The Arab region consists of a diverse set of countries with different national contexts, including in the case of energy. However, most countries remain exceptionally reliant on fossil fuels with a highly limited role played by clean energy alternatives; while the region also lags behind other region’s progress in energy efficiency. In the Arab LDCs, energy access remains incomplete, severely obstructing socio-economic progress.
Arab countries need to better integrate sustainable energy as a fundamental element of national development policies by directly linking policy goals across sectors such as energy, transport and urban planning; as well as elevating topics such as natural resource management, air and environmental protection along with more inclusive ways to ensure energy is used and produced sustainably to matters of explicit national interest.
1 Introduction
The Arab region is a large and diverse region that shares a rich geography known for its natural resource wealth as well as its climate vulnerability (UN ESCWA 2017a, 2017b, 2019a, 2019b). It is home to some 400 million people (World Bank 2019a), stretching from the Atlantic coast of North Africa in the West to the Straits of Hormuz in the East, and includes some of the world’s wealthiest as well as some of the world’s poorest nations.
The ability to harness the pool of natural resources through adequate choices of infrastructure, technology, governance and sustainable management practices will be key in creating economic opportunities for young people and improving their living standards. It is also the main driver for socio-economic development and for the attainment of gender equality, empowerment of women and intergenerational equity, which are also at the heart of driving long-term prosperity in the Arab region.
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Ensuring access to affordable, reliable, sustainable and modern energy for all (Sustainable Development Goal 7 (SDG 7) is a key condition for reducing inequalities, poverty eradication, advances in health and education, sustainable economic growth, and the principle of “leaving no one behind”. Economic and socio-economic opportunities include local market creation by new technologies and standards, such as energy access, local job creation, and cross-linkages to other core sectors such as water management and agricultural development; as well as environmental protection, the fight against indoor and outdoor air pollution and climate action.
In the context of the Arab region, sustainable energy entails vast opportunities in a region endowed with significant human, oil and gas, economic and technological resources. Indeed, ensuring that sustainable energy becomes an integral part of Arab governments’ policymaking, beyond headline targets and green visions, involves the profound rethinking of institutional setups and capacity building to support genuine national efforts. Designing and implementing effective sustainable energy policies presents special challenges because of the complexity and cross-cutting nature of energy policy. This challenge is compounded by existing institutional weaknesses, lack of adequately skilled staff, as well as institutional structures that have not traditionally evolved to accommodate one-stop national planning for matters related to energy access, energy efficiency, domestic energy supply side management and climate policies. The results are often ambitious national development targets that fail to be supported by sufficient market-oriented policies and, in some cases, by weak enforcement of existing law.
This chapter provides a very brief synopsis on the Arab region economies and energy context. It starts by an overview of the role of energy and policy reforms in Arab countries’ economies, followed by a summary of progress in recent years in three main areas that are linked to SDG 7, sustainable energy for all as part of the global Agenda 2030 and then provides key recommendations and policy guidelines.
2 Economic and Demographic Growth
The Arab region’s population has grown considerably over the past decades, from around 216 million in 1990 to almost 400 million in 2017 with exceptionally high population increases in individual GCC countries ranging from 100% in Kuwait to over 400% in Qatar and the United Arab Emirates, owing to large-scale labour migration and high birth rates. At the same time, Arab living standards have risen dramatically, alongside high levels of education and health care access, particularly in upper middle- and high-income countries. Since 1990, per capita GDP purchasing power parity (PPP) in Arab countries has risen by 16% in Saudi Arabia, 36% in Jordan, 70% in Lebanon and over 90% in Morocco (Fig. 33.1).
