MENA’S GREEN ENERGY BOOM

OPPORTUNITY ENERGY UPDATE MIDDLE EAST & AFRICA

Middle East and Africa Poised for Rapid Renewables Growth

BY SIMON WEST

In a nation known more for its giant oil and gas projects, Iraq’s bid to raise the share of renewables in its energy mix to 33 percent by the end of the decade could provide breakbulk and project cargo with a fresh stream of transport opportunities.

According to the country’s oil ministry, deals inked with international developers such as France’s TotalEnergies, Saudi Arabia’s ACWA Power and Abu Dhabi-based Masdar will help Iraq expand its solar capacity to 12 gigawatts, or GW, by 2030, a target that calls for some major construction activity.

The deal with Total, for example, signed off with the Iraqi government in Regions: Middle East, Africa

Problem: How to harness potential of renewables projects across the MENA belt

Solution: Focus on safety, security, and early involvement

September 2021, would see the French firm build and operate a 1 GW solar photovoltaic, or PV, plant in oil-rich Basra, part of a wider US$27 billion agreement to install a series of oil, gas and green energy projects in southern Iraq to improve the nation’s power supply.

Work on the PV facility, which would require specialist logistics support to move heavy components such as transformers, solar panels, trackers and steel structures, is expected to begin in 2023, with start-up slated for 2025.

“Iraq is proudly considered as one of the first countries to use solar energy as an alternative source of power. In the seventies, residential complexes powered by solar energy were built on Abu Nawas Street, adjacent to the Tigris River in Baghdad,” said Omar Alnahi, chief executive of Iraq-based breakbulk mover, Al-Rashed United Shipping Services.

“Today, solar energy is the most feasible source of power for Iraq to invest in, given the country’s bright weather

OPPORTUNITY MIDDLE EAST & AFRICA

Sharaf Shipping handles project cargo for

renewable projects. CREDIT: SHARAF SHIPPING.

throughout the year. Solar farms can be built especially in the western desert of Anbar Governorate, as well as in Basra, making it possible for Iraq to become one of the world’s solar power capitals.”

SECURITY AND SAFETY FACTORS

Alberto Pittaluga, general manager in Iraq for Dubai-based heavy transport specialist Al Faris, said the country had “great potential,” despite a sometimes-volatile working environment. Iraq is slowly rebuilding its economy and restoring stability after decades of conflict, most recently with hardline militants fighting for Islamic State.

Al Faris has been operating out of Khor Al Zubair, a port city close to Basra, since early 2021, carrying cargo mainly for oil and gas installations and power generation projects.

“The main challenge in Iraq is not the execution of the job when it comes to heavy transportation or heavy-lift,” Pittaluga said. “It is the pre-arrangement and the mobilization of resources, as you have to deal with a number of factors such as security and safety. And of course, the infrastructure is very obsolete because it was destroyed during the wars, so you also face challenges when you select the right routing to deliver the cargo.

But he continues to see “great potential” in Iraq. “That is the reason why I have been working here since 2011, when I [left] ALE. Even though the country has suffered and gone through a lot of destruction in the last decades, you still have prime clients there – international oil companies like Shell, Eni, ExxonMobil, BP. So, the standards are really high – much higher than any other Middle East country that I have worked in.”

RENEWABLE CAPACITY TO SURGE

Iraq is just one of many states throughout the Middle East and North Africa, or MENA, region that have unveiled ambitious plans to diversify their economies and expand green energy production.

A recent report from Global Energy Monitor, or GEM, showed Arabicspeaking countries in the MENA region are on track to boost their utility-scale renewable capacity by an incredible 500 percent by 2030. More than 49.5 GW of prospective solar projects and 11.3 GW of wind projects are slated to come online by the end of the decade, as well as a giant 12.5 GW solar plant in Oman that is projected to start operations by 2038.

