According to the latest IRENA World Energy Transition Outlook, getting back on the 1.5-degree trajectory requires tripling the globally installed renewable generation capacity to 11 terawatts by 2030, and sustaining a steep growth until 2050.
The key countries and biggest greenhouse gas contributors in the Middle East are actively pursuing renewable investments, gradually increasing the share of green power in the regional generation mix.1 BCG expects an eight-fold increase in the combined solar and wind capacity installed in the region by 2030, significantly outpacing global growth.
Local renewable energy champions have emerged, and key international energy players are positioning themselves in the Middle East to capitalise on the enormous business opportunity renewables represent, expanding their local footprint. As a result, we have seen many renewable world records in the Middle East, including the lowest-ever achieved Power Purchase Agreements (PPA)tariff2 or the world's largest solar parks,3 emphasising the region's rapid progress and ambitious goals.
However, succeeding in the Middle East’s highly competitive renewable energy market is difficult and businesses need to pull multiple levers to gain an advantage over their competitors to participate in the regional renewable market, while remaining profitable. The most important success factor, without doubt, is attaining scale and unlocking all the benefits it offers – lower unit cost, better quality and volume of deals, and better financing. Renewables in the Middle East are not an arena for small players. Other success factors include developing an optimal operating model considering local specifics, establishing value-adding partnerships, securing access to increasingly scarce land, and ensuring favourable project financing. Also, implementing advanced risk evaluation and management approaches is vital to overcoming the commercial challenges that are inherent in renewable projects in the region.
Accelerating the investments in renewable energy signifies the region’s commitment to the global energy transition. Scaling up renewables goes beyond just capacity; it involves fostering a sustainable and economically viable green energy ecosystem that can cater to the region’s future needs. As we move forward to the new era of green power, the Middle East is shaping its path in the global renewable revolution, catering to the region’s future energy needs.
