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Article

Renewable Energy and Governance Resilience in the Gulf

by
Li-Chen Sim
Institute of International and Civil Security, Khalifa University of Science and Technology, Abu Dhabi P.O. Box 127788, United Arab Emirates
Energies 2023, 16(7), 3225; https://doi.org/10.3390/en16073225
Submission received: 7 March 2023 / Revised: 26 March 2023 / Accepted: 29 March 2023 / Published: 3 April 2023
(This article belongs to the Section C: Energy Economics and Policy)
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Abstract

:
The six Gulf monarchies—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (UAE)—are more politically stable than their peers in the Middle East and North Africa. Explanations for governance resilience range from repression to neopatrimonial and instrumental legitimacy, hydrocarbon-based rentierism, and permissive regional and international environments. This paper considers, in view of the proliferation and uptake of renewable energy in the Gulf, how governance resilience may be affected as a result of changes in state-society relations during the energy transition away from a fossil-fuel-based energy system. It offers a qualitative analysis of the impact of renewable energy deployment in the Gulf, supported by a rich array of secondary literature and data. It also offers a deep, if brief, dive to highlight intra-regional nuances. The authors conclude that in the short term, renewable energy deployment has a very modest impact given its limited share of power generation. In the longer term, even assuming that stated ambitions for renewable energy are fulfilled, no negative impact on monarchial resilience is expected thanks to gains in legitimacy and revenue streams, as well as purposeful alignment with an external environment supportive of renewable power in developing countries.

1. Introduction

In the wake of the uprisings and revolts that spread throughout much of the Arab world in the early 2010s, the six Gulf monarchies—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (UAE)—experienced more stability than most other states in the Middle East and North Africa (MENA) regions (see Figure 1). Within the Gulf, Bahrain was the site of the most significant and violent unrest; relatively little contestation occurred in Qatar and the UAE, while upheavals in Saudi Arabia, Kuwait, and Oman lay somewhere in between. More than a decade later, the Gulf states recorded far fewer protests and riots during the coronavirus pandemic than most of the Middle East (see Figure 2). There were fewer incidents in Jordan than in Bahrain, but incidents in other states in the Middle East were in the thousands. The Gulf states are also among the most COVID-19-resilient countries in MENA and globally [1]. Consequently, the Gulf monarchies are perceived as more politically stable than their peers in MENA (Figure 1).
Although the Gulf monarchies have emerged relatively unscathed from the Arab Spring and the coronavirus pandemic, it is arguably the third challenge of this century that gives pause to the narrative of governance, or specifically, in the case of the Gulf monarchies, resilience. As key stakeholders in the current fossil-fuel energy system, the Gulf monarchies are expected to face large reductions in hydrocarbon revenues as a result of significant declines in long-term oil and gas demand [4,5,6]. They are also at extremely high risk of water stress, like most MENA countries [7], and are warming twice as fast as the global average [8]. Within MENA, the Gulf monarchies—with the exception of the UAE—have thus far performed relatively poorly in terms of renewable energy policies [9] and environmental sustainability [10]; they have also not properly leveraged their higher level of readiness to tackle climate vulnerability [11]. In this context, the recent and rapid deployment of renewable energy, particularly in the UAE and Saudi Arabia, deserves greater attention since the resulting changes in patterns of state-society relations could potentially undermine institutions or practices that have facilitated stability in governance.
This paper offers a qualitative analysis of the impact of the deployment of renewable energy on monarchial resilience in the Gulf states. It draws upon insights from key literature on monarchial survival and the energy transition, which have thus far been tackled separately in the scholarly literature and leverages a variety of datasets to produce evidence-rich speculation about the future trajectory of monarchial resilience. It also offers a deep dive into individual Gulf monarchies to highlight nuances about the pathways of renewable energy in perpetuating monarchies and state-society patterns of interactions in the Gulf. We find that in the short term, renewable energy deployment has a very modest impact given its limited share of power generation. In the longer term, even assuming that stated ambitions for renewable energy are fulfilled, we expect no negative impact on monarchial resilience. In fact, gains in legitimacy and rents, as well as a more hospitable and enabling external environment, are likely to strengthen political stability. In this connection, our paper also contributes to the wider debate on the trend and process of autocratization [12,13,14,15,16], especially the conditions that facilitate the success or failure of “autocratic hardening” [17] in authoritarian states. This is because our findings imply that there may be no correlation between renewable energy uptake and democratic governance [18].
A few words about the scope of the paper are necessary, the first being that our sample is limited to Gulf monarchies only. The choice to exclude the remaining two monarchies in the Middle East, Jordan and Morocco, was based on the fact that they are structurally distinct from their Gulf peers in terms of hydrocarbon endowments and their status as labor exporters. Second, the focus is on the actual deployment of non-dispatchable, variable sources of renewable power, namely solar and wind, and how these impact monarchial resilience; geothermal in Saudi Arabia [19] and hydropower are therefore excluded, even though they are forms of renewable energy. Other climate mitigation and adaptation measures, such as energy efficiency, carbon capture, or investment in natural offsets, are also beyond the scope of our paper.
The remainder of the paper is organized as follows: Section 2 contextualizes existing research on monarchial resilience in the Gulf. It also sets out the research approach in this article, which considers renewable energy as a novel, independent variable that affects monarchial resilience. Section 3 explores the specific pathways in which the deployment of renewable energy may affect the durability of Gulf monarchies. We find that upside gains to governance resilience as a result of the deployment of renewable energy are derived from the latter’s augmentation of the state’s legitimacy, rents, and external operating environment; the impact on repression is less meaningful. Section 4 narrows the discussion from the regional level to individual states to briefly consider the nuances among them. Section 5 concludes with thoughts on the policy implications of the article’s argument and findings.