Fig. 33.1
Population and GDP per capita growth in the Arab region, 1990–2017. (Source: World Bank (2019). World Development Indicators. Notes: Not represented due to incomplete data: Kuwait, Libya, Qatar, State of Palestine, Syrian Arab Republic and Yemen)
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3 Energy in Arab Economies
The Arab region is a rapidly growing market for energy and relies on oil and natural gas for its energy mix more than anywhere else in the world. Over the past 25 years, regional primary energy consumption tripled, from around 150,000 ktoe in 1990 to around 435,000 ktoe by 2016 (Fig. 33.2). The GCC economies—all of them fossil fuel producers with a concentration of energy intensive industrialisation strategies since the 1980s—have seen particularly fast demand growth. In the GCC states alone, total energy consumption quadrupled since 1990, with two countries, the Kingdom of Saudi Arabia and United Arabia accounting for 45%, and countries such as Qatar, Bahrain and Oman having seen particularly fast growth in consumption between 7 and 15% per annum (ESCWA 2019b).
Fig. 33.2
Historical total final energy consumption in the Arab region by country (ktoe), 1990–2016. (Source: IEA (2019a), “World energy balances”, IEA World Energy Statistics and Balances (database))
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Population growth, economic and industrial expansion and rising living standards have all been contributing to the Arab region’s rise in energy consumption. With some of the region’s members counting to the world’s wealthiest states on a per capita basis (World Bank 2019a), and most others being middle-income countries, demand for energy is further set to grow over the coming decades, resulting in a further rise in regional energy consumption throughout the period up to 2030.1
Fossil fuels have historically been vitally important in the Arab region’s energy mix. More than 95% of regional energy supply is derived from oil and natural gas, making the Arab region the most fossil fuel-dependent region in the world (Fig. 33.3). Oil has historically played a key role as a key natural resource asset in a number of Arab countries in the Gulf and the Maghreb, making it both the most important export product and a key fuel on domestic energy markets throughout the region. Natural gas is a second, increasingly important energy resource besides oil, whose production, consumption—particularly in Arab countries’ power sectors—and import have risen sharply in recent decades.
Fig. 33.3
Fossil fuel energy consumption (% of total primary energy supply) by world region, 2014. (Source: World Bank (2018))
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Arab countries hold some of the world’s most important conventional energy resources, accounting combined for over 40% of globally traded oil alone (OPEC 2018). Yet, fossil fuel resources are unevenly distributed between Arab countries. The GCC economies, Algeria, Egypt, Iraq and Yemen are net exporters of energy, although all of them also import energy such as transport fuel and, in some cases, natural gas. Other countries such as Jordan, Lebanon, Morocco, Sudan, the Syrian Arab Republic and Tunisia are net importers whose domestic energy mix has historically been more diversified, though it remains heavily dependent on imported fossil fuels (Table 33.1).2
Notes: Oil production includes crude, NGL and feedstocks
4 Energy Pricing and Fiscal Policies
Pricing policies are of pivotal importance for the allocation of scarce resources, including energy. In addition to fiscal challenges and losses in income, the unchecked domestic demand in energy- exporting countries of the Arab region reduces their export capacity. Even so, many exporters continue to subsidise the domestic energy markets thereby reinforcing the problem. Energy importers are facing challenges in meeting the fiscal cost of rising levels of energy imports, in particular since domestic energy prices in many Arab countries have historically been unreflective of movements in international import costs (Fattouh and El-Katiri 2012), leading to heightened concerns about their energy security.
Relatively high and rising oil prices during the 2000s up to the early 2010s have since triggered a series of reform efforts throughout Arab countries (Fig. 33.4), including in oil and gas exporting countries. Both groups share a historically high degree of dependence on fossil fuels, though some progress has been observed in both energy importing and exporting countries that have made diversifying their domestic energy mix a policy priority. Indeed, policy changes have included efforts to adjust domestic energy pricing frameworks and to integrate some elements of energy-efficiency regulation into an increasing number of Arab countries’ domestic energy sector policy frameworks (James 2014; UN ESCWA 2017e; Sdralevich et al. 2014; Verme 2016). More recently, increased policy focus has arisen around the promotion of a more diversified range of energy sources, boosting the profile of renewable energy in particular (IRENA 2019; UN ESCWA 2017c, 2018a, 2018b, 2018c, 2018d; World Bank 2016).
