Policy Support & Development Lift the MEA Wind Power Market

The Middle East and Africa wind power market will see strong growth rates to 2017 before more steady growth arrives in the mid-to-long term. Middle East and Africa wind power market decreased to 682MW in 2015, a 39 percent decrease compared to the previous year caused by a low year in South Africa. MAKE expects a 90 percent increase in growth in 2016, followed by years of steady growth as developing markets begin to mature. MAKE’s wind power outlook for the Middle East and Africa forecasts steady growth in the region from 2016 to 2025 supported by strong growth in core markets, such as South Africa, Egypt, Morocco and certain countries in the Middle East.

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The Middle East and Africa (MEA) is the smallest sub-region globally in terms of cumulative installed capacity at the end of 2015. However, it is the region where the largest relative growth is expected with a compounded annual growth rate of 21.7 percent over the 10-year outlook. More than 30GW of wind power capacity will be added in the Middle East and Africa from 2016 to 2025. South Africa is the largest wind power market in the sub-region. Continued policy support and development confirm that the market will remain the leader over the outlook. The RE IPPPP enables more than 6GW of new wind power capacity to come online by the end of 2025. Tremendous wind resources combined with very competitive bidding have resulted in very low electricity prices, helping to make wind power a competitive technology.

“Egypt and Morocco have accelerated development of the region’s supply chain”

The second hub of development is located in North Africa led by Egypt and Morocco. Both countries are reaping the benefits from early implementation of renewable energy programs. Strong wind resources across their respective coasts, combined with increased political stability, have attracted many private developers and turbine OEMs to these markets. Egypt and Morocco have accelerated development of the region’s supply chain. Siemens’ deal in Egypt and winning bid in Morocco will result in localization of the first blade facilities in Africa. A local supply chain will support development of wind power in the region and allow export options to neighboring countries and potentially to Europe. The lifting of economic sanctions have created significant opportunities for wind power development in Iran. The country’s need for generation capacity, along with wind tariffs and large wind resources support wind power development. Project finance availability is a short term barrier for development although the situation is improving. The ability of local banks to provide project finance has started to return to pre-sanction levels. Solar power is gaining momentum in the region. MEA possesses one of the best combined wind and solar resources in the world. However, the development of solar is yet to match that of wind power development. Certain countries have accelerated their solar programs while others remain focused on wind. The competitiveness of both technologies is improving with plenty of opportunity for both technologies to grow.

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