Solar power a key chance for MENA countries

AT Kearney believes that when looking at energy generation cost and job creation opportunities MENA countries should invest in a solar power energy industry.

Concentrated Solar Power (CSP) will likely become cost competitive in the next 12 months, as oil and gas prices are increasing to oil expected to selling at above 100 US dollars and the costs for CSP technology are sinking due to productivity improvements.

“The cost competitiveness of solar energy will lead to a boom in solar energy on a global basis and represents a unique opportunity for the Middle East,” said Dr. Dirk Buchta, managing director of A.T. Kearney Middle East.

In the past especially European and US suppliers have dominated the solar market. This is currently about to change as cheap Chinese suppliers are entering the market but with low quality products.

This may be the chance for the Middle East which is geographically well positioned to become a future major player. With an average of 310 sunny days per year and a high annual solar irradiance of over 2,500 kWh per square meter per annum, the Middle East has more than double the amount of solar energy potential than anywhere in Central Europe.

“The Middle East may benefit from the expected global boom in solar energy through developing its own solar power energy industry supplying its own demand and parts of the growing global demand for renewable energy,” said Christian von Tschirschky, principal, A.T. Kearney Middle East.

“There is an increasing demand for solar technology on a global basis which may be partially covered by technology and production sites in MENA – why leave it to the Chinese?” added von Tschirschky.

According to A.T. Kearney the Middle East therefore has the opportunity to become a boom center for solar energy in the next 10 years with additional 9,000 MW of concentrated solar power capacities until 2020 and more than 40,000 MW until 2030.

This solar generated power will give the Middle East the option to sell the gas and oil at increasing prices to the world market instead of burning it to generate electricity, and also create huge employment opportunities in direct or supporting industries.

“The MENA region has a unique opportunity to develop high quality globally competitive solar suppliers, who produce at lower costs than US or European suppliers. A competitive regional solar energy industry has the potential of creating more than 100,000 new jobs in the region, based on benchmarks from other regions.

These jobs include direct jobs in Photovoltaic (PV) and CSP suppliers, developers and operators as well as supporting industries” said von Tschirschky.

“Besides developing solar technology and production centers, the region may also sell solar energy in the future as part of the European Desertec project to Europe which will open the chance for additional revenues of US$ 90bn per annum for MENA,” concluded von Tschirschky.

However, the growth of a MENA wide solar industry will have to be supported by national and regional strategies, and relies on close cooperation between governments and the private sector.

The areas which the MENA governments and the private sector need to address to exploit all opportunities arising from the expected solar boom are related to the creation of a conducive environment, which ensures sufficient funding, a supporting regulatory framework, education of solar energy workforce as well as industrial zones for renewable energy and the construction of solar plants.

World Bank set to invest $5.5bn in MENA solar power

The World Bank has announced plans to invest more than $5.5bn in solar energy projects in the Middle East and Africa.

The bank’s Clean Technology Fund (CTF) approved financing of $750m and plans to “mobilise an additional $4.85bn from other sources, to accelerate global deployment of Concentrated Solar Power (CSP),” the lender said in a statement.

The CSP investment will be in five countries in the Middle East and North Africa: Algeria, Egypt, Jordan, Morocco, and Tunisia. The eleven power plants are due to be operational in around three and half years.

Shamshad Akhtar, World Bank regional vice president of the Middle East and North Africa, said “This is a most strategic and significant initiative for MENA countries. The initiative would leverage energy diversification, while promoting Euro-Mediterranean integration to the benefit of MENA countries that will be able to exploit one of the major untapped sources of energy.” The projects are expected to reduce green house gas emissions in the region by around 1.7 million tons of carbon dioxide per year.