Fig. 33.4
Energy price reform in Arab countries. (Note: Brent price based on BP’s annual statistical review 2018)
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Arab oil and gas exporters have been part of this transition, as their economies have significant opportunities to gain from a more sustainable use of energy within their domestic markets. Producers such as Iraq, Kuwait, Libya and Qatar rely for over 80% of their government revenues on fossil fuel export earnings, a proportion that has barely changed over the past decades (UN ESCWA 2019b; IMF 2017a, 2017b). Fossil fuels diverted from international to domestic markets in producing states result in a fiscal opportunity cost that could be minimised through more efficient use of energy—which historically received little priority—and greater reliance on renewable energy, which has grown increasingly cost-effective in recent years (IRENA 2017, 2019a).
The level and depth of reform differ significantly between countries and energy sources, with many price corrections for selected fuels and consumer groups made in an ad hoc manner and few systematic reforms in domestic energy pricing. Ad hoc price corrections simply translate to higher prices for the final consumer groups, whose price remains effectively static after the price increase, irrespective of further price movements for energy products on international markets.
In the case of electricity, prices vary across the Arab region, affecting real as opposed to statistical access. Jordanians, Moroccans, Palestinians and Tunisians pay on average more than 20 times the average bill in the Arab region’s lowest cost country (Kuwait); while average incomes are also far below those found in the Arab region’s lowest price electricity markets. Domestic energy price reform in a number of Arab countries in most recent years has further increased the financial burden on lower- and middle-income households in particular, affecting disposable household income and, as a result, de facto access to modern energy. Lagging parallel progress in the area of energy-efficiency regulation, poorly insulated existing building stock, and inefficient vehicles imply final consumers in many cases face rising energy and utility bills without the ability to meaningfully adjust consumption behaviour (Fig. 33.5).
Fig. 33.5
Average domestic electricity tariffs in the Arab region (US$ Cents/KWh/Month), 2016. (Notes: Data for Mauritania not available)
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Energy price reform that has been progressing in the Arab region is likely to play an important enabling role for more sustainable energy consumption and production patterns. Lack of cost-reflective energy prices is a major disincentive to energy efficiency and distributed renewables. At the time of writing, energy subsidies remain a feature in many Arab energy markets for different user groups, although their size has been falling along with reform progress in some countries, coupled to fluctuating shadow prices on international markets. At the same time, changing energy prices also entail many socio-economic challenges, including the protection of energy access by low- and middle-income households as well as businesses and industries. Integrating energy planning into wider socio-economic development planning will help governments design policies in an inclusive way, for instance by coupling energy price reform to improved other social safety nets, and the redirection of subsidies to investment in sustainable energy technologies.
5 Arab Region Progress on SDG 7
Box 33.1 Sustainable Development Goal (SDG) 7
“Ensure access to affordable, reliable, sustainable and modern energy for all”
7.1 By 2030, ensure universal access to affordable, reliable and modern energy services
7.2 By 2030, increase substantially the share of renewable energy in the global energy mix
7.3 By 2030, double the global rate of improvement in energy efficiency
Progress on sustainable energy (SDG 7) differs significantly across the region in reflection of vast socio-economic and geographic differences. While some of the region’s countries are amongst the wealthiest on a per capita basis, and striving to improve the productivity of their vast energy resources; Arab LDCs have yet to achieve universal access to modern energy. SDG 7 tracks progress in sustainable energy across three main targets: for (i) access to modern energy—electricity and clean cooking fuels and technologies (CFTs); (ii) renewable energy; and (iii) energy efficiency (Box 33.1).3 The remainder of this section outlines the region’s overall status across these targets.
