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The Middle East is expanding its renewable energy and clean tech sectors at an accelerated pace, as several countries plan for economic diversification beyond oil and gas. While fossil fuels may continue to provide massive revenues for countries such as Saudi Arabia, the UAE, and Qatar, these Middle Eastern states are ensuring they hold a competitive position in the future of international energy through the development of major wind, solar, green hydrogen, and other renewable energy projects.
Several countries in the Middle East have long depended on oil and gas for both energy security and to bring in revenues, which have allowed these states to become some of the richest in the world. As the world transitions towards green and many traditional oil and gas reserves are being depleted, several countries in the region are now pumping funds into renewable energy projects and clean technologies to ensure they do not fall behind. At the COP28 climate summit, held in the UAE, many regional leaders made ambitious climate pledges, with the Middle East and North Africa (MENA) expected to add 62 GW of renewable energy capacityover the next five years, according to the International Energy Agency (IEA). Solar energy will contribute more than 85 percent of this capacity growth, as countries across the region exploit their abundant sun.
Saudi Arabia is expected to contribute a third of the MENA region’s renewable energy increase, alongside growth in the United Arab Emirates (UAE), Morocco, Oman, Egypt, Israel, and Jordan. Together, these countries will contribute around 90 percent of the region’s renewable energy capacity growth. Saudi Arabia’s green energy capacity increase relies heavily on the development of a massive new urban area at the northern tip of the Red Sea – Neom. The megaproject – which many international experts and scientists are skeptical about – is expected to span 26,500 km2 and be completed in 2039. Related: Aramco’s Q1 2024 Results: Saudi Arabia is at a Dangerous Tipping Point
The development of Neom is supported by $500 billion from Saudi Arabia’s Public Investment Fund. The Kingdom says it will be powered wholly by renewable energy, with no roads or cars. It is expected to accommodate nine million people and will be connected by high-speed rail and pedestrian links. The government plans to build a clean industrial hub called Oxagon within the development, where it will construct the “world’s largest green hydrogen facility”, at a cost of $8.4 billion. Saudi Arabia is aiming to achieve a power mix of 50 percent renewable energy by 2030.
The UAE hopes to reach a renewable energy mix of 44 percent by 2030, supported by the rapid development of the country’s solar power, as home to three of the world's largest solar plants. The UAE’s Noor Abu Dhabi solar park is expected to reduce the country’s carbon emissions by around one million metric tonnes annually, while the Rashid Al Maktoum Solar Park in Dubai is expected to produce enough solar energy to power 800,000 homes by the end of the decade. The UAE is also beginning to develop its wind energy industry, developing a 103.5-MW project to power 23,000 homes and reduce carbon emissions by 120,000 tonnes a year. It is the first country in the Middle East to operate a nuclear power facility, which is expected to contribute 25 percent of the country’s energy needs once fully operational. Meanwhile, the government is investing heavily in the development of its blue and green hydrogen industry in line with its National Hydrogen Strategy 2050. The UAE hopes to become one of the biggest producers of green hydrogen worldwide in the coming decades.
In April, the UAE and Oman signed a $35-billion investment partnership for the development of renewable energy, green metals, railways, and digital infrastructure and technology. The two countries plan to boost economic cooperation through strategic investments. The largest investment agreement was for an industrial and energy megaproject valued at $31 billion, which will include renewable energy initiatives, including solar and wind projects, alongside green metals production facilities. Mohamed Hassan Alsuwaidi, the Minister of Investment of the UAE, explained, “The agreements represent a major milestone in our bilateral ties, as they pave the way for us to leverage our collective strength to realize our shared vision of advancement and prosperity.”
Oman also aims to become a major green hydrogen producer, developing on its existing oil and gas expertise and using its abundant open land to develop solar and wind farms to provide the renewable energy required for the electrolysis process needed to produce green hydrogen. Andrea Zanon, the CEO of WeEmpower Capital, stated, “Oman boasts some of the world's most suitable locations for solar and wind power generation, key ingredients for producing low-cost green hydrogen through electrolysis.” Zanon added, “This green hydrogen can then be transported through Oman's existing 4,000km gas pipeline network, significantly reducing infrastructure costs compared to starting from scratch… Furthermore, Oman's extensive experience in processing and exporting liquefied natural gas (LNG) and ammonia translates directly to efficiently managing green hydrogen and its derivatives.” Oman hopes to produce at least a million tonnes of green hydrogen annually by 2030, 3.75 million tonnes a year by 2040 and 8 million tonnes by 2050.
By Felicity Bradstock for Oilprice.com
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