Two of the top oil producers on earth, the KSA and UAE each possess the requisite capital and government-backed renewable energy drive to inspire confidence among investors, according to ]imer AbuAli, MENA Head of Cleantech, Ernst & Young. With large scale wind and solar projects already underway, both Gulf nations are adamant to diversify their energy mix with a sizable portion of renewables.
“Emerging markets, endowed with resources and high levels of government support, are already learning from their predecessors’ experiences, with many opting for capacity tenders in favor of financial incentives,” Jimer told the Saudi Gazette.
“Increasing energy demand in these regions has strengthened government investment in clean energy. Saudi Arabia and the UAE are supported by strong government initiatives, a proven track record in energy infrastructure, and robust financial markets.”
Like the United Arab Emirates, Saudi Arabia has implemented plans to supplement its oil consumption with solar power. Boasting an annual solar irradiance of 2,550kWh per square meter and climatic conditions ripe for both Concentrated Solar Power (CSP) and Photovoltaics, the Kingdom also has swaths of land conducive to silicon manufacture.
Earlier this year, the government unveiled a $109 billion plan to install 41GW of solar and 9 GW of wind capacity by 2032, Saudi Gazette reports.
“Other strong signals to the market include the King Abdullah City for Atomic and Renewable Energy (KA-Care), the Government’s alternative energy arm, announcing its plans to launch a major renewable energy auction.”
In addition to Masdar, which is currently working on a 100MW CSP plant – the largest in the region, the UAE has instituted a series of steps that will reduce the emirate’s energy consumption over the next few years.
Wind plants with a total potential capacity of 130MW are also in the pipeline.
While Asia and the Gulf are forging ahead, Europe and the United States are crippled by the ongoing financial crisis.
“In the West, such economic difficulties – together with a resurgence of cheap gas – have yet to translate into bold policy announcements,” Ernst & Young announced on their website.
“With voters weary of recession and squeezed by ever-increasing demands on their finances, policy-makers have yet to demonstrate the appetite to make long-term investment decisions that would necessitate short-term cost increases.”
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