CMAS - Department of Civil Engineering | Queens University | Kingston, ON | Canada

Renewable Energy Potential in the MENA

Region - Strategy for Transition
Ibrahim Moataz Nour Eldin Mohamed, Master of Engineering Candidate 2013
ABSTRACT: Demand for energy to meet social
and economic development to guarantee a safe
standard of living and improve human welfare is
increasing. As the planets population rises, and
industrialization
of
developing
countries
accelerates, global energy demand continues to
increase. Renewable energy (RE) is one of many
options to lowering green house gas (GHG)
emissions produced from the energy systems,
while still satisfying demand. Renewable energy
can lower GHG emissions, mitigate global
climate change, and if implemented properly,
social and economic benefit is guaranteed. The
Middle East and North Africa (MENA) region has
approximately 57% of the worlds proven oil
reserves, and 41% of proven natural gas resources.
The region has an opportunity to reshape its
energy sector and further promote economic
growth. The objective of this work is to illustrate
the importance of having a renewable and
sustainable
energy
approach,
illustrating
renewable energy potential in the region and
indicating the importance of policy for transition.
Index Terms: MENA Region, Renewable Energy
Potential, Policy for Transition
I. INTRODUCTION

Every

society requires energy services to meet basic

human needs. According to the Intergovernmental Panel
on Climate Change (IPCC, 2012), global use of fossil
fuels (coal, oil, and gas) post the industrial revolution
has dominated energy supply leading to increasing
growth of carbon dioxide (CO2) emissions. As emissions
continue to grow, CO2 concentrations have increased to
over 390 ppm, or approximately 40% above
preindustrial levels, by the end of 2010 (IPCC, 2012).
Radiative forcing is defined as the difference between
Author: Ibrahim Moataz Nour Eldin Mohamed. Queens University,
Department of Civil Engineering: CMAS: Collaborative Masters in
Applied Sustainability, April 2013.
Tel: +1 613-985-5665
Email: 7imnem@queensu.ca (Ibrahim Mohamed)

the radiant energy received by the earth and radiated

back into space. Approximately 50% of the incoming
solar radiation from the sun is absorbed by the earths
surface. Greenhouse gases are gases in the atmosphere
that absorb and emit radiation. The greenhouse effect is
a process by which GHGs re-radiate energy in all
directions. Part of this re-radiation is towards the surface
of the earth, which results in increasing the average
surface temperature, also known as global warming (Le
Treut, H, 2007).
A region with considerable fossil fuel resources, if the
region developed its renewable energy sectors, oil and
gas resources can be used for other industrial activities
that can generate a greater value then currently offered
as feedstock for power generation (Booz & Co. 2009).
Despite global interest in renewable energy, research
and development (R&D) in this sector is underfunded in
the MENA region. Not all renewable energy
technologies will be viable for the region. There are
many motives for the MENA region to be a world leader
in renewable energy, some of these reasons are: The
region has profitable geography and climate, the regions
current energy supply may not be sufficient to meet
future demand, renewable energy can help address
current environmental problems, renewables could
increase return-on-investment making fossil fuels more
profitable in other industries, and the renewable energy
industry could generate social and economical benefits
to the region (Booz & Co, 2009). Cheaper oil costs have
not helped this matter, as renewable energy is relatively
less cost effective in a region that has abundant supplies
of fossil fuels.
The MENA region is illustrated in Figure 1 below:

Figure 1: MENA Region (Continentoil Limited, 2008)

CMAS - Department of Civil Engineering | Queens University | Kingston, ON | Canada

II. RENEWABLE ENERGY
To define renewable energy, one must first define its
purpose. Prior to the industrial revolution, nearly all
energy used was renewable. Climate change, peak oil,
and environmental concerns are all aspects that drive
sustainable development, which incorporate renewables
and renewable energy. So what is sustainable
development? The most widely recognized definition for
sustainable development comes from the Brundtland
Commission Report (1987), which states Development
that meets the needs of the present generation without
compromising the ability of future generations to meet
their own needs. Renewable energy is therefore energy
that is generated from natural resources that can easily
be replenished. This would then conclude a neverending supply of energy that allows present generations
to meet their needs without hindering the ability for
future generations to grow. Figure 2 below outlines
global energy supply in 2008, illustrating how
renewables contribute to approximately 13 percent:

