Rystad says renewable energy capacity in the Middle East will skyrocket

Renewable energy capacity in the Middle East is expected to grow rapidly in the coming years, and by 2040, green energy sources will surpass fossil fuel use in the energy sector.

This is according to Rystad Energy’s latest research, as highlighted in a statement sent to Rigzone by Rystad on Tuesday, adding that photovoltaics (PV) is expected to become the dominant source, accounting for more than half of the region’s electricity supply by the middle of this year. age. In 2023, photovoltaics accounted for two percent, Rystad noted in the release.

“By 2050, renewable energy sources, including hydro, as well as solar and wind power, are expected to account for a staggering 70 percent of the Middle East’s energy mix,” Rystad said in the release.

“This represents a monumental jump from just five percent recorded at the end of 2023, signaling a transformational change in the region’s energy landscape,” he added.

“Despite the upcoming increase in clean energy installations, in the short term the region will continue to rely heavily on natural gas and its consumption will continue to increase until it peaks around 2030.” – continued.

In his announcement, Rystad acknowledged that the Middle East is “traditionally an oil and gas powerhouse,” but said the region is “shifting its focus to renewable energy sources in response to rapid industrial development, a growing population and a global drive to reduce greenhouse gas emissions.” “.

“The region is home to more than 280 million people and has one of the fastest-growing populations in the world, growing by more than 60 percent since 2000,” Rystad added.

“This has led to a rapid increase in energy demand, more than doubling in the last 20 years,” he further stated.

By 2050, energy demand in the region will reach around 2,000 terawatt hours (TWh), up from 1,200 TWh today, Rystad forecasts in the release. This is due to the strong development of industry, population growth and electrification of transport and other sectors, she added.

Fossil fuels accounted for 93% of total energy generated in the Middle East at the end of 2023, according to a Rystad release, which highlighted that renewable energy sources each accounted for three percent and nuclear and hydropower each for two percent.

As noted in the release, energy from natural gas accounts for nearly three-quarters of the region’s electricity generation, accounting for 40 percent of total gas demand. Due to the relative lack of hydropower potential and low gas prices, the Middle East will continue to use gas-fired power as its main source and ultimately as a transition fuel in the long term, he added.

The share of gas in the electricity mix is ​​expected to drop from 74%. at the end of 2023 to 46 percent in 2040 and 22 percent by 2050 – according to the publication.

“The Middle East is lagging behind in the renewable energy transition, overshadowed by Asia and Africa, where renewable energy is expected to surpass fossil fuel energy production by 2032,” Nishant Kumar, a renewables analyst, said in the release energy and energy at Rystad Energy.

“Since 2019, renewable energy production has exceeded fossil fuel consumption in Europe. With almost 40 percent of energy consumed by the growing residential sector, the Middle East is facing growing energy demand,” he added.

“This, combined with the need for economic and freshwater diversification through desalination, underscores the urgent need to transition to renewable energy sources. Moreover, the projected increase in the number of electric vehicles in the long term indicates a future increase in energy demand, which will make the transition to renewable sources not only necessary but inevitable for the long-term sustainable development of the region,” Kumar continued.

According to the Energy Institute’s (EI) latest statistical review of world energy, published last year, total renewable energy consumption in the Middle East in 2022 was 0.26 exajoules. The figure represented 0.6% of the global share of renewable energy consumption that year and a 19.8% year-on-year increase in the region, the review found. The EI review shows that from 2012 to 2022, the annual growth rate averaged 39.9%.

The review shows that this consumption is based on gross production and does not take into account cross-border electricity supplies.

The review found that total renewable energy production in the Middle East was 0.25 exajoules in 2022, accounting for 0.6% of the global share that year and representing a year-on-year increase of 19.9%. The review highlighted that renewable energy production in the Middle East increased by 40.5 percent year-on-year between 2012 and 2022.

Analyzing renewable energy generation by source, the review found that the Middle East produced 27.0 TWh in 2022, of which 23.7 TWh came from solar, 3.0 from wind and 0.3 from other renewable energy sources. The review notes that this includes electricity generated from geothermal energy, biomass and other renewable energy sources.

In a separate message sent to Rigzone earlier this month, Rystad said demand for crude oil will continue to grow in the medium term, according to its research and modeling, “as low-carbon alternatives are not yet sufficiently developed or economically competitive to offset the growing demand for petroleum, transport and industrial services.

“Rystad Energy’s latest Oil Macroeconomic Scenarios report explains how 13 oil-dependent sectors will face a more complex transformation than expected just a few years ago,” he added.

“These findings underscore the view that demand for oil remains unchanged and that the process of replacing the capital associated with oil consumption will be complex and lengthy due to oil’s competitive advantage in many transportation sectors and industrial processes,” it continues.

Claudio Galimberti, director of global market research at Rystad, said in the release: “as oil demand is likely to remain on an upward trend in the medium term, the likelihood of a rapid shift away from crude oil is decreasing unless we see breakthroughs in these low – carbon-based energy carriers that can technically and economically replace crude oil.

“Our updated medium-term forecast should bring a touch of realism to the oil transition narrative, as well as a renewed sense of urgency to explore even more and invest even more – where it makes economic sense – in clean technologies and renewables to achieve these goals. breakthroughs,” he added. he added.

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