The United Arab Emirates (UAE) has set ambitious targets to increase its reliance on renewable energy sources and has made significant progress in this area over the last few years. The goal is to have clean energy make up 50% of the total power mix by 2050. At present, the UAE is one of the fastest-growing utility-scale markets in the Middle East and North Africa, with approximately 2,000 MW of renewable energy being installed each year.
Despite this progress, there are still several challenges that the UAE needs to overcome to meet its targets. One of these is the surge in PV module prices, causing delays in flagship projects in the region, as Romain Riche, international development director at the Middle East Solar Industry Association (MESIA), explains: “Due to those challenges, the country's cumulative installed capacity remains valued at around 3.5 GW by end 2022, but shall soon reach 6 GW capacity with the completion of the current mega-projects in Abu Dhabi (Al Dhafrah 1,500 MW) and Dubai (MBR Solar Park Phases 4 and 5, respectively 950 and 900 MW).”
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To address these challenges, the UAE has implemented programs such as the Dubai Clean Energy Strategy 2050, which aims to provide 75% of Dubai's total power capacity from clean energy sources, and the Abu Dhabi Vision 2030. These initiatives have set ambitious targets for the advancement of solar PV technology. Riche believes that new developments are likely to be announced at COP28, which is set to take place in the UAE this year.
The distributed solar segment has been popular in Dubai due to its net metering policy, but overall, its development remains limited. Accelerated development and updated policies are required to meet the ambitious targets set by the UAE Energy Strategy 2050, which aims for a clean energy share of 44% by 2050.
The growth of solar energy in the UAE is hampered by several factors, including legal and legislative concerns, funding constraints, and grid integration limitations. One such challenge is the lack of regulation for the distributed generation (DG) market in the UAE outside the Dubal emirate. However, in November 2021, the UAE announced its intention to adopt a federal law regulating the connection of distributed renewable energy production units to the electrical grid in all seven emirates. This is expected to revitalise the DG market over the next few years, with an estimated annual increase of 400 to 500 MW annually once regulations are in place.
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In the utility-scale sector, the projects are primarily focused in Dubai and Abu Dhabi, making it difficult for local developers and EPCs to grow in the local utility-scale sector. Despite these challenges, the International Renewable Energy Agency predicts that the UAE may generate 25% of its electricity from solar energy by 2030 and have a total installed solar capacity of 44 GW by 2050, very near its target. The UAE will need to continue its efforts to implement laws and programs to support the expansion of solar energy and meet these goals.
