Balancing the grid: MENA’s solar growth in a fossil fuel world

Solar Energy in the MENA Region: An Overview

The MENA region, known globally for its vast reserves of oil and natural gas, is gradually becoming a focal point for renewable energy development, particularly in solar power. The region boasts some of the highest solar irradiance levels globally, making it an optimal location for solar energy generation. Countries such as Saudi Arabia, the United Arab Emirates (UAE), Egypt, and Morocco have all recognised this potential and have embarked on ambitious solar projects to diversify their energy portfolios and reduce their reliance on fossil fuels.

According to the MESIA Solar Outlook Report, the MENA region increased its solar capacity by 23% in 2023, with notable contributions from countries like Turkey, the UAE, Israel, Egypt, and Saudi Arabia. Despite this growth, fossil fuels still account for 87% of the region’s power generation mix, while solar photovoltaic (PV) technology contributes just over 2%. This stark contrast highlights the scale of the challenge facing the region as it seeks to transition towards a more sustainable and low-carbon energy future.

Utility-Scale Solar Projects Leading the Charge

The report emphasises that much of the growth in solar energy across the MENA region has been driven by large utility-scale projects. These projects, often backed by government initiatives and significant private investment, are central to the region’s renewable energy strategy. Saudi Arabia’s 1.5 GW Sudair solar project, which became fully operational in early 2024, is a prime example of this trend. The project, part of the country’s broader goal of reaching 40 GW of solar capacity by 2030, has increased Saudi Arabia’s total operational solar capacity to over 2.2 GW.

The UAE has also made significant strides in solar energy, particularly through the development of the Mohammed bin Rashid Al Maktoum Solar Park, one of the world’s largest solar energy projects. With a planned capacity of 5 GW by 2030 and an investment of up to AED 50 billion, the park has already added around 7.3 GW of solar capacity to the country’s energy mix. Additionally, the UAE is targeting 14 GW of clean energy capacity by 2030, most of which will come from solar energy.

Oman, another key player in the region’s solar landscape, has set a target for 30% of its power generation to come from renewable sources by 2030, up from just 3% today. Jordan is also making progress, aiming to increase its renewable energy share from 30% to 50% by the end of the decade. These ambitious targets reflect the region’s growing commitment to renewable energy, particularly solar power.

However, while these utility-scale projects are undoubtedly crucial to the region’s energy transition, the report stresses the importance of adopting a more balanced approach. MESIA argues that distributed energy projects, such as rooftop solar installations and commercial and industrial (C&I) solar projects, must also play a key role in the region’s solar energy strategy. These smaller-scale projects offer several benefits, including greater energy security, reduced transmission losses, and the ability to meet local energy demand more effectively.

The Role of Distributed Energy in the Energy Mix

Distributed energy generation refers to the production of electricity closer to the point of use, rather than at a large, centralised power plant. This approach can be particularly beneficial in regions like MENA, where vast distances and challenging terrain can make it difficult and costly to transmit electricity from remote utility-scale solar farms to urban centres.

In countries like Turkey and Israel, distributed solar energy has already made significant inroads. Turkey, for example, has seen strong growth in rooftop PV and C&I solar projects, driven by a net metering scheme that allows households and businesses to sell excess electricity back to the grid. By the end of 2023, Turkey’s installed solar PV capacity had reached 11 GW, with rooftop PV and C&I projects accounting for approximately 78% of the total. Turkey aims to increase its solar power capacity to 53 GW by 2035, with distributed energy expected to play a significant role in achieving this target.

Similarly, Israel has implemented policies to promote rooftop solar installations, including a mandate that all new commercial buildings must be equipped with rooftop PV panels. The country’s power mix is expected to include 30% renewable energy by 2030, up from 11% today, with distributed energy projects playing a key role in this transition.

