Middle East Addiction to Cheap Gas Slowing MENA Green Transition to Renewables - Bloomberg

Middle East Addiction to Cheap Gas Slowing MENA Green Transition to Renewables - Bloomberg

The Middle East and North Africa region has raised renewables capacity by 50% in the past year and a similar boost is likely in 2024, but it still needs a 20-fold surge to replace cheap natural gas and avoid costly economic losses in the energy transition, according to a clean-energy think tank.

The region has started 6.9 gigawatts of solar and wind projects since May 2022, and another 9 gigawatt is likely to be completed by the end of next year, according to Global Energy Monitor. However, over 500 gigawatts of additional clean power is needed to replace the generation from existing oil and gas plants.

“The renewables capacity added in the last year is relatively unambitious compared to the region’s peers,” the think tank said in a report. South America, a region with a similar population size and gross domestic product, has brought online at least four times as much capacity over the same period.

The MENA region is home to some of the world’s biggest and lowest-cost oil and gas producers, which is likely to keep making fossil fuel generation attractive, according to the report. But renewables costs are also falling and the region has set global records for cheap energy from solar and wind installations, bringing the risk that new oil and gas power will become stranded assets, it said.