The rapid expansion of alternative energy has thrown up a wealth of investment opportunities, which according to a report published by Wells Fargo are spread across three tiers: large established companies in established growth markets such as hydro-electric and wind energy; small publicly listed companies developing energy technologies such as biomass, solar and fuel cells and private, non-listed companies developing experimental technologies such as nanotechnology based solar panels.
According to the International Solar Energy Society (ISES) the Gulf region holds enormous potential for investment, particularly in terms of wind power and solar energy, which the region has an abundance of. Dr. Waheeb Essa Alnaser, Chairman, Arab Section, ISES went on to say: “Despite controlling 40 percent of the world’s known oil reserves and 23 percent of proven natural gas reserves, the GCC must conserve hydrocarbon resources not only because they are finite sources, but because conservation makes financial sense. In contrast, water is an extremely scarce resource in the GCC, which is one of the world’s most arid regions. Therefore, these countries should use the solar and wind energy which is abundance there; each m2 receives 5kWh per day while for wind it is nearly 2 kWh- where both are economically efficient. If the GCC countries devoted an area 10 km by 10 km then they could fulfill all their electricity and desalinated water needs using solar thermal technology.”
The Middle East Magazine, April Issue, reported that GCC countries are expanding their electricity-generating capacity and are expected to invest US$200-250bn in up to 20 energy projects by 2020.
Kuwait plans to spend US$15bn to double its power capacity to 20 GW by 2020, while Saudi Arabia could see power consumption rise 57 percent to 65 GW by 2018. Bahrain will need nearly 10 GW of electricity by 2020. In the UAE, the Dubai Electricity and Water Authority will invest nearly US$8bn in the next five years to triple power and water output. The article went on to say that by 2020 the GCC population is forecasted to reach 53.5 million, a 30 percent increase over 2000. According, the Economist Intelligence Unit (EIU), over the same period, the region’s real GDP is expected to grow by 56 percent.
Furthermore as the world recovers from the economic crisis which forced many developed nations to pull out of or reassess their renewable energy investments, countries across the region are rapidly becoming an attractive alternative. At a recent panel discussion in Saudi Arabia, Arab News reported that ‘many major projects in the developed world were in trouble due to the global credit crunch, effectively opening the way for the GCC’. CEO of Gulf One Investment Bank, Saudi Arabia, Nahed Taher concluded: “Vast opportunities exist for investors and businessmen as some of those projects are likely to be relocated or replicated in this part of the world.”
Daily newspaper Al Arab recently reported on Qatar that ‘negotiations are underway between Qatar and foreign investors to build a US$1bn solar power project in the country’. In response to the potential of this multi-billion dollar industry, the Qatar Alternative Energy Investors Summit will take place in Qatar from 16th-17th May 2010.
The summit is built on four pillars, all critical to sustaining the economic growth of renewable energy; knowledge; government; finance and commercialisation. Based on these four pillars, the summit will cover research and development, policies enforcement and government responsibilities, investment opportunities and how to turn these opportunities into worthwhile investments.
The summit, hosted by business information company, naseba, in association with International Geothermal Association and International Solar Energy Society, will be attended by high level investors, banks, asset management firms, private equity firms, key associations, alternative energy projects and public and private sector thought leaders from around the Middle East.
