A Roadmap for Renewable Energy in the Middle East and North Africa

Working paper

Abstract:: Home to more than half of the world’s crude oil and more than a third of its natural gas reserves, the MENA region has, for the past fifty years, gained enormous significance as a global producer and exporter of energy. The MENA region is already a major energy consumer, and is forecast to continue to account, alongside Asia, for the majority of the world’s energy demand growth well into the 2030s; placing domestic energy policies at the heart of the region’s economic agendas for the coming decades. This paper argues that renewable energy – most importantly solar power, with its particular regional climatic advantage – could play a significant role as a cost-competitive alternative to conventional fossil fuels, if the full opportunity cost of domestically consumed oil and natural gas resources is fully priced into the regional energy system. The absence of cost-reflective energy and electricity tariffs in the MENA region today currently conceals this potential cost advantage; and leaves renewable energy deployment subject to further, economically distorting, policies such as renewables targets and fiscal incentives. Systematically opening up the economic opportunities offered by renewable energy to the MENA region will hence require structural reform of regional energy market and pricing mechanisms, thereby rationalizing the use of different energy sources in each domestic market.

Language:: English
Keywords:: United Arab Emirates

green economics

Oil

Electricity

OIES

GCC

Wind

solar

Energy subsidies

Middle East and North Africa

MEP6

Egypt

Laura El-Katiri

Morocco

hydropower

Saudi Arabia

Kuwait

MENA

MEP 6

Renewables

Natural gas

UAE

Jordan

feed-in tariffs

Renewable Energy
UUID:: uuid:e5a147ba-8542-4041-90c7-87c9b29c7ab5
Local pid:: ora:10372
Deposit date:: 2015-03-03

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