UAE, Saudi Arabia lead GCC renewable energy investments: S&P Global

S&P Global Ratings said Saudi Arabia and the UAE continue to lead climate-related efforts, with around 90 per cent of the GCC region’s established renewable energy capacity found in the two countries as of year-end 2021.

The two countries also remain committed to updated targets as part of renewed efforts to reach net zero, S&P Global said in its Gulf Nations Invest To Accelerate Deployment Of Renewable Energy report while noting that the UAE alone contributes 77 per cent to the region’s established capacity.

GCC countries have renewed new targets or renewed their commitment to the Paris Agreement over the past years and energy transition looms large in most national plans for decarbonisation.

The World Bank estimated that GCC countries closed 2022 with a combined GDP of around $2tn but the implementation of a ‘green growth strategy’ has the potential to catapult it to more than $13tn by 2050.

The UAE and Saudi Arabia are accelerating the decarbonisation of their energy sectors by heavily investing in renewables as part of the two Gulf states’ broader strategy to achieve net zero targets by 2050 and 2060, respectively.

The UAE unveiled plans to invest $163bn (Dhs600bn) to achieve its net zero emissions target in October 2021 while Saudi Arabia said it aims to invest more than $186bn (SAR700bn) into a green economy.

Renewable energy investments

Meanwhile, the UAE is extensively investing in nuclear energy, solar plants and sustainable transport. The country operates three nuclear power reactors that feed energy to its grid and is home to three biggest solar plants in the world—the GW Noor Abu Dhabi solar park, the Mohammed bin Rashid Al Maktoum Solar Park which will produce 5,000MW of power by 2030 and Masdar City’s 17,500MWh solar plant.

The Gulf state reached an agreement with the US in November 2022 to invest $100bn in clean energy projects to produce 100 GW by 2035. Meanwhile, the partnership between Abu Dhabi-state backed firms ADNOC, TAQA and seeks to build Masdar into one of the world’s biggest clean energy companies with a production capacity of over 50GW by 2030.

Read: Abu Dhabi’s ADNOC, TAQA and Mubadala complete deal to acquire Masdar stakes

Saudi Arabia, on the other hand, has been going all out to commit itself to sustainable development and the kingdom plans to rely on renewables for 50 per cent of its electricity generation by 2030.

The National Renewable Energy Program, which is part of the Gulf state’s ambition to secure a comfortable energy mix for producing electricity using sustainable means, will see ACWA Power producing 11.8 GW by 2025. The kingdom launched five new projects in September 2022 to produce electricity using renewable energy with a planned total capacity of 3,300 MW.

The wind farms in Yanbu, Al-Ghat and Waad Al Shamal have a total production capacity of 1800 MW while two solar plants in Al Hinakiyah and Tabarjal will have a total production capacity of 1500 MW. GCC countries have been slowly moving away from fossil fuels in favour of clean energy.

Also read: PIF subsidiary, ACWA Power to develop MENA’s largest solar plant in Saudi Arabia

Saudi Arabia and its fellow Gulf Arab states have sought to bolster their green credentials. Globally, many countries have ambitious plans for green hydrogen, but GCC states have unique advantages that could allow them to lead the transition to hydrogen.

Hydrogen is a highly efficient energy carrier and upon combustion, the only by-product of this zero-emissions fuel is water—making it an ideal medium for electrification and substitution of fossil fuels.

Gulf countries, including Saudi Arabia, the UAE and Oman are all working on hydrogen projects with the kingdom’s $5bn green-hydrogen plant in NEOM expected to be completed in the coming months.

As 2023 began, the Global Power and Renewables team of @SPGCI examined five key #trends that we believe will define #power and #renewables markets worldwide this year. Get more insights:https://t.co/wqZlmoDFke pic.twitter.com/TKqVaocsJM

— S&P Global (@SPGlobal) March 2, 2023