The Arab region or the Middle East part of the world is very rich in oil and natural gas resources which meet 96% of their total energy demand, while the renewable energy resources cater to only a meagre 4%. This affluence of oil reserves pose a great challenge for the development of renewable energy resources in the region, but nevertheless constant strenuous efforts are being taken by the governments of Middle East region in developing renewable energy resources.
Efforts are being taken to raise the production of renewable energy resources to meet 6% of the overall demand by 2020 in the region, where electricity consumption is rising steadily at a rate of 7% per year, due to economic growth and development and hence meeting the demand with clean form of energy is increasingly a challenge.
The region has also a good source of solar radiation and wind speed to develop the required renewable form of energy through commercial power plants. Desertec Industrial Initiative 2013 reported that in the Arab region, a transition to a renewable based power system is economically more feasible and more attractive than in most other regions of the world.
The region strives hard to transform its energy production into a sustainable one by shifting gears to alternative energy resources to the convention fossil fuels found abundant in the region under the guidance of Regional Centre for Renewable Energy and Energy Efficiency (RCREEE), in alliance with the League of Arab states and International Renewable Energy Agency (IRENA), and the former includes 22 states from the Middle East region.
RCREEE has brought its course of action and strategy towards its sustainable energy policy or the year of 2030 in which different member states set their targets out of which Morocco’s clean power target of 40% installed capacity leads the table followed by Algeria, Egypt, Qatar, Saudi Arabia and so on, all of them having the targets exceeding 20% clean power by 2020.
These aforementioned targets are general renewable energy targets and don’t include technology specific targets, which in turn is inclusive of solar and wind energy production, out of which solar power consists of both Concentrated Solar Power (CSP) and Photo Voltaic (PV) power. These technology based renewable energy development has become the emphasis of alternative energy generation of the Arab nations.
Each Arab nation as a part of this initiative has undertaken several measures like setting up dedicated authorities or departments in their Ministry of Energy to look after Renewable Energy Technology (RET) and formulating policies that encourage private sector investment in Renewable Energy production. Investments are encouraged through public funds as well.
Said that, renewable energy production is not without any challenges. There are many measures that hinder the achievement of the said targets that could be tackled by a joint effort of the different nations and with international assistance. The Arab nations put together are currently constructing renewable energy plants of capacity 6.4 GW, excluding hydro power plants, which is a significant scale of production, the largest contributors being wind and solar power plants aggregating 4.5 GW and 1.8 GW respectively.
That said, the achievement of these targets are not without any challenges as the institutional set ups in each member state differ in their structure and function and their association with each other is extremely important for the realization of the aggregate targets of the region.
The following are the few challenges that need to be resolved in the realization of renewable energy targets.
Political will: As like any other scheme, political will forms the fulcrum of the realization of these targets with streamlined policies and a concrete administrative structure that can effectively oversee the functions. Mobilisation of funds would be another hindrance with the crude oil prices being irregular- which forms the main source of income in the region, the economies need to be balanced in finding an alternative for what is the primary source for sustenance.
Lack of target and strategy: Many of the countries lack a clear target setting strategy which is made cumbersome and gets entwined in binding legal documents and hence the first step towards the transformation to clean energy itself gets struck. A legal framework that defines the roles and responsibilities of every actors and the regulatory policies is another need that poses a challenge.
Legal framework: As of now only six of the 22 countries that are Algeria, Jordan, Morocco, Palestine, Syria and Tunisia have a well-defined legal framework and the remaining are yet to form one. The absence of legal framework declines investor confidence turning down the possibilities of a renewable energy mass production.
Supporting policy: Another challenge is the absence of a supporting policy in terms of a Power Purchase Agreement, which is now a lengthy process and doesn’t allow large-scale production of renewable energy.
In other words a lack of clarity on the number of projects planned through public competitive bidding reduces the investor confidence and hence a condition of uncertainty is prevalent. Moreover the electricity tariffs in most of the countries are subsidized that makes the investment in renewable energy production less alluring.
Financial challenges: The challenges are not just the lack of a definite administrative and legal framework but also financial. The renewable energy production needs a considerable upfront investment and this makes the case worse for the countries, where fuel costs are low. Thus the expectations of an investor for a better premium can be corroborated only by the government actions that ensure a secure investment platform.
Other challenges: Moreover technical knowledge in these countries are not so competent as per the global standards and the Quality Assurance systems. Renewable energy engineering for RETstandardization are not so well placed.
A few countries have been selected in which dedicated renewable energy resources development entities are set up after a SWOT analysis, that are monitored for its function and its horizontal coordination with other actors in spreading awareness about renewable energy outside its premises. Accordingly course of actions for different countries have been charted out based on the category under which the challenge falls, like administrative, financial etc.
There are a lot dependent factors which will decide the success of realization of these targets, but as of now, it can be strongly believed that there is enough political will for a better cause.