5.1 Energy Access
Access to energy overall is one of the brightest spots in the Arab region’s sustainable development agenda.4 The Arab region’s electrification rate stood at 92.5% in 2017, slightly up from 88.4% in 2010, making it the most electrified regional group of countries in the developing world. Highly urbanised populations in all but the Arab LDCs, the availability of low-priced modern fuels and electricity and considerable efforts by most Arab countries since the 1950s to expand their utility sector infrastructure account to a large extent for this success. By 2017, electrification access was virtually universal in all but three Arab countries.
Encouragingly, the decline of the region’s access deficit has further been accelerating in recent years as several countries managed to close their access gap to achieve virtually universal access. In the same year, 14 out of 19 countries had access rates for clean cooking fuels and technologies (CFTs) above 95%, reflecting, among other factors, widespread access to electricity and Liquefied Petroleum Gas (LPG) for cooking in most urban and many rural households (Fig. 33.6).
Fig. 33.6
Progress in population with electricity access in the Arab region from 2010 to 2017 (millions of people and share of population with access to electricity). (Source: UN ESCWA (2019d))
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The Arab region’s population without access to electricity fell from about 40 million in 2010 to around 30 million in 2017. Over 90% of the Arab region’s access deficit for electricity, and over 95% for CFTs in 2017 remained concentrated in the three Arab LDCs: Sudan, Yemen and Mauritania. The Sudan accounts for the largest population access deficit in the Arab region with almost 18 million people without formal access to electricity. The rest of the region’s access deficit is found in Libya and the Syrian Arab Republic, both conflict-torn countries, with Libya never recovering its 100% electricity access rate since 2000. Libya, the Syrian Arab Republic and Mauritania are the only three countries in which more people lacked access to electricity in 2017 than in 2010.
Rural populations are disproportionally more affected by missing energy access. Eighty-eight per cent of Arab LDCs’ urban, but only around 50% of their rural populations had access to electricity in 2017. Many initiatives aimed at increasing electricity access in Arab countries have hence focused on rural areas. In Yemen, 98% of the urban population have access to electricity, versus 69% in rural areas. In the Sudan and Mauritania, these numbers are 82% for urban access, versus 43% rural access in the Sudan and no access at all for rural populations in Mauritania. Access distribution for clean cooking fuels and technologies (CFTs) such as LPG and improved cooking stoves is comparable (Fig. 33.7).
Fig. 33.7
Electrification rates in the Arab region, 2000–2017 (%). (Source: UN ESCWA (2019d))
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Conflict and instability have had a highly detrimental impact on modern energy access in the region and led to the destruction of significant parts of national and local energy sector infrastructure as well as disruptions to fuel supply routes. Living conditions and level of energy access remain in many cases estimated and likely not reflected in our current data.
Conflict-affected countries Libya and Syrian Arab Republic saw declining rates of electricity access (the latter also according to official data), reflecting large-scale destruction of infrastructure that will likely challenge the countries’ efforts in providing universal access to electricity to all citizens for many more years to come. Reduced access to electricity has furthermore increased the demand for liquid fuels in countries like Iraq, Libya, the Syrian Arab Republic and Yemen, leading to shortages and surging prices that have placed even liquid fuels out of many households’ budget, even where actual fuel supplies have not been interrupted as a result of conflict (Fig. 33.8).
Fig. 33.8
The Arab region’s electrification access-deficit in population numbers, 2010 and 2017. (Source: UN ESCWA (2019d))
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5.1.1 Electricity Service Quality and Affordability
While access to electricity is today near universal in most Arab countries outside the Arab LDCs, the quality and cost of service vary significantly across countries. In most recent years, planned and unplanned service disruptions due to insufficient generation capacity and transmission infrastructure have been of particular concern in conflict-affected countries like Iraq, Libya, the Syrian Arab Republic, the occupied Palestinian territory, Yemen; but also, in neighbouring countries like Jordan and in particular Lebanon. Lebanon having itself suffered from chronic utility sector problems long preceding the conflict in the Syrian Arab Republic, saw these problems exacerbated by the dramatic increase in electricity demand by more than a million Syrian refugees who fled to Lebanon during the civil war (Wright 2018; McDowall 2019).