2. Theoretical Background, Framework, and Research Hypotheses

Explanations of monarchial resilience in the Gulf revolve around four independent variables, the first of which is legitimacy. One strand examines personalist bases of legitimacy whereby the ruler dispenses resources and opportunities to a network of elites in return for loyalty, information, and, to a lesser degree, competency; these elites in turn form their own patron-client networks. The resulting neopatrimonial “networks of privilege” [20] penetrate deeply into all areas of society, including the military, bureaucracy [21], business [22,23], and religion [24]. Such patron-client relations discourage systemic reforms, co-opt potential dissenters, and foster considerable durability, especially among “dynastic monarchies” [25], if managed adroitly. Another strand investigates the impact of attempts at modernizing or “upgrading authoritarianism” [26] to increase the instrumental legitimacy of Gulf monarchies. These include limited political participation [27,28,29], state-scripted advances in economic neoliberalism [30,31,32], social reforms [33], globalization [34], branding [35,36,37], and nationalism [38]. Such efforts extend traditional bases of support to include new and wider domestic coalitions [39,40].
A second variable is rentierism [41], and in particular, the hydrocarbon revenues available to “allocation states” [42] in the Gulf. Income generated from the activities of state-owned oil and gas companies finances extensive welfare states in terms of employment [43], health, education, and energy and water subsidies [44] that buy social peace, lubricate patron-client networks [45], reduce the volatility of economic growth [46], and facilitate authoritarian upgrading [47]—while side-stepping direct taxation and its consequent demands for representation. In Abu Dhabi, for example, 90% of the emirate’s budget is funded from hydrocarbon revenues (around 50%) as well as dividends from state-owned enterprises (around 40%), including ADNOC and various emirate-controlled sovereign wealth funds [48]. Nevertheless, the extent to which mere availability of hydrocarbon revenue translates into monarchial resilience in the Gulf depends on tribal and sectarian affiliations [49,50], the ownership structure of state-owned companies [51,52], political repression (see below), historical relationships with the merchant class [53,54], a relatively small population size [55], and the global outlook of their leaders [36,56].
Third, political repression is thought to discourage rebellions and shore up the longevity of Gulf monarchies. Repression includes threatened [57] and actual [58] actions that could be domestic or transnational in scope [59,60]. Unlike in other MENA states, the relatively moderate and discriminate repression in the Gulf reduces, but does not eliminate, incidences of political violence and pressure on the regime [61]. The more efficient control over the coercive security apparatus may be a function of the presence of working royals within such organs, in line with the ‘dynastic monarchies’ argument above. It could also be a result of the relatively higher state capacity among Gulf monarchies, all of which outperform the MENA average [62].
Fourth, bearing in mind the characteristic of the Middle East as one of the most “penetrated” regions of the world [63], the extant literature posits a link between regional or international environments that facilitate authoritarianism and increased regime security. Within the Gulf, “pan-royalism” [64] was expressed through Saudi-Emirati intervention in Bahrain in 2011, collaboration in cross-policing [64], and Saudi Arabia’s role as the Gulf’s “authoritarian gravity center” [65]. As for external stakeholders, despite foreign policy agendas by North American and European states that encourage greater democratization and civil rights in the Middle East, they have generally prioritized access to stable supplies of hydrocarbons and political stability in MENA, resulting in many cases in “democracy prevention” [66,67]. In this regard, USD multi-billion arms sales to the Gulf [68], the burgeoning market for homeland security solutions in the Gulf [69], the maintenance of the Fifth Fleet and Indo-Pacific Command in Bahrain and Qatar, respectively, and concerns about the rise of influential, authoritarian states such as China, Russia, and Turkey in Middle East affairs [70,71] greatly undercut calls to create more inclusive political institutions in the Gulf.
The emergence of an irreversible ‘tipping’ or ‘inflection point’ [72,73] for the transition to an energy system that includes higher shares of renewable energy sources begs the question of monarchial resilience in the hydrocarbon-rich Gulf. Globally, the share of electricity generated by renewables is likely to rise from 29% today to 38% by 2030 and 55% by 2050 [74]. A net-zero pathway would see these shares rise significantly [75]. The Middle East, however, is the region with the lowest share of power generated by renewable energy, at 1.4% in 2021; only the Commonwealth of Independent States has a lower share at 0.6% [76].
The literature on renewable energy in the Gulf comprises at least four distinct dimensions. The first analyses variables including policy, geography, financial, technological, social, and prestige that increase, hinder, or vary the actual deployment of renewable energy in the Gulf [77,78,79,80,81,82]. The second examines applications of renewable energy in sectors such as desalination, hydrogen, buildings, transport, and industry [83]. The third dimension is outward-facing and considers the extent to which bilateral relations, multilateral diplomacy, and geopolitical power may be shaped by Gulf states that champion renewable energy or by non-Gulf partners that prioritize renewable energy [84,85,86].
The fourth and final dimension concerns the political economy of renewable energy on state-society relations, including political inclusiveness, the role of the private sector, and state-provided employment in the Gulf [87,88,89]. This is the least developed dimension of renewable energy in the Gulf and one to which our article contributes. Drawing upon the monarchial resilience literature, we find that the deployment of renewable energy is particularly significant for sustaining or even improving legitimacy, revenues, and the state’s external environment; the impact on repression is less meaningful. Overall, renewable energy appears to support monarchial resilience in the Gulf.

