The appetite for wind energy in the GCC

It could be a big step: the first utility-scale wind farm in the GCC has recently begun producing power. The 50-megawatt (MW) Dhofar wind farm in Oman produced its first kilowatt-hour of electricity in August. While only one of the wind farm’s 13 turbines is operational, the entire complex should be up and running by the end of 2019. The wind farm is expected to be able to generate power for about 16,000 homes once it is fully operational – helping offset an estimated 110,000 tonnes of carbon dioxide emissions per year.

A number of other wind power projects are in development across the region. In Saudi Arabia, for example, it has been announced that Abu Dhabi’s Masdar (which also backed the Dhofar wind farm) has won the tender for the planned 400MW Dumat Al Jandal wind project. In Dubai, firms are reportedly being sought to conduct a feasibility study for a wind power project in Hatta.

However, according to experts from Strategy& (part of the PwC network), there is more work to be done when it comes to renewable energy development, including wind energy, in the region.

“The GCC is falling behind developed countries such as Germany, and developing economies such as Chile, Mexico, Morocco, and South Africa”, they found.

Part of the reason, they argue, is continued reliance on fossil fuels – both for export and domestic energy consumption.

Writing for the Oxford Institute for Energy Studies, Laura El-Katiri and Muna Husain mostly agree with that assessment – but add there are some caveats. “Highly distorted domestic energy markets that continue to price fuel at a fraction of its shadow economic cost provide few market-based incentives for utilities to switch towards renewables,” they write.

“The recent emphasis on the use of energy policies for renewables for the creation of ‘green’ jobs by GCC policymakers may increase, rather than reduce, unproductive economic sinks across the GCC states’ domestic energy industries and that would considerably dilute, if not call into question, any economic gains to be made from renewable energy in the GCC.”

However, a January report from the International Renewable Energy Agency (IRENA) is more positive. It says the following: “Wealth and socio-economic development across the GCC remain closely tied to the region’s substantial oil and gas reserves. Yet rising populations and economic diversification have led to greater energy demand. Renewables, although a relatively recent entrant to the GCC energy landscape, hold vast potential to cut fuel costs, reduce carbon emissions, conserve scarce water and create jobs.”

It should be noted that most, if not all, GCC nations have clean energy targets and diversification agendas, such as Saudi Arabia’s Vision 2030 or Kuwait’s Vision 2035.

With its year-round sunny climate, it also comes as no surprise there are now a number of large solar power projects in operation across the region (such as Noor Abu Dhabi, the world’s largest single-site solar project, with a capacity of 1,177MW) – with more scheduled to come online in the coming years.

So how might things blow for the future of wind energy in the GCC? While things are at a light breeze at present, there’s always the possibility it could quickly turn into a gale.