Long known for being oil-producing economies, many Gulf states have been switching over to renewables in a bid to remain competitive and meet emissions targets, despite the current commodities boom.
Given the recent boom in commodities, including oil, many people might be forgiven for assuming that oil-producing countries in the Middle East and Persian Gulf would be experiencing profit increases.
Quite the contrary.
While everybody has been focused on rising oil prices and its effects on inflation, many of these oil-producing nations have been making plans to switch over to renewable energy forms such as solar power and hydrogen.
Although initially resistant to the idea, many gulf states like Saudi Arabia have come to see the value in switching over to greener forms of energy, particularly solar.
This comes as a result of domestic geographical advantages, with plentiful year-round sunshine and vast expanses of desert providing ideal conditions for building solar farms without destroying the natural habitat.
There are many up-sides to renewable energy; the provision of cheap electricity for local populations and desalination plants for example.
However, the effects go much further, creating new jobs as well. This, in turn, futureproofs the region’s energy industry and reduces reliance on oil production––thereby heading towards net-zero targets.
Since announcing their Vision 2030 economic-reforms agenda, authorities in Saudi Arabia have been forging ahead with energy regulation reforms and plans to develop the renewable-energy sector.
The Neom smart city, which will be powered entirely via renewables by the time it becomes operational in 2025, is an example of just one of these initiatives.
Similar projects are also underway in Qatar and Dubai, including the Al Kharsaah solar power plant, which aims to become operational this year.
The hope is that once these projects are able to generate and store enough excess power, they will also become another source of energy export that can help replace oil in the decades ahead.
Authorities in other nations, including Iraq, Algeria, Egypt, Jordan, Morocco, and Tunisia are following suit, with many launching similar projects, including local solar panel factories.
However, many of these are still in the early stages of development or tender phases.
In an interview with Arab News, Denisa Fainis, general secretary of the Middle East Solar Industry Association said, “By capturing photovoltaic energy from the biggest source in the universe and providing access to electricity to areas that still rely on fossil fuels, we can reduce carbon emissions, reduce costs in business operations and maintenance, and improve air quality, while further development in the sector will provide jobs for generations to come.”
Given the rising energy prices due to the Russia-Ukraine conflict and its impact on inflation, this energy transition could not come too soon.