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GCC to maintain leading role in global energy markets: Report

6 Dec 2023 By OUR CORRESPONDENT

Muscat – GCC countries are poised to maintain a key role in the global energy markets by exploiting their cost-effective renewable energy potential, spurring investment, and expanding innovation, according to a report released by International Renewable Energy Agency (IRENA).

Describing the progress of renewable energy in the GCC countries, IRENA’s report highlights renewables as climate mitigation and economic diversification opportunity for the Gulf countries.

Renewable Energy Markets: GCC 2023 Report suggests that GCC countries can leverage existing resources to develop innovative renewable energy-based solutions not only to mitigate climate change, but also to diversify their economies, create jobs, and reduce environmental impacts of the energy sector.

As the UN Climate Change Conference (COP28) is underway in the heart of the GCC in Dubai, this report serves as a resource and reference point for policymakers, businesses and civil society in harnessing the region’s vast renewable resource potential.

‘At less than two cents per kilowatt hour (kWh), solar PV is now the least-cost option for power production in the GCC, outpacing natural gas, liquefied natural gas, oil, coal and nuclear power,’ Abu Dhabi-based IRENA said in the report.

Plummeting generation costs and abundant solar and wind resources in the region open the door for innovative energy technologies, such as green hydrogen, to be produced competitively.

“As the world ushers in a new energy era, the GCC region has a unique opportunity to maintain a leading role in the global energy market,” said IRENA Director-General Francesco La Camera.

“Momentum in the region builds, as GCC states develop increasingly ambitious renewable energy and hydrogen strategies and pursue the implementation of their net-zero commitments,” he said.

Renewables, as per the report, are now cost-effective in the GCC, with highly successful auctions resulting in world-record-low prices for solar. ‘This is boosting the economic case and paves the way for the introduction of high shares of renewables in the electricity mix. Further sustained action is needed to translate ambitious targets into delivery on the ground.’

The report underscores a significant increase in the GCC’s installed renewable power capacity, from 176 megawatts in 2013 to over 5.6 gigawatts in 2022. However, renewables still only account for a negligible amount of the region’s electricity capacity, while end-uses continue to rely on fossil fuels.

Public investments in infrastructure and in value chains can further drive and enable the deployment of renewable energy and associated benefits, the report finds. It emphasises building on existing energy infrastructure, including enhancing regional grid interconnections and developing infrastructure to support end uses of renewables, for example in transport.

As mentioned in the report, the GCC countries need to play a larger role in achieving global emission reduction targets, both domestically and internationally. Beyond national efforts, GCC countries are in a position to support the energy transition in developing countries through international collaborative investments in renewable energy.

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