(Susan et al., 2011). The MENA region includes 18

Countries, the Palestinian territories and The Western
Sahara. A diverse region with great fossil fuel reserves,
the region consists of an arid to semi-arid climate that is
poor in water resources and arable land. A GDP per
capita that ranges from $2,900 in the Gaza Strip to
$102,000 in Qatar, the MENA region is home to over 320
million people with an increasing urbanization rate.
Despite many similarities and differences, the MENA
region has been in political tension for more than 60
years. The ongoing PalestinianIsraeli conflict, the Gulf
war in the 1990s, current religious-based conflicts, and
most recently the Arab Spring all conclude that regional
cooperation is uncertain (Olund et al., 2010). Table 1
below lists the countries in the MENA region with
information to further understand the diversity present
in this region:
Table 1: Countries in the MENA Region (The World Fact Book, 2013):
Country
1
2

Algeria
Bahrain

3
4

Egypt
Iran

Iraq

Israel

Jordan

Figure 2: Global Energy Supply 2008 (IPCC, 2012)

Kuwait

Global use of fossil fuels as the primary energy source

has significantly impacted GHGs and carbon dioxide
concentrations in the atmosphere. It is important to
understand that the amount of carbon present in fossil
fuel reserves, yet unburned, has the potential to add
quantities of CO2 into the atmosphere that would exceed
any
scenario
currently
considered
regarding
environmental impacts of GHGs. This stresses the
importance of RE technologies coupled with strategic
policy to ensure a transition from conventional fossil
fuels.

9
10
11

Lebanon
Libya
Morocco

12
13

Oman
Palestine

14
15

Qatar
Saudi
Arabia
Syria
Tunisia
Turkey

III. MENA REGION

In the past inhabitants of the planet took the availability
of the natural resources for granted, assuming that the
environment is a limitless source of raw material. This
philosophy has recently been changing, as people now
understand that the environment has finite capacities to
supply material and absorb our waste. One of many
critical reasons why it is a challenge to address the
environmental concerns in the MENA region is due to
the lack of sufficient and reliable information to provide
baseline for current studies and recommendations

16
17
18
19

United
Emirates

Type of
Government
Republic
Constitutional
Monarchy
Republic*
Islamic
Republic
Parliamentary
Democracy
Parliamentary
Democracy
Constitutional
Monarchy
Constitutional
Emirate
Republic
Transitioning*
Constitutional
Monarchy
Monarchy
Parliamentary
Democracy
Emirate
Monarchy

Population
37,100,000
1,248,000

GDP in
Billion
$274.5
$32.44

GDP per
Capita
$7,500
$28,200

83,688,000
78,869,000

$537.8
$997.4

$6,600
$13,100

31,130,000

$155.4

$4,600

7,591,000

$247.9

$32,200

6,509,000

$38.7

$6,000

2,647,000

$165.9

$43,800

4,1410,000
5,614,000
32,310,000

$64.69
$87.91
$171

$15,900
$13,300
$5,300

3,090,000
4,260,000

$90.66
$11.95

$28,500
$2,900

1,952,000
26,535,000

$189
$740.5

$102,000
$25,700

Republic*
Republic
Parliamentary
Democracy
Emirate

22,531,000
10,733,000
79,750,000

$107.6
$104.4
$1,125

$5,100
$9,700
$15,000

5,315,000

$361.9

$49,000

It is important to note that most governments in the

region with their large economies have failed to address
the economic costs associated with environmental
degradation and sustainable development. This is
evident by how budgetary allocations for environmental
purposes are far less than 1 percent of the GDP of any
country in the region (Olund et al., 2010). This then
concludes the importance of raising awareness to all
decision makers and citizens with information regarding
the consequences of environmental degradation. This

