FEATURE / Renewable Energy

As greenfield renewable energy developments accelerate in size and volumes , while potential investors begin to rumble about sky high prices in the renewables secondary market , questions are being asked whether a bubble is forming , writes Bracewell .

SCALING It is by now a familiar story – eye watering size of renewables plants , dotted around the whole of the Middle East . Gone are the days of 10 MW , 20 MW or 50 MW solar or wind IPPs . Anything less than 100 MW appears to be categorised as small , usually accompanied with the mental images of lonely couple of solar modules perched on a roof top , as opposed to the industrial scale of panels that a mere 10 MW plant requires .

To put it into perspective , the Al Kharsaah 800.15 MW solar PV IPP in Qatar that we closed ( credit in particular to Marubeni Corporation , Total Solar and QP ) in July last year involved over two million bifacial photovoltaic modules , strewn across 3.86 square miles . Marubeni and Aljomaih ’ s 300 MW Rabigh IPP in Saudi Arabia ( which we closed in April this year ) is half that size , but still involves a volume of space and solar modules that most cannot fathom . And this is only the beginning ! Even the scaling solar deals , which historically adopted more humble volumes , are now running into hundreds of MWs of power . The latest example of these are the Asian Development Bank and IFC guided deals in Uzbekistan , numbering three projects in total and ranging between 180-220 MW each .

More commonly known for its fossil fuel laden economies , it is quickly becoming the worst kept secret that the Middle East has in the past several years turned into a regional ( if not global ) hub for renewables development . The scale of greenfield developments either closed or near closing in the last 12 months alone speaks for itself : 1.4 GW of solar IPPs under Saudi Arabia ’ s second round of renewables ( with more than 1 GW planned under the third round ), 800 MW in Qatar , 500 MW in Oman and roughly 5.3 GW of solar IPPs ( yes , that that ’ s right ) in Dubai and Abu Dhabi alone . This is obviously not to mention the extensive green and brown hydrogen initiatives taking place across the region , including ( most recently ) ADNOC ’ s planned USD2.2 billion 420 MW hydrogen fired power plant .

So , why is this happening ? Apart from good will , the fundamentals appear to support it : regional energy consumption is trending upwards at the rate of 5 per cent per annum , which is coupled with shortage of readily available natural gas supplies , thus ( as the argument goes ) expanding the motivation for renewables capacity , particularly solar ( given the abundance of sunshine ). The macroeconomic view also appears to support the ongoing trajectory of this development frenzy . The Arab Petroleum Investments Corporation ( Apicorp ) recently released its regional 2021-25 investment report , which concludes that approximately USD805 billion of energy investments will be made regionally in the next 4 years . The particular point of interest is that while oil takes approximately 28 per cent of that pie , there is a visible drop between projects committed ( USD127 billion ) and projects planned ( USD99 billion ). The power sector ( which again is increasingly renewables minded ) shows a ramp-up trend , with USD93 billion of

14 ISSUE 104 • JULY - AUGUST 2021