Renewable Energy Gulf is worst performer for investment in renewables By Melissa Hancock June 21, 2023, 3:22 AM Reuters/Nasser Ishtayeh The global weighted average cost of solar power is now 56% cheaper than fossil fuel and nuclear alternatives and very sunny regions such as the Gulf can benefit further Region represented just 1.6% of global investment in 2022 Renewables’ share of energy has risen by 1 percentage point in decade 92.6% of UAE’s power was from non-renewable sources in 2021 The Middle East is the worst-performing region for investment in renewable electricity sources, new research has found. Africa and the Middle East combined represented just 1.6 percent of worldwide investment last year, according to the Renewables 2023 Global Status Report. China accounted for 55 percent of total investment, followed by Europe at 11 percent and the US at 10 percent. The report was compiled by REN21, a Paris-based organisation of scientists, governments, non-government organisations and renewable energy experts. The UAE and Morocco are members of the group. The research found that the Middle East recorded the smallest increase in renewables as a share of electricity generation between 2012 and 2022. The rise was just 1 percentage point, from 2.4 percent in 2012 to 3.4 percent in 2022. The 2022 figure is made up of 1.7 percentage points for hydropower, 1.4 points for solar energy and 0.2 points for wind energy. The REN21 report found that investment in renewable power and fuels across the Middle East and Africa totalled $8.4 billion in 2022. While this was slightly up on the $8.2 billion recorded in 2021, it was down from a peak of $13.7 billion in 2018. Joel Michael, CEO of Oceans & Us in Dubai, said one of the reasons for the slow transition to renewable energy was the region's continued reliance and investment in hydrocarbons. The UAE relies on thermal power – mainly gas – for the lion’s share of its electricity supply. It accounted for 92.6 percent of the country's total electricity generation in 2021. The Gulf state is aiming to meet 30 percent of its power needs using clean energy by 2030, according to consultancy GlobalData. Saudi Arabia also raised its renewables capacity targets in February 2019, setting a goal to have a capacity of 27.3GW within five years and 58.7GW by 2030. Progress has been slow and, in 2021, only 0.2 percent of the kingdom’s 356.6 terawatt hours of electricity came from renewables. GlobalData is forecasting that Saudi's renewables capacity will be just 1.5GW by the end of 2023. The Middle East Solar Industry Association published a report in February warning that the region’s solar industry needed to work faster to meet energy transition targets. Romain Riche, international development director at the association, told AGBI at the time that the key challenges were accelerating the pace of renewable projects, ensuring availability of supply chains and making sure the region’s grid infrastructure is resilient enough. The REN21 research found that global investment is still not shifting fast enough towards renewables and away from fossil fuels. Of the $640 billion poured into the power industry last year, 26 percent was allocated to fossil fuels and nuclear power, even though renewable sources have lower life-cycle costs. Lazard’s Levelised Cost of Energy 2023 report shows that solar and wind are cheaper when the life-cycle cost of electricity (LCOE) is measured. Nuclear costs between $138 to $223 per megawatt hour, but the LCOE for a grid-connected photovoltaic power system is between $24 and $96. The figure for onshore wind is between $24 and $75. UnsplashDistribution and connection to grids are vital to take-up of renewable tech but have been neglected, says REN21 Closing the infrastructure gap Rana Adib, executive director of REN21, said one of the key challenges was a lack of infrastructure to use the renewable energy being generated. “We focus on a few technologies like solar PV and wind and their generation capacity, neglecting distribution and connection to grids,” she said. “Electricity generation from renewables means attention to infrastructure. "It’s like you manufacture cars and wait for roads. When we built cars, we did it with confidence that roads will accompany the process. The same thought and action process must apply to renewables.” REN21 said momentum was building for the creation of a worldwide target for renewable energy in the power sector, to be announced at Cop28 in the UAE, which begins in November.
