Rabat – As countries in the Middle East and Africa move at different paces towards the net-zero goal, energy experts believe that the region remains unprepared for an energy transition.
Expert opinions collected by German-based consulting firm Roland Berger during the Middle East and African Energy Week pointed out that if the region adopts tailormade solutions, it can achieve its energy transition and even support Europe.
The participants in the index had to fill out a survey focusing on 11 energy priorities from “driving exit strategies for coal” to “resilience of energy systems.”
The survey shows that the expansion of renewable energy is key to transforming the region into a global green hydrogen hub and thus cutting greenhouse emissions and reliance on fossil fuel economies.
“This is an area where technology is already mature and implementation therefore relatively straightforward,” said Pierre Samaties, partner at Roland Berger’s Middle East office in Dubai.
With over 46 green hydrogen projects underway in MENA, the region is a “good fit” to produce the alternative energy source with the support of renewables and existing regional export infrastructure and financing resources, Samaties added. Oman, the UAE, and Egypt notably lead the regional transition as they together host 27 green hydrogen projects in the region.
The consultancy firm further noted that the MENA region can use renewables to decarbonize its industries and ease its reliance on fossil fuels while Africa is facing an “energy trilemma” that requires the “right balance between affordability, reliability, and sustainability.” In other words, the continent has to address energy poverty and unequal access to power while moving from coal to renewables.
To do so, the German consulting firm calls for the training and upskilling of the local population to serve the emerging energy sectors and thus regional economic growth.
Taking the case of Morocco, the North African country works on expanding the share of renewable energy in the electricity mix to up to 80% by 2050. Still, the regional leader remains reliant on energy imports (oil and natural gas).
Coal continues to be a major source of power for local industries and even households in some regions. The country has also not yet committed to a net-zero goal.
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While the energy transition seems simple on paper, its implementation remains challenging due to the lack of on-scale and affordable carbon capture and energy storage technologies.
The development of a “clear, stable policy framework” for decarbonization projects and their investments is also needed to ensure the sustainable flow of money to support the development of renewable energy projects.
Recommending a step-by-step phase-out of coal, Roland Berger noted that countries in the Middle East and Africa have developed adequate policies to regulate and finance the energy sector. Furthermore, countries can support technological innovation to reduce the cost of new technologies used in capturing carbon and storing it, but also for storing the energy surplus. All of this while minding the rise in regional CO2 emissions, up 50% between 2005 and 2021.
The German consultancy firm thus recommended the adoption of electric solutions – powered by renewables – in the heating and transport sectors to cut emissions.
Carbon capture and storage (CCS) provide additional support to mitigate the climate impact, the company added. It further noted that short and long-term storage technology such as converting power to hydrogen and other intermediary fuels appears to be crucial in securing a sustainable supply of energy. The use of digital solutions can also maintain a safe and reliable setup, maintenance, and operation of the future energy grid.
While storage and capture technologies remain expensive, the introduction of low-interest green financing is set to contribute to the re-invention of the energy business models to accelerate decarbonization efforts by securing long-term payment dreams over the investment period.
The introduction of an overarching regulatory framework for green energy is, as Roland Berge put it, essential to ensure a cost-effective reduction of carbon emissions as well as adopt carbon-pricing mechanisms.
