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The world is predicted to fall short of its goal to triple renewables by 2030: Despite a predicted surge in global renewable energy capacity to 7.3 TW by 2028 — up from the current 510 GW — the anticipated growth trajectory will still fall short of the goal to triple global capacity by 2030, reaching only 2.5 times the current level,according to the most recent report (pdf) by the International Energy Agency (IEA).
What’s driving the higher renewables projections globally? The global 2023 forecast has increased by 33% — or 728 GW —from the IEA’s December 2022 publication primarily due to policy changes and improved economics for large-scale wind and solar PV projects, as well as faster consumer adoption of distributed PV systems in response to higher electricity prices, the report concluded.
How will our region fare in the next 5 years? The MENA region is predicted to see accelerated action in renewable energy sources in the next 5 years with a 62 GW increase from 2023 to 2028. The projected growth rate is three times higher than the previous 5 year period, andthe leading countries in this growth include Saudi Arabia, the UAE, Morocco, Oman, Egypt, Israel, and Jordan, collectively representing over 90% of the region’s expansion. Solar PV is set to make up 85% of the expected 62 GW increase in the region’s renewable capacity by 2028. The Middle East is also anticipated to be one of the next biggest markets for solar thermal energy, which together with the EU will account for over 40% of the increase in solar thermal heat use.
Oman’s renewables forecast was revised downwards: Delays in large-scale renewable energy projects, including in the field of green hydrogen, have caused a decline in Oman’s projected growth.However, the process can often take several years as countries need to qualify bidders, select winners, and sign PPAs after opening an auction.
Hydrogen’s role in renewables growth is becoming prominent: Saudi Arabia was named among the world’s major contributors alongside China and the US, which together are projected to contribute over 75% of global renewable capacity for hydrogen production by 2028. Anticipated global growth will reach 45 GW within the same time frame, about 1% of total renewable energy deployment. Certain markets, particularly those focused on hydrogen exports, demonstrate a more significant investment in solar and wind energy, with percentages ranging from 4% in Australia to over 30% in Oman. Countries with potential for hydrogen exports like Saudi Arabia, Australia, Oman, and the UAE will contribute over one-fifth of renewable capacity deployment driven by hydrogen by 2028.
Our region’s competitive pricing is pushing expansion:Competitive pricing due to incentivized policies for solar PV and onshore wind projects is behind the accelerated growth in the MENA region, the report explains. The region mainly owes its renewable energy expansion to competitive auctions, which account for 35% of its growth. Nearly all countries in the region are looking to attract private investors through government tenders for utility-scale PV, onshore wind or concentrated solar power (CSP) projects. These tenders have resulted in some of the world’s lowest bid prices for solar energy.
There’s still a few factors holding us back:The delayed procurement of utility-scale capacity through competitive auctions, lack of cost-reflective end-user tariffs for distributed solar PV installations, and the need for enhanced system flexibility through storage are noted as hindrances to optimal growth. Implementing these three improvements could drive growth 70%. As a result, expansion through mechanisms other than competitive auctions — such as unsolicited bilateral contracts with utilities and corporate PPAs — has been increasing, the report found.
Wind isn’t faring well: Aside from China, onshore wind expansion is facing hurdles in major markets like India and Australia. Forecasted growth took a hit in ASEAN, Africa, and the Middle East due to sluggish project advancement and unclear policies, according to the report.