CMAS - Department of Civil Engineering | Queens University | Kingston, ON | Canada

awareness coupled with an improved regulatory agenda
and incentives that induce positive environmental
practices are key improvement areas that must be
addressed.
IV. CONVENTIONAL POWER GENERATION
Conventional power generation in the MENA region is
prominently fossil fuel based. Figure 3 below illustrates
how the MENA region (made up of the Middle East and
North Africa), in comparison to other regions in the
world, relies on natural gas and oil (liquid based fossil
fuels) for energy generation:

Figure 3: Regional Consumption Patterns (MENA Energy Facts, 2011)

To emphasize the dependence of this region on fossil

fuels, Figure 4 below outlines the electricity supply for 3
major MENA countries:

billions of people residing in developing countries. Its

resource potential is difficult to characterize due its
complexity in food, forest, and fiber production systems
(IPCC, 2012).
Bioenergy applications have been focused mostly on
heat production ranging from individual home cooking
to large district heating and combined heat and power
systems. In areas that suffer from water scarcity, the
cultivation of suitable perennial crops can increase
potential of land by making it possible to produce
bioenergy on lands that are less suitable for crops.
Converting land to biomass plantations will reduce
water needs and provide benefit to electricity and
energy production. This renewable energy option can
be viable for remote areas that have limited or no access
to electricity grids.
The major biomass producing countries in the MENA
region are Egypt, Algeria, Yemen, Iraq, Syria and
Jordan. Estimated waste generation from the Middle
East countries alone is estimated to be greater than 150
million tons annually. Furthermore, the large quantity of
sewage sludge produced with the high rate of
population growth and urbanization in the region
presents bioenergy potential that is underutilized (Zafar,
2013). Agriculture, an important contributing sector in
most MENA region economies, varies across the region
at 3.2% in Saudi Arabia to 13.4% in Egypt (Zafer, 2013).
This indicates large quantities of crop residue that has
potential yet untapped. Utilizing thermochemical,
chemical, or biological processes, these residues can be
used to produce electricity and heat instead of being
burnt or ploughed back into the soil.
B. Geothermal Energy

Figure 4: Electricity Generation Supply: UAE, Egypt, KSA (MENA

Energy Facts, 2011)

V. RENEWABLE ENERGY OPTIONS

Life cycle estimates of CO2 intensity for electric power
producing renewable technologies, relative to fossil fuels
show one to two orders of magnitude lower CO2
emissions (grams of CO2 per KWh) (IPCC, 2012). The
following section will describe renewable energy
options that can guarantee lower GHG emissions
produced from energy systems while still satisfying
energy demand.
A. Bioenergy
Bioenergy is a form of renewable energy that is derived
as waste product from biological sources. The greatest
advantage of bioenergy is that it is often a waste of other
processes. Bioenergy plays a critical role in the lives of

Geothermal energy is utilizing accessible thermal energy

form the earths interior by extracting heat through wells
and other means. The highest quality of geothermal
resource is limited to locations with high tectonic
activity, with accessible stored heat that ranges from 110
to 403 x 106 EJ at 10 KM deep to 34 x 106 EJ at 3 KM deep
(IPCC, 2012).
The only country in the MENA region that appears to
be utilizing geothermal energy is Turkey. A report
published by the Geothermal Energy Association
(Jennejohm et al., 2012) states that Turkey is the seventh
most promising country in the world in geothermal
energy potential and that it has 800 MW of proven
geothermal capacity for electricity generation.
Geothermal resources are very limited in the rest of
the MENA region and geological explorations have not
yet been completed. Current exploration data conclude a
few sites for low potential geothermal in Egypt, Jordan,
Yemen, Saudi Arabia, and Tunisia (Al-Karaghouli, 2007).
C. Hydropower
Hydropower is harnessing energy from moving water at
higher to lower elevations primarily to produce

