Gulf states are diversifying their economies into solar energy production to meet their net-zero targets
A recent MESIA report named Saudi Arabia as a “booming market” for renewable energy investment

DUBAI: Gulf states are stepping up the transition to renewable energy by launching ambitious infrastructure projects designed to help reduce their reliance on oil and gas to meet domestic energy needs.

Some of these projects will enable Saudi Arabia to expand its total solar energy capacity by almost 40 gigawatts by 2025 from the current 455 megawatts. Specific development plans in the Kingdom include the NEOM smart city, which will include a $5 billion hydrogen plant, and the Red Sea Project, which will have the capacity to generate 400 MW of solar power and will host the world’s largest off-grid energy-storage project to date.

“Saudi Arabia is making notable progress with its plans to develop clean energy and reduce emissions,” Denisa Fainis, general secretary of the Middle East Solar Industry Association, told Arab News.

“The climate measures will go hand in hand with tending to the continued high demand for fossil fuels. As the world’s largest oil exporter, more than half of Saudi Arabia’s revenues come from its fossil fuel sector.”

 MESIA’s latest report, published in January, listed Saudi Arabia as one of the world’s “booming markets in the renewable-energy sector, bringing more investors and developers to participate in huge projects than any other.” It said improvements in regulatory frameworks had helped the country to position itself among a group of nations that is leading the clean-energy revolution.

The Kingdom’s $500 billion NEOM megaproject will play a key role in efforts to diversify the Saudi economy while drawing exclusively from clean energy resources. It is estimated that NEOM will require between 20 and 40 GW of solar and wind power capacity to meet its energy requirements when it becomes operational in 2025.

Authorities in the Kingdom are planning several other projects in areas such as the Red Sea, Madinah, Qurayyat, Jeddah and Wadi Al-Dawasir to help reach the national target of net-zero emissions by 2060.

Elsewhere in the region, the 800 MW Al-Kharsaah solar project in Qatar is expected to be operational by mid-2022. In the UAE, the 5,000 MW Mohammed Bin Rashid Solar Park in Dubai and Al-Dhafra Solar Project, which will have a capacity of 2,000 MW, will be commissioned in stages by 2030.

Authorities in Iraq, Algeria, Egypt, Jordan, Morocco and Tunisia have launched similar projects that are in the development or tender phases.

Significantly, many nations in the region view the energy transition as an opportunity for economic growth and the creation of jobs, including the potential to manufacture solar-power components locally.

 The Gulf region obviously enjoys a geographical advantage in the solar-energy sector, thanks to plentiful sunshine and its proximity to Africa, Europe and other countries in the Middle East, which positions it to become a long-term energy exporter.

“By capturing photovoltaic energy from the biggest source in the universe and providing access to electricity to areas that still rely on fossil fuels, we can reduce carbon emissions, reduce costs in business operations and maintenance, and improve air quality, while further development in the sector will provide jobs for generations to come,” Fainis said.

In the five years since announcing their Vision 2030 economic-reforms agenda, Saudi authorities have been forging ahead quickly with plans for the development of the renewable-energy sector. The Kingdom has set for itself the target of generating half of its power needs from renewable sources by 2030 — that is, 60 GW of solar and other forms of clean energy.

Saudi Arabia is also planning to increase sustainability through the adoption of a circular carbon economy approach, a massive tree-planting campaign, the reduction of carbon emissions by more than four percent of global contributions, and measures to combat pollution and land degradation.

The country is also planning to issue its first green bond early this year that complies with environmental, social and governance concerns. Such bonds will become one of the main funding channels for the Kingdom’s future.

As part of Vision 2030, the Ministry of Energy is building two renewable-energy plants, with a capacity of 600 MW, in the Third Industrial City in Jeddah and Industrial City in Rabigh. The projects are being implemented through MODON, the Saudi Authority for Industrial Cities and Technology Zones.

 Meanwhile, a Red Sea battery-storage project will help to ensure the new resort destination taking shape along the Kingdom’s western coastline is powered entirely by renewables, and the Kingdom also plans to establish 23 solar panel factories in 12 industrial cities. At the end of last year, the largest solar plant in the region, with a production capacity of up to 1.2 GW, was inaugurated in Tabuk.

Saudi Arabia’s successes and ambitious plans are indicative of a wider trend. According to MESIA, solar capacity in the Middle East and North Africa region has the potential to reach up to 8,309 MW this year as the region adds more renewable-energy projects to meet individual national targets and transition strategies.

“There is massive expansion that can be anticipated in the next decade for the MENA region, (which is) particularly attractive for solar investments as the region has some of the highest solar-irradiation levels in the world,” Fainis said.

In addition to production, she believes the Arab region could also take the lead in storage solutions, which is another as-yet untapped area.

Countries such as Algeria, Egypt, Iran, Iraq, Jordan, the UAE, Oman, Qatar and Saudi Arabia are also rapidly adopting the use of new technology in the renewables sector, including artificial intelligence systems. According to MESIA, the Saudi smart grid market is expected to be worth $3.6 billion by 2030. Indeed, NEOM is expected to be powered entirely by AI-controlled solutions that use 100 percent renewable energy.

“Broadly, the MENA region has an ideal combination of large usable land areas for photovoltaic solar plants and high solar irradiation levels to maximize energy generation from solar energy,” MESIA said in its report in January.

Solar and wind power are not the only renewables attracting a flurry of investment. Green hydrogen is viewed as a significant emerging player in the energy mix as part of the process to achieve the net-zero targets set by regional governments, particularly in Saudi Arabia and the UAE.

 All of these projects will be essential to the efforts to mitigate the effects of climate change in a region where the damage it causes is tangible.

Mercedes Maroto-Valer, director of the Research Center for Carbon Solutions at Heriot-Watt University in Dubai and director of the UK Industrial Decarbonization Research and Innovation Center, warned that the climate situation in the region is growing worse.

“Temperatures have also been on the rise, with the highest regional temperature to date recorded in Mitribah in Kuwait at 54C,” she told Arab News.

However, with the development of new technologies and the ambitious national targets agreed during the COP26 climate summit in Glasgow last November, there is hope yet for a more sustainable future.

Fainis believes the MENA region must develop a local supply chain for equipment and training programs for the local workforce, build capacity in technology transfer, and continue to attract foreign investment.

“As populations grow, electricity demands will reach all-time highs,” she said. “Whether through energy auditors or initiatives by regulators, countries will have to adapt to the increasing energy needs.”

Source : https://www.arabnews.com/node/2064541/saudi-arabia