Barriers, Risks and Policies for Renewables in the Gulf States

Johan Lilliestam and Anthony Patt
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Johan Lilliestam: Institute for Environmental Decisions, Climate Policy Group, ETH Zürich, Universitätstrasse 22, 8092 Zürich, Switzerland
Anthony Patt: Institute for Environmental Decisions, Climate Policy Group, ETH Zürich, Universitätstrasse 22, 8092 Zürich, Switzerland

Energies, 2015, vol. 8, issue 8, 1-23

Abstract: The countries of the Gulf Cooperation Council (GCC) have both large fossil fuel resources and vast renewable energy potentials. Here, we investigate in a literature meta-analysis and a survey, whether there is a need for renewables in the GCC, what barriers and risks presently deter investments, and what possible policy-solutions could be. We find that there is a long-term need for renewables, to diversify the economy and prepare for a post-fossil fuel era. In the short term, two main obstacles deter investments: inefficient bureaucracy, and the combination of fossil fuel/electricity subsidies and the absence of renewable energy support. Removing fossil fuel and consumption subsidies or introducing a support scheme could make investments in renewables profitable. Eliminating energy subsidies appears particularly beneficial to the economic outlook but this seems particularly difficult to implement, due to the political economy of rentier states. Increased bureaucratic transparency and efficiency is needed, so that potentially attractive investments can rapidly and predictably obtain the necessary permissions. Hence, the administrative and economic environment for renewable energy investments in the GCC is not right today, and no breakthrough is on the horizon, but there is a range of policy solutions to enable investments in the future.

Keywords: renewable energy; renewable energy investments; Gulf Cooperation Council (GCC); renewable energy policy (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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