Middle Eastern Solar Energy Production: Potential and Promise

Since March 3rd, 1938, when an American-owned oil well discovered the largest source of petroleum oil in the world at Dharhan in Saudi Arabia, the Middle East region has played a crucial role in meeting the ever-increasing energy demands of the world. Today, with climate change staring us in the face, the Middle East region once again has the potential to play a critical role in producing massive amounts of energy. But this time, not the polluting kind underground, but the clean, renewable kind above ground by using the region’s vast stretches of flat, perennially sun-soaked deserts.

Another advantage that the Middle East enjoys is its proximity to Europe where the potential for solar energy production is limited and near sourcing of clean energy may soon become imperative. Couple these advantages with a maturing technology and falling prices of photo voltaic cells, the time is ripe for the region to begin its energy transition to solar power in earnest. Governments here have recognised this potential and are aggressively trying to make the move to cleaner energy sources.

The UAE, which is working on two of the largest solar energy projects in the world, today appears to be well on its way to achieving its target of net zero emissions by 2050 and a 23.5% reduction of Greenhouse Gas Emissions (GGE) by 2030. The country plans to produce about 14GW of clean, renewables-based electricity by then. Till date, the UAE has seen investments of up to $40 billion in renewable energy.

Projected to be the largest single-site solar farm in the world, the Mohamed

Bin Rashid (MBR) Solar Park aims to produce 5GW of power by 2030. The project is being overseen by the Dubai Electricity and Water Authority. Phases 1,2 and 3 have been completed and are operational. Phase 4, called Noor Energy 1, is being constructed using three distinct solar technologies including Concentrated Solar Power using parabolic basins (600MW), solar power tower (100MW) and photo voltaic (PV) solar panels (25MW). DEWA owns 51% of Noor Energy 1 while ACWA Power holds 25%, and the Silk Road Fund owns 24%. The project is being commissioned in phases and is expected to be fully operational in 2023.

Other Key Developments

A consortium led by ACWA Power and Gulf Investment Corporation is developing the 900MW PV-based Phase 5 of the MBR Solar Park. When complete it will bring the total production from Park to 2.8GW by 2023. H.E. Saeed Mohammed

Al Tayer, MD & CEO DEWA has said: “DEWA works to achieve the fifth pillar of the Dubai Clean Energy Strategy 2050, which focuses on creating an environ- mentally-friendly energy mix, with 25% coming from solar energy, 7% from nuclear power, 7% from clean coal, and 61% from gas by 2030.”

Back in 2019, Abu Dhabi commissioned - what was then – the world’s largest solar plant, Noor Abu Dhabi (1.17GW). Last year the emirate has announced new plans to install 8.8GW of capacity by 2025. Presently, the Al Dhafra solar power plant is being constructed in Abu Dhabi. Consisting of 3.5 million solar cells, when completed, it will reduce emissions by 2.4 million tonnes a year while producing 2.5 GW of electricity. Other UAE emirates like Sharjah and Ras Al Khaimah are also in the process of rapidly implementing smaller scale projects.

On the distributed solar front, DEWA’s Shams Dubai program has seen widespread adoption across Dubai with homes and businesses making investments in rooftop solar panels following a “net metering” principle. This allows customers to produce their own solar energy to power their homes and businesses. This augments their conventional supply from the grid. Any surplus electricity produced by the rooftop which is not used, is immediately sold back to the grid at the same price as the conventional supply.

Sustainable States

The UAE’s climate change efforts have been widely recognised at the COP26 summit in Glasgow. So much so that the UAE has been appointed to host of the 28th session of the Conference of the Parties (COP28). Saudi Arabia is another country in the Middle East region that is aiming to become a solar energy powerhouse in the near future. The country has set a target of generating 50% of its electricity from renewables by 2030 and achieving net zero emissions by 2060.

Saudi Arabia is attracting the maximum number of investors and developers for its solar energy and sustainable living projects. In this regard, the US$500 billion NEOM project has been getting a lot of attention. This under construction mega project when complete will require anywhere between 20 to 40 GW of green electricity that will be produced by a number of solar farms in the vicinity.

The Kingdom’s Renewable Energy Project Development Office (REPDO) is also commissioning numerous solar projects. Phases 1 and 2 have already been awarded while phases 3, 4 and 5 are in various stages of the tendering process. Saudi Arabia is also rapidly setting up plants for the production of solar panels with the Saudi Authority for Industrial

Cities and Technology Zones (Modon) planning to add 23 solar panel factories in the country in the near future.

Egypt is another country making determined strides in renewable energy production. Last year the government announced the reservation of 7,600 sq. kms of land which has the potential to produce 90GW of solar-powered electricity. However, also in 2021, projects in the country slowed down to inflation concerns, rising solar cell prices and shipping costs.

Other Middle Eastern countries like Oman, Jordan, Qatar and Morocco are also setting themselves ambitious targets, but the pace of implementation is not as rapid as the other countries due to regulatory and bureaucratic hurdles. However, there is plenty of hope, with solar projects in the region offering electricity at some of the lowest prices in the world.

C Ost Factors

With the current global average price of solar-powered electricity sitting at 4.8 cents/kWh the UAE and Saudi Arabia are commissioning projects where the maximum chargeable costs hover around 1.5 cents/kWh. Barring India and China, which also produce solar-based electricity at comparative rates, the Middle East with its advantageous geographic location can continue to be the dominant supplier of a cheap power –this time solar power – to neighbouring Europe and Africa.

A recent report by Mordor Intelligence has projected that the Middle East solar power market will grow at CAGR of 11% over the next five years. This growth also provides opportunities for employment as the region’s economies move away from oil and gas production to solar energy production. Solar PV is widely recognized as a creator of more jobs per unit of energy produced than any other energy source. Unlike oil, the production of solar energy does not depend upon fixed amounts of available resources, but its growth depends on technological advancement as the sun comes up everyday offering the industry opportunity to continuously improve into the future.

As Moore’s law has demonstrated, computer processing power doubles every two years. Solar technology also promises to follow a similar exponential path of growth and value addition. Thus, ensuring that the Middle East will retain its position as a key supplier of energy to the rest of world in the coming years.