UAE Renewable Energy Market

UAE Renewable Energy Market Analysis

The UAE Renewable Energy Market is expected to register a CAGR of greater than 8% during the forecast period.

In 2020, COVID-19 negatively impacted the market. Presently, the market is likely to reach pre-pandemic levels.

• Over the medium term, the government's policies in favor of the development of the renewable energy sector are likely to boost the number of renewable energy system installations in the country.
• On the other hand, as nuclear power and natural gas use rise, there will be a lot of competition, which is likely to slow market growth during the forecast period.
• Still, the market has a lot of chances to take advantage of the new funding options that are helping to speed up the commercialization of renewable energy. As an example, in addition to conventional project financing, the sector is witnessing financial innovation to help facilitate and provide the investments required in the long term.

UAE Renewable Energy Market Trends

Solar Energy Expected to Dominate the Market

• The United Arab Emirates is a country that receives a lot of sunlight. The country is geographically well-positioned, with solar irradiance of approximately 2,285 kWh/m2. It has one of the highest solar exposure rates globally. Moreover, the maturing technology has led to the declining cost of solar power deployment.
• The solar PV capacity in the country was around 2705 MW in 2021, a 17% growth over the previous year's (2020) figures. The numbers are expected to shoot up at a fast rate in the near future due to upcoming solar projects and an increase in the share of renewables in the power generation portfolio.
• For instance, in January 2023, the Emirates Water and Electricity Company (EWEC) issued a request for a proposal (RfP) to develop a solar photovoltaic (PV) power project of 1.5 GW capacity in the Ajban area for the Emirates of Abu Dhabi. The bidders have to submit their responses to the RFP by the end of the first quarter of 2023. The scope of the project includes the development, construction, financing, ownership, and maintenance of the power plant and its associated infrastructure.
• Also, in January 2023, EDF and Masdar's joint venture, Emerge, signed an agreement with Coca-Cola Al Ahlia Beverages to build a 1.8 MW solar PV plant for its Al Ain facility.This is a commercial and industrial project that is located at the Coca-Cola Al Ahlia Beverages facility in Al Ain. This plant would be a combination of rooftop, ground-mounted, and car park installations.
• Such changes are likely to have a huge impact on the development of solar power technology in the country's residential, commercial, and industrial sectors.

Government Policies Expected to Drive the Market

• In order to reduce the country's carbon footprint, the United Arab Emirates (UAE) government is constantly working on various programs and policies to foster the deployment of renewable energy in the country. The UAE's renewable installed capacity was anticipated to reach 2706 MW in 2021.
• Solar, wind, and bioenergy are the main contributors to the UAE's rising renewable electricity generation. The country's energy ministry has set ambitious goals to increase this share and implemented numerous laws and policies to achieve these targets.
• For instance, in 2017, the UAE Energy Strategy 2050, launched by the government, aimed at achieving a 44% share of the total energy mix, which is currently 25% in the country.
• As of December 2022, the government invested around USD 163 billion to develop renewable energy projects to reach its zero-emission goal.
• Furthermore, the Abu Dhabi Department of Energy (DOE) launched a Clean Energy Certificate (CEC) regulatory policy in 2021. The policy's rules and regulations set up an accreditation system that will be used to give Clean Energy Certificates to participants, who can be either producers or users of clean energy.This means that everyone, from big companies to small businesses that care about the environment, can benefit from the system, no matter how much they use.
• Owing to the diligently implemented laws and policies by the country's government, the renewable energy sector is expected to grow tremendously.

UAE Renewable Energy Industry Overview

The UAE renewable energy market is semi fragmented. Some of the key players in the market (not in particular order) include Yellow Door Energy, Enerwhere, MASE, Akuo Energy SAS, and Masdar, among others.

UAE Renewable Energy Market Leaders

UAE Renewable Energy Market News

• November 2022: The UAE and the U.S. announced the signing of a strategic partnership, owing to which USD 100 billion will be mobilized to develop 100 GW of clean energy by 2035. The contract has been signed for the development of clean energy supply chains and innovation, managing carbon and methane emissions, decarbonization, and nuclear energy.
• March 2022: The Dubai Electricity and Water Authority (DEWA) was developing a 250 MW Hatta pumped storage hydropower plant near Dubai. The total investment in the project is estimated to be around USD 386.5 million. The project is scheduled for commissioning in early 2024.