UAE Set to Surpass Renewable Energy Capacity Goals for 2030, According to IEA

The United Arab Emirates (UAE) is poised to exceed its renewable energy capacity targets for 2030, as confirmed by the International Energy Agency (IEA) in its latest Renewables 2024 report. The report highlights that while the combined ambition of MENA countries aims to reach 201 GW of renewable capacity by 2030, the main-case forecast is projected to fall 26 percent short of this goal.

Notably, Saudi Arabia, Egypt, and Algeria are expected to account for nearly 60 percent of the region’s total renewable energy ambitions. While the IEA’s outlook is more optimistic than previous years for these countries, it indicates that their installed capacities are still anticipated to fall short of their declared targets.

To achieve the region’s renewable energy aspirations, the report identifies three key challenges that must be addressed. Firstly, there is a need for faster auction implementation. The report states that the process of opening tenders, selecting winners, and signing Power Purchase Agreements (PPAs) can often exceed one year. Accelerating this process would enable more projects to come online sooner.

Secondly, improving the regulatory and policy environment for distributed solar photovoltaic (PV) systems is essential. Implementing reforms that allow for self-consumption and provide remuneration for excess electricity generation is crucial. Although several countries have established legal frameworks for self-consumption and net metering, the report notes a lack of public data showing significant deployment in the commercial and residential sectors, apart from the UAE, indicating that implementation remains a challenge. Additionally, reforms to ensure that electricity tariffs are cost-reflective would enhance the economic appeal of renewable energy, especially for large industries.

Lastly, the report highlights that increased growth could be facilitated through greater industrial electrification and the removal of barriers for new market entrants, thereby promoting the widespread use of corporate PPAs.

Looking ahead, the IEA forecasts that Solar PV capacity in the Middle East and North Africa is expected to expand by 84 GW by 2030, with more than half of this growth coming from Saudi Arabia and the UAE. Overall, the installed solar PV capacity in the region is projected to increase more than fourfold between 2024 and 2030, raising its share in the power mix from 2 percent to over 8 percent.