By Tsvetana Paraskova - Jan 30, 2025
By expanding renewables domestically, these petrostates are freeing up more of their oil and gas for export instead of burning it for power.
Chinese manufacturers are supplying most of the clean technology for the giant projects in the Middle East.
Rystad Energy: The region is expected to see exponential growth in renewable energy capacity, especially of solar plus battery storage.
The biggest and most influential Middle Eastern oil producers in OPEC are making headlines for a rather surprising reason—their giant renewable energy projects.
Saudi Arabia and the United Arab Emirates (UAE) have recently announced gigawatt-scale solar plus battery developments, which are set to boost the share of renewables in their electricity mix.
The Middle Eastern petrostates are not pivoting from oil and gas—on the contrary. By expanding renewables domestically, these petrostates are freeing up more of their oil and gas for export instead of burning it for power.
The Middle East region added record renewables capacity in 2023. Although the nominal capacity commissioned, 5.1 gigawatts (GW), was much lower than the capacity connected to the grid in the EU and the U.S., the Middle East’s growth from a low base, at 16.6%, was the second highest growth in the world after China, according to the International Renewable Energy Agency (IRENA).
Since the end of 2023, the Middle East has seen announcements of mega solar projects, which are the largest single developments in the world and will provide clean energy to hundreds of thousands of homes.
Saudi Arabia has just announced connecting a 500 MW/2000 MWh solar and battery energy storage plant in Bisha to the grid. This is now the world’s biggest single-phase energy storage project in operation.Related: Buyers Flock to Negotiate U.S. LNG Deals Amid Trump’s Tariff Threat
But the Saudi announcement was eclipsed by the UAE, which earlier this month announced plans to launch the world’s first large-scale ‘round the clock’ gigascale project, combining solar power and battery storage in Abu Dhabi.
Masdar, the UAE’s state-held clean energy giant, said it would build the project to deliver up to 1 GW of daily baseload power from renewable energy. The project will feature a 5.2 GW (DC) solar photovoltaic (PV) plant, coupled with a 19 gigawatt-hour (GWh) BESS, which would provide 24/7 electricity to around 700,000 homes in the country.
“For the first time ever, this will transform renewable energy into a world-leading 1GW of reliable baseload energy every day on an unprecedented scale – a first step that could become a giant leap for the world,” said Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and Chairman of Masdar.
China-based Contemporary Amperex Technology (CATL) will provide the energy storage technology for the $6-billion project in the UAE.
Another Chinese giant, battery and EV manufacturer BYD, provided the batteries for the already operational BESS facility Bisha in Saudi Arabia.
“Our batteries can withstand temperatures of over 60C, and they are sand, water and wind resistant,” Yong Liu, a marketing executive at BYD, told the Financial Times, commenting on the advantages of the Chinese solar and battery products for the Middle Eastern market.
Chinese manufacturers are supplying most of the clean technology for the giant projects in the Middle East.
The region is expected to see exponential growth in renewable energy capacity, especially of solar plus battery storage, analysts say.
Renewables capacity is set to outpace fossil fuel usage in the power sector by 2040, consultancy Rystad Energy said last year. Solar PV is expected to emerge as the predominant source, accounting for more than half of the region’s power supply by 2050, up from just 2% in 2023.
Renewable energy sources, including hydropower, are set to account for 70% of the Middle East’s power generation mix by 2050, according to Rystad.
Solar power capacity in the Middle East is set to surge to 160 GWdc by 2033, an eightfold increase from 2023, Wood Mackenzie analysts said last month, noting that the region “is solidifying its position as a solar energy hub, driven by ambitious national targets and record-low tariffs achieved in competitive auctions.”
In addition to solar, the Middle Eastern petrostates are looking to become leaders in green and low-carbon hydrogen and green ammonia production with the help of electrolysis from renewable power sources.
Moreover, Saudi oil giant Aramco, the world’s biggest oil firm, has just announced plans to set up a joint venture with Maaden to extract lithium from high-concentration deposits and advance cost-effective direct lithium extraction (DLE) technologies.
The Middle East is embracing clean energy technologies to diversify its fossil-fuel-reliant power mix, free up oil and gas for exports, and remain relevant in the energy transition. It’s not surprising that the world’s biggest solar and battery projects are in the Middle East—Saudi Arabia and the UAE have been raking in billions of U.S. dollars of oil money for decades.
By Tsvetana Paraskova for Oilprice.com
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