In the conflict-torn Syrian Arab Republic, average electricity services last for around four–six hours per day (UN ESCWA 2019c); in the occupied Palestinian territory, electricity is supplied on average for eight hours per day (UN ESCWA 2019c). Irregular electricity supply is of grave concern for the functioning of basic health services, education, and economic activity, making it a top priority to address electricity provision as a precondition for post-conflict reconstruction and the building of sustainable peace and security in affected Arab countries.
5.2 Renewable Energy
Progress in the deployment of modern renewable energy has been far more modest than regional inroads in energy access, although recent years have been encouraging. The share of renewable energy in total final energy consumption has been in slow decline in the Arab region (Fig. 33.9), a historical long-term trend that reflects the high share of traditional biofuel in the region’s renewable energy mix. Falling consumption of traditional biomass in favour of more modern, higher quality liquid fuels and electricity in Arab LDCs and parts of North Africa accounts for virtually all of this trend, indicating a net welfare benefit despite falling overall renewable energy consumption. Three countries—Egypt, Morocco and the Sudan—account for over 85% of the region’s total consumption of solid biofuel; the Sudan alone consumes 59% (Fig. 33.10).
Fig. 33.9
Renewable energy share in total final energy consumption (%), 2000–2016. (Source: IEA (2018), World Energy Balances; Energy Balances, UN Statistics Division (2018))
Fig. 33.10
Total Arab renewable energy consumption by country, 2016. (Source: IEA (2018), World Energy Balances; Energy Balances, UN Statistics Division (2018))
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The share of renewable energy has been plateauing at around 10.2% of the Arab region’s total final energy consumption since 2010; it declined by another 11% between 2014 and 2016. Other, more modern forms of renewable energy such as solar and wind power have historically played a limited role in the Arab region. Hydro power forms an exception, but its deployment is limited in geographical scope, as is its potential for expansion given many important hydro resources are already being utilised. In consequence, encouraging yet slow growth in the deployment of modern renewable energy technologies in the region has not yet been sufficient to halt the region’s overall trend of falling renewable energy consumption.
Against the backdrop of relatively long-lasting resistance of Arab energy markets to embrace modern renewable energy, the recent surge in deployment is a significant development, despite comparably small numbers. In 2016, solar, wind and hydro power accounted for 19% of the region’s total renewable energy consumption, with slow but consistent growth since the 2000s (Fig. 33.11).
Fig. 33.11
Renewable energy consumption by type of fuel in the Arab region, 2016. (Source: IEA (2018), World Energy Balances; Energy Balances, UN Statistics Division (2018))
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Very few Arab countries rely on renewable energy for a substantial share of their final energy consumption. Excluding solid biofuel consumption, the highest shares of renewable energy consumption as part of the national energy mix are found in Sudan, the occupied Palestinian territories, Jordan and Morocco, based on a mix of hydro, solar and wind resources (Fig. 33.12). If solid biofuel is included, renewable energy contributes above 10% of the national energy mix in Mauritania, Morocco, the occupied Palestinian territories, the Sudan and Tunisia. Nine Arab countries—including all GCC countries—consumed no or negligible amounts of renewables, basing their energy mix virtually entirely on fossil fuels.
Fig. 33.12
Renewable energy share in TFEC by technology (excluding solid biofuel), 2016. (Source: IEA (2018), World Energy Balances; Energy Balances, UN Statistics Division (2018))
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The residential sector remains the dominant end-user of renewable energy. In 2016, it accounted for over 80% of total renewable energy consumption, owing to the large proportion of solid biofuel used for cooking and lighting, in particular in the Arab LDCs. Only 18% of the Arab region’s renewable energy consumption is accounted for by electricity generation, once again reflecting limited systematic deployment of renewable energy beyond hydro power in a limited number of Arab countries. Renewable energy has not yet made its way into the transport sector’s energy mix in any Arab country, with minor exceptions such as pilot schemes using biofuel (Warshay et al. 2016; SBRC 2018).
