(MENAFN- The Peninsula) Governments across the Mena region are making increasing commitments to achieve diversification in their power sectors to improve energy security and reduce reliance on gas imports. The launch of the first phase of Saudi Arabia's 9.5GW National Renewable Energy Programme (NREP) early this year provides the latest illustration of the major changes occurring in the Middle East and North African power sector.
MENA Power 2017, a new research report from Middle East business intelligence service MEED noted the installed generation capacity in Mena region is expected to reach a massive 440GW by 2020.
According to MEED, the launch of the first phase of Saudi Arabia's 9.5GW NREP has led to a raft of alternative energy projects being planned or implemented in the region. The move towards integrating renewable energy into development programmes has been facilitated by the sharp drop in photovoltaic (PV) solar technology costs in recent years.
The cost of installing PV solar has fallen by 80 per cent since 2007, and the three major PV solar projects tendered in the UAE since 2015 have all achieved, at the time, word record low tariffs. In particular, the 2.99 $cents a kilowatt hour ($c/KWh) tariff selected for Dubai's 800MW PV project in 2016 was the first time that the cost of renewables had fallen below conventional fossil fuel plants. In addition to renewables, state utilities are also moving forward with plans for alternative energy, from nuclear power to clean coal.
Another key shift in the region's power sector is the move towards increased private investment and privatisation in the generation of electricity as governments cut budgets in response to the lower oil price. Saudi Arabia, the largest utilities market, is the leading example of this, with Riyadh preparing to sell off the first 20GW of its generation assets to private investors in 2017. Egypt and Oman are also undertaking preparations to significantly restructure and privatise large parts of their electricity markets.
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