MENA is undergoing a green energy boom: The region has operationalized some 6.9 GW of solar and wind capacity since May 2022, increasing the region’s solar and wind power production 57% to 19 GW, according to a report (pdf) by US-based clean-energy think tank Global Energy Monitor. With 9 GW of renewables projects slated for completion by the end of 2024, that capacity is expected to increase again by around 50% next year.

The capacity of solar and wind projects in the pipeline jumped 400% y-o-y: MENA has nearly 361 GW worth of prospective solar and wind projects on the way, an increase of 292 GW on the year before, according to the think tank. That’s more than the total prospective capacity of the US and Canada combined. However, just 6% of this proposed capacity is under construction, while 47% is in pre-construction — i.e. they have secured financing, government permitting, land rights, or formal power purchase agreements. The remainder of the prospective capacity is wrapped up in announced projects, which often don’t end up seeing the light of day.

Wind farms have been eclipsed by solar projects: A whopping 97.1% of the region’s capacity operationalized since May 2022 is solar capacity, with wind continuing to be underutilized in the region despite the resource’s strong potential in nearly all countries. Only Mauritania and Morocco have grown their operating wind capacity during the period, bringing online a combined 226 MW.

But is Egypt falling behind in the region’s green transition? The UAE has more than doubled its operating utility-scale solar and wind capacity to 5.6 GW between May 2022 and May 2023, overtaking Egypt as the MENA region’s best performer in that metric, according to Global Energy Monitor. We’re now in second place with local utility-scale projects generating a total of around 3.7 GW, up only 5.9% from May last year. Alongside Oman and Morocco, the UAE has emerged as one of the “potential renewable leaders in the region,” the NGO writes.

We were also pushed out from first place for prospective solar + wind energy: Egypt was also surpassed in prospective capacity — capacity from projects that are either announced or being built — by Oman, which grew its prospective utility-scale solar and wind capacity more than fivefold to 83 GW since May 2022. Egypt currently has a prospective capacity of 69.2 GW, of which 95.2% was penciled in during the past year.

We knew the winds of change were coming: Global Energy Monitor last year predicted that we could lose our top spot as the Arab League pursues an ambitious plan to push regional renewable energy capacity to 80 GW by 2030.

Yes, but: Despite progress, the region is still “light years from dethroning oil and gas,” says Kasandra O'Malia, project manager at Global Energy Monitor. Some 90% of the region’s electricity comes from oil and gas. It would take roughly 500 GW of additional solar and wind power — 26 times the current capacity — to replace the region’s 343-GW oil and gas plants. Additionally, 18 of the 23 countries examined in the report still plan to bring online more oil and gas plants.

Most of MENA’s prospective renewable energy won’t go towards decarbonizing our electricity grids: Some 60% of the region’s prospective renewable energy is earmarked for export as green hydrogen, meaning it won’t help the region’s national electricity grids transition away from fossil fuels.

All things considered, we’re behind our global peers: To put things into perspective, South America — whose population and GDP are similar to the region’s — has operationalized more than four times the capacity that MENA did in the past year, adding some 32 GW to its solar and wind energy capacity.

But financial incentives could catalyze the region’s green transition: The region has set global records for the lowest levelized cost of energy (LCOE) for solar and wind projects. The declining cost of renewables could discourage the construction of new oil and gas power plants and expose existing fossil fuel plants to the risk of becoming stranded assets.

Gulf sovereign wealth funds are also investing big in solar and wind — including here: Saudi Arabia’s Public investment fund and Abu Dhabi’s Mubadala have been leading the charge with investments in over 46 GW of renewable capacity abroad, 22% of which is earmarked for Egypt. Saudi Arabia’s ACWA Power and the UAE’s Masdar-led consortium both secured land in Sohag for 10-GW wind projects in the past two months. Acwa Power is also reportedly eyeing up a tender for five solar power plants on the North Coast and in April secured USD 114 mn in backing from a consortium of international lenders for a 200 MW solar power plant in Kom Ombo.

Your top green economy stories for the week:

  • Maersk’s new green fuels venture eyes Suez Canal production hub: Danish shipping giant AP Moller-Maersk and its parent company AP Moller Holding have established a startup that will manufacture green methanol to fuel container ships in the Suez Canal Economic Zone.
  • Arab, Chinese companies could invest USD 600 mn in Egypt wind plants: Three unnamed firms hailing from the Arab world and China are looking to invest USD 600 mn to build wind farms in Egypt.
  • Five investors interested in Gabal El Zeit: The government has received five offers from investors interested in acquiring the 580-MW Gabal El Zeit wind farm, Planning Minister Hala El Said said last week.
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