The Middle East and North Africa region (MENA) could produce enough energy through renewable forms to power the world three times over, according to a new report by Booz & Company, a global management consulting firm.
To date, notes the report, this potential has gone largely untapped, owing to a series of policy decisions favoring conventional energy. However, a series of factors should push smart governments and companies toward more closely examining the potential for renewable energy in the so-called MENA region, contend the report’s authors.
Despite the recent global boom in renewable energy activity, renewables in much of the MENA region are underfunded or not funded at all. Yet, according to the report, the case for renewable energy is actually stronger in the region than in many other geographic areas that have been far more active. There are at least six reasons that the MENA region should be a world leader in renewable energy, suggests the report:
The region has an advantageous geography and climate
The region’s current energy supply may not be sufficient to meet future demand
Renewables could help address the region’s environmental problems
Renewables could generate value in their own right, as well as freeing oil and gas for more profitable uses
Renewables could enhance the export value of the region’s traditional energy assets
The renewable energy industry could drive economic diversification and create jobs
Without question, wind and solar offer the greatest potential in the MENA region, concludes the report. Furthermore, note the report’s authors, wind energy is already cost-competitive with traditional energy sources in the region, once subsidies for conventional energy are taken into consideration; solar power is rapidly approaching parity.
Other forms of renewable energy (including geothermal and biomass) may be promising, but most MENA countries do not have the natural resources to make them viable, states the report.
To develop a viable renewable energy sector, according to the report’s authors, regional governments will need to take a number of critical steps:
Develop a renewable energy strategy that positions the sector as a key element of the overall energy strategy
Put in place an adequate institutional setting at the government level
Develop a favorable policy and regulatory framework to promote the development and use of renewable energy
Enable technical grid integration
Develop long-term capabilities and a deep talent pool
The report concludes those MENA countries that act quickly could eventually become the renewable energy sector’s world leaders.
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