5.2.1 Renewable Energy Announced Targets, National Policies, Projects and Upcoming Capacities
Falling costs for renewable technologies that have rendered renewables increasingly cost-competitive vis-à-vis fossil fuels have considerably increased the relevance of renewable energy solutions to policy planning in a number of Arab countries. Individual, scene-setting utility-size projects in a number of Arab countries have been elemental in demonstrating the increasing cost-competitiveness of wind and solar technologies (Table 33.2). Added benefits that are seen as increasingly valuable among governments in the region include contributions to national efforts to participate in global climate mitigation, and economic value creation through local job creation (IRENA 2019a).
Table 33.2
Renewable electricity generation capacity installed in the Arab region, 2017
Consecutive auction rounds for utility-scale projects in the United Arab Emirates and Saudi Arabia that scored world record low price bids for solar PV and CSP technology in 2016, 2017 and 2018 have helped demonstrate the enormous economic potential of solar energy for large-scale power generation. In both countries, solar PV is now cost-competitive with all other conventional fuels, substantially strengthening their business case here and elsewhere in the region (IRENA 2019a). Morocco, Egypt, Tunisia and Jordan have also been investing separately into wind power, which, owing to excellent local resources, has helped generate low-cost electricity (APICORP 2018; The National 2017). These increasingly compelling economic arguments in favour of renewable energy should help boost the role of renewable energy technologies in some regional countries’ energy mix.
Most Arab countries by now have national renewable energy targets that reflect the growing importance of renewable energy technologies to national energy planning across the region. Increased cost-competitiveness, along with the increased value of renewable energy technologies in areas such as energy independence, natural resource management and climate policy has been reflected in ambitious renewable energy targets set by countries such as Egypt, Jordan, Morocco, Saudi Arabia and the United Arab Emirates. For instance, the Egyptian government’s Sustainable Energy Strategy to 2035 confirms the country’s target stated in 2009 of 20% of Egypt’s electricity generation from renewable sources by 2022, with more recent plans for renewable energy to contribute 42% of electricity generation by 2025 (Bloomberg 2017). Morocco plans to increase the share of renewables including hydro power in its energy mix to 42% by 2020, then rising to 52% (around 10 GW) by 2030 (Le Matin 2018). Endowed with some of the Arab region’s best solar as well as excellent wind resources, Jordan launched its new National Green Growth Plan in early 2018, aiming to scale up renewables to 10% of the total energy mix by 2020 (Ministry of Water and Irrigation 2015).
Among the GCC countries, which were among the last Arab countries to open their markets to renewable energy, some have in recent years pushed ahead with ambitious renewable energy targets. The United Arab Emirates, so far the GCC’s most dynamic renewable energy player, recently launched its first federal “Energy Strategy 2050” that aims to increase the share of clean energy in the country’s electricity generation capacity to 50% by 2050 (UAE Government 2018). IRENA in 2019 estimated potential capacity additions in the GCC, excluding most recent plans by Saudi Arabia, to amount to around 7 GW by the early 2020s (IRENA 2019a). In early 2019, Saudi Arabia separately announced ambitious plans for 60 GW of solar and wind generation capacity by 2030 in a bid to diversify its energy mix, which would make it one of the Arab region’s largest producer of renewable energy-powered electricity (Renewables Now 2019).
5.3 Energy Efficiency
The Arab region is not on track with global energy-efficiency targets. Regional energy intensity rose during the 1990s—contrary to most other regions of the world—and has only started to decline slowly since the beginning of the 2010s. In 2016, aggregate regional energy intensity stood at around 4.7 MJ/USDPPP2011, a decline of around 3% over the six-year period. The Arab region has the second lowest regional energy intensity rate in global comparison, largely an artefact of its fuel mix based on widespread efficient use of gas. Nonetheless, lacking progress in implementing energy efficiency as a strategic policy priority implies past modest decline in regional energy intensity rates stays far behind potential, and is not enough to help the region maximise the productive use of its energy resources (Fig. 33.13).
