The installed renewable capacity of the United Arab Emirates, which was until recently nearly non-existent, concluded in the year 2020 at 2.3 GW, around 91% of which comprises of solar PV projects, a Rystad Energy analysis shows. Solar PV additions are going to pile up, especially from year 2022, and drive the country’s total renewable capacity to an impressive 9 GW by the end of the year2025.
Rystad Energy, evaluating activity in the country, expects solar PV capacity to reach 8.5 GW in the United Arab Emirates by the end of the year 2025, being by far the technology that will contribute the most to diversifying its energy mix. The share of renewable energy in the United Arab Emirate’s power generation mix is set to increase from 7% in the year 2020 to 21% in the year 2030, and to 44% by the year 2050.
Previous targets for the year 2020 have already been achieved, and a robust project development pipeline suggests that the 2030 target is within reach. It is too early to predict the achievability of the country’s 2050 target, but the flexibility and determination shown by the UAE’s renewable sector amid Covid-19 situation will surely make it attractive for investors and developers alike. This, together with some of the world’s lowest power purchase agreement (PPA) prices, suggests that year 2050 targets are well within reach.
Given the country’s current project pipeline, United Arab Emirate’s renewable capacity is on track for a remarkable compound annual growth rate of more than 31% towards 2025. Among the 7 emirates that make up the United Arab Emirate, the majority of renewable activity is concentrated in Abu Dhabi and Dubai, which together account for over 90% (8.2 GW) of total capacity in 2025.
Major projects expected to drive this growth include 4 solar farms, Abu Dhabi PV3 (1500MW), the Al Dhafra (2GW), MBR Phase IVa and IVb (950MW) and MBR Phase V (900MW), all of which are in various stages of development. The remaining 0.9 GW of capacity will come from projects in other emirates, such as Ras Al Khaimah, Umm Al Quwain, and Sharjah.
Dubai is currently having more than 1 GW of installed capacity, all of which comes from the MBR solar park’s 3 phases. Thanks to the MBR solar park, Dubai exceeded its 2020 target in the month June, increasing the share of renewable energy in the emirate’s energy mix to nearly 9%.
Abu Dhabi, the capital of UAE, has set itself a target of 5.6 GW of solar PV capacity by the year 2026. Abu Dhabi’s currently installed capacity stands at 1.3 GW, the majority of which comes from the 1.17 GW Noor Abu Dhabi (Sweihan) project, in addition to the Shams solar CSP project (100 MW) and the Abu Dhabi virtual battery (108 MW).
UAE is home to 1 of the lowest tariff prices in the world, consistently with prices declining by more than 76% in the past 4 years. The country has grabbed into a habit of breaking the world record for the lowest PPA prices and has set records nearly every time recent auction results have been announced. The Al Dhafra project, the latest solar PV award in UAE, recently agreed upon a tariff of USD 13.50 per megawatt-hour among the lowest solar PPA prices in the world.
“Renewable energy seems to be a top priority in the UAE. Despite the Covid-19 situation, the government of UAE has provided a reasonable amount of investment to continue ongoing projects.