2017 Middle East and Africa Wind Power Outlook

Wind power capacity added in the Middle East and Africa (MEA) in 2016 amounted to 676MW, compared to the 682MW added in 2015. New capacity in South Africa and Morocco in 2016 represented more than 80% of new added capacity in MEA. In South Africa, the Renewable Energy Independent Power Producer Procurement Program (RE IPPPP) continues to support wind power capacity additions, although ongoing delays in the government’s signing of Power Purchase Agreements (PPA) has impacted RE IPPPP Round 4. In Morocco, the Law 13-09 that allows private power producers to supply electricity to the grid or to a third party via a PPA, remains a strong driver supporting wind power growth.

Cumulative capacity in MEA reached 4.2GW at the end of 2016 while only 1GW of cumulative capacity was installed through the end of 2010. The Middle East remains behind Africa in terms of wind power development. It only accounts for approximately 8.7% of total cumulative capacity in MEA by YE/2016. The remaining 91.3%, or 3.8GW, was installed in Africa, led by South Africa, Morocco, and Egypt.

Nearly 40GW of new wind power capacity will be added in the Middle East and Africa region from 2017 to 2026, with a compounded annual growth rate of 22%. The growth in wind is supported by tremendous wind resources as well as an increase in experience and best practices across the value chain, which will result in a gradual reduction in the LCOE of wind power (-15% from 2017 to 2022) across the region. The implementation of auctions in countries such as South Africa, Egypt, Morocco and U.A.E. has resulted in some of the cheapest bidding prices globally for both wind and solar projects.

Competition between solar and wind power is increasing, but since both segments are immature and given the large resources spread across the region, both technologies will have time to develop in parallel. This dynamic may change over the long-term primarily due to LCOE gains of solar power

Development of a local supply chain in North Africa, notably in Morocco and Egypt, is expected to support wind power development in the region by allowing for intra-regional exports. Moreover, despite its ongoing financial difficulties, Iran will contribute to growth in the medium term while Saudi Arabia, currently working on its first tenders, will assume a leadership position in the Middle East during the outlook period. The bulk of the smaller countries in MEA will also play a large role in the region’s development as incremental country-level growth in aggregate will add up. By the end of the outlook, wind power capacity will be added in more than 80% of the countries in the region although 70% of total new capacity will be added in only seven countries

MAKE’s Middle East and Africa Wind Power Outlook is a 60+ page report containing 95+ charts, tables and graphs providing in-depth analysis of the wind power markets in Middle East and Africa. The report studies the key drivers and barriers for new wind power installations in the region with a focus on specific national and sub-regional markets. The analysis focuses on macro conditions, regulatory frameworks as well as 10-year market outlooks and three forecast scenarios (bull, base and bear) for South Africa. Market models are illustrated, demonstrating the critical forces that are shaping demand for new wind power generation assets.