Popular articles

No Entries


How reality will catch up with potential: An interview with ESIA President Vahid Fotuhi on PV market development in the MENA region

ESIA President Vahid Fotuhi
ESIA President Vahid Fotuhi

Vahid Fotuhi is the co-Founder and President of the Emirates Solar Industry Association (ESIA), a regional NGO that promotes the use of solar power.

From 2004 until 2007, Vahid was based in Algeria where he was in charge of Government Affairs for BP’s oil and gas division. Previously, Vahid held senior level roles with Energy Intelligence, World Economic Forum and Transparency International. 

Viewed as an expert in the field of solar energy, Vahid is regularly quoted in Reuters, Bloomberg, The National, Arab Gulf News, and Arabian Business. He is also a regular speaker at renewable energy conferences in the Middle East.


Solar Server: Can you give our readers a brief overview of the current state of PV market development in the MENA region?

Vahid Fotuhi: The sun is rising on MENA’s solar industry; and the weather forecast is looking good. In the meantime, there are some critical steps that need to be taken in order for the reality on the ground to catch up with the potential up above us.


Solar Server: Can you comment on the concurrent development of both policies and projects?

Vahid Fotuhi: In a sense, the projects have been taking the lead on the policies. In the UAE for example, they have already awarded a 100 MW CSP project and will soon award another 100 MW PV project. Saudi Arabia has also awarded a number of utility-scale solar projects in the past two years. All of this is being done with the existence of an over-arching solar policy.

But the gap between projects and policies is shrinking. In places like Abu Dhabi, Dubai, Saudi Arabia and elsewhere we see regulators taking firm steps in adopting policies that will set the framework and incentives to help grow the industry.


Solar Server: Out of these projects, which are the closest to completion?

Vahid Fotuhi: The Shams is 100 MW, is expected to be completed later this year. And at the same time you have a 10 MW thin-film project in Saudi Arabia that is expected to be also completed this year as well. So things are moving along nicely.


Solar Server: What in your mind are the greatest barriers to this market development?

Vahid Fotuhi: Historically, there has be no need to draw on the sun’s resources. Whilst there has been rich solar resource up above, there have also been vast hydrocarbon resources down below. And our industries are a lot more accustomed to relying on hydrocarbons than on solar energy. So as a whole the region has focused on developing its oil and gas resources, both for domestic economic growth and as a source of export revenues.

But as the population continues to grow (in most MENA countries over 50% of the population is below the age of 25) and as hydrocarbon reserves start to get depleted the region’s leaders are looking at alternative sources of energy. The most obvious option is the sun. In this region, there are 360 sunny days every year!

Solar Server: Can you comment on the development of policy in the region?

Vahid Fotuhi: Slowly but surely, the necessary policies and regulations are being put in place to establish a healthy long-term solar industry. Some jurisdictions are ahead of others. For example, we believe that Dubai and Saudi Arabia will formally unveil a comprehensive set of regulations for the solar sector within the next six to twelve months. Morocco has already achieved this, having launched the Moroccan Agency for Solar Energy (MASEN) well over a year ago. In the next year or two we will see Abu Dhabi, Jordan, Kuwait, and several other MENA countries follow their steps.


Solar Server: What kind of impacts do you think that mega-projects such as Dubai's Mohammad bin Rashid Al Maktoum solar park will have on the development of national PV industries?

Vahid Fotuhi: I think it will have a very big impact. We've already started seeing many international solar companies inquire about opening a branch office here. This is good news, both for local talent in search of a career in the solar sector and local contractors looking to partner with established solar companies.

Solar is providing growth and economic growth in this region. Research has shown that for every 100 MW of solar projects installed, it generates 600 million dollars of GDP growth. This gives you an idea of the scale of the benefits that solar energy offers.


Solar Server: Sunrise in the Desert talks about the comparative economics of solar versus fossil fuel generation in MENA nations. Can you summarize for our readers how utility-scale PV compares to oil-fired and natural gas-fired generation on an LCOE basis in the region at current fuel prices? What does this say about the viability of solar as a mass power source at this time?

Vahid Fotuhi: Solar power is competitive with oil-fired power generation whenever crude oil prices are above $80/bbl. So places like Saudi Arabia and Jordan which use significant volumes of crude oil for power generation it would make sense for them to start incorporating solar power in their energy mix.

In markets where LNG is imported, like Dubai and Kuwait, solar power becomes competitive with conventional baseload generation when gas prices are $16/MMBtu. And in cases where gas is used for peaking units, solar is more attractive whenever the cost of the gas is above $5/MMbtu.

Given that oil and gas prices are likely to stay high in the years ahead we expect the solar industry in the MENA region continue growing year after year. The future is bright!


Solar Server: Can you provide a brief overview for our readers of the impacts that you feel recent political developments in the region will have on the development of PV markets?

Vahid Fotuhi: The Arab Spring has caused the countries that have been affected by the political upheaval to revisit their solar plans and make necessary adjustments. In most cases this will cause a delay in how projects get tendered and awarded. But this is only temporary. Once the new regime is in place their solar aspirations will set march again. And by then hopefully solar costs will be even lower, thus making solar even more attractive to them.

Also, the ‘hot’ solar markets that I have mentioned, namely Dubai, Saudi Arabia, Jordan, Abu Dhabi, have generally not been negatively affected by the instability. We expect to see them continue to progress with their solar initiatives.


Solar Server: What are your current predictions for market growth in the MENA region? Which nations do you see as leaders in this development? Which market segments (residential, commercial, utility-scale)?

Vahid Fotuhi: It is too early to tell right now. It will definitely be utility-scale, rather of residential or commercial. The costs are lower and the yield potential is higher; these are two key factors for policy-makers.


Solar Server: In terms of nations, which nations do you see as the regional leaders?

Vahid Fotuhi: The UAE, Saudi Arabia, Morocco are probably the top three.

They all definitely use a lot of natural resources, and in the case of Morocco, they actually import a lot of oil to make up for their lack of hydrocarbon reserves. So Morocco would be a natural choice because they don't have hydrocarbons. If you don't have hydrocarbons, you use your natural resource, which is the sun, and that's why we make good progress with our renewable energy agenda.

Saudi Arabia burns over 500,000 barrels of crude oil a day for power generation, which is a huge amount, half a million barrels a day, and 6 billion dollars a month, in terms of crude oil prices. That money could go to solar power generation, which requires no fuel. And that’s exactly why the officials in Riyadh are looking up towards a brighter future.

Interview by Solar Server International Correspondent Christian Roselund