Future Photovoltaic Electricity Production Targets and The Link to Consumption per Capita on The Policy Level in MENA Region

TL;DR

This paper analyzes the energy policies and renewable energy potential in the MENA region, emphasizing the need for subsidy reforms and decoupling economic growth from energy consumption to meet climate goals.

Contribution

It provides an overview of MENA's electricity market, policy effectiveness, and renewable energy prospects, highlighting strategies for decoupling growth from oil dependency.

Findings

MENA has high solar energy potential but is early in renewable adoption.

Decoupling economic growth from energy consumption benefits fiscal stability.

Subsidy reforms are crucial for renewable energy development.

Abstract

This paper provides an overview of the status of the electricity market in the region, indicating the nexus between electricity consumption with population growth and GDP. It also analyzes the policy portfolio in different countries, indicating some of the in-action policies' effectiveness and recommended alternatives. World Bank datasets were used for the analysis between 2000 and 2014. We found that the MENA region is at an early stage for renewable energy with a high potential for solar energy, making it attractive for investors. However, the high dependency on oil for consumption and exporting might not provide a prosperous environment for renewable technologies to grow. Therefore, a greater focus on decoupling economic growth from energy consumption will have a long-lasting impact on fiscal revenues for net-oil exporting countries. Moreover, the consequences of the decoupling will allow more renewables penetration in the current energy mix enabling many countries to reach their Paris Agreement goals. For short-term energy policy actions, starting a subsidy reform towards the final repeal of subsidies is a must as these measures relate to all end-use sectors and impact fiscal stability in many countries. With its 1.65GW Benban Solar Park in Aswan, Egypt has shown an example of shifting from subsidizing fossil fuel products to commissioning renewable projects to get closer to its Paris Agreement targets.