CMAS - Department of Civil Engineering | Queens University | Kingston, ON | Canada

electricity. Most hydropower production facilities are
built and run by governments in the MENA region.
Countries in the region that have hydropower potential
are Egypt, Lebanon, Iraq, Syria, Tunisia, Morocco and
Algeria. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia,
UAE, Yemen, and Libya are countries in the MENA
region that have no hydropower capacity.
It is important to note that the potentials for these
countries are much higher than current generating
capacities (Al-Karaghouli, 2007). Initial capital costs,
dam construction, and environmental effects are all
factors that limit the use of hydropower in the region.
Figure 5 below illustrates how regional share of
hydropower production has not changed over the years:

energy is considered the least expensive long-term

energy option because it is pollution free, infinitely
sustainable, does not require fuel, produces no GHGs,
and does not produce toxic or radioactive waste.
Figure 6 below illustrates wind energy potential in the
MENA region in terms of giga-watt of generation
capacity:

Figure 6: Wind Power Generating Capacity (Booz & Co, 2009)

According to the United Nations Environmental

Programme (UNEP), each megawatt-hour of electricity
produced by wind energy helps to reduce 0.8-0.9 tons of
GHG emissions that are produced by local or diesel fuel
generators each year (Al-Karaghouli, 2007).
Figure 5: Regional Hydropower Production 1973-2008 (IPCC, 2012)

D. Wind Energy
Wind energy relies indirectly on solar energy, which is
received by the earths surface and converted into
kinetic energy creating an imbalance between net
outgoing radiation at high latitudes and net incoming
radiation at low latitudes (IPCC, 2012). This coupled
with the earths rotation, geographic features and
temperature gradients result in wind. There are multiple
wind energy technologies available, but the primary use
of wind energy is to harness kinetic energy from moving
wind to generate electricity from large wind turbines
either deployed offshore or near-shore (IPCC, 2012).
The wind energy market has rapidly evolved in the
past 30 years due to extensive research and
development. According to the IPCC (2012), wind
turbine capacity has increased from 75 kW in the 1980s
to 1.5 MW and larger in 2009. Egypt, Algeria, Saudi
Arabia and Morocco are countries in the MENA region
that have extensive wind energy potential. Potential
wind energy available depends mainly on wind speed,
but is highly affected by density of air that is determined
by air temperature, barometric pressure and altitude. As
wind speed increases, the power and energy output
increases. Several MENA countries have wind velocity
ranges from 8-11 meters/second, which is considered a
good wind energy resource. Currently, wind energy is
the least cost type of renewable energy technology (AlKaraghouli, 2007). In many developed countries that
have utilized wind energy in previous years, wind

E. Direct Solar Energy

Direct solar energy is energy harnessed from solar
radiation to produce heating and cooling for buildings
or electricity generation. Solar thermal systems are
active and passive systems that provide heating and
cooling for buildings and heat processes in industry.
Solar energy for electricity production can be generated
from photovoltaic electricity generation (PVs) or
concentrating solar power systems (CSPs). The term
direct solar energy refers to directly drawing the suns
energy, verses other forms of renewable energy, such as
wind and ocean energy, which utilize solar energy after
it has been absorbed by the earth and converted to other
forms (IPCC, 2012).
Solar irradiance has a magnitude that averages 1,367
W/m2 for a surface perpendicular to the suns rays.
Depending on sky conditions, location, and climate, the
irradiance can decrease and increase. The biggest
problem with direct solar energy is that it is
unpredictable and unlike conventional fossil fuel energy
generation, it cannot be turned on and off as it is limited
to day time hours.
There are many ways to use solar energy effectively,
and due to recent advancements in the technology, solar
energy applications promise to be competitive with
conventional technologies. According to a report by the
UNEP, solar irradiance is the biggest resource in the
MENA region with several orders of magnitude larger
than the total world electricity demand (Al-Karaghouli,
2007). Solar energy applications can be grouped into
three main categories, they are: thermal applications,

