MENA Needs To Accelerate Wind & Solar Adoption

• GEM's analysis for MENA region's status of energy transition shows the speed of renewable energy deployment needs to accelerate significantly   
• It needs to install 19 GW annually to be able to achieve decarbonization before 2050  
• A large majority of projects are devoted to green hydrogen, and that too for export purposes instead of being used to decarbonize local industries and electricity sector  

The Middle East and North Africa (MENA) region can achieve a fully decarbonized electricity sector before 2050 if it installs over 500 GW of solar and wind energy capacity to replace electricity generation from 343 GW of gas and oil power plants, provided none of it is used for hydrogen production, says Global Energy Monitor (GEM).  

This would translate into installing 19 GW annually. At present, the region operates 19 GW of utility– scale solar and wind capacity. However, the rate of installation is too slow, according to GEM analysts since MENA installed only 6.9 GW new utility– scale solar and wind energy over the course of a year, since May 2022.  

GEM points out that it is way less than 32 GW South America brought online over the same period, with Brazil alone adding more than 14 GW of large-scale solar and wind capacity.  

On the other hand, planned gas power plant capacity in MENA increased by 38% YoY reaching 92 GW over the reported period.    

The region has another 9 GW of utility-scale solar and wind projects under construction, to come online by 2024-end. Nonetheless, gas is 'still king' here. The 343 GW oil and gas power plant capacity in MENA region accounts for 23% of the world's operating oil and gas power plant capacity, and over 90% of electricity within the region.   

What's also worrisome, according to GEM, is MENA's bet on green hydrogen 'despite the uncertainty and risk involved with this nascent technology'. Analysts note that 60% of the region's prospective utility- scale solar and wind capacity of 361 GW is earmarked for green hydrogen. The prospective capacity increased by 292 GW in the last year.   

"While Oman and Morocco appear to be threading the needle by planning sufficient solar and wind projects to meet their domestic green electricity targets, in many MENA countries the focus on green hydrogen may undermine efforts to provide ample domestic electricity access or transition national electricity sectors away from fossil fuels," GEM points out in its analysis.  

Most of these green hydrogen projects are targeted for exports instead of being used to decarbonize local industry and electricity sectors, which should actually be the primary use of this clean fuel. Mauritania, for instance, has announced 3 green hydrogen projects of 50 GW total capacity even as less than 50% of the country's population has access to electricity (see Total Eren On Board For 10 GW Green Hydrogen Project). 

Additionally, the risks with green hydrogen include the technology and infrastructure for transporting this fuel over long distances is still being developed, they warn.  

Nevertheless, when the 'questionable hydrogen and export projects' are subtracted from the region's prospective utility-scale solar and wind capacity, the remaining 130 GW, if realized, could make significant progress in displacing oil and gas use for electricity. 

Of the 361 GW prospective solar and wind projects, only 23 GW are under construction while 171 GW are in pre-construction stage meaning these have either financing, government permitting, land rights, or formal power purchase agreements in place. Remaining 46% have just been announced, and according to GEM, it is least likely for all of these to be realized.  

GEM remarks, "In no global region, with the possible exception of China, will all of these prospective projects end up becoming operational." 

Masdar and ACWA Power, owned by the sovereign wealth funds of the UAE and Saudi Arabia respectively, together own a minimum of 46 GW of this prospective capacity across at least 21 countries in the global south. In comparison, the world's largest sovereign wealth fund in Norway has only 3 GW operating renewables capacity.  

In terms of countries, it considers the UAE, Oman and Morocco as potential renewable energy leaders thanks to their operational large– scale solar and wind capacity, ambitious targets and prospective project capacity.  

The complete analysis of the MENA region by GEM is available on its website.