MENA region seeing sharp growth in renewable energy sector: IEA

A giant wind farm is being built in Egypt which will provide power to 11 million homes. Shutterstock
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Updated 05 June 2024
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MENA region seeing sharp growth in renewable energy sector: IEA

RIYADH:The Middle East and North Africa region is registering the highest growth in the global renewable energy sector due to its relatively small current base and ambitious 2030 targets.

In its latest report, the International Energy Agency said the region shows the highest growth factor based on its ambitions — 4.5 times its current base, led by Saudi Arabia, Egypt and Algeria. 

“The MENA region accounts for less than 8 percent of global emissions from power generation and heat production. It aims to realize its significant untapped renewable energy potential by increasing capacity from less than 50 gigawatts in 2022 to 200 GW by 2030,” said IEA. 

It added: “Two-thirds of this ambition is concentrated in four countries: Saudi Arabia, Egypt, Algeria and Israel.” 

Saudi Arabia leading from the front

According to the report, Saudi Arabia is playing a crucial role in this energy transition journey, with the nation eyeing to boost its renewable capacity to 59 GW by 2030. 

“The Kingdom had less than 1 GW of renewable energy capacity installed in 2022 and it aspires to 59 GW by 2030, a significantly higher aim than it originally set in 2016 (9.3 GW). The increase was announced in 2019, in conjunction with plans to achieve net zero emissions by 2060,” said IEA. 

Algeria aims to install at least 14 GW of solar photovoltaics and 5 GW of wind by 2030, while Egypt seeks to increase renewable power generation to 37 GW by the end of this decade. 

According to the report, solar PV makes up almost half of the capacity aims for 2030. 

IEA highlighted that if all the projected ambitions in the region materialize, capacity for this energy source in the region will increase from 16.5 GW in 2022 to over 90 GW by 2030. 

“Even higher amounts could be achieved if some of the non-specified capacity in government ambitions is allocated to solar PV. High solar irradiation levels and increasing competitiveness make solar PV the main technology choice in the region’s ambitions,” said IEA. 

Clean energy transition progressing steadily




COP28 was held in Dubai in 2023

According to the analysis, countries worldwide have a significant opportunity over the coming months to develop clear plans for boosting renewable power, which could help move the planet closer to achieving the 2023 UN Climate Change Conference goal of tripling global capacity by 2030.

The report highlighted that tripling clean energy sources by the end of this decade is achievable through right policy decisions by governments. 

“At COP28, nearly 200 countries pledged to triple the world’s renewable power capacity this decade, which is one of the critical actions to keep alive hopes of limiting global warming to 1.5 degrees Celsius. This report makes clear that the tripling target is ambitious but achievable – though only if governments quickly turn promises into plans of action,” said Fatih Birol, executive director of IEA. 

He added: “By delivering on the goals agreed at COP28 – including tripling renewables and doubling energy efficiency improvements by 2030 – countries worldwide have a major opportunity to accelerate progress toward a more secure, affordable and sustainable energy system.” 

MENA projects set to boost renewable capacity

 

Shuaibah Two (2) Solar Facility

Place: Mecca Province, Saudi Arabia
Power: 2.06 GW  by 2030

 


Gulf of Suez Wind Power Project 
Place: Egypt
Power: 1.10 GW by 2026

 

Al-Ajban solar park

Place: Abu Dhabi, UAE
Power: 1.5 GW by 2026

 


Mohammed bin Rashid Al Maktoum Solar Park
Place: Dubai, UAE

Power: 5 GW by 2030

 

NEOM Green Hydrogen Project
Place: NEOM, Saudi Arabia
Power: 600 tonnes per day of green hydrogen by 2026 

Sharp price drop in renewable energy technologies

The energy think tank highlighted that more countries are turning toward renewables, such as solar PV and wind, following a sharp drop in costs over the past decade and renewed efforts by governments to build resilient energy systems with lower emissions.

According to the report, the amount of renewable capacity added worldwide each year has tripled since the Paris Agreement was signed in 2015. 

IEA revealed that the global renewable capacity additions reached almost 560 GW in 2023, representing a 64 percent year-over-year increase from 2022, with China becoming the biggest contributor. 

The energy agency also noted that the transition journey faces particular challenges, including lengthy wait times for project permits, inadequate investment in grid infrastructure, and high financing costs, especially in emerging and developing economies.

IEA added that governments should implement targeted actions to overcome these obstacles. 

“For example, on reducing financing costs to improve the bankability of renewable projects, it suggests approaches such as improving long-term policy visibility; supporting projects in the pre-development phase; and reducing price, inflation and exchange rate risks,” said the think tank. 

In May, another report released by the IEA said that the rapid rollout of clean technology will make energy cheaper. 

According to that study, the key task for governments globally is to make clean energy technologies more accessible to those who may otherwise struggle with the upfront costs. 

The agency highlighted that clean energy technologies are already more cost-competitive over their lifespans than those reliant on conventional fuels like coal, natural gas, and oil, with solar photovoltaic and wind being the cheapest options for power generation. 

The report highlighted that electric vehicles, although expensive compared to their traditional counterparts, will be cost-effective in the long run due to their low maintenance costs. 

