RIYADH: Saudi Arabia has achieved a world-record low levelized cost of electricity for solar photovoltaics, reaching $10.4 per megawatt-hour, according to a new report. A recent analysis by Norwegian business intelligence and research company Rystad Energy indicated that along with the UAE and Oman, the Kingdom is poised to lead the Middle East’s solar transition due to several key factors. The report highlighted the increasing significance of solar power in the energy policies of Middle Eastern countries, attributing this trend to factors such as low hurdle rates, large-scale projects, declining hardware prices, as well as low labor costs and high solar irradiance. “The region has exceptional solar energy potential, receiving more than 2,000 kilowatt-hours per sq. m. annually in solar irradiation in countries such as Saudi Arabia, the UAE, and Oman,” the report stated. The total solar capacity in the Middle East surpassed 16 gigawatts by the end of 2023 and is projected to approach 23 GW by the end of 2024, the report added. Rystad Energy’s projections indicate that by 2030, the capacity will exceed 100 GW, with green hydrogen projects contributing to an annual growth rate of 30 percent. Saudi Arabia, the UAE, and Oman are expected to collectively account for nearly two-thirds of the region’s total solar capacity by the end of the decade. Furthermore, renewable sources, including hydro, solar, and wind, are anticipated to constitute 70 percent of the Middle East’s power generation mix by 2050, a substantial increase from 5 percent at the end of 2023. Despite this growth, the region will heavily rely on natural gas in the short term, with usage peaking around 2030. At the end of 2023, 93 percent of the Middle East’s power generation was from fossil fuels, with renewables at 3 percent, and nuclear and hydro at 2 percent each. By 2030, it is expected that 30 percent of installed capacity will be from renewables, potentially reaching 75 percent by 2050. Rystad Energy predicts significant growth in battery energy storage in the 2030s to support the transition to solar and wind power. The share of gas in power generation is forecasted to decrease from 74 percent in 2023 to 22 percent by 2050.