Why the Gulf’s oil powers are betting on clean energy
The sun is setting on an era of Middle East oil. For more than a century, exports from the Gulf’s petroleum-producing states have been the bedrock of their economies and an important contributor to global trade. Now, however, these countries are embracing a new source of power – clean energy – as they seek to ensure a sustainable future for their citizens. From wind and solar farms to initiatives in the field of green hydrogen, the Gulf’s oil powers are investing heavily in renewable energy technologies in a bid to move forward.
1. An Age of Renewable Energy: The Gulf’s Investment
The Gulf region has long been the home of oil and gas, with the United Arab Emirates, Oman, and Qatar leading the way in extraction and refining. Now, the Gulf is looking to turn its focus to clean, renewable energy sources and is investing heavily in the technology.
The countries of the Gulf are all investing in renewable energy sources, from solar to wind and hydroelectric, as a way to reduce their carbon emissions and meet global challenges around climate change. The UAE and Qatar are two of the most invested countries in renewables, with the latter boasting the largest and most advanced solar energy plant in the world, the Al Kharsaah Solar Park. Oman is taking a more conservative approach, investing in smaller-scale renewable energy initiatives and partnering with industrial giants, such as Shell, to make the transition from traditional energy sources to renewables smoother.
- The UAE and Qatar — investing in larger renewable energy plants, such as solar
- Oman — investing in smaller projects, as well as partnering with industrial giants
2. Moving Beyond Oil to Renewable Energy in the Gulf
The Gulf is no stranger to oil and its abundance of natural resources, from its deep reserves to its coastal refining capabilities. Yet, in spite of its recognition as an oil powerhouse, the Gulf nations have made significant strides towards renewable energy. Their efforts are essential in mitigating global warming’s increasing impacts and its ability in providing for more reliable, secure, and cheaper energy.
The pervasive development in renewable energy resources in the Gulf is largely fuelled by ambitious pushes in solar and wind power. Countries such as the United Arab Emirates, Saudi Arabia, and Bahrain have installed trillion-dollar solar farms and are looking forward to harnessing more of their natural exposure to sunlight. Additionally, they have invested in offshore wind farms to support their rapidly growing economies and improve their energy security.
- The United Arab Emirates’ Shams-1 is the largest solar project in the Middle East, installing over 2.3 million modules.
- Saudi Arabia is setting up the world’s largest solar power plant with a budget of $200 billion.
- Bahrain’s Al Dur Power and Water plant is now fully powered by renewable energy.
3. The Financial Benefits of Investing in Renewable Energy
Investing in renewable energy can be a great way to not only help the environment in the long-term, but to also enjoy great financial benefits in the short-term too.
initial costs of investing in renewable energy may seem high, but the cost savings on long-term energy bills will quickly pay for them. In fact, the return on investment for renewable energy can be as high as 10% – meaning that you’ll be able to enjoy savings and even profit from renewable energy in the long run.
Renewable energy can also provide financial benefits in the form of:
- Tax breaks & credits
- Increased resale value of property
- Subsidies & renewable energy certificates
Moreover, using renewable energy helps businesses locate & keep more customers, as more & more people are beginning to prefer to purchase from sustainable sources.
4. Shifting the Tide to a Greener Future: How Oil Powers Are Revolutionizing the Gulf’s Energy Sector
The Gulf’s energy sector is no stranger to revolution. In the last decade, oil powers have been actively shifting away from dependency on oil and towards other sustainable alternatives more in line with global trends. This shift has been supported by ambitious renewable energy projects and the introduction of new green initiatives across the region.
The first green milestone was reached when Dubai announced it would generate 75 percent of its energy needs through renewable sources by 2050. This announcement demonstrated the ambition of their renewable energy drive, setting a glowing example to the wider Gulf region. The following years have seen Saudi Arabia, Kuwait, Qatar, and Bahrain follow with their own ambitious plans. Progress has been made on solar energy projects, with the UAE now generating 5 percent of its energy from solar panels, and Kuwait 8 percent.
- Jordan’s Best Sunshine Solar Park: This energy project is set to become the largest in the world, boasting a 310-megawatt capacity.
- Qatar Solar Energy Company: The project aims to generate 800 megawatts in 2022, while also targeting 200 megawatts of solar capacity in rural areas between 2020 and 2022.
- Dubai Silicon Oasis Solar Plant: This 5 megawatt project is the first of its kind in the region, producing enough energy to power 45,000 homes.
These projects, alongside energy efficiency initiatives, are helping to drastically cut down greenhouse gas emissions in an effort to counter effects associated with climate change. They are an important step in the right direction, but are only but a small glimpse of a larger shift that is taking place as the region transitions to a greener economy.
The world is firmly set on a course for a future powered by renewable energy. On the Gulf oil powers are no different – as they look to make the transition from fossil fuels to clean energy. As regions around the world look to make a similar transition to a cleaner and brighter future, it may be these Gulf nations who are paving the way forward.