11 Aug 2020
Posted in Power
Net-metering and capacity tenders to drive solar PV capacity in the MEA region
Several countries in the MEA region have increased their focus on the development of solar PV in order to build capacity while reviewing GHG emissions. Countries are specifically working toward the implementation of a net-metering scheme and solar PV auctions. This is facilitated by governments by taking several regulatory steps to favor the adoption of a net-metering scheme and increase participation in solar PV auctions, says GlobalData, a leading data and analytics company.
The majority of countries in the MEA region are heavily reliant on natural gas and oil as power generation sources. With high volatility of oil prices and increasing pressure to reduce GHG emission, many governments in the region are working to the development of alternative power generation sources. One of the most visible trends in the region is the introduction and improvement of net-metering schemes for solar PV installations. Israel and UAE have been implementing net-metering since 2013 and 2015 respectively. Under Dubai Electricity and Water Authority’s net-metering scheme, net-metering was implemented in over 1,000 buildings so far with a total capacity of over 100 MW. Following this trend Morocco, Nigeria and Ghana have also introduced net-metering regulations. Kenya has also passed legislation for net-metering and is preparing to roll out their net-metering program.
In addition, MEA region countries such as Algeria, UAE and Qatar are pushing toward solar tenders/auctions to drive the growth of solar PV. In 2019, Iraq’s Ministry of Electricity held a solar PV auction and awarded a capacity of 755 MW. In the same year, Emirates Water and Electricity Company in UAE issued a tender for the 2 GW solar projects in Al Dhafra region. Egypt and South Africa have also adopted the auction mechanism to award renewable power capacity including solar PV.
Aditya Sharma, Power Analyst at GlobalData, comments: “The growth of net-metering and solar power auctions not only help these countries to develop alternate power generation sources but also helps to facilitate economic growth as this increases private investment activities. Further, many solar PV projects undertaken in these countries have regulations associated with minimum local content requirement (LCR), which will facilitate increased employment along with industrial and technological development.
“Many countries in the MEA region are members of OPEC and are largely dependent on oil as their primary energy resource. However, to follow the global trend of transition toward renewable energy and to decrease their dependence on a single energy source, many countries in MEA region are taking steps toward the development of new renewable power capacity.
“These countries are specifically focused on solar PV owing to the abundant availability of land with high irradiation levels. Governments in many the MEA countries have also taken steps to form partnerships with other global and regional entities for better knowledge sharing. Some governments have also updated their investment laws and policies to make this market more investment favorable.”