The energy agency further noted that incentives and greater support, mainly targeted at disadvantaged households, can improve the uptake of clean energy technologies in the coming years. 

In the same month, IEA highlighted that investments in clean energy technology are strengthening the global economy by creating new industrial and employment opportunities. 

IEA noted that ensuring a reliant and diversified supply of energy transition minerals is crucial to meet the net-zero targets. 

The report also revealed that the market size of key energy transition minerals is expected to double from now to reach $770 billion by 2040.


NEOM board of directors announces leadership change

Updated 12 November 2024
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NEOM board of directors announces leadership change

  • Head of Public Investment Fund’s Local Real Estate Division since 2018, Al-Mudaifer has a deep and strategic understanding of NEOM and its projects

NEOM: The NEOM Board of Directors on Tuesday announced the appointment of Aiman Al-Mudaifer as acting CEO of the company. Al-Mudaifer assumes leadership of NEOM, following Nadhmi Al-Nasr’s departure.

As NEOM enters a new phase of delivery, this new leadership will ensure operational continuity, agility and efficiency to match the overall vision and objectives of the project.

Al-Mudaifer takes the helm of the organization with the support of a strong leadership team across NEOM’s regions, sectors and departments.

Head of Public Investment Fund’s Local Real Estate Division since 2018, Al-Mudaifer has a deep and strategic understanding of NEOM and its projects.

In his role at PIF, Al-Mudaifer oversees all local real estate investments and infrastructure projects. He is also a board member of multiple prominent companies within the Kingdom.

NEOM is a fundamental pillar of Saudi Vision 2030 and progress continues on all operations as planned, as we deliver the next phase of our vast portfolio of projects including THE LINE, Oxagon, Trojena, Magna and The Islands of NEOM. 

Through these projects, NEOM seeks to achieve harmony between livability, business and nature, and to create a better future for current and future generations.


Maldives, Bulgaria push for greater climate action, financing

Updated 12 November 2024
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Maldives, Bulgaria push for greater climate action, financing

RIYADH: Insufficient financing continues to be a significant barrier preventing many countries, especially underdeveloped nations, from meeting their climate goals, according to the President of the Maldives.

Speaking on the second day of COP29, held in Azerbaijan from Nov. 11-22, Mohamed Muizzu emphasized that small island developing states require trillions, not billions, of dollars in climate finance.

“It is the lack of finance that inhibits our ambitions, which is why this COP, the finance COP, we need to deliver the new climate finance goal. This must reflect the true scale of the climate crisis. The need is in trillions, not billions,” Muizzu said.

He added, “It must consider the special circumstances of small island developing states — it must include adaptation, mitigation, and loss and damage.”

Muizzu also reiterated the importance of the environment for his country, stating: “You have called for stronger climate action. Our call has not changed. Our cause has not strayed because, for us, the environment and the ocean are more than resources. They are our cultural identity.”

In a similar vein, Bulgarian President Rumen Radev addressed the global impact of climate-related disasters, emphasizing that no region is immune to the deadly and costly consequences of climate change.

“Bulgaria is committed not only to being part of regional and energy cooperation initiatives across Central and Eastern Europe, the Balkans, and the Black Sea region but also beyond, by strengthening the links between the European Union and non-EU countries who share our priorities on climate neutrality, just energy transition, energy security, and low-carbon technological innovation,” Radev said.

He further called for broader action, stating, “All parties should undertake greater efforts to integrate climate change adaptation and resilience into all policies and strategies.”


Closing Bell: Saudi main index slips to 12,048

Updated 12 November 2024
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Closing Bell: Saudi main index slips to 12,048

RIYADH: Saudi Arabia’s Tadawul All Share Index fell on Tuesday, losing 58.74 points to close at 12,047.67.

The total trading turnover of the benchmark index was SR5.75 billion ($1.53 billion), with 70 stocks advancing and 152 declining.

Saudi Arabia’s parallel market saw a drop, losing 50.59 points to close at 29,110.41. The MSCI Tadawul Index also declined, shedding 5.06 points to end at 1,516.14.

The best-performing stock on the main market was Al Jouf Cement Co., with a 4.75 percent increase to SR10.58. Other top gainers included Malath Cooperative Insurance Co. and Elm Co., with shares rising by 4.40 percent to SR15.66 and 3.87 percent to SR1,101.1, respectively.

The worst performer on the main index was Fawaz Abdulaziz Alhokair Co., whose share price dropped by 4.42 percent to SR12.12.

National Environmental Recycling Co., also known as Tadweer, announced it had signed a memorandum of understanding with Re Sustainability Middle East Co. to explore the potential for establishing smelters and recycling units in the Kingdom. According to a statement on Tadawul, the deal is valid for one year and carries no immediate financial impact.

The company’s share price declined by 0.45 percent to SR13.4. 

Purity for Information Technology Co. announced it has secured a contract valued at SR10.7 million from Saudi Comprehensive Technical and Security Control Co. to supply technology equipment. The company stated that the financial impact of the contract will be reflected in the first quarter of next year.

