Mena region targets three-fold increase in renewable energy by 2020

However, according to the latest research report by MEED Insight, ‘Mena Renewable Energy 2012’, states right across the region are now planning a substantial hike in renewable energy capacity over the coming decade to meet high power demand growth, limit the use of oil and gas feedstock in power generation, and take advantage of a forecast drop in solar and wind generated electricity.

Ten of the 14 Arab states covered in this report have set 2020 renewable energy targets, ranging from 5% of the total energy mix to 42%. Even those that have not, such as Saudi Arabia and Iraq, are talking of implementing major solar power programmes. The targets imply that renewable energy capacity will have to rise three-fold to at least 27,000 MW if they are to be met.

Even though renewable energy is being taken much more seriously across MENA, the 2020 targets are highly ambitious, given the limited track record of most regional states. In parts of the region, much still needs to be done on clarifying, developing and improving the regulatory and institutional framework. Issues such as feed-in tariffs and grid access also need to be addressed. Finally, the removal of red-tape and slow-decision making is a prerequisite given that both have seriously hampered the development of new projects in the past in North Africa.

Renewable energy plans have been hit by the outbreak of conflict, civil unrest and regime change across much of the region. In North Africa and Syria, numerous projects have been delayed or put on hold since the start of 2011. Even once political stability returns, it is likely to be some time before they are reactivated. Most vulnerable remain the raft of planned solar power and wind farm independent power projects (IPPs), which will require substantial commercial finance. If they are to proceed, bilateral and multilateral financing may well have to play a much greater role than previously envisaged.

"For most Arab states, raising the contribution of solar and wind power in the energy mix is only one part of the renewables drive," says Angus Hindley, MEED’s Research Director. "Increasingly, governments see the capacity push as nurturing new solar-related manufacturing, which will not only create much-needed employment but also assist in economic diversification."

Along with providing a detailed analysis of the existing renewable energy sector across the Mean region, this report offers a detailed forecast for demand growth, additional capacity and investment requirements up to 2020. It has been based on face-to-face interviews with key players in the sector and supported by proprietary data compiled by MEED and MEED Projects.