CMAS - Department of Civil Engineering | Queens University | Kingston, ON | Canada

electricity production, and chemical processes. Solar
energy applications range from water heating,
swimming pool heating, building ventilation, building
heating, building cooling, building day lighting, crop
drying, off-grid electricity generation, distributed
electricity generation (diversification), detoxifying water
and air and water treatment. With the abundance of
solar irradiance in the MENA region, solar water heating
has the biggest potential. Producing electricity from CSP
has good potential due to the fact that the direct normal
irradiance in all MENA region countries is higher than
the required value.
Figure 7 below illustrates annual solar irradiance
followed by Figure 8 illustrating CSP potential in MENA
countries:

Figure 7: Annual Solar Irradiance - 2002 (Al-Karaghouli, 2007)

irradiance for major countries in the MENA region is

outlined in Table 2 below to summarize the
kWh/m2/year capacity for both CSP and PV:
Table 2: kWh/m2/year capacity for both CSP and PV in the MENA
Region UNEP (Al-Karaghouli, 2007)

Country

Direct Normal
Irradiance (CSP) kWh/m2/year

Global Horizontal
Irradiance (PV)
kWh/m2/year

Algeria

2700

1970

Bahrain

2050

2160

Egypt

2800

2450

Iraq

2000

2050

Jordan

2700

2310

Kuwait

2100

1900

Lebanon

2000

1920

Libya

2700

1940

Morocco

2600

2000

Oman

2200

2050

Qatar

2000

2140

Saudi Arabia

2500

2130

Syria

2200

2360

Tunisia

2400

1980

UAE

2200

2120

Yemen

2200

2250

VI. POLICY FOR TRANSITION

Figure 8: CSP Potential in the MENA Region (Booz & Co, 2009)

Photovoltaic applications for direct electricity generation

in the MENA regions has global incidence irradiance
above 1,800 kWh/m2/year, the highest in the world (AlKaraghouli, 2007). Comparing PV to traditional fossil
fuels, PV is currently the most competitive in cases of
small, off-grid, isolated communities and similar
applications. Solar energy offers many advantages to
remote and rural locations throughout the MENA
region, from producing fresh water, heating water,
cooling applications, and electricity generation. Low
maintenance
requirements
make
solar
energy
applications even more suitable for remote locations
where the population is usually poorly educated in
comparison to urban areas. Savings can also be
generated from needless fossil fuel transportation and
imports to off-grid locations for conventional energy
generation. Direct normal and global horizontal

Investment requirements to move into low-carbon

energy for electricity production are estimated at USD
5.7 trillion (2009 dollars) over the period of 2010 to 2035
(MENA-OECD Business Council, 2010). The private
sectors participation in the development of the
renewable energy sector in the MENA region is crucial;
this is because of its experience and ability to ensure cost
efficiency. Initiative from the private sector is not
enough, countries must consider whether they want to
build a strong renewable energy sector that is supported
and
built
on
strong
institutions,
education,
manufacturing enterprises and other efforts, in contrast
to solely operating as technology users (Booz & Co,
2009).
Apart from gradually decreasing oil and fossil fuel
dependence in the region, there are many motives for
governments to invest in renewable energy. Structured
in many reports, journal articles, studies, and policy
briefs is the fact that investment in renewable energy can
increase research and development which will decrease
cost in RE technologies, and provide more jobs and
education to the communities that take advantage of this
growing market. In order to meet investment needs in
the renewable energy sector in the MENA region, an