Its share price dropped by 0.73 percent to SR8.33.

Red Sea International Co. reported a narrowed net loss of SR2.18 million for the first nine months of this year, compared to a SR54.7 million loss in the same period in 2023. According to a statement on Tadawul, the improvement was driven by a 515.78 percent year-on-year increase in sales revenue. However, Red Sea International’s share price declined by 4.05 percent to SR71.

Lazurde Co. for Jewelry reported a 42.98 percent decline in net profit for the first nine months, totaling SR24.8 million, compared to the same period last year. The company attributed this drop to a 6.61 percent year-on-year decrease in operating profit over the nine-month period. Lazurde’s share price dropped by 2.05 percent to SR13.36.


UN climate chief urges aggressive action as emissions hit GDP

Updated 12 November 2024
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UN climate chief urges aggressive action as emissions hit GDP

  • UN official warned that worsening climate impacts will ‘put inflation on steroids’ unless every country takes bolder climate action
  • Simon Stiell called on governments to leave COP29 with a clear global climate finance plan

RIYADH: The global climate crisis is rapidly evolving into an economic threat, with the impact of emissions reducing the gross domestic product of several countries by up to 5 percent, a UN official said. 

Speaking at the high-level segment for heads of state and government at the COP29 in Baku, Simon Stiell, executive secretary of the UN Framework Convention on Climate Change, emphasized the urgent need for more aggressive climate actions to address economic challenges, including rising inflation. 

“We used to talk about climate action as being mostly about saving future generations. But there has been a seismic shift in the global climate crisis, as the climate crisis is fast becoming an economy killer,” said Stiell. 

He added, “In this political cycle, climate impacts are curving up to 5 percent off GDP in many countries. The climate crisis is a cost-of-living crisis, as climate disasters are driving up costs for households and businesses.” 

Stiell’s comments came shortly after a report by finance consultancy Oxera, which revealed that climate-related extreme weather events have cost the global economy more than $2 trillion over the past decade, with the US being the most affected. 

The UN official warned that worsening climate impacts will “put inflation on steroids” unless every country takes bolder climate action. 

Stiell urged the world to learn from the COVID-19 pandemic, highlighting the economic suffering caused by slow and ineffective collective action on supply chain issues. 

Describing climate finance as “global inflation insurance,” he warned that failing to address the economic toll of climate change would lead to disaster. 

“Letting this issue languish halfway down cabinet agendas is a recipe for disaster,” he said. 

However, Stiell remained optimistic, asserting that effective climate action could save economies and create new economic opportunities. He pointed to the growth of renewable energy as a potential driver of stronger financial states for nations. 

“This isn’t just about saving your economies and people,” he said. “Bolder climate action can drive economic opportunity. Cheap, clean energy can be the bedrock of your economies. It means more jobs, growth, less pollution choking cities, healthier citizens, and stronger businesses.” 

Stiell called on governments to leave COP29 with a clear global climate finance plan and urged international cooperation as the key to combating global warming and ensuring humanity’s survival. 

“We need your direct engagement on new national climate targets and plans — NDCs — so that all of you can benefit from the boom in clean energy and climate resilience,” said Stiell. 

He added: “These are not easy times, but despair is not a strategy, nor is it warranted. Our process is strong, and it will endure. After all, international cooperation is the only way humanity can survive global warming.” 


OPEC revises down global oil demand growth forecasts for 2024, 2025

Updated 12 November 2024
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OPEC revises down global oil demand growth forecasts for 2024, 2025

  • OPEC revised its 2024 global oil demand growth estimate to 1.82 million barrels per day, down from 1.93 million bpd forecast last month

LONDON: The Organization of the Petroleum Exporting Countries has again downgraded its global oil demand growth projections for both 2024 and 2025, marking the fourth consecutive reduction.

The revision, announced on Tuesday, underscores weaker demand expectations for key regions such as China, India, and other parts of the world.

The updated forecast highlights the ongoing challenges faced by OPEC+, the broader alliance that includes OPEC members and partners like Russia. Earlier this month, OPEC+ delayed plans to increase oil output starting in December, citing concerns over falling oil prices.

In its latest monthly report, OPEC revised its 2024 global oil demand growth estimate to 1.82 million barrels per day, down from 1.93 million bpd forecast last month. This marks the first revision to the outlook since it was initially set in July 2023.

China was the primary driver of the downward revision. OPEC reduced its forecast for Chinese oil demand growth to 450,000 bpd, down from 580,000 bpd, noting that diesel consumption in September dropped year on year for the seventh consecutive month. OPEC attributed this decline to a slowdown in construction and weak manufacturing activity, as well as the rising use of LNG-fueled trucks in China.

The weaker outlook weighed on oil prices, with Brent crude trading below $73 per barrel following the release of the report.

The demand outlook for 2024 remains uncertain, with significant differences among forecasters regarding the strength of global demand growth, particularly concerning China’s recovery and the pace at which the world transitions to cleaner fuels.

In addition to the 2024 revision, OPEC also lowered its forecast for global oil demand growth in 2025 to 1.54 million bpd, down from the previous estimate of 1.64 million bpd.