Energy transition strategies in the Gulf Cooperation Council countries

Abstract

During the last two decades, Gulf Cooperation Council (GCC) countries have seen their population, economies and energy production growing steeply with a substantial increase in Gross Domestic Product. As a result of this growth, GCC consumption-based carbon dioxide (CO₂) emissions increased from 540.79 Metric tons of CO₂ equivalent (MtCO₂) in 2003 to 1090.93 MtCO₂ in 2020. The assumptions and strategies that have driven energy production in the past are now being recast to achieve a more sustainable economic development. The aim of this study is to review and analyze ongoing energy transition strategies that characterize this change to identify challenges and opportunities for bolstering the effectiveness of current strategic orientations. The ensuing analysis shows that since COP26, GCC countries have been pursuing a transition away from carbon-based energy policies largely characterized by the adoption of solar PV with other emerging technologies including energy storage, carbon capture, and hydrogen generation and storage. While as of 2022 renewable energy adoption in the GCC only represented 0.15 % of global installed capacity, GCC countries are making strong efforts to achieve their declared 2030 energy targets that average about 26 % with peaks of 50 % in Saudi Arabia and 30 % in the UAE and Oman. With reference to solar energy, plans are afoot to add 42.1 GW of solar photovoltaics and concentrated solar power which will increase 8-fold the current installed renewable capacity (5.1 GW). At the same time, oil and gas production rates remain stable and fossil fuel subsidies have grown in the last few years. Also, there is a marked preference for the deployment of CCUS and utility-scale solar energy technology vs. distributed solar energy, energy efficiency and nature-based solutions. The pursuit of energy transition in the GCC will require increased efforts in the latter and other overlooked strategic endeavors to achieve a more balanced portfolio of sustainable energy solutions, with stronger emphasis on energy efficiency (as long as rebound effects are mitigated) and nature-based solutions. Increased efforts are also needed in promoting governance practices aimed to institutionalize regulatory frameworks, incentives, and cooperation activities that promote the reduction of fossil fuel subsidies and the transition away from fossil fuels.