Fig. 33.13
World regional energy intensity trends, 1990–2016. (Source: IEA (2018), World Energy Balances; Energy Balances, UN Statistics Division (2018); World Bank, World Development Indicators)
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Regional aggregate scores also conceal substantial cross-regional differences in energy intensity dynamics. The Maghreb as a sub-regional aggregate has seen slightly rising rates of energy intensity since the 1990s, with a slight decline over the period 1990 to 2016. Less extensive oil and gas resources have enabled exports and supported increasingly urbanised economies. Industrial productivity has increased and a shift to service-structure economies has been observed, albeit with a remaining important share of agriculture in Morocco and Tunisia in particular.
The Mashreq has seen a slight decline in energy intensity rates in recent years, albeit with individual country exceptions. Conflict and instability have had a strong influence on energy intensity in Iraq and the Syrian Arab Republic, as well as some of their neighbours. Arab LDCs have converged at energy intensities of around 4 MJ/USD. With Mauritania and the Sudan being largely agrarian economies, industrial activity serves domestic or regional markets but is limited in exports. Both the Sudan and Yemen struggle with geopolitical conflict and all three countries face numerous constraints in energy access and services—a key limitation to development and increasingly linked to provision of safe water and food.
Overall energy intensity in the GCC has been rising since the 1990s, albeit with a gradual decline in more recent years. Individual countries have driven the regional trend, with Kuwait, Oman, Saudi Arabia and United Arab Emirates undergoing long-term growth in their energy intensity rates since the 1990s, although from lower starting points. Bahrain and Qatar’s energy intensity is far above the rest of the GCC, though with a downward trend. GCC economies are characterized by their carbon-intensive extractive industries, often with global competitiveness and global export of indigenous oil and gas products, and services. Most have developed downstream value-added products in derived petroleum products and metal processing (Fig. 33.14). High levels of terrestrial water scarcity on the Arabian Peninsula have been driving significant investment in high-efficiency integrated power water systems (see Box 33.1 on trends in energy-efficiency policy).
Fig. 33.14
Arab subregion energy intensity trends from 1990. (Source: International Energy Agency 2018; United Nations Statistics Division 2018; World Bank 2019b)
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There are some signs that economic activity is starting to decouple from energy use. Few countries in the region have continued their general trend to increasing energy use as they develop. Primary energy growth in the industrialised GCC countries started to stall, or slightly reverse from 2014 as less energy intensive economic activities have been developed. This is probably due in part to the fall of global oil prices from a record annual average price in 2014 stimulating new economic and budget approaches in oil-exporting countries.
The progress for energy efficiency is often tentative. Most countries in the Arab region still need to transpose energy-efficiency ambitions and plans into largely implemented measures and measurable energy-efficiency progress. Some substantive new policies have emerged, offering evidence that well-designed, implemented policies achieve results (see Box 33.2). Arab countries that are starting to build implementation substance to their energy-efficiency policies will experience a lag as policies take some time to influence investment, operations and behaviour. Robust programmes of policies tend to embed consistent change trends in energy use and increase its value. Whether this change can be sustained remains to be seen, but countries with effective energy-efficiency policies do tend to generate consistent energy intensity improvement trends that flow on to stall energy-use growth.
Box 33.2 Energy-Efficiency Policies in the GCC Countries
Countries such as Kuwait, Oman and the United Arab Emirates have in recent years demonstrated considerable focus on energy-efficiency improvements throughout their economies and have been working on subsequent strategies. Saudi Arabia, the GCC’s largest energy market, for instance has in recent years expanded its policies on energy efficiency significantly, including in areas such as standards for air-conditioning units, labelling for consumer appliances and fuel-economy standards for new personal vehicles. Other GCC members such as Qatar and the United Arab Emirates engaged in energy-efficiency (EE) programmes, including substantial new initiatives (labelling and minimum energy performance standards (MEPS), EE financing programmes, among others).
