gulf countries.”
In 2021, $23 billion was invested in renewable energy by sovereign investors which was more than investment in gas or oil.