$50bn solar bill for Middle East

The $50 billion prediction from the Dubai-based Middle East Solar Industry Association emerged as hundreds of delegates converged on the World Future Energy Summit that began in Abu Dhabi.

The Middle East could spend as much as US$50 billion in the next seven years on solar power.

The prediction from the Dubai-based Middle East Solar Industry Association (Mesia) emerged as hundreds of delegates converged on the World Future Energy Summit that began in Abu Dhabi yesterday.

The solar body estimates the region will install 12,000 to 15,000 megawatts of solar by 2020, plus an additional 22,000 to 25,000 gigawatts of other renewables such as wind and hydropower. Today the region has just 271MW of installed solar power, including Abu Dhabi’s 100MW Shams 1 solar array in the Western Region.

The study, which spans 14 countries, was published jointly by Mesia and the market researcher Meed Insight. It covers renewable energy targets ranging from Dubai’s modest 1 per cent to Morocco’s ambitious 42 per cent by 2020.

The region is at a turning point in executing its solar plans, said industry executives, with projects being awarded recently in Algeria, tenders announced in Jordan and bids expected soon in Saudi Arabia. Five years ago, only about one in two countries in the region had renewable energy targets.

“We’re seeing a move from the announcements to the mechanisms,” said Erik Voldner, the executive director of operations at Enviromena, an Abu Dhabi-based solar installation company. “A lack of visibility doesn’t mean there’s no movement on the programme.”

The study relies on an estimate that each megawatt of concentrated solar power (CSP), which relies on mirrors to produce heat that can then be used to generate electricity, costs about US$7 million and each megawatt of photovoltaic, which uses cells to directly produce electricity, will cost $2m.

Industry insiders expect the coming years to present an opportunity for CSP producers to narrow the price gap as a 25MW target in Saudi Arabia incentivises the growth of the industry. In the past five years, subsidy-driven demand in Europe and the rapid expansion of China’s solar panel production sector has driven down PV prices by 80 per cent. But the decline in PV prices is slowing, with costs this year expected to fall just 6 per cent.

The expected growth also presents fresh opportunities for research and development to adapt panels and mirrors to the region’s environmental conditions.

Abu Dhabi would need 1.5 to 2GW of renewables to meet its 7 per cent target, said Steve Griffiths,the executive director of institute initiatives at the Masdar Institute.

“If you look at anything that’s done in other countries, you don’t have this dust, you don’t have this humidity,” said Mr Griffiths.