ABU DHABI, United Arab Emirates, Jan. 22 (UPI) -- The Middle East, spearheaded by the oil-rich Persian Gulf monarchies, could spend up to $50 billion on developing solar power over the next seven years, says the Middle East Solar Industry Association.
The MESIA group based in Dubai, financial center of the United Arab Emirates, estimates the region will install 12,000-15,000 megawatts of solar power by 2020, with another 22,000-25,000 gigawatts from other renewable energy sources such as wind and hydro-power.
The rapid expansion of power generation is a critical issue for governments and rulers across the region in the coming decade as populations swell and industrialization spreads, particularly in the petrostates of the gulf which have found their oil exports are suffering because they're diverting too much oil to power plants.
"It is estimated that installed generating capacity in the region will be required to double by 2020 to cover demand and restore the reserve margin of at least 15 percent," observed gulf analyst Andrew Roscoe.
Overall, he said, "this would require capital expenditure of at least $200 billion on generation projects ... Providing power through conventional means has become increasingly costly in recent years due to gas shortages and rising oil prices.
"As a result, governments across the region are planning to diversify power generation resources to shore up energy security and lower costs in the long term," Roscoe noted.
At present, the Middle East has just 271MW of installed solar power, including the 100MW Shams 1 array in Abu Dhabi, the Emirates' oil-exporting economic powerhouse, developed by the state-run green energy company Masdar and its partners French energy giant Total and Spain's energy infrastructure company Abengoa.
Shams 1, which produces enough electricity to power 20,000 homes, is Masdar's second solar plant. It also runs a 100MW solar photovoltaic, or PV, plant and is awaiting approval for another 100MW PV plant in Abu Dhabi.
The National, an English-language daily published in Abu Dhabi, reported at the weekend that the total value of renewable projects and master plans, either completed or under way in the six member states of the Gulf Cooperation Council totals $4.5 billion.
That's split between $1 billion for hydro projects, all of them in Saudi Arabia, and $3.5 billion for solar operations, according to figures released at the four-day World Future Energy Summit held in Abu Dhabi and which ended Wednesday.
The GCC comprises Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain.
A MESIA study, which covers 14 countries, concluded that the Middle East is at a critical point with its plans for building up solar energy.
Solar contracts have recently been awarded in Algeria, resource-poor Jordan has just put out tenders and bids are expected shortly in Saudi Arabia, which is pressing ahead with several projects.
The United Arab Emirates is the current regional leader in renewable solar programs, with $1 billion in projects under way or completed. Abu Dhabi is leading the push and aims to get 7 percent of its energy needs from renewables by 2020.
Abu Dhabi is also the headquarters of the International Renewable Energy Agency, a multilateral organization established in 2009 to promote renewables.
In Abu Dhabi, the government-owned energy company Taqa is building a waste-to-energy power plant that will eventually convert 1 million metric tons of municipal solid waste into 100MW of electricity. Completion is scheduled by 2016 or 2017.
But the Saudis have ambitious plans to build a hefty 41 gigawatts of solar power in the next two decades.
That will include 25GW of concentrated solar power, or CSP, which produces power by concentrating sunlight, usually through mirrors that magnify the sun's warmth, to heat liquids and generate steam to run turbines for power generation.
PV power plants, by comparison, use solar panels which convert sunlight directly into electricity.
The Saudis' CSP project will likely make or break this new technology, which has the potential to produce energy even at night. CSP could thus be a major factor in covering the region's electricity gap.
"We're seeing a move from the announcements to the mechanisms," observed Erik Voldner, executive director of operations with Enviromena, an Abu Dhabi-based solar installation concern.
All told, regional solar projects due to get under way between now and 2025 are valued at $162 billion, with Saudi Arabia being the biggest long-term market.