In January 2014 the Saudi government confiscated 40,000 non-compliant air conditioners (ESA 2014). Since 2014, the United Arab Emirates Etihad energy service company (ESCO) funded 200 million dirham (AED) in 2500 building energy-efficiency retrofits (AED 180 million in 2016) (DEWA 2019). The per capita consumption of electric power in Qatar was 15,307 kWh per year in 2014 (Fig. 33.15). This consumption was reduced by 18% during the “Tarsheed” rationalisation programme period (2012–2016) (State of Qatar 2018).
Fig. 33.15
Energy intensity in Gulf Cooperation Council countries. (Source: World Energy Balances IEA (2018); Energy Balances, UN Statistics Division (2018); World Bank, World Development Indicators)
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Qatar and the United Arab Emirates both have also comprehensive national energy strategies integrated into their economic long-term plans. Qatar’s National Development Strategy 2011–2016 towards Qatar National Vision 2030 covers controls and incentives for water and conservation “in place of today’s fragmented system of laws and regulations”, including new, green building standards (General Secretariat for Development Planning 2011). The challenge here is undoubtedly the rigidity of ensuing legislation and enforcement thereof. In the United Arab Emirates, Abu Dhabi’s Economic Vision 2030 and Dubai’s Integrated Energy Strategy 2030 are dedicated plans that include demand-and-supply policies and focus on the development of sustainable ways of providing energy to the next generation.
Source: UN ESCWA (2017c), SDG7 Tracking Report 2019—Arab Region.
Conflict-affected countries’ energy intensity levels are substantially higher than those of neighbouring countries and fluctuate considerably over time. Iraq, Libya, the State of Palestine and the Syrian Arab Republic experienced significant disturbances to their economic activities during the period under study, due to the ongoing geopolitical conflict in this region. Conflict-induced effects on energy intensity include damage to key energy infrastructure including power plants, T&D infrastructure, dams, and conflict-driven constraints to operation and maintenance. This also impacts the region, with neighbouring Lebanon and Jordan each handling large influxes of refugees.
Agriculture and services have seen the deepest fall in energy intensity in the Arab region since 2010. By contrast, the industrial and residential sectors’ energy intensity has slightly increased. These trends have been observed across all Arab countries, except for Egypt, Iraq, Morocco and Jordan who also had their industrial sector energy intensity improve. Most of the improvement in energy intensity is probably due to the changes in the economy’s structure, moving towards more energy productive activities.
6 Conclusion and Key Policy Recommendations
The Arab region consists of a diverse set of countries with different national contexts, including in the case of energy. However, most countries remain exceptionally reliant on fossil fuels with a highly limited role played by clean energy alternatives, in particular renewable energy; while the region also lags behind other region’s progress in energy efficiency. In the Arab LDCs, energy access remains incomplete, severely obstructing socio-economic progress. Making sustainable energy part of Arab countries’ policy agenda requires far more systematic efforts than has been the case in the past.
Arab countries need to better integrate sustainable energy as a fundamental element of national development policies. This includes integrated energy sector management; directly linking policy goals across sectors such as energy, transport and urban planning; as well as elevating topics such as natural resource management, air and environmental protection along with more inclusive ways to ensure energy is used and produced sustainably to matters of explicit national interest. For Arab LDCs, it is important that sustainable development goals become part of the countries’ own socio-economic development plans and are sound investments in social and economic development, not just additional cost burdens to government budgets.
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Access to electricity and to CFTs is the standard current measure for progress in energy access under the inter-institutional tracking framework for SDG 7, Tracking SDG 7. For a background, please see https://trackingsdg7.esmap.org/about-us.