CMAS - Department of Civil Engineering | Queens University | Kingston, ON | Canada

environmental and economical based policy is required
to not only attract private investment, but also ensure
that transition occurs at a rate that does not hinder longterm performance. This regulatory framework that
should be instituted by governments in the region must
generate competitive environments for investors to
encourage business opportunities and push towards
economic growth. In order to accomplish this task,
governments are required to create a national energy
and environmental policy framework that adheres to
international commitments, promotes private sector
investment, and provides incentives that encourage
investment in the relatively new renewable energy
sector. Regardless of the strategy employed by each
country in the MENA region, governments must start
small, grow quickly, and begin now (Booz & Co, 2009).
Almost all of the countries in the MENA region have
adopted some form of renewable energy target, but
these goals are generally not supported by the
appropriate strategies or regulatory agencies. It is
evident that this region is far behind when compared to
current initiatives in Europe, North America, and Far
East Asia. Figure 9 below illustrate countries in the
region with specific RE targets in early 2011:

Figure 9: MENA Countries with Specific RE Targets in Early 2011

(IPCC, 2012)

Governments must appoint an entity (green energy task

force) to lead the development of polices and regulations
and follow up on the implementations created. Such an
operating body should be in charge of the broader
climate change agenda and ensure that renewable
energy is considered within the overall context of energy
diversification and climate change mitigation (Booz &
Co, 2009).
National energy policies should clearly define targets
(short, medium and long-term) that are determined by
close collaboration between the private sector and a
newly created regulatory body or entity in charge. Prior
to setting targets, governments should clearly outline
current existing energy infrastructure in order to adopt
future energy targets within the current infrastructure.
The policy would then include detailed direction for
adapting and enabling grid integration with the needs of

renewable energy. The greatest challenge with RE

technologies is the variable voltage inputs. This creates
the need for a grid that accommodates inconsistent
energy inputs, versus current conventional electric grids
that are used with consistent power sources. The gird
should also include effective power storage mechanisms
to ensure that excess captured production is
accommodated in the grid (MENA-OECD Business
Council, 2010). In conclusion, considerable investment
will be necessary for the transmission and distribution of
renewable energy in the grid. Investment will be needed
to upgrade existing grids with simple technology to
respond to variable energy inputs from the new
technologies. For that reason, it is highly recommended
that all policies include a cost-model to account for the
necessary upgrades required, in order to openly
acknowledge the challenges.
A. Subsidizing Renewable Energy
Government intervention to overcome market
favorability of fossil fuels in required to powerfully
introduce renewable energy technology into the
marketplace. It is clear that non-renewables must be
used to accompany the transition towards a renewable
energy supply, and for both economical and
environmental reasons, natural gas appears to be the
best non-renewable to assume this position (Jalilvand,
2012).
Worldwide subsidies for renewable energy are
expected to rise in the coming years. Many policy
instruments are available for subsidizing renewable
energy markets until the markets are fully competitive.
The best policy instrument is dependent on the current
countries circumstances, government role, energy
potential, and effectiveness in planning and
transitioning away from conventional technology. All
fossil fuel subsidies must be phased out as they pose a
direct barrier to the deployment of renewable energy.
Energy prices in the MENA region do no reflect total
environmental costs and therefore increase the cost
competitiveness of renewables.
According to Jalilvand (2012), a study conducted in
the European Union concluded that if all externalities
were internalized in the cost of energy and electricity,
prices for oil and coal would double. For that reason, an
energy-pricing scheme that introduces the entire cost
conventional energy excluding all government subsidies
would advance the cost competitiveness of renewables.
Not only will the cost of fossil fuels increase creating
renewables more competitive, but also the money saved
(billions of dollars in the MENA Region) can be used to
subsidize renewables and push forward to a renewable
energy based economy.
Subsidies for renewable energy are aimed at reducing
cost and consumer price for the technology in order to
make it more competitive, and therefore promote and
increase investment. Subsidies function side-by-side

CMAS - Department of Civil Engineering | Queens University | Kingston, ON | Canada

other energy companies, or purchasing RE from a

third-party company (Schaeffer et al., 1999). With
the low supply of green certificates, prices will be
high creating incentives for energy and electricity
suppliers to provide more renewable energy.
Therefore, TGCs are considered a cost effective way
to meeting renewable energy targets.

with research and development to improve the

technology and decrease future costs, at the same time
providing market incentives. Figure 10 below illustrates
the importance of R&D in the overall market
development.

