Renewable Energy: Seeds of Change, a whitepaper by Deloitte Middle East, finds that the recent changes in regional policies towards renewable energy will create an abundance of opportunities for private sector companies in the GCC, in the near and long term.
As an oil producing region, the Middle East has long been considered a net emitter of carbon. However, the Deloitte Whitepaper indicates that this perception now appears to be changing as the region takes steps to embrace renewable energy. Many GCC governments have already announced plans to capitalize on renewable energy. Saudi Arabia, Kuwait, and Oman have each stated plans to produce at least 10% of their energy from sustainable sources by 2020. Whereas Dubai and Abu Dhabi each set targets of producing 5% and 7% respectively of their energy from solar and renewable sources by 2030.
While energy independence is one reason for the shift to renewables, the opportunity costs of burning oil is becoming increasingly difficult to ignore, Energy experts at Deloitte say. They cite that Saudi Arabia alone is estimated to be diverting 800,000 barrels of its daily oil production to oil burning power plants. At current market prices of US$ 120 per barrel, this amounts to up to USD 35 billion in lost oil revenue per annum as a result of not selling oil to foreign markets.
Mr Declan Hayes MD of Renewable Energy & Cleantech, Deloitte Middle East said that "In the near term, we expect to see several policy announcements and a push towards green energy production being stimulated at the national and governmental levels. This is because it is the Governments and National companies themselves who are currently bearing the impact of the costs and who see the financial incentive to initiate change."