The MESIA report highlights the importance of further expanding distributed energy projects across the MENA region. These projects can complement the large utility-scale solar farms by providing a more flexible and resilient energy system. In addition to improving energy security and reducing transmission losses, distributed energy projects can also help to create jobs, stimulate local economies, and empower communities to take control of their energy future.

Challenges to Solar Energy Adoption in MENA

Despite the clear benefits of solar energy and the region’s significant solar potential, several challenges continue to hinder the widespread adoption of solar power in the MENA region. One of the most significant obstacles is the continued dominance of fossil fuels in the region’s energy mix. Many MENA countries have long relied on their abundant oil and gas reserves to fuel their economies, and transitioning away from these traditional energy sources is proving to be a slow and complex process.

Additionally, the region’s extreme desert climate presents unique challenges for solar energy generation. High temperatures, dust storms, and sand accumulation can reduce the efficiency of solar panels and increase maintenance costs. To address these issues, innovative solutions such as robotic cleaning systems and advanced solar panel technologies are being developed to improve the performance and durability of solar installations in harsh environments.

Another challenge is the need for significant investment in energy infrastructure, including grid upgrades and energy storage systems, to accommodate the growing share of renewable energy in the power mix. While utility-scale solar projects are helping to drive the energy transition, the integration of distributed energy systems into existing grids remains a complex and costly endeavour. Governments and private sector stakeholders will need to work together to develop policies and incentives that support the growth of both utility-scale and distributed solar projects.

Finally, the report highlights the importance of developing a skilled workforce to support the region’s growing solar energy industry. As the sector continues to expand, there will be a growing demand for engineers, technicians, and other professionals with expertise in solar energy technologies. Investing in education and training programmes will be essential to ensuring that the region has the human capital needed to support its renewable energy ambitions.

The Future of Solar Energy in MENA

Looking ahead, the future of solar energy in the MENA region appears promising, but much work remains to be done to realise its full potential. The MESIA Solar Outlook Report projects that the region’s installed solar capacity, currently at 32 GW, could reach nearly 40 GW by the end of 2024 and grow to 180 GW by 2030. This represents a compound annual growth rate of 30%, reflecting the region’s strong commitment to expanding its renewable energy portfolio.

Saudi Arabia, the UAE, Egypt, Oman, and Morocco are expected to lead the charge, accounting for more than two-thirds of the region’s installed solar capacity by the end of the decade. However, achieving these ambitious targets will require a concerted effort from governments, businesses, and civil society to overcome the challenges facing the solar industry.

One of the key areas of focus will be the development of energy storage solutions to support the integration of solar energy into the grid. As solar power generation is inherently intermittent, the ability to store excess energy for use during periods of low sunlight will be critical to ensuring a stable and reliable energy supply. Advances in battery storage technology and other energy storage solutions will play a vital role in the region’s energy transition.

Another area of growth is the development of green hydrogen projects, which could further accelerate the region’s shift towards a low-carbon energy system. Green hydrogen, produced using renewable energy sources such as solar and wind, has the potential to replace fossil fuels in industries that are difficult to electrify, such as heavy industry and transportation. Several MENA countries, including Egypt and Morocco, have already announced plans to invest in large-scale green hydrogen projects, positioning the region as a potential global leader in this emerging sector.

A Bright Future

The MENA region stands at a critical juncture in its energy transition journey. While significant progress has been made in expanding solar energy capacity, the dominance of fossil fuels in the region’s power mix remains a major challenge. To accelerate the shift towards a more sustainable and low-carbon energy system, the region will need to adopt a more balanced approach that includes both utility-scale solar projects and distributed energy initiatives.

Governments, businesses, and civil society must work together to address the challenges facing the solar industry, from improving energy infrastructure to developing a skilled workforce. With the right policies and investments in place, the MENA region has the potential to become a global leader in solar energy and a key player in the fight against climate change. The future of solar energy in MENA is bright, but achieving its full potential will require sustained effort, innovation, and collaboration across all sectors of society.

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