10 July 2023

The sun is shining on Middle East solar energy - here’s why

The solar energy industry has developed rapidly across Middle Eastern markets in recent years, boosted by falling photovoltaic (PV) technology costs and a desire by national governments to demonstrate leadership on climate action.

This trend has increased since Egypt hosted the COP27 conference last year, and as the UAE takes the baton, hosting COP28 in Dubai in December this year.

Renewable energy solutions, such as solar power, form a crucial part of the energy transition. Solar projects are springing up across the region, as solar PV has emerged as the cheapest source of electricity generation for new projects in GCC countries and beyond.

The Middle East has some of the highest solar energy potential anywhere in the world. Egypt, for instance, hosts one of the top five biggest solar energy sites in the world, Benban near Aswan. This site covers 37 sq km and will contribute to the government’s target of achieving 42% of energy from renewables by 2035. Benban comprises 34 solar power plants, each with a capacity of 50MW.

David Ramos, Acting Head of Sustainability at HSBC Bank Middle East

In the UAE, which aims to reach net zero by 2050, current trends predict the production capacity of clean energy, including solar and nuclear, to reach 14 GW by 2030, up from about 100 MW in 2015 and 2.4 GW in 2020. The sizable 5 GW capacity Mohammed Bin Rashid Al Maktoum Solar Park has been growing in Dubai, and with investments totalling AED 50 bn (USD 13.6 bn), the solar park is expected to save over 6.5 mn tons of carbon emissions annually when completed. The emirate also aims to attract clean energy start-ups by creating the Dubai Green Zone via its USD 27 bn Green Energy Fund.

Abu Dhabi meanwhile is in the process of adding 3.5 GW across two sites. One of which - the Al Dhafra Solar PV project - is at 2 GW the world’s largest single solar site, and will provide clean energy to more than 110k households when it’s connected to the grid this year. In Saudi Arabia, some 10 GW of renewable capacity is in the pipeline. The kingdom, which aims to be carbon neutral by 2060, plans to boost its renewable energy capacity to 58.7 GW by 2030, from a target of 9.5 GW by 2023. Solar energy is expected to account for 68.1% of the 2030 goal.

Qatar, which plans to produce 20% of its energy from solar power by 2030, last year launched its 800 MWp Al Kharsaah Solar PV Independent Power Producer, the country’s first large-scale solar project. Covering 10 sq km, the equivalent of roughly 1,400 football fields, the project features 2 mn modules mounted on trackers and a semi-automated cleaning system.

And in Oman, the government inaugurated in 2022 its 500 MW Ibri Solar Power Plant, the country’s largest clean energy production facility, which is expected to help reduce greenhouse gas emissions by 340k tons a year, according to MESIA.

It’s an exciting time to be involved with the solar energy industry, and it’s clear that it will be leading the way on the green transition, offering investors a range of exciting new opportunities in the renewable energy market across the Middle East.