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With the World Bank promising $5.5 billion for the development of solar energy in the Middle East and North Africa (Mena), the energy-hungry region will start tapping into the immense potential that energy from the sun offers.
According to estimates Mena has a potential to generate 630 million megawatts of solar power.
The World Bank's Clean Technology Fund says it has approved financing of $750 million, which will mobilise an additional $4.85 billion in co-financing, both public and private, to speed development of concentrated solar power (CSP) in five countries across Mena. The fund will invest in CSP programmes in Algeria, Egypt, Jordan, Morocco and Tunisia. The CTF is a multi-donor trust fund to facilitate deployment of low-carbon technologies at scale.
The CTF-approved investment plan will support the deployment of about one gigawatt of CSP generation capacity, thereby tripling worldwide CSP capacity. The plan will also support transmission infrastructure in the Maghreb and Mashreq for domestic supply and exports, as part of Mediterranean grid enhancement.
The World Bank says the proposed 1GW deployment through 11 commercial-scale power plants over three to five years will provide the critical mass of investments necessary to attract significant private sector interest, benefit from economies of scale to reduce cost, result in learning in diverse operating conditions and manage risk.
Mena has a vast potential for solar energy as the region receives the highest average annual solar radiation of above 2,000 kwh/square metre with ample sunshine throughout the year. Mena falls under the sun-belt where the average annual temperature per year is above 40 degree and the region has huge potential to generate power from this.
Also, solar power is expected to become cost competitive in the near future as rising costs for oil and gas make renewable energy sources increasingly attractive.
A T Kearney, the global management consulting firm, says that when looking at energy generation cost and job creation opportunities Mena countries should invest in a solar power energy industry.
Concentrated Solar Power (CSP) will likely become cost competitive in the next 12 months, as oil and gas prices are increasing to oil expected to selling at above $100 and the costs for CSP technology are sinking due to productivity improvements.
"The cost competitiveness of solar energy will lead to a boom in solar energy on a global basis and represents a unique opportunity for the Middle East," says Dr Dirk Buchta, managing director of A T Kearney Middle East.
In the past especially European and US suppliers have dominated the solar market. This is currently about to change as cheap Chinese suppliers are entering the market but with low quality products. This may be the chance for the Middle East which is geographically well positioned to become a future major player. With an average of 310 sunny days per year and a high annual solar irradiance of over 2,500 kWh per square metre per annum, the Middle East has more than double the amount of solar energy potential than anywhere in Central Europe.
"The Middle East may benefit from the expected global boom in solar energy through developing its own solar power energy industry supplying its own demand and parts of the growing global demand for renewable energy," says Christian von Tschirschky, principal, A T Kearney Middle East.
"There is an increasing demand for solar technology on a global basis which may be partially covered by technology and production sites in Mena - why leave it to the Chinese?" asks von Tschirschky.
According to A T Kearney the Middle East therefore has the opportunity to become a boom centre for solar energy in the next 10 years with additional 9,000 MW of concentrated solar power capacities until 2020 and more than 40,000 MW until 2030. This solar generated power will give the Middle East the option to sell the gas and oil at increasing prices to the world market instead of burning it to generate electricity, and also create huge employment opportunities in direct or supporting industries.
"The Mena region has a unique opportunity to develop high quality globally competitive solar suppliers, who produce at lower costs than US or European suppliers. A competitive regional solar energy industry has the potential of creating more than 100,000 new jobs in the region, based on benchmarks from other regions. These jobs include direct jobs in Photovoltaic (PV) and CSP suppliers, developers and operators as well as supporting industries," says von Tschirschky.
Besides developing solar technology and production centres, the region may also sell solar energy in the future as part of the European Desertec project to Europe which will open the chance for additional revenues of $90 billion per annum for Mena.
However, the growth of a Mena-wide solar industry will have to be supported by national and regional strategies, and relies on close cooperation between governments and the private sector.
The areas which the Mena governments and the private sector need to address to exploit all opportunities arising from the expected solar boom are related to the creation of a conducive environment, which ensures sufficient funding, a supporting regulatory framework, education of solar energy workforce as well as industrial zones for renewable energy and the construction of solar plants.
