GCC Renewables Outlay to be $16 Billion by 2020

A new report has outlined that while the Middle East provides an attractive opportunity for renewable energy development, it is still falling short of global outlays even though it is estimated the total GCC outlay will be around US$16 billion by 2020.

The report stated: “Although structural and institutional challenges for renewables have led to underinvestment, the GCC has several factors that make rapid deployment of renewables an attractive opportunity.

“These include plentiful, high-yield renewable resources; an natural gas shortage; and an established independent power plant (IPP) model, which makes cheap, long-term project finance available and can attract the necessary private and foreign investors.

“Capitalizing on that opportunity requires a considerable financial and policy commitment.

“GCC governments must avoid a short-term, haphazard approach that will result in an inefficient supply mix or renewables plants disconnected from national energy strategy.”

The report also outlined that in order to avoid such risks, GCC governments should take six critical actions, listed below:

· Set ambitious and realistic renewable energy targets that are grounded in a comprehensive and integrated national energy plan

· Clarify the national energy governance framework and define institutional roles and accountabilities

· Reform the current fossil fuel and energy subsidies regime and reallocate financial resources

· Broaden the range of financing instruments available to renewables

· Unify regional standards to aggregate demand for equipment and increase transparency and comparability across projects

· Build the capabilities of policymaking and regulatory authorities.

Among developing countries, China has taken the lead in renewables since 2004.

While it is estimated that $16 billion will be invested in renewables by 2020, the report warns that still may not be enough to keep pace with global growth.

Read more: DP World Launches Green Initiative