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Solar Energy Market Potential in the Middle East Region

The economic development in the Middle East region over the past century has mainly relied on the region’s oil and gas deposits. The region produces about 28 million barrels of crude oil per day which is more than one third of the world’s total production that makes the region most important for the global energy sector. The region also enjoys abundant resources of natural gas and produces around 20% of the total global gas production.

Rapid economic growth in certain countries such as UAE, Saudi Arabia and Qatar has seen tremendous growth in population over the last decade. As the energy demand continues to grow with population and oil reserves start to deplete, the region is looking at renewable sources of energy especially solar energy as the region has great solar potential.

Although the Middle East region relishes abundant renewable energy resources, the current contribution of renewable energy in power installed capacity is approximately 6% or about 12 GW including large-scale hydro power and less than 1% or about less 2 GW if hydro power is excluded according to a report by IRENA.

The amount of solar radiation received per unit area i.e. direct normal radiation (DNR) which is a measure of a region’s suitability for solar thermal concentrated applications ranges between 2050 and 2800 kilowatts-hour per square meter per year (kWh/m2/year) in the region. These rates, which are among the best in the world, make the region most suitable for solar heating and cooling, Concentrated Solar Power (CSP) and Concentrated Photovoltaic (CPV) applications.

The region is also very favorable for PV applications as the total amount of shortwave radiation received or horizontal irradiance (GHI) which is a measure of suitability for PV ranges between 1920 kilowatts-hour per square meter per year (kWh/m2/year) and 2450 kilowatts-hour per square meter per year (kWh/m2/year) for the region. These ranges are also some of the highest values observed in the world.

In 2013, four Middle East countries used Concentrated Solar Power (CSP) technologies for electricity production. The UAE inaugurated the largest stand-alone CSP plant in the world, Shams 1 (100 MW), in January 2013.

Developed, owned and operated by Shams Power Company, a joint venture of Masdar (60%), Total (20%) and Abengoa (20%), Shams 1 extends over an area of 2.5 km², with a capacity of 100MW and a solar field consisting of 768 parabolic trough collectors. Some of the features of Shams 1 CSP plant are:

  • 192 parallel loops with four series-connected collectors
  • Power supplied is enough to power 20,000 UAE homes
  • Displaces approx. 175,000 tons of CO2 annually

Shams 1
Image: Shams 1

While the current installed capacity of renewable energy technologies in the Middle East region is relatively small compared to other regions, the region is set to see massive growth in the solar energy sector. Almost 6.4 GW of renewable energy projects (excluding hydropower) are currently under construction or being planned throughout the Middle East region. Out of this 6.4 GW, more than 1.8 GW relate to solar projects while 4.5 GW comes from Wind energy. However in the long term, the solar targets are more than double the wind targets according to RCREEE (2013) and REN21 (2013) reports. Among solar technologies, CSP target solar capacity is 40% higher than the PV solar capacity.

While the Middle East region possesses vast potential of solar power, it still lags behind more established markets such as Europe and North America. However, the region is gradually tapping these resources to create a new market while diversifying its economy.

Posted by Faisal Saleem

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