DUBAI — Declining renewable energy prices and increasing energy demand in the Middle East and North Africa (MENA) region present a unique opportunity for stakeholders to accelerate renewable energy production, invest in long-term competitiveness and energy security.

The bright future for renewable energy in the region was explored in-depth at a recent Bloomberg New Energy Finance (BNEF) event in Dubai, attended by approximately 60 energy and financial services professionals. Key discussion topics included the global rise of electric vehicles, increasing competitiveness of renewable energy technology and regional opportunities for renewable technology growth.

Between 2017 and 2040, 530GW of new power-generating capacity will be needed in the MENA region, according to Bloomberg New Energy Finance in its annual long-term economic analysis of the future of energy – the New Energy Outlook. Around 358GW, or almost two-thirds of this, is likely to be new solar and wind, driving the capacity mix from one dominated by fossil fuels (93%), to one where over 50% is zero-carbon.

Solar and wind will dominate the future of electricity generation around the world because both technologies are increasingly competitive with coal and gas-fired generation, and as deployment increases, costs will continue to decline.

By 2021, electricity from new solar PV plants is likely to be cheaper than new coal in China, India, Mexico, the UK and Brazil. Globally, to 2040, there will be around $7.4 trillion of investment in new renewable energy plants, according to BNEF analysis.

In the MENA region new solar PV is already cheaper than new gas-fired power in energy importing countries and a competitive option to diversify supply in many energy exporting countries. Bloomberg New Energy Finance analysis suggests there will be 274GW of PV commissioned by 2040, which together with onshore wind is set to attract $361 billion in new investment.

Automaker plans suggest there will be over 200 electric vehicle models on the market by 2020, and as battery prices continue to decline, these cars will be cheaper to buy and cheaper to run than fossil fuel alternatives. Forecasts made by Bloomberg New Energy Finance in its annual Electric Vehicle Market Outlook suggest that by 2040 more than half (54%) of new light-duty vehicle sales and a third (33%) of the global car fleet will be electric.

While the bulk of these vehicles are likely to be in China, Europe and North America, every electric vehicle (EV) on the road chips away at demand for conventional fuels. By 2040, a global fleet of 530 million EVs will need 8.5 million fewer barrels of transportation fuel per day. While this is only around one twelfth of today’s global production it will certainly put downward pressure on the oil price.

The MENA region has seen some the cheapest photovoltaics (PV) and onshore wind projects anywhere in the world, but renewable resources remain under-developed. Investment is rising, however, with over $6 billion invested across 1Q-3Q 2017 – a new record. Governments have set ambitious targets, and if met, they will drive a six-fold increase in wind and solar, or an additional 20GW, by 2020.

This acceleration in activity will offer a $27 billion investment opportunity, sending a strong message to the world that the powerhouse of the fossil-fuel era, is shaping up to be a powerhouse of the renewable energy age as well. — Bloomberg