T.WO MILLENNIA after the ancient Egyptians dropped their solar deity, Ra, their descendants rediscover the power of the sun. In the southern desert, half an hour by car from Aswan, Egypt finishes its encounters with Benban, one of the world’s largest solar farms (pictured). Its 6m panels produce 1.5 gigawatts (GW) of energy, enough to power over 1m homes. “In a decade we will still need oil for plastics and other petrochemicals, but not for energy,” said Rabeaa Fattal, a Dubai investor in Rising Sun, one of Benban’s 40 fields.
Much of the modern Middle East and North Africa was built on oil. It exports more of the black stuff than any other region. A quarter of Middle East power comes from it, compared to 3% from renewable sources. But the recent fall in oil prices reminds us that it is dangerous to rely on one source of revenue. And in the long run is the global trend towards cleaner energy sources. Renewable energy capacity in the Middle East has doubled to 40 gigawatts (GW) over the last decade and is expected to double again by 2024.
With its vast wilderness, the Arab world’s most abundant source of clean energy is the sun. Economies other than oil were the first to exploit it. More than a third of Morocco’s energy now comes from renewable energy (in the UK) I. the average is 18%). Oil producers are catching up. Major project in Abu Dhabi, the capital of the United Arab Emirates (United Arab Emirates), recently received the world’s lowest tariff proposal for solar power. Oman, Kuwait and Qatar also have big projects. The Middle East as a whole produces 9GW of solar power, up from a paltry 91 megawatt a decade ago. Between 2008 and 2018 investment in the field increased 12 times.
The increasing competitiveness of renewable energy makes analysts optimistic that the trend will continue (see chart). Solar farms are cheaper, faster and safer to build and maintain than oil and gas plants. The United Arab EmiratesA new solar plant will generate electricity at about two-thirds the cost of gas and one-third the cost of oil, even at today’s low prices. Several countries in the region talk about becoming renewable energy exporters.
Even so, investors still have cause for hesitation. For starters, Arab autocrats often promise more than they achieve. Take Muhammad bin Salman, the de facto ruler of Saudi Arabia, who has made renewable energy a pillar in his economic reform plan. In 2018 he and SoftBank, a Japanese conglomerate, announced the world’s largest solar power generation project in the Saudi desert. It was shelved six months later.
Regional turmoil also scares investors away. Iraq’s electricity minister blames protests for scrapping its plans to meet 20% of demand with renewable energy by 2030. Conflicts in neighboring countries have condemned Jordan’s efforts to export solar power to Lebanon. Troubled Egypt offered to buy solar power at above-market rates in order to attract investors to Benban.
There is also a risk that, in the short term, cheap oil dims is a solar power ambition. Saudi Arabia, for example, may prefer to burn more oil for energy. A decline in revenue could force oil-producing states to halt new solar projects.
But such projects are largely driven by the private sector, and continue to compare favorably with fossil fuels. “We have seen an acceleration of tenders during covid-19,” said Paddy Padmanathan ACWA Power, a Saudi company that operates renewable energy projects. “Why spend money taking fuel out of the ground and processing it instead of relying on God-given free sun and wind?” ■
This article appeared in the Middle East and Africa section of the print edition under the heading “Rays of hope”