Black, gold, and green futures: The Middle East's integral role in the energy transition

The energy transition to net zero by 2050 is fully underway, and all eyes are currently on the Middle East. The recent culmination of ADIPEC – one of the world's most influential gatherings for energy industry professionals – coupled with the imminent COP28 event has placed the region firmly under the global spotlight.

Notably, COP28's selection of its chair, Dr. Sultan Ahmed Al-Jaber – the UAE's Minister of Industry and the Abu Dhabi National Oil Company (ADNOC) CEO – has stirred a significant debate. Given the Middle East's historic and deep-rooted ties to the oil and gas sector, this choice may seem paradoxical to many. However, the reality is that the Middle East, after delivering the benefit of cheap and abundant fossil fuels to the world, will play a critical role in the energy transition and should, there-fore, sit at the proverbial climate table to help transition us to a greener future.

Navigating the climate crisis: MENA's renewable energy revolution

Currently, the Middle East stands at a climatic precipice. The harsh reality is that the Middle East and North Africa (MENA) region has been experiencing the adverse effects of climate change at a rate much faster than the global average. Between 1980 – 2022, temperatures in the region soared by 0.46°C per decade, a stark contrast to the world's average increase of 0.18°C. As one of the world's most water-stressed areas, MENA grapples with mounting challenges, ranging from escalating temperatures to prolonged droughts.

Given these stark environmental realities and the region's economic reliance on oil and gas exports, therein lies an intricate balance to strike. With its vast renewable energy potential and robust financial resources, the Middle East is not only poised to participate in the energy transition but can spearhead it. As global endeavours intensify to decarbonise the energy sector, the urgency for MENA nations to pivot towards clean energy alternatives becomes paramount. The dual challenge of addressing the impacts of climate change while navigating economic diversification away from traditional oil and gas revenues calls for visionary leadership and innovative strategies. With the world's gaze fixed intently, the Middle East stands at a historic crossroads with the potential to lead and redefine the global energy landscape.

In the years leading up to COP26 in 2021, Gulf states, heavily rooted in hydrocarbons, were often labelled climate obstructionists. However, the narrative started to shift dramatically around COP26. In a historic moment, the UAE made a ground-breaking pledge to attain net zero emissions by 2050. This was followed by similar commitments from Saudi Arabia and Bahrain, targeting 2060. During COP27 in 2022, Kuwait and Oman echoed this sentiment with their 2050 pledges. Spearheaded by nations like Saudi Arabia and the UAE, this renewed commitment showcases the region's dual capabilities – a deep-seated expertise in hydrocarbons and a modern commitment to renewable energy and the energy transition.

Data from the International Renewable Energy Agency (IRENA) shows that the Middle East is championing change despite having the lowest clean power share in its electricity mix globally. In 2022, the region saw its renewables capacity soar by 12.8% from the previous year, marking the most substantial percentage gain among all global regions.

Solar energy is emerging as the region's crown jewel. In the UAE, the Al Dhafra Solar plant will be the world's largest when completed and will achieve a world-record lowest solar energy price of 1.32 cents/kWh. In Saudi Arabia, financing for the 2.6 GW Al Shuaibah solar plant was completed earlier this year, which will be the country's largest renewable energy project to date and is expected to start operation in 2025. In Egypt, the Benban solar park is the largest in Africa, containing more than 41 solar power plants spread over 37 km.

Innovating for a sustainable future

In the pivotal era of the energy transition, the Middle East is not just navigating change; it is embracing it with the right mindset for innovation. This region understands that succeeding in this transition necessitates a shift to new innovation curves and the development of ground-breaking technologies. This readiness to embrace technological advancement and digital acceleration is integral to the region's approach to redefining energy production and consumption.

The Boston Consulting Group highlights that the Middle East's commitment to innovation is remarkably strong, ranking second only to China (Figure 1). A significant 58% of Middle Eastern companies are dedicated to innovative practices, surpassing the global average of 45%. This statistic underscores the region's proactive and forward-thinking approach to innovation.

In Saudi Arabia, the drive for innovation is encapsulated in Vision 2030, an ambitious plan to diversify the economy and unlock new sectors through robust public and private investments. This vision is supported by Saudi Aramco, the nation's national oil company, which is at the forefront of this innovation wave. Aramco is pioneering initiatives such as developing mobile carbon capture and storage (CCS) technologies aimed at significantly reducing carbon dioxide emissions in the transportation sector. These efforts align with global environmental goals while enhancing efficiency and demonstrating the synergy between national aspirations and corporate innovation in Saudi Arabia.

The region is also investing heavily in nuclear fusion technology, with, for example, Israeli company NT-Tao aiming to build a reactor small enough to fit in a shipping container, which would be the world’s smallest.

Finally, UAE-based Lamprell has invested heavily in technology to drive the energy transition. In 2020, the company worked with digital twin pioneer Akselos to demonstrate that predictive digital twin technology can reduce the steel weight and associated costs of offshore wind jacket foundations by up to 30%, leading to lower costs and increased uptake.

Fuelling the future: The Middle East's central role in the global energy shift

Amid an evolving global energy landscape, the journey towards net zero will be characterised by the significant contributions of the Middle East. This transition is neither binary nor 1D; it necessitates a multifaceted approach where every region converges to be part of a holistic solution. A genuinely successful energy transition demands an inclusive strategy, intertwining traditional and emerging energy sources in unison.

The Middle East, blessed with a bounty of renewable energy potential and an innovative, forward-thinking mindset, is uniquely positioned to lead this global transition. By investing aggressively in renewable energies, the region seeks to address its environmental challenges and offer valuable insights that can benefit the rest of the world.

As the world charts the course towards a sustainable future, let us recognise that the Middle East, with its intricate dance between the oil and gas sector and renewables, exemplifies the balance that the world needs. The road ahead may be filled with challenges, but with collective commitment, diverse collaboration, and an ‘all options’ approach, we can pave a path that promises prosperity for the planet and its inhabitants.

For more news and technical articles from the global renewable industry, read the latest issue of Energy Global magazine.

Energy Global's Autumn 2023 issue

The Autumn 2023 issue of Energy Global hosts an array of technical articles focusing on green hydrogen, wind installation technology, blade monitoring solutions, and more. This issue also features a regional report looking at some key renewables projects in Australia.

Read the article online at: https://www.energyglobal.com/special-reports/30112023/black-gold-and-green-futures-the-middle-easts-integral-role-in-the-energy-transition/