Figure 10: Importance of

Development (IPCC, 2012)

R&D

for

RE

Technology

Market

It is important that subsidies are only used to create

competitive markets for renewables. Once these markets
are competitive, the subsidies should be seized. Unlike
fossil fuel subsides which are infinite and aimed to
ensure permanent cheap prices, renewable energy
subsidies should never be permanent and be used only
to launch innovations and improve technology
(Jalilvand, 2012).
Due to the diverse nature of countries in the MENA
region, each country should decide on which policy
instrument is best suited and should be implemented.
Illustrated below are several renewable energysubsidizing instruments that can be implemented to
guarantee competitiveness of renewable energy in the
market place:
1. Feed-in tariff (FIT) Price-based subsidisation: A
feed-in tariff is an agreement to pay a guaranteed
dollar amount for every kWh of electricity generated
from renewable energy over a set period of time, for
certain types of renewable electricity (Cory et al.,
2009). This offers long-term security for investors,
and guarantees all qualified renewable energy
projects access to the electricity grid (Mabee et al.,
2012). FIT is considered the most common
renewable energy subsidy, and encourages
technological advancement. This is due to increased
efficiency, which increases electricity production,
and therefore increases return-on-investment.
2. Tradable green certificate scheme (TGC) Quantitybased subsidisation: Under the TGC, electricity
suppliers are forced to supply a certain amount of
electricity from renewable sources. Electricity
producers can meet their obligations by ownership
of a RE facility, acquiring green certificates from

In contrast with the FIT, the TGC can ensure that a

certain share of the electricity/energy is produced from
renewable energy, as quotas can easily be defined. The
drawback of the TGC is that it requires continuous
monitoring to ensure that all energy producers are
meeting their obligations (Jalilvand, 2012). It must be
noted that under the FIT program, there is very little
competition between renewable energy producers as the
return on renewable energy production is guaranteed
regardless of market demand. FIT returns are reduced
over the years and ultimately expire, and for that reason
are thought of as a temporarily long-term incentive for
cost reductions.
3.

Tax incentives: Tax reductions for renewable energy

producers can result in effectively increasing
renewable energy production as companies will
have increased after-tax-earnings. Tax incentives can
increase local and national investment. Tax
incentives include but are not limited to: investment
tax incentives, production tax incentives, property
tax reduction, value-added tax reductions, research
and
development
tax
credits,
equipment
manufacturing tax incentives, and imposed taxes on
conventional fossil fuels (Jalilvand, 2012).

The success of subsidies is generally dependent on the

conditions created for the investors. The FIT program
guarantees demand and return by taking the price risk
from the producers giving them security and thus an
incentive to produce renewable energy. For these
reasons, governments around the world tend to favor
the FIT over the TGC (Jalilvand, 2012).
Each country in the MENA region will need to
analyze each subsidy instrument in order to determine
which instrument best fits their current situation.
Multiple instruments might be employed at different
time periods depending on short-term and long-term
targets. Subsidies should be employed based on their
effectiveness, efficiency and appeal to investors in the
market place. Taking into consideration the differences
between the countries in the MENA region, the best
solution appears to be that each country starts small and
creates a framework to implement policies that promote
renewable energy technologies to generate a smooth
transition from the conventional power to a more energy

