Solar power to lead Middle East energy transition

The sector reached the lowest cost of $10.4 per MWh in Saudi Arabia.

Solar power is expected to drive the energy transition in the Middle East region, with the sector expected to reach nearly 23 gigawatts (GW) in 2024, after exceeding 16 GW in the previous year, according to Rystad Energy.

In a report, Rystad Energy said solar power is the cheapest energy source, citing Saudi Arabia where it reached a world record-low levelised cost of electricity of $10.4 per megawatt-hour.

This is driven by various factors such as low hurdle rate, large-scale projects, falling prices of hardware, low labour costs, and high solar irradiance of over 2,000 kilowatt-hours per square metre annually in Saudi Arabia, the United Arab Emirates, and Oman.

By 2030, the region’s solar capacity is expected to surpass 100 GW, with green hydrogen projects accounting for an annual growth rate of 30%.

Saudi Arabia, the UAE, Oman, and Israel are projected to contribute two-thirds of the solar capacity by decade-end.

Currently, fossil fuels comprise 93% of the region’s total power generation at the end of 2023, followed by renewables at 3%, nuclear and hydro at 2% each. Natural gas, meanwhile, accounted for almost 75% of its electricity generation.