MENA – Investment in GCC renewable energy could reach $16bln in 2020 with a cumulative total of $40bln between 2016 and 2020, says study.
The GCC has many resources at its disposal that could lead the way in certain renewable energy sectors, especially solar, experts have stated.
Investment in GCC renewable energy could reach $16 billion in 2020 with a cumulative total of $40 billion between 2016 and 2020, provided the correct decisions and policies are adopted, according to a recent study by Strategy&. This projection is a dramatic rise from past numbers, as investment in renewables totaled less than $1 billion in the GCC in 2016, compared to $130 spent on renewable energies in 2016 globally.
The GCC has many resources at its disposal that could lead the way in certain renewable energy sectors, especially solar, experts have stated.“The case for rapid deployment of renewable energy in the GCC is compelling. The GCC has ample solar and wind resources, a regional gas shortage along with growing domestic demand for hydrocarbons as fuel and feedstock, and an affordable means of financing renewable energy. With the right policies and decisions an increasing number of utilities in the GCC could add renewables to their energy supply mix,” said Dr Raed Kombargi, partner with Strategy& Middle East.
Located in the heart of the global sunbelt, the GCC countries have some of the highest solar exposures in the world; solar power plants in the region can expect 1,750 to 1,930 hours of full-load operation a year, compared to 940 hours in Germany. The region also has the independent power plant (IPP) model, a commercial credit mechanism that makes cheap long-term financing affordable and available through private and foreign investors. “The speed of transition to a new energy mix across the GCC is accelerating, with international investors showing considerable interest in renewables. To further take advantage of the renewables opportunities will require considerable funds and commitment, along with a careful approach that minimizes risk,” said Dr Shihab Elborai, principal with Strategy& Middle East.