Outlook mixed for renewable energy installations in Middle East and Africa region

Renewable energy has a mixed outlook in the Middle East and Africa (MEA) region, due to a reluctance to invest from some countries and an inability to afford renewables in others, according to GlobalData. 

Several major MEA countries are actively supporting the growth of renewable energy through mechanisms such as renewable targets, renewable portfolio standards (RPS), feed in tariffs (FiTs) or auctions, net metering and tax exemptions or subsidies. 

Anchal Agarwal, Power Analyst at GlobalData, says: “Most of the countries covered in MEA* have renewable energy targets, implying that these governments are actively supporting the growth of renewable energy in their respective countries. Some countries have capacity targets, while others have targets to achieve a fixed share of generation from renewable sources.”

Iran set a target in 2014 of 5 Gigawatts (GW) from wind and solar power, by 2020. In spite of this, renewable energy did not make much progress in the country. Hence, in January 2018, the government again declared a target of installing 1 GW of renewable energy projects every year from 2018 to 2022.

The availability of oil in the MEA region presents a major challenge to renewables. For example, in 2016, Saudi Arabia reduced its 2040 renewable goals from 50% to 10% of the country’s electricity supply. In April 2017, the country declared that it will develop 30 solar and wind projects over the next 10 years as part of the kingdom’s $50 billion program to boost power generation and cut its oil consumption.

Agarwal continues: “A noticeable observation in the MEA region is the growing popularity of the auction/tender mechanism to develop large-scale renewable projects. Countries such as Egypt, Iraq, Israel, Morocco, Qatar, Saudi Arabia, South Africa and UAE have auction mechanism for various renewable energy technologies. However, countries including Algeria, Iran, Kenya, Nigeria and Tanzania have already proposed the renewable auctions and they are expected to announce it within a year.”

FiTs and net metering are other major policy support mechanisms used by governments of Middle East & African countries to promote renewable energy. Six countries have FiT schemes for various renewable technologies, and Ghana and UAE are the only countries to have proposed a net-metering scheme.

* MEA countries covered = Algeria, Angola, Egypt, Ghana, Iran, Iraq, Israel, Morocco, Nigeria, Qatar, Saudi Arabia, South Africa, Syria and UAE.