IRENA head: MENA must play transformative role in new energy landscape

MENA region is focus of IRENA head’s commentary, seeing unique opportunity to ensure world’s emerging energy system accommodates and capitalizes on the region’s abundant renewable energy potential and strategic proximity to major global markets; securing MENA’s position in evolving energy landscape

The Director General of the International Renewable Energy Agency (IRENA), Francesco La Camera, wrote in an opinion published last week that the MENA region is redefining its role, that fossil fuel-driven growth has proven to be unsustainable, despite creating tremendous growth, and new energies will create enormous economic opportunity for the Middle East and North Africa.

La Camera was writing in the wake of IRENA’s World Energy Transition Outlook (WETO) published in June.

Meanwhile, Fatih Birol, head of the International Energy Agency (IEA) said last week that the world’s energy transition is unstoppable. His comments come in the wake of his agency’s release of World Energy Outlook 2023, three weeks ago.

The comments of both leaders, and the data they deliver to back up their beliefs, form an important framework for the upcoming COP28 in Dubai next month.

Competitive renewables

The head of the Abu Dhabi-based energy agency makes a compelling case for his MENA-centered statements.

Today, even without subsidies, solar and wind power stand cost-competitive with fossil fuels and have emerged as the preferred choices for new power generation. In fact, renewables accounted for 86% of all new power generation in 2022. This trend is not merely set to continue; it is accelerating significantly, extending even beyond the power sectors.

Transitioning to a renewables-based energy system offers a pathway to simultaneously meet growing energy demand, promote economic growth, maximise socio-economic benefits, and achieve decarbonisation objectives in the MENA region, La Camera writes.

He applauds nations including Bahrain, Kuwait, Oman, Saudi Arabia, and the UAE for having embraced net-zero emission targets.

According to IRENA’s WETO 2023, in the MENA region, clean energy investment increases fourfold to over $90 bn by 2050, by which time it represents over a third of the total. But this falls short of the trajectory implied by the region’s decarbonisation goals, including national net zero emissions commitments.

The International Energy Agency, in introducing World Energy Outlook 2023, wrote that the energy world is set to change significantly by 2030; assuming all renewable commitments are met, clean energy investment increases fourfold to reach nearly $80 billion by then. This will take the share of clean energy investment to nearly half of the total.

In power generation, this investment leads to renewables accounting for a sharply rising share of generation, 15% of the electricity generation by 2030 and a two-thirds share by 2050, with solar PV alone responsible for nearly half of all the electricity generated by 2050.

Urgent action

WETO 2023 showed that global renewable power capacity must triple from approximately 3,000 GW to just over 11,000 GW by the year 2030. The world is seemingly aligning to meet this objective with G7 countries, adopting IRENA’s targets for the group, and more recently, G20 countries, including the Kingdom of Saudi Arabia, echoing IRENA’s global goal to triple renewable energy capacity in New Delhi.

Recently, the UAE has embraced this level of ambition, pledging to triple its own renewable energy capacity by 2030. This endeavour is particularly noteworthy as the country prepares to host COP28, reflecting a genuine commitment to leading by example.

“Building political momentum and commitment is a critical first step, but it is just the beginning,” writes La Camera. “Everything, from our communities and energy frameworks to our everyday lives, is anchored in the current energy system; this must change.”

Three Pillars

WETO 2023 envisions three pillars that will form the foundation for a way forward.

Firstly, building the necessary infrastructure and investing at scale in grids, via both land and sea routes, to accommodate new production locations, trade patterns, and demand centres.

Due to its abundance of low-cost renewable power and a strategic geographical location near Europe and Asia, the MENA region possesses a competitive advantage in becoming a key green hydrogen hub.

Secondly, ambitious targets must be followed by effective policies and regulations that encourage investments. Fossil fuel investments in the Middle East are still significantly higher than renewable energy investments, indicating an urgent need to align financial flows with ambitious climate targets.

Finally, developing the necessary institutional capacities to help ensure that skills and capabilities match the energy system we aspire to create. This is crucial not only for a just transition but also for ensuring a workforce is ready for a new system.

Oil-exporting countries will require deliberate policy attention to retrain workers and forge new employment opportunities by cultivating local industries and manufacturing, thereby replacing roles once sustained by the previous energy sectors.

With effort comes benefits

In a news piece published by the International Energy Agency (IEA), its Executive Director Fatih Birol said: “The transition to clean energy is happening worldwide and it’s unstoppable. It’s not a question of ‘if’, it’s just a matter of ‘how soon’ – and the sooner the better for all of us.”

Birol elaborated further that public and private sectors, including investors, must back clean energy transitions. Doing so will lead to “new industrial opportunities and jobs, greater energy security, cleaner air, universal energy access and a safer climate for everyone.”

He added: “Every country needs to find its own pathway, but international cooperation is crucial for accelerating clean energy transitions.”

Energy & Utilities (E&U) reported on an IRENA report that said electricity generation will triple by 2050.

E&U also reported on an IEA report which revealed Oman as a competitive hydrogen (H₂) supplier by 2030.

Photo credit: IRENA