The Middle East and North Africa (MENA) region, and nearby Asia, have emerged as two of the fastest growing and most dynamic economic blocs in the world. For most of the first decade of the 21st century, the markets of these regions – in which Abu Dhabi is at the centre – have grown collectively at more than 7% a year.
To give a sense of their size, the combined GDP of the countries of the MENA region plus India and Pakistan is US$3.2 trillion, and it is set to grow 5% per year over the next five years – driven by three main factors: strong population growth rates, substantial legal and regulatory reforms, and market liberalisations that have unlocked a dynamic entrepreneurial spirit and paved the way for companies to grow and expand.
In addition to these macroeconomic factors, the cleantech and renewable energy industry across this broad area is poised for a period of sustained growth, fuelled by both government and private sector interest. Just in the Middle East and North Africa region, the cleantech market is expected to be worth US$100 billion by 2014.
On the policy side, there is a growing commitment from governments in these regions to sustainable development, reflected in ambitious goals to increase the renewable energy share in the national power generation mix, as well as the creation of increasingly supportive regulatory environments.
At the same time, businesses in the region are becoming increasingly aware of both corporate social responsibility and bottom-line reasons to implement green building, supply chain and business operations elements to their organisation, further fuelling demand for renewable energy and cleantech services and solutions.
For example, Abu Dhabi, Dubai and Qatar, among others, are implementing green building standards, while World Green Building Council member organisations have been established in the UAE and India, and are under certification in Saudi Arabia, Morocco, Qatar, Syria and Palestine. Bahrain, Egypt Jordan, Kuwait, Oman, Pakistan and Tunisia also have associated or emerging councils.
India, Turkey, Egypt, Jordan and Algeria have passed renewable energy laws or implemented feed-in tariffs, while Saudi Arabia was expected to announce a schedule of feed-in tariffs by mid-2011.
Abu Dhabi has committed to secure 7% of its total energy needs from renewable sources by 2020 – early steps toward this including a joint venture between Masdar, France’s Total and Spain’s Abengoa, to build a 100MW CSP plant in Abu Dhabi’s Western Region. Also, Masdar is developing a 100MW PV plant and a 30MW wind farm to be built in the Emirate. Turkey seeks to meet 30% of its power demand from renewables, including 10,000MW of installed wind capacity by 2020 and 600MW of solar by 2013, as well as a quadrupling of hydropower, according to EIU.
India is rapidly adding renewable energy power and as of March 2010 had a total installed renewable capacity of nearly 17,000MW. It seeks to achieve 25% of total power generation from renewables by 2030, supported by feed-in tariffs, “green” energy bonds, tax incentives on import of equipment to produce renewable energy products, and other subsidies, soft loans and fiscal incentives. As well, India proposes to substantially increase hydropower capacity by 2017; had nearly 11,000MW of installed wind power in 2009, and aims to expand its solar-power generating capacity to 20,000MW by 2022.
Saudi Arabia seeks to generate nearly 10% of power demand from sustainable resources by 2020, and has established the King Abdullah City for Atomic and Renewable Energy. In early 2011, Saudi Aramco awarded a contract to build a 3.5MW solar plant near Riyadh.
Egypt seeks to generate 20% of electricity from renewable sources by 2020, including to 1,300MW of solar and a 10-fold increase in wind capacity to nearly 6,600MW by 2020. Morocco seeks to develop 2,000MW of wind, 2,000MW of hydroelectric and 2,000MW of solar power capacity by 2020, approximately 42% of its total power capacity. Jordan has set a target of 10% renewable power by 2020, including 1,200MW of wind energy and 600WM of solar.
Pakistan seeks to derive 6% of its total energy mix from renewable sources by 2030. An Asian Development Bank loan is helping fund a nine-fold increase in an existing wind farm from 6MW to 56MW, with wind energy resources – just in the south of the country – estimated at 50,000MW, according to EIU.
Algeria aims to meet 30% of electricity demand from solar by 2050, as well as to export renewable energy to Europe. EIU estimates installed solar of nearly 430MW and installed wind of 30MW by 2020.
Qatar is investing US$500 million to build a production facility for polysilicon for use in making solar cells, while Kuwait has pledged to produce 5% of its energy requirements from renewable power generation by 2020.