Abu Dhabi // For the UAE’s ambitious renewable energy goals to be met, it is important that the industry sets up a manufacturing base in the region, experts say.
Olaf Remmler and Marcel Munz, energy consultants at international management consultancy PA Consulting Group who carried out a study of the Arabian Gulf’s solar potential, said the renewable generation capacity of the Gulf could reach 100 gigawatts (GW) by 2030, with about 60GW expected in Saudi Arabia.
Their estimate was based on the published strategies of countries in the region, as well as an overview of solar projects currently under consideration.
The sheer size of the opportunity, with investments worth as much as Dh1 trillion, makes the Gulf the most promising market for solar-energy companies worldwide.
“This region is the most attractive region for low-carbon energy in the world in the next 15 to 20 years,” said Mr Munz, an energy consultant at the company.
“There is still some homework to do. However, I think the sheer potential is so big that it will have a huge role in the economies of these countries.
“The Emirates has the most advanced programme so far, although the size and the opportunity is a little bit smaller,” he said.
But, he said, achieving clean energy goals – including a 7 per cent target in Abu Dhabi by 2020, and 5 per cent by 2030 in Dubai – will not be possible without local manufacturing facilities.
“If that will not happen, it is difficult to see how you can sustain such a build-up,” said Mr Remmler.
“And also, from a regional perspective, you would want to own certain parts of the value chain and drive it, rather than being dependent on suppliers.”
With several high-profile solar-power plants opening this year, the UAE is leading the way among Gulf countries.
But, said Mr Remmler, “everything has been more or less project-driven”, which is not enough to create the base for a local solar-manufacturing industry.
“If you are to invest as a manufacturer here, you would want a clear framework on how you operate in the region, what the market looks like,” he said. “As long as it is project-to-project, that would just be difficult because you just don’t have a perspective.”
Creating a solar industry will help Gulf countries to diversify their economies, the experts said.
The generation manufacturing industry alone has the potential to create three million jobs, with the bulk of them in Saudi Arabia.
Mr Munz said governments in the region had “to commit to transparent strategies” so that investors could assess all of the risks during the lifetime of a project.
It was important to set up a legal framework, showing a commitment to the targets countries have announced.
Marc Norman, the marketing and communications director at the Middle East Solar Industry Association, said a prediction of 100GW by 2030 “may be too ambitious”.
“Although the potential for solar power in the Middle East is irrefutable, the pace at which governments have deployed commercial procurements has been sluggish,” he said.
“Over the past two years, the Middle East Solar Industry Association has seen solar power companies from all parts of the value chain and all over the world flocking to the region avidly to get a piece of the action, from chemical suppliers to panel manufacturers and project developers.
“There is an exceptional amount of expectation surrounding solar power in the Middle East. We need to capitalise on that energy now.”