May 6, 2020 Read More →

Middle East solar development plans on course despite oil price crash, Covid-19

Bloomberg:

Some of the Middle East’s biggest oil producers are pushing into solar energy even amid the rout in crude prices.

Cheap crude used to deter investment in renewable energy in countries that depend on oil sales for revenue. Today, solar projects cost only about one tenth of what they did a decade ago, thanks to more affordable equipment and better technology, according to research by BloombergNEF.

The Middle East’s first forays into renewables faltered when oil prices dropped or official priorities shifted. Solar programs that Saudi Arabia and Abu Dhabi embarked on a decade or so ago would have required tens of billions of dollars and never got far off the ground. Since then, governments have found partners to help shoulder costs, and in spite of potential delays from the coronavirus, their solar ambitions are gaining traction.

“Solar power is the cheapest kilowatt-hour in the Middle East,” Benjamin Attia, an analyst for power and renewables at consultant Wood Mackenzie Ltd., said in a telephone interview from Boston. New projects in the region rely on private funding, rather than government spending, and are therefore “insulated from headwinds” of lower oil prices, he said.

Electricity demand in the Middle East has risen by about 6% a year on average since 2000, according to the International Energy Agency. Whereas countries in the region used to rely mostly on power stations fueled by natural gas or crude, solar plants can now meet all of their likely growth in demand, said Robin Mills, founder of Dubai-based consulting firm Qamar Energy.

Despite uncertainty about the pandemic, the region’s expanding populations are sure to need more electricity as economies recover. Middle Eastern countries will add thousands of megawatts of new solar-power capacity through at least 2025, according to Wood Mackenzie.

[Anthony Di Paola]

More: Mideast petro-states look past oil rout to chase solar power

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