The Middle East and North Africa (MENA) region has the potential to become one of the world’s largest producers of renewable energy. Renewable energy industry developments combined with the region’s potential in wind and solar power could create significant advantage for countries that move to capitalize on them, according to a new study by Booz & Company.
“Renewables in much of the MENA region are underfunded or not funded at all, in part due to the region’s abundant supplies of fossil fuels, said Ibrahim El-Husseini, a partner at Booz & Company. There are at least seven reasons why the MENA region could be a world leader in renewable energy.
The region has an advantageous geography and climate. The MENA region has the world’s greatest potential for solar power generation, offering 45 percent of the world’s total energy potential from all renewable sources. If the region achieved this potential, it could generate more than three times the world’s total current power demand. The region also has some potential for large-scale wind farms.
The region’s current energy supply may not be sufficient to meet future demand. At present, the MENA region has 146 gigawatts of installed capacity for electricity generation. “With demand forecasted to grow at more than 7 percent per year for the next decade, MENA countries will need to build 80 to 90 gigawatts of new capacity by 2017 to meet demand,” explained Walid Fayad, a principal at Booz & Company. Renewables could play a major role in meeting increasing demand and could complement the region’s unique energy needs.
Renewables in the region will help mitigate the global climate change challenge. Many countries in the region rank among the highest greenhouse gas (GHG) emitters in the world on a per capita basis, due mainly to the use of fossil fuels in the majority of power generation and industrial production facilities. Introducing carbon neutral renewable energy into these countries’ energy mix will help reduce GHG emissions and mitigate climate change”
Renewables could generate value in their own right, as well as freeing oil and gas for more profitable uses. “If renewable energy sources could replace the oil or gas currently used for power generation, the surpluses created could become available for more profitable downstream applications,” noted Tarek El Sayed, a principal at Booz & Company. Renewable energy sources could also be a strategic export industry.
The renewable energy industry could drive economic diversification and create jobs. The oil and gas sector contributes 47 percent of the GCC’s GDP, but only 1 percent of employment. Countries struggling with high unemployment rates could generate employment opportunities in renewables.
