TWO MILLENNIA After the ancient Egyptians lost their sun god, Ra, their descendants discover the sun. In the southern desert, a half-hour drive from Aswan, Egypt puts the finishing touches on Benban, one of the world’s largest solar farms (pictured). Its 6m panels produce 1.5 gigawatts (GW) of energy, enough to drive over 1m home. “In a decade, we will still need oil for plastics and other petrochemicals, but not for energy,” said Rabeaa Fattal, a Dubai-based investor in Rising Sun, one of Benban’s 40 fields.
Much of the modern Middle East and northern Africa was built on oil. It exports more of the black stuff than any other region. A quarter of the power in the Middle East comes from it, compared to 3% from renewable sources. But the recent collapse in oil prices is a reminder that it is risky to be dependent on a single source of income. And in the long run, the global trend is towards cleaner energy sources. Renewable energy capacity in the Middle East has doubled to 40 gigawatts (GW) over the last decade and will double again in 2024.
With its vast deserts, the Arab world’s richest source of energy is the sun. Non-oil economies first took advantage of it. More than a third of Morocco’s energy now comes from renewable energy sources (in I the average is 18%). Oil producers are catching up. A major project in Abu Dhabi, the capital of the United Arab Emirates (UAE), recently received the world’s lowest tariff offer for solar energy. Oman, Kuwait and Qatar also have major projects. The Middle East generates a total of 9GW solar energy, up from a meager 91 megawatts a decade ago. Between 2008 and 2018, investments in the field increased twelvefold.
The increasing competitiveness of renewable energy sources 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 UAEThe new solar power plant will generate electricity at about two-thirds of the cost of gas and one-third of the cost of oil, even at today’s low prices. Several countries in the region are talking about becoming exporters of renewable energy.
However, investors still have reason to hesitate. At first, Arab autocrats often promise more than they deliver. Take Muhammad bin Salman, the de facto ruler of Saudi Arabia, who has made renewable energy a pillar of his economic reform plan. In 2018, he and SoftBank, a Japanese conglomerate, announced the world’s largest solar power project in the Saudi desert. It was stored six months later.
Regional concerns also scare investors away. Iraq’s electricity minister accuses protesters of derailing his plans to meet 20% of renewable energy demand by 2030. Conflicts in neighboring countries have condemned Jordan’s efforts to export solar energy to Lebanon. Turbulent Egypt offered to buy solar energy at higher prices than to attract investors to Benban.
There is also a risk that cheap oil in the short term will dampen the countries’ glow for solar energy. Saudi Arabia, for example, may prefer to burn more oil for energy. Declining revenues could force oil-producing states to suspend new solar projects.
But such projects are largely run by the private sector and they continue to compare with fossil fuels. “We have seen an acceleration in bids during covid-19,” says Paddy Padmanathan ACWA Power, a Saudi company that runs renewable energy projects. “Why spend money on extracting fuel from the ground and processing it rather than relying on given free sun and wind?” ■
This article appeared in the Middle East and Africa in print under the heading “Rays of Hope”