- Rystad Energy says solar PV is expected to lead the total renewable energy expansion of the UAE to 9 GW by 2025
- Most of the expected capacity addition—8.2 GW—will be in Abu Dhabi and Dubai
- UAE’s renewable energy targets seem to be well within reach, analysts claim, but see it reaching 44% by 2050, as against 50% the country aims for officially
Solar PV is likely to lead renewable energy installations in the UAE making up 8.5 GW of expected 9 GW cumulative installed renewable energy capacity of the region by 2025, according to the analysts at Rystad Energy. Solar power also made up around 91% of total installed renewable capacity of 2.3 GW at the end of 2020, they add.
The majority of the renewable activity is concentrated in Abu Dhabi and Dubai that together account for over 90% or 8.2 GW of forecasted capacity in 2025. Dubai increased the share of renewables in its energy mix to close to 9% in June 2020 with 1 GW installed capacity, exceeding its 2020 target thanks mainly to MBR solar park, according to the analysts. Aiming for 5.6 GW solar PV by 2026, Abu Dhabi currently stands at 1.3 GW, mainly based on 1.17 GW Noor Abu Dhabi project at Sweihan (see 1.17 GW Sweihan Solar Project Energized).
A robust project development pipeline, comprising some large scale solar farms including 2 GW Al Dhafra, 1.5 GW Abu Dhabi PV3, 950 MW MBR phase IVa and IVb, and 900 MW MBR Solar Park phase V, give the analysts confidence for the UAE to achieve 21% renewable energy in the national energy mix by 2030 and increase it to 44% by 2050. The official target of the country is to reach 50% renewable energy capacity by 2050.
“It is too early to predict the achievability of the country’s 2050 target, but the resilience and determination shown by the UAE’s renewable sector amid Covid-19 will surely make it attractive for investors and developers alike,” opines Rystad Energy. “This, together with some of the world’s lowest power purchase agreement (PPA) prices, suggests that 2050 targets are well within reach.”
All in, the market intelligence firm expects UAE’s renewable capacity to grow at a compound annual growth rate (CAGR) of over 31% towards 2025.
“Despite the Covid-19 shock, the government has provided a reasonable amount of investment to continue ongoing projects. UAE has already attracted big international players in the renewable sector – a healthy sign for future business,” added Gaurav Metkar, Senior Analyst at Rystad Energy.