Iraq is number five on the San Francisco-based organization’s list of regional leaders in terms of prospective capacity additions, behind Oman, Morocco, Algeria and Kuwait. Saudi Arabia, the United Arab Emirates, Egypt, Western Sahara and Tunisia make up the top ten.

The scale of the buildout in some countries demonstrates a “marked shift” away from fossil fuel power, GEM said. The 39.7 GW of solar and wind energy projects planned by the report’s three top performing countries in the region – Oman, Morocco and Algeria – is almost four times their prospective new gas-fired capacity.

“Middle East and North Africa have always had tremendous potential for wind and solar development, but to see these countries shunning fossil fuel gas in favor of renewables, and at this scale, is stunning,” said GEM’s global solar power tracker lead, Kasandra O’Malia.

According to the report, the region has always enjoyed great potential for wind and solar development, with wind farms emerging in Morocco, Tunisia and Egypt in 2000 followed by utilityscale solar plants in the UAE and Saudi Arabia towards the end of the decade.

More recent development, according to O’Malia, is being driven by green hydrogen and large-scale plans for transcontinental green energy export. As such, many of the region’s new capacity additions are so-called mega projects.

“A number of those top countries are bringing in tens of gigawatts of renewables in support of hydrogen, and in particular, green hydrogen. They want to set up facilities that use wind and solar power and to use the resultant electricity for electrolysis to split water into hydrogen,” O’Malia told Breakbulk.

“The demand for hydrogen is increasing very rapidly with the energy transition. You see big industries like steel and cement wanting to transition into using hydrogen rather than traditional coal-blast furnaces, for example.”

OMAN OFFERS POTENTIAL

O’Malia pointed to Oman, which tops GEM’s list with 15.3 GW worth of utility-scale solar projects announced, in development or under construction. With arid landscapes and basking sunshine ideal for largescale solar buildout, renewable energy

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Iraq-based breakbulk mover, Al-Rashed United Shipping Services is excited by renewables potential.

CREDIT: AL-RASHED UNITED SHIPPING SERVICES

“The Middle East and sub-Saharan Africa are the fastest-growing economies in terms of scale and speed.And, therefore, they are certainly more attractive in terms of places to invest and the readiness to invest into sustainable energies.” – Amadou Diallo, CEO Middle East & Africa, DHL Global Forwarding

expansion in Oman is being driven by what is being billed as the largest renewable fuels production facility in the Middle East.

The US$30 billion green hydrogen venture, developed by a consortium comprising Omani staterun energy company OQ, global green fuels company InterContinental Energy and Kuwaiti clean tech investor EnerTech, will see thousands of wind turbines and solar panels deployed in stages across a 6,500-square-kilometer tract of land in the sprawling, southernmost governorates of Al Wusta and Dhofar.

That would power water desalination and electrolysis plants to produce 1.8 million tonnes per year of zero-carbon green hydrogen that could be used as feedstock for up to 10 million tonnes per year of green ammonia.

“Oman, like most of the MENA region, has very good natural resources for renewables. Alongside this, the government has a stated vision for the future that involves diversifying their current assets and anticipating a global shift away from oil and gas,” O’Malia said.

Kuwait, perhaps a surprise inclusion in GEM’s top five countries, is aiming to generate 15 percent of its energy output from renewable sources by 2030, part of a longer-term plan to pivot the economy towards more sustainable sectors.

A number of projects in the Gulf Cooperation Council, or GCC, nation, whose oil sector still accounts for 90 percent of its revenues, are starting to take shape.

Surya Chandra, line manager at Sharaf Shipping, a logistics company with offices close to Kuwait City, pointed to the Shagaya renewable energy project, a world-scale solar and wind initiative being developed by the Kuwait Institute for Scientific Research, as particularly interesting for breakbulk and heavy-lift.

The four-phase project, located 100 kilometers west of Kuwait City, is expected to account for 3.2 GW of the nearly 9.7 GW of the emirate’s prospective utility-scale wind and solar projects to be built by 2030. As part of the first stage, a 50 megawatt, or MW, concentrated solar plant was commissioned in late 2018.

