Gulf Cooperation Council’s Renewable Energy Targets — Considerable Or Weak?
Much has been made of renewable energy growth targets recently made by key Middle Eastern countries such as Saudi Arabia, Kuwait, and the United Arab Emirates (UAE). Clearly, when oil-rich nations start pouring money into renewable energy, a global energy transition is ashift. However, it’s worth putting these investments into a bit more perspective.
Masdar recently commissioned a Frost & Sullivan white paper on renewable energy and cleantech within the Gulf Cooperation Council (GCC) — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.
From that white paper, you can see the renewable energy targets of some of these countries or their leading states. Have a look:
While it’s nice to see some renewable energy growth planned in this region, 1%–10% targets are hardly ambitious.
While this is not an apples-to-apples comparison (better would be investment per capita or per GDP or per electricity demand), the image below is interesting. Up until 2012, investment in the Middle East & Africa region was much less than investment in other regions of the world. However, in 2012, investment shot up a bit, rising higher than investment in Central & South America. Let’s just hope that jump is followed by further jumps of a similar size or greater in the coming years.
Let’s hope that early success with renewable energy projects — creating jobs, cutting costs, etc. — inspire the countries to increase their renewable energy targets and growth.
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Keep in mind that the citizens of Gulf Nations (not the 3rd country nationals that provide their labor base) usually have multiple very large houses, multiple very large cars while opulent shopping malls have spread out across the sand and highrise buildings have defined their skyline. All this square footage has to be air-conditioned against the searing heat for around 9 months of the year or longer. If oil production in any of these countries should peak (if it hasn’t done so already), you will see a massive crash of their economy and a massive downturn in energy usage since the vast majority of the economic activity in these countries is built either directly or closely-tied with oil exports. Over the course of a few years, the 1% – 10% targets might become 5% – 50% if the crash leaves the existing renewable energy installations in place. By 2020, we might start getting the first indications that some of the countries with smaller oil reserves might be close to being tapped out.
If one country gets tapped out, the world will demand greater transparency into reserves accounting and some of the other countries with smaller reserves, or even the “big boys” like Saudi Arabia, will have to lift the curtain on their “creative” reserves and production accounting. What they find there is probably going to be troubling to say the least. And if oil prices get so high that it’ll cost way too much for them to burn it in their power plants or desalinate water with it instead of exporting it, these countries will be glad they had some renewable energy to fall back on.