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Data and projections: June 2020

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Chart of the quarter

The Gulf states may be best known for hydrocarbons, but over the past six years they have repeatedly set new record low prices for solar power. Dubai took the lead for the first time in 2014 when it secured an unsubsidised levelized energy cost (LEC) of 5.99 US cents / kwh for the 200MW second phase of the Mohammed bin Rashid Al Maktoum Solar Park. Since then Gulf states have held the record for all but a few months, tendering successively larger plants. The latest was a huge 1.5GW plant in Abu Dhabi for just 1.35c/kwh, less than a quarter the cost Dubai paid in 2014. 

The Gulf has ideal conditions for solar power and the drive to expand capacity is driven by purely commercial considerations as it is now cheaper than burning oil and, in some cases, than developing gas reserves. Although some of the most grandiose schemes, such as a Softbank proposal to install 200GW capacity in Saudi Arabia and export electricity, have not materialised, the rate of solar (and some wind) installations continues to grow. This will enable the Gulf to export a larger share of its hydrocarbon production, which is particularly valuable when total production is constrained by OPEC+ quotas.

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Hani Ashkar

Hani Ashkar

Middle East Senior Partner, PwC Middle East

Stephen Anderson

Stephen Anderson

Clients and Markets Leader, PwC Middle East

Richard Boxshall

Richard Boxshall

Middle East Chief Economist, PwC Middle East

Tel: +971 4 304 3100

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