Water surpasses solar as the GCC’s fastest growing renewable technology

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renewable energy
Source: EY’s 4th MENA Cleantech survey report

Insufficient government policy frameworks, price competitiveness and poor grid infrastructure are barriers to cleantech industry development. A significant shift in the expectations of industry executives occurred during 2014 with regard to the growth of clean technologies in the MENA region over the next five years. Innovation in water technologies is helping drive energy efficiency in the region, especially given the mostly hot, arid climate. It’s interesting to note that water was mentioned less frequently as a growth area over the last three years, yet now it has become the leader in market potential over the next five years. Prospects for investment in water infrastructure in 2014 have also improved markedly over previous years.”

Solar was ranked second in terms of market potential over the next five years, although it was ranked first place over the past three years. Confidence in solar had been growing based on the announcements of new projects and policies in the region, owing to its low pricing and interest rates, and abundant solar resources.

Following water and solar in the survey results are green buildings and energy efficiency. These technologies may rise in importance over the coming years, given their highest return on investment and fastest payoff as well as the high levels of energy consumption in several MENA countries.

Nimer Abu Ali, director, MENA power and utility, EY, comments:

“Cleantech is finding widespread acceptance in the region. Technological breakthroughs in solar, wind and water are driving the increased importance of cleantech among regional leadership, legislators and government entities. Decreasing cost of solar and wind farms, coupled with the development of rooftop generation technology, are providing more options to countries to lower their dependency on fossil fuels. Future developments will see the region adopt technologies such as electric cars, smart metering and a host of other clean technologies.”

These rankings were mirrored closely in the GCC. Water technologies, for example, edged out solar as the fastest-growing cleantech technology. Energy efficiency and green buildings were also ranked third in the GCC. Due to climatic conditions and high energy usage, energy efficiency and green buildings will continue to remain a top priority for the GCC countries.

Challenges facing the development of cleantech

Across MENA, insufficient government policy frameworks and regulations continued to be the largest barrier to the development of the cleantech industry in 2014. This barrier has continued to grow in importance over the past few years.

Price competitiveness in 2014 remained the second most important barrier in the GCC. The sharp decline in cleantech prices over the past few years however, is not considered significant in the MENA region as cleantech is still considered to be too costly to deploy.

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