Report finds MENA region lagging on renewable power

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The MENA region offers 45 per cent of the world's total energy potential from all renewable sources, but in general is not capitalising on this opportunity.

"Renewables in much of the MENA region are underfunded or not funded at all, in part due to the region's abundant supplies of fossil fuels," says Ibrahim el Husseini, a partner at

who is also the lead author of the management consulting firm's

on the potential for renewable energy in the region.

The Booz study found that the MENA region has the world's greatest potential for solar power, as well as some potential for large-scale wind farms. If it achieved the full potential it could supply more than three times the world's total current demand for electricity.

It suggested, as have a number of previous studies, that renewable energy development in the region could help mitigate global climate change and significantly improve local air quality while enhancing the export value of the region's oil and gas resources. It could also drive economic diversification and create jobs.

Since competitive positions in the renewables sector are not yet set, countries such as the UAE that move quickly "could build a sizable and sustainable competitive advantage", Booz concluded.

Among the factors holding back renewable energy development in the MENA region, according to Booz, is the relatively high cost of solar power.  While photovoltaic technology can be a cost-effective replacement for diesel genrators in remote areas, large-scale grid-connected solar power "cannot currently compete with the region's fuel of choice, natural gas," sayd Mr el Husseini.

Booz estimates that the unsubsidised cost of solar photovoltaic power in the MENA region would become competitive with gas-fired generation between 2015 amd 2025, depending on gas and carbon prices.

The region's substantial subsidies for conventional energy were also holding back renewable energy initiatives, according to the study: "Subsidising energy puts an automatic brake on the private sector's development of renewable energy sources, because such sources need to compete with an energy source that is already very cheap and widely available."

Nevertheless, renewable energy development could be vital for the MENA region, because its current power supply, amounting to 146 gigawatts of installed generating capacity, may be insufficient to met future demand. Countries in the region will need to build add a further 80 to 90 gigawatts of capacity by 2017, Booz forecasts.

The firm recommends that governments in the region develop renewable energy strategies, appoint and empower national entities to lead the development of policies and regulations pertaining to renewable power and follow up on their implementation, and develop favourable polich and regulatory frameworks. They should also invest in electricity grids capable of integrating intermittent power production from wind and solar sources with conventional generation, and in a skilled workforce of technicians, designers and enginers.

P
ic: A solar plant being build in Ras al Khaimah, courtesy of Centre Suisse d'Electronique et de Microtechnique.
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