RIYADH: Saudi Arabia and the UAE are leading the region’s fight against climate change by producing 90 percent of the Gulf’s renewable energy, according to S&P Global Ratings.
The US-based agency said that by the end of 2021, installed solar capacity in the two countries surged from 165 megawatts in 2016 to three gigawatts.
This increase helped fuel the renewable energy growth, with the UAE responsible for 77 percent of the output in 2021.
According to the report, Saudi Arabia and the UAE intend to continue making investments in the renewables sector.
“We believe plans to establish a renewables sector could help them in their efforts to achieve their climate goals,” it added.
The ratings agency highlighted the work of the government’s of the two countries, and said: “The UAE and Saudi Arabia have both established public-private partnership frameworks, making project finance an obvious choice for funding deployment.
“As energy transition in the region progresses, we expect to see more renewables projects tapping the capital markets for financing, including a growing number of solar PV projects.
“In our global portfolio of solar PV projects, the key credit qualities include the timing of and budget for maintenance, availability, and good management of solar panel degradation.”
The Kingdom’s most recent update to its Nationally Determined Contribution plan says it intends to reduce, avoid, and remove annual greenhouse gas emissions by 278 million tons of CO2 by 2030.
It is aiming to ensure renewable energy will make up about 50 percent of the energy mix to achieve this target as part of Saudi Arabia’s goal to become a net zero emitter by 2060.
The Kingdom plans on building one of the world's biggest green hydrogen facilities, which will be powered by over 4 GW of solar and wind energy and will be operational by 2025. The NEOM project's plant is expected to create 650 tons of green hydrogen per day.
Saudi Arabia is also building more significant wind farms at Yanbu, Wa'ad Al Shamal, and Al-Ghat.
S&P Global Ratings cited comments from the International Renewable Energy Agency in the report that said the Kingdom’s renewable energy generation capacity grew to 443MW in 2021 from 24.3MW in 2016.
According to the UAE’s Renewable Energy Strategy 2050, decarbonizing the power industry is a top priority and by 2050 it plans for 50 percent of energy generated in the country to be from renewable or nuclear sources.