Dubai-based Sharaf Shipping transported components for the facility before the pandemic.

According to GEM, the Kuwait Authority for Partnership Projects, or KAPP, is also mulling a US$3.5 billion proposal for a 5 GW solar complex in northern Kuwait from a group of unnamed private investors.

“A lot of renewable projects in Kuwait are going to take off over the next decade, and there will be huge demand for renewable energy logistics in this region,” Chandra said.

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DRIVING THE SUSTAINABILITY AGENDA

Elsewhere in MENA, economic powerhouses Saudi Arabia and the UAE have embarked on aggressive strategies to shake up their oil-dependent economies. The UAE is home to one of the world’s largest single-site solar projects – Noor Abu Dhabi. The 1.2 GW facility in the emirate of Abu Dhabi began commercial operations in 2019.

“I see Saudi driving a very hardcore sustainability agenda, for example when it comes to building Neom,” said Amadou Diallo, CEO, MEA, at DHL Global Forwarding, referring to Saudi’s US$500 billion “smart city” on the Red Sea coast that will house wind, solar and green hydrogen plants, as well as ports, desalination facilities, sports stadiums and a 170-kilometer metro line dubbed The Line.

“You have a trend that is accelerating in terms of competition in the GCC, where each of the countries is trying to become more sustainable and drive opportunities in the sector. This will end up making those countries more attractive.”

Morocco and Algeria, meanwhile, are at the vanguard of renewable energy development in Arabic-speaking Africa, with 14.4 GW and 10.0 GW of utility-scale solar and wind capacity, respectively, in the pipeline.

Morocco, number two on GEM’s list, is targeting more than half of its power needs from renewable sources by the end of the decade, with plans to add 8.8 GW of wind and solar capacity between 2018 and 2030. By late 2021, the country had already brought online more than 4 GW of capacity, with renewables accounting for 37 percent of its energy mix, up from 35 percent in 2019.

Algeria, meanwhile, is planning to grow its utility-scale wind and solar capacity by more than twentyfold by 2030, GEM said. Algeria has the greatest potential for wind power of any African nation, the research group said, quoting a study from the World Bank’s International Finance Corporation.

“Much of this new renewable capacity will facilitate a transition away from domestically produced gas. The country also benefits from its proximity to potential renewables export markets in Europe and subSaharan Africa,” GEM said.

Development is being supported by robust economies throughout the MENA region, which are forecast to expand by 5 percent this year, up from 4.1 percent in 2021, according to latest figures from the International Monetary Fund.

“The Middle East and sub-Saharan Africa are the fastest-growing economies in terms of scale and speed,” DHL Global Forwarding’s Diallo said. “And, therefore, they are certainly more attractive in terms of places to invest and the readiness to invest into sustainable energies.”

Each GCC country is trying to become more sustainable which is driving opportunities in the sector.

CREDIT: AL-RASHED UNITED SHIPPING SERVICES Colombia-based Simon West is senior reporter for Breakbulk.

ETHIOPIA’S ‘STAND OUT’ POTENTIAL

Eyeing the region’s potential, DHL Global Forwarding is expanding its North Africa cluster, which will include Morocco from 2023. The company opened its first office in Algeria’s capital city Algiers in late 2021.

According to Amadou Diallo, CEO of MEA at the forwarder, even some of the smaller economies in the Arabic-speaking region have an opportunity to grow renewable energy capacities. The executive Amadou Diallo pointed to EthiDHL opia as one of Africa’s standout “green” nations.

The U.S. International Trade Association said the East African country has the potential to generate more than 60 GW of power from hydro, wind, solar and geothermal sources.

“Both the Middle East and Africa have a real chance because there is no old infrastructure that needs to be replaced. There is no disruption to an old system, it is rather building up new systems, and building up to sustainable systems so that they can provide all the energy that is needed for the population,” Diallo said. BB