Annual electricity growth of 6.4% in the Middle East and North Africa by 2022

According to a new study released by the multilateral development bank Arab Petroleum Investment Company (Apicorp), electricity demand in the MENA region is expected to increase
at an annual rate of 6.
4% by 2022.
To support their renewable energy development, major energy importers have introduced a variety of support mechanisms, including competitive bidding, the introduction of a tax system (FiT), tax exemptions and power purchase agreements (PPAs).

On the other hand, energy exporters other than the UAE have not adopted renewable energy as they continue to rely on the cheap extraction of conventional resources to meet their growing demand
for electricity.

Apicorp's report also found that the UAE, Morocco and Jordan are leading renewable energy development in the region, as these countries have all taken steps to ensure their energy diversification is on track with European help
.

The Moroccan government is on track as they set a target
of 2GW of solar and wind power per year by 2020.
The country has made impressive progress in the wind energy sector: five wind projects totalling 850MW have already been approved
.

In terms of solar, the first phase of the Noor Concentrated Solar (CSP) project was commissioned in 2016, while Noor-2 and Noor-3 are expected to add a combined 350MW in 2018 and will become the world's largest CSP project
upon completion.

Similarly, in Jordan, a surge in investment in renewable energy has been seen, supported by the international community
.
These include the Japan-led Kepco project, the South Korea-led Fujeij wind energy project and the European Bank for Reconstruction and Development's Al Rejef project, and the Quwerira project
, co-led by UAE and Spanish companies.
Through these projects, the government has increased the country's energy target from 600MW to 1GW
by 2020.

The UAE, and Dubai in particular, has done impressive work to stay on
track with renewable energy targets.
With phases 3 and 4 of the Dubai Solar Park, which is expected to start production by the end of 2020, the UAE will be at the forefront
of renewable energy development in the region.
Other emirates have also set up projects to push renewable energy targets, such as Abu Dhabi's Shams CSP project
.

Similarly, Saudi Arabia has launched a series of renewable energy initiatives, with the newly established Ministry of Energy, Industry and Mineral Resources responsible for the country's promising renewable energy programs
.
By building proper infrastructure, this demonstrates the government's commitment to achieving renewable energy targets and attracting foreign investors
.
The first utility-scale solar project was recently awarded ACWA Power
.

The 300 MW Sakaka PV project in the Al-Jawf region achieved the world's lowest solar winning bid with a price locked at $0.
02342/kWh and will operate
under a long-term PPA.
As for wind power, progress is also evident, albeit at a slower pace than solar
.
The government has received four bids for the first wind project, which is expected to have an installed wind capacity of 400 MW
in the Al-Jawf area.

As the country gradually increases its solar and wind power generation, Apicorp also predicts a more optimistic
outlook for Egypt.
Egypt's main challenges are low foreign exchange reserves and an uncertain outlook for the Egyptian pound
.

While research predicts an improved outlook, financing remains the biggest hurdle for governments, but increasing commitment from international lenders such as IFC and EBRD is helping to attract much-needed capital into the sector
.

Looking across the MENA region, the cost of reduced competitiveness will support the success of
renewable energy initiatives.
However, large oil and gas reserves and low extraction costs mean that hydrocarbons will continue to meet growing demand in countries such as Kuwait, Qatar and Algeria, while policy uncertainty and the lack of effective and supportive regulatory frameworks have also led to slow
progress on renewable energy in the region.

Ghassan Al-Akwaa, an energy industry expert at Apicorp, said: "For those countries that have excelled in renewable energy policy, the main driver is government initiatives
.
Morocco, Jordan and the UAE prove it
.
Their governments have taken steps to ensure the success of
these policies.
The Saudi and Egyptian governments are also starting to implement policies, and we expect the renewable energy sector to expand
in the coming years.
”