Scaling up renewables is a key
enabler of global and regional commitment to combat climate change,
and the Middle East is well equipped to lead the renewable energy revolution.
To combat the pressing issue of climate change,
and stay on the path to limit global warming to 1.5 degrees centigrade,
we must take bold steps.
We need to significantly reduce greenhouse gas emissions
from today's 50 billion per annum down to net zero by 2050.
A crucial part of the solution lies in accelerated build out of renewable
generation capacity.
To get back on the 1.5 degrees trajectory,
we need to triple installed renewable generation capacity by 2030,
reaching 11 terawatts and sustain the steep growth until 2050.
In the Middle East, we expect to see an eight fold increase of installed solar
and wind capacity by 2030, significantly outpacing the global growth.
The Middle East is on the verge of a renewable energy revolution.
The change is already happening.
Key global and local energy players are positioning themselves
to seize the immense opportunity, and announce concrete plans
to significantly expand their renewable portfolios.
The Middle East is moving fast.
The key countries in the region have made credible commitments
to confront climate change, backed by net zero pledges,
multibillion investment commitments, and world-class renewable projects.
It is in the Middle East, where we have seen many renewable world records,
including the lowest LCOE achieved in a renewable auction
or biggest solar park in the world.
What does it take for businesses to position themselves
for success, and grab a share of the immense business opportunity
renewables represent?
In our view, there are five levers
which can be put to gain a competitive advantage in renewables.
First success factor, without a doubt, is attaining scale.
Second, to develop an optimal operating model
and enter value adding partnerships along the renewable project lifecycle.
Third, to ensure access to increasingly scarce land.
Fourth, to ensure a favorable project financing and optimize
cost of capital by tapping the right financing pools.
The fifth, to develop an advanced risk evaluation and management approach
to optimally handle commercial risks tied with a renewable project.
Let's have a closer look at the most important success factor
in renewables - scale.
As leading players build scale
and increase the installed capacity, they gain a disproportionate advantage,
move along a steep learning curve and achieve lower development,
EPC, O&M and financing cost than their competitors.
Scale also opens access to higher volume and better quality of deals.
Moreover, it increases project success rates due to regulatory expertise and superior
stakeholder management capabilities, developed along the learning curve.
Size matters in renewables.
Attaining scale is imperative for businesses
to achieve a sustainable competitive advantage,
and positioning themselves for success in this exciting market.
Throughout our involvement with COP 28, we aim to advance
the breakthroughs in renewables while we unlock future opportunities.
The business case for renewables is conspicuous,
and the Middle East is a fertile ground for the renewable energy revolution.
Despite the dire climate scenarios, the region builds on its dynamism,
demanding the attention to the unlimited possibilities.