CMAS - Department of Civil Engineering | Queens University | Kingston, ON | Canada

secure future. In order to attract bank financing,
governments must carry out long-term cost-benefit
analysis of incentive programs and subsidy instruments.
This brings up the importance of regional development
banks in the MENA region such as the Kuwait Fund for
Economic Development, Arab Fund for Economic and
Social Development, and the Islamic Development Bank
that need to incorporate renewables into programs and
schemes implemented in MENA region countries.
VII. BARRIERS TO SUCCESS
Although some countries in the MENA region have
begun some renewable energy projects, great
opportunities are still unutilized and potential has not
yet been tapped. Barriers to increased development of
renewable energy projects in the MENA countries are
similar, although some country-specific circumstances
remain and require distinct policy solutions. The
following are among many barriers to renewable energy
deployment in the MENA region (Kamel, 2004):
Awareness and Information: The poor degree of
knowledge regarding RE technologies among policy
makers, energy planers, education institutions, and
users of the technology leads to a low number of
interested individuals. The RE industry would also
require a skilled workforce made up of engineers,
technicians, designers, and policy makers. There is a
global shortage of these required talents and the
shortage is even more critical in the MENA region (Booz
& Co, 2009).
Financing: As shown previously, the MENA region is
made up of diverse countries with different gross
domestic products and average standards of living.
Financing RE projects in the MENA region is a major
obstacle beginning with financial institutions that lack
awareness and experience with the importance of
financing these clean technologies and the ability to
evaluate investment. With competing resources at lower
prices, RE projects are viewed as high-risk projects with
low return-on-investments.
Regulation: As concluded previously, there is little
incentive promoting RE technology in the MENA
region. In some countries, regulation and law have
muted RE opportunities. Egypt, for example, has
imposed a 50% import tariff on batteries for PV systems,
and a 10% import tariff on PV cells.
Reputation: In many MENA countries, RE
technologies have a reputation that they are unreliable,
not efficient or cost effective, have a high initial capital
cost, and would not be able to meet required energy
levels. A detailed roadmap outlining the transition from
current conventional fossil fuels to RE technologies is
required. A clear indication of how current conventional
low impact fossil fuels will supplement RE technologies
is important to increase confidence in RE technologies.

The above stated coupled with undeveloped

infrastructure and required grid integration are among
many barriers to RE development in the MENA region.
VIII. CONCLUSION
Transitioning away from the conventional and carbonintensive fossil fuels to meeting current needs is the
challenge for every jurisdiction around the globe, this is
due to post industrial revolution anthropogenic
greenhouse gas emissions resulting from fossil fuel
consumption accounting for significantly increasing
greenhouse gas concentrations in the atmosphere.
Economic development has been strongly related to
energy consumption and use. RE technologies can help
reduce this relationship while still satisfying demand
and pushing towards sustainable and efficient
development.
The MENA region, a region with considerable fossil
fuel reserves, has shown little interest in renewable
energy in recent years, despite global attention. It is
understood that not all RE technologies are viable for
every MENA country, but it is acknowledged that the
region has profitable geography and climate resulting in
high renewable energy potential. Solar and wind energy
potentials in the MENA region show highest return-oninvestment.
Most governments in the region have failed to address
the economic costs associated with environmental
degradation, and therefore have shown little concern in
engaging in the growing market. Governments must
appoint an entity to lead the development of policies
and regulations concerned with RE development, and at
the same time take into consideration energy
diversification and climate change mitigation. Current
existing energy infrastructure should be clearly
identified. Transparent and multi-objective policy
should be implemented in full coordination with all
stakeholders in order to create an efficient and cost
effective policy shift. In order to attract private
investment, policies that facilitate investment in
renewable energy should be included and made part of
all government economic development goals. New laws
and regulations will need to be implemented to achieve
a competitive business environment in the MENA
region. Government systems should promote individual
business and property rights and freedom of entry and
exit with equal grid access. This is to be conducted
under a legal system that is transparent, accountable,
predictable and easily accessible.
A region with high-untapped renewable energy
potential, the MENA region has an opportunity to reshape its energy sector. A shift towards an energy
sustainable system will begin with fossil fuels
supplementing RE technologies until RE technology
markets are capable of phasing out all conventional
energy generating systems, lowering GHG emissions
while still satisfying regional demand.

CMAS - Department of Civil Engineering | Queens University | Kingston, ON | Canada

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