Low Carbon Energy in the Middle East and North Africa (International Political Economy Series)

This book explores the evolving roles of energy stakeholders and geopolitical considerations, leveraging on the dizzying array of planned and actual projects for solar, wind, hydropower, waste-to-energy, and nuclear power in the region. Over the next few decades, favorable economics for low carbon energy sources combined with stagnant oil demand growth will facilitate a shift away from today’s fossil fuel-based energy system. Will the countries of the Middle East and North Africa be losers or leaders in this energy transition? Will state–society relations undergo a change as a result? It suggests that ultimately, politics more so than economics or environmental pressure will determine the speed, scope, and effects of low carbon energy uptake in the region. This book is of interest to academics working in the fields of International Relations, International Political Economy, Comparative Political Economy, Energy Economics, and International Business. Consultants, practitioners, policy-makers, and risk analysts will also find the insights helpful. Acknowledgments 6 Contents 7 Notes on Contributors 9 Abbreviations 14 List of Figures 15 List of Tables 18 1 Low Carbon Energy in the Middle East and North Africa: Panacea or Placebo? 19 Introduction 19 MENA and the Global Energy System 20 Low Carbon Energy in MENA 24 The Geopolitics of Low Carbon Energy in MENA 28 Low Carbon Energy and State-Society Relations in MENA 30 Scope of the Book 32 2 The Politics of Low-Carbon Energy in Iran and Iraq 36 Introduction 36 Iran 37 Background 37 Nuclear Power 42 Hydropower 46 Non-hydro Renewable Energy 48 Iraq 52 Background 52 Renewable and Nuclear Energy 54 Conclusions 59 Bibliography 64 3 Pairing Coal with Solar: The UAE’s Fragmented Electricity Policy 74 Introduction 74 Background on UAE Power Sector 76 Clean Energy Goals Versus Reality 80 Clean Energy Aspirations and Credibility 82 Diversification Away from Gas 84 Regional Gas Politics 86 Relations with Iran 86 UAE-Iran Gas Trade 87 Relations with Qatar 87 Gas Trade with Saudi Arabia? 88 Why Diversify? 89 Regime Security and Nuclear Power 90 The Political Economy of Gulf Solar Power 91 The Dash for Coal—To Replace Gas 93 Questions Around Coal 95 Discussion and Conclusion 97 Annex: Future Power Plant Projects in the UAE 105 4 The Rise of Renewables in the Gulf States: Is the ‘Rentier Effect’ Still Holding Back the Energy Transition? 109 Introduction 109 Literature Review 111 Renewables Development Over the Last Decade in the GCC 112 Early Forays into the World of Renewables 113 What Is the Picture Like Today? 114 Bahrain 116 Kuwait 116 Oman 117 Saudi Arabia 117 Qatar 118 UAE 119 Distributed Renewable Energy in the GCC 119 A Closer Look at Saudi Arabia 122 The Credibility Gap 123 National Champions 125 What Explains the Differences 126 Rents Are not the Reason for the Divergence 127 Economic Ambition and Dynamism 127 Clients and Rent Seeking Pressures 128 Soft Power Projection 129 Conclusion 130 5 From Fuel-Poor to Radiant: Morocco’s Energy Geopolitics and Renewable Energy Strategy 136 Introduction 136 Methods 138 Status of Alternative Energy in Morocco 138 Fuel Switching and Geopolitics 143 Coal 143 Fuel Oil and Natural Gas 143 Oil 147 Outside Forces and Influences in Morocco’s Energy Transition 147 Financing 148 The Role of the Gulf States 149 EU and Transnational Grid Integration 150 Sub-Saharan Africa 153 Western Sahara 154 Internal Pressures Maintaining Fossil Fuels, and Challenges of Achieving an Inclusive and Equitable Domestic Energy Transition 155 Domestic Social Pressure 156 Conclusion 158 6 Byzantine Energy Politics: The Complex Tale of Low Carbon Energy in Turkey 170 A Dangerous Fossil Fuel Dependency 170 Two-Steps Forward, One-Step Back in Renewable Energy Policy 172 Cornered by Crises and Pressured by External Actors 175 Grassroots Resistance and Civil Society Mobilization Against Dirty Energy Projects 177 State Actors as the Drivers of and Obstacles to Clean Energy Reforms 180 Legacy of State-Led Developmentalism 180 Obsession with Economic Rents and Political Power 183 Clientelism and Populism: Creating Cronies and Co-opting Constituents 185 Foreign Policy Interests: Energy Projects for Geostrategic Leverage 187 Changing Institutional Capacity: Concentration of Power and Politicization of Bureaucracy 189 Conclusions 192 References 195 7 Electricity Sector Developments in Egypt: Toward an Increasingly Clean and Independent Future 199 Introduction 199 Drivers of Renewable and Nuclear Power Generation Development 200 Security of Supply 201 Geopolitics 202 Climate Change 204 Development Prospects 204 Renewable Energy Targets 205 Domestic Political Context 205 Egypt’s Recent Transitions of Power 206 Internal Stability 206 Egypt’s Military 207 Brief Review of the Egypt’s Power Sector Evolution 208 Recent Generation Capacity Additions 209 Sector Governance 210 Long Term Contracts for Renewable Support 211 Law 87/2015 213 Additional Opportunities Within the Updated Sector Structure 213 Bilateral Contracts and Retail Choice 214 Ancillary Services and ‘Stabilization Power’ 215 Regulated Market 215 Nuclear Energy Ambitions 216 Development of the El Dabaa Nuclear Power Plant 216 Project Cost 217 Compatibility with Renewables 218 Justifications for the Project 218 Looking Toward the Future 218 8 Levant: Where Politics Defeat Alternative Energy