The Middle East’s ...
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Several Western governments have laid out plans to accelerate the rollout of renewable energy. In the United States, the Biden administration’s package of climate, healthcare and tax legislation, known as the inflation Reduction Act, has allocated roughly $369 billion for climate and energy programs, including help for consumers in buying electric vehicles and investments in renewable and nuclear energy. The European Union has outlined plans to spend $317 billion in the coming few years on overhauling its energy supplies and ending its dependence on Russian energy. Ultimately what is required is not just to diversify away from a single energy commodity, but to change the nature of the energy system itself, and to do so while maintaining the affordable, secure provision of energy services.
This analysis seeks to examine the efforts to diversify the energy mix in the Middle East. The focus is on the transition from fossil fuels to clean energy (i.e. renewables and nuclear power). The Vienna-based Organization of Petroleum Exporting Countries (OPEC) predicts that demand for renewables will expand five folds from 2020 to 2045, representing the single-largest incremental contribution to the future energy mix. The main point is that the world has not been investing enough in energy in recent years, a fact that left the energy system much more vulnerable to the sort of shocks seen the early 2020s. A smooth and secure energy transition will require a major uptick in clean energy investment flows.