With the Dubai government allocating $163bn to diversify its energy sector until 2050, including a $27bn fund for renewables, the emirate is rapidly emerging as a global centre for research and innovation for solar and other green power projects.

On Track

As part of the Dubai Clean Energy Strategy, the emirate aims to increase its share of clean energy sources on the grid to 75% by 2050. As of early 2017, 90% of energy needs in Dubai and the UAE were serviced by natural gas. However, through recent large-scale investment in the renewables segment, Dubai is on track to exceed its short-term target of 7% renewables on the grid by 2020.

In 2016 the Dubai Electricity and Water Authority (DEWA), the emirate’s public utilities provider, launched the Dh100bn ($27.2bn) Dubai Green Fund, which aims to finance investments in sustainable energy, including renewable energy schemes and efficiency initiatives, in collaboration with local banks and foreign investors.

Huge Potential

In addition to providing cheaper and more sustainable sources of power production, renewables have huge economic potential in Dubai, and the segment is expected to create around 100,000 jobs across the UAE by 2030.

Several factors make renewables, particularly solar energy, an attractive option to meet Dubai and the UAE’s energy needs. Total annual solar energy per square metre in the UAE is high, at around 2200 KWh. Spain, in comparison, has the highest solar energy levels in Europe at 2000 KWh per year. In addition, the global cost of solar power has fallen considerably, decreasing by 86% between 2009 and 2018. As a result, renewable energy technologies such as photovoltaic (PV) energy and concentrated solar power (CSP) are increasingly able to compete with oil and gas-based electricity generation in terms of price. For example, the second phase of Dubai’s 200-MW Mohammed bin Rashid Al Maktoum Solar Park (MBR Solar Park) operates at around $0.054 per KWh. This is comparable to the cost of electricity generation from oil, at $20 per barrel.

Sector Size

The UAE accounts for around 65% of the GCC region’s total installed PV capacity, and investment in this segment has continued to rise. In 2017 the UAE accounted for 100% of the $6bn that was invested in renewables within the GCC, with Dubai receiving more than 79% of this funding.

Renewables have huge economic potential in Dubai, and the segment is expected to create around 100,000 jobs across the UAE by 2030 While investment in renewables across the GCC declined in 2018, the UAE still received the largest share of funding, at 57% or $715m, and Dubai received $490m. MBR Solar Park, located south of Dubai city on a 16-sq-km plot in the desert, is the emirate’s flagship renewables project. The Dh50bn ($13.6bn) development is set to become the region’s largest solar park and will have the capacity to produce 5000 MW by 2030 and offset an estimated 6.5m tonnes of CO₂ emissions. The solar park will have the capacity to power 25% of the grid, enough to supply around 800,000 homes.

However, while large-scale projects such as MBR Solar Park are dominating headlines, there has also been significant growth in small- and mid-scale solar projects in Dubai and the wider UAE. The UAE’s solar energy segment was worth $40m in 2018, higher than neighbouring Saudi Arabia ($30m) and Oman ($12m). The UAE’s solar market has grown exponentially in recent years. According to the International Renewable Energy Agency, the country had 594 MW of installed solar capacity at the end of 2018, more than any other country within the GCC region.

Research & Development

In order to establish itself as a regional and global centre for renewable and clean energy, the emirate will require not only investment but also the most up-to-date technology. Dubai’s government is prioritising research and development (R&D) initiatives to drive the expansion of the renewables segment. DEWA is in the process of constructing a new centre for renewables R&D activity, which will be located at MBR Solar Park. The facility is being opened in stages and it is expected that investment will reach Dh500m ($136.1m) by the time the centre fully opens in 2020.

In 2019 researchers and government representatives began conducting initial studies in indoor and outdoor laboratories. Current research covers a series of areas, including limiting the impact of dust on the performance of PV panels; smart grid technologies and systems; energy efficiency; and desalination and water purification using solar power.

The R&D centre is also expected to support the growing private renewables segment and conduct training programmes for professionals. Through the partnership with state entities, and the collaboration with foreign firms from the US and Spain, among others, the centre will be an important component of being able to support the emirate’s renewables projects in the years ahead.


One of the major solar projects currently under development in Dubai is the fourth phase of the MBR Solar Park, a combined CSP and PV facility. When it is completed in 2030, the 44-sq-km plant will be capable of producing 950 MW of energy per day.

The MBR Solar Park will be the largest single-site CSP investment in the world, and the site’s tower – where sunlight is reflected from large sun-tracking mirrors, known as heliostats – will be the world’s tallest at a height of 260 metres. Some 70,000 heliostats are set to be installed at the site, making it the largest number of mirrors at any single CSP project. The heliostats will be controlled remotely using wireless technology.

These innovations have enabled developers to considerably reduce infrastructure and operational costs, lowering the levelised cost of electricity (LCOE) to $0.07 per KWh. In comparison, the global average LCOE in 2018 was $0.19 per KWh. “By pushing this solar project, Dubai has been able to bring prices down to an unprecedented level, far exceeding expectations,” Fabrice Abalain, regional analyst at the Energy Industries Council (EIC), told OBG.

Beyond Solar

Although solar projects are largely driving the development of the renewables segment, Dubai has also set its sights on expanding hydropower and waste-to-energy projects as part of its ambitious clean energy agenda.

The largest of these projects is the $523m pumped-storage hydroelectric power plant at Hatta Dam in the Hajar Mountains, in proximity to the border with Oman. Set for completion by the end of 2021, energy generated from the turbines of the hydropower plant are expected to add an additional 250 MW to DEWA’s existing grid.

In addition to this, the Dubai government has several other renewables initiatives in the pipeline. “There is already a plan to build a 100-MW waste-to-energy plant in a partnership between the Dubai municipality and DEWA, where municipal waste will be used to produce energy, thereby generating renewable power and reducing landfill waste,” Taher Diab, senior director of the Dubai Supreme Council of Energy, told OBG.

Investment Opportunities

With the Dubai government’s support for green energy initiatives, investment in renewables has risen sharply in recent years. According to data provided by the EIC, capital expenditure on ongoing and planned renewables projects in the emirate worth some Dh50bn ($13.6bn) up to 2030. The majority of opportunities lie within large-scale government tenders; for example, DEWA invited proposals for the fifth phase of the MBR Solar Park in 2019.

However, small- and mid-scale renewables projects have also been attracting interest. “Dubai is leading the renewables segment in the GCC and holds a comparative advantage over other countries such as Saudi Arabia and Oman,” Shyam Yadav, managing director of Clenergize Consultants, a Dubaibased solar power consultancy, told OBG. “Higher electricity tariffs and efficient solar policy in the UAE have encouraged businesses to look to solar power to lower their costs.”

Dubai’s renewables market has significant potential to boost the economy, as developments in technology and research help to establish the emirate as a regional and global leader in clean energy. Although the government remains largely focused on expanding solar power, due to the emirate’s strong potential in this segment, the dynamic energy sector is also creating long-term opportunities for investment in a wide range of renewable energies.