Disruptions 225 Overview of the Power Sector 225 Current Status of Alternative Energy 229 Opportunity of Challenging the Status Quo 232 Lebanon: The Spread of the Decentralized Model 232 Jordan and Palestine: The Promise of Reduced Foreign Dependence 234 Governments’ Drive Supported by Donors 235 Botched Execution: Identifying the Shortcomings 239 Lack of Strategy and Long-Term Planning 239 Lack of Institutional Priority, Capacity, and Consistency 241 Fueling the Competition 244 Battling with Traditional Utilities 244 Competing with Fossil Fuels 245 Triggering Regional Rivalry 246 Conclusion 247 9 Governance Amid the Transition to Renewable Energy in the Middle East and North Africa 251 Introduction 251 Political Implications of Conventional Energy Resources 253 Theory of the Rentier State 253 The Political Resource Curse6 254 Under What Conditions Are Resources a Curse or a Blessing? 256 Concerns Beyond the ‘Curse’ 257 Implications for Renewable Energy 259 What Is the Impact of Decarbonization on Governance? Will Renewable Energy Provide the Means to ‘Escape’ the Resource Curse? 261 Summary of Theoretical Expectations for Variation in the Renewable Energy Transition 265 Potential Scenarios for How the Transition Will Affect Fiscal and Political Stability 267 Will the Rise of Competitive Renewables from Oil Spark Rivalry Between Competing SOEs? Or Will This Instead Result in a Unified, Transformed SOE? 267 How Can These Countries Reduce Dependency on Fossil Fuels? 268 Conclusion 270 10 Powering the Middle East and North Africa with Nuclear Energy: Stakeholders and Technopolitics 277 Introduction 277 Multi-level Perspective: An Analytical Framework 279 Nuclear at the Landscape Level 282 Nuclear at the Niche Level 285 Nuclear at the Regime Level 288 Political Management of the Nuclear Commitment 290 Create New Actors in Favour of the Niche Technology 291 Co-benefits of Nuclear and Fossil Fuel Energy Regimes 292 Pre-empt Negative Policy Feedback 293 Build Domestic Public Support 295 The Future of Nuclear Energy in MENA 297 Conclusion 300 11 Climate Change Policy in the Arab Region 312 Introduction: Comparing Arab Countries’ Climate Policies 312 Changes and Continuities 313 Absence of a Two-Level Game 314 Different Domestic Challenges 315 From Post-oil Rhetoric to Present-Day Climate Action 316 Climate Change Policy in the United Arab Emirates 317 Role in the UNFCCC 317 Domestic Policy Evolution and Main Elements 318 Institutional Framework 319 Alignment, Drivers and Future Prospects 320 Climate Change Policy in Saudi Arabia 322 Role in the UNFCCC 322 Domestic Policy Evolution and Main Elements 323 Institutional Framework 324 Alignment, Drivers and Future Prospects 325 Climate Change Policy in Morocco 327 Role in the UNFCCC 327 Domestic Policy Evolution and Main Elements 328 Institutional Framework 329 Alignment, Drivers and Future Prospects 330 Climate Change Policy in Egypt 331 Role in the UNFCCC 332 Domestic Policy Evolution and Main Elements 333 Institutional Framework 334 Alignment, Drivers and Future Prospects 335 Conclusions 336 Index 346 This book compellingly illustrates how the transition to renewable and nuclear energy may fundamentally change the energy system dynamics of a region that has long been known for hydrocarbon-dependence and political strife. -Steve Griffiths, Senior Vice President, Research and Development, Professor of Practice, Khalifa University of Science and Technology, Abu Dhabi, United Arab Emirates This book is an essential guide for policy makers, analysts and academics trying to make sense of the dynamics, policies and motives driving the change to a more sustainable energy future in the MENA region. -Catherine Dourian, Regional Manager, Middle East and Gulf for the World Energy Council If you want to know how the global march towards greening our energy is impacting the Middle East and North Africa region, this book is a must-read. -Carole Nakhle, CEO, Crystol Energy This book explores the evolving roles of energy stakeholders and geopolitical considerations, leveraging on the dizzying array of planned and actual projects for solar, wind, hydropower, waste-to-energy, and nuclear power in the Middle East and North Africa. Over the next few decades, favorable economics for low carbon energy sources combined with stagnant oil demand growth will facilitate a shift away from today's fossil fuel-based energy system. Will the countries of the MENA be losers or leaders in this energy transition? Will state-society relations undergo a change as a result? It suggests that ultimately, politics more so than economics or environmental pressure will determine the speed, scope, and effects of low carbon energy uptake in the region. This book is of interest to graduate students and academics working in the fields of International Relations, International Political Economy, Comparative Political Economy, Energy Economics, and International Business. Consultants, practitioners, policy-makers, and risk analysts will also find the insights helpful. Robin Mills is CEO of Qamar Energy and Fellow at the Columbia University Center on Global Energy Policy and author of two books, The Myth of the Oil Crisis and Capturing Carbon. Li-Chen Sim is Assistant Professor at Khalifa University of Science and Technology in the United Arab Emirates. Her most recent books are The Rise & Fall of Privatization in the Russian Oil Industry and External Powers and the Gulf Monarchies