What Energy Diversification Means for the Middle East
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Last month, Saudi Arabia announced plans to invest $109 billion in solar energy which would amount to a third of the Kingdom’s total power generation. Morocco, Egypt, Jordan, and Algeria have initiated decade-long energy plans that will allocate another $25-45 billion in combined investments in wind, solar, and nuclear energy to power 10-20% of their energy portfolios by 2020. They plan to sell the electricity generated through these clean energy projects to the European Union at a premium cost.
Here at the Chamber, we believe that American companies can lend their technology to the Middle East and North Africa clean energy projects, which would expand U.S. commercial ties to the region. In that effort, the Chamber will host a delegation of government officials from seven countries in the Middle East and North Africa this week as part of the State Department’s International Visitors Program on Trans-Boundary Energy Resource Management. Through our Middle East and North Africa Clean Energy Initiative, we continue to promote energy sustainability and help U.S. companies better compete in the global energy market.
While trends project that oil and gas will continue to dominate the global energy sector for years to come, emerging economies don’t have the same purchasing power as developed nations and are seeking to diversify their energy sources. Energy security remains a top policy priority for economies across the globe as energy costs skyrocket and countries like China, India, and Brazil seek to meet the demands of the sprawling middle class. Morocco wants to decrease its dependence on fossil fuels and export electricity derived from solar energy. With its new $9 billion energy plan, the country hopes to reduce its consumption of oil by 2.5 million tons. For cash rich countries like Saudi Arabia, diversification could save the country 690,000 barrels a day of oil it currently uses to power their summer air conditioners.
In countries like Egypt, Morocco, and Jordan, where 40-50% of their population is under the age of 25, the next generation will be forced to address issues of energy dependence, and high costs for oil. For these reasons, many countries in the Middle East and North Africa are turning to clean energy sources to plan for the future when the oil begins to run out.