3. Results of the Nexus between Renewable Energy and Monarchial Resilience

The deployment of renewable energy in the Gulf is a fairly recent development, with installed capacity rising from 14 megawatts (MW) to 3498 MW between 2010 and 2021 [90]. Despite high levels of solar irradiation [91], renewable energy is not a large contributor to the overall energy mix at the moment; in the UAE, the region’s leader in renewable energy deployment, renewable sources only generated 4% of power in 2020 [92]. Nevertheless, all of the Gulf states have committed to increasing the share of renewable energy in power generation capacity (see Table 1); whether or not these ambitions can be realized is debatable [93]. They have also organized/awarded procurements or competitive auctions for renewable energy projects that were record-breaking in the early phases and remain among the leading bid prices for solar and wind energy globally [79].

3.1. Renewable Energy and Neopatrimonialist Structures

Three features of renewable power systems in the Gulf make them particularly helpful in maintaining patron-client ties among states and constituencies, hence reinforcing monarchial stability in the Gulf.

3.1.1. Utility-Scale Renewable Power

The first is the choice in favor of a centralized and utility-scale model of renewable power. The generation, transmission, and distribution of renewable power in the Gulf are overwhelmingly centralized and at utility scale; in contrast, the latter co-exists relatively equitably with decentralized and distributed models in other regions of the world [95]. The scale of a typical renewable power project in the Gulf is huge by any count. On average, the absolute cost of a utility-scale solar project in the GCC is USD 3.2 billion versus USD 283 million in the US, or slightly below the world average cost of USD 322 million [96]. According to the Global Power Plants database, as of mid-2021, the average installed capacity of solar projects in the UAE was 140 MW, excluding Abu Dhabi’s 1.2 GW Noor solar plant, compared to 11.57 MW in the US [97]. In comparison, investments in distributed solar projects amounted to just USD 40 million in the UAE, USD 30 million in Saudi Arabia, and USD 12 million in Oman by the end of 2018 [80]. The installed capacity of distributed solar in Dubai—which accounts for almost all non-utility scale solar in the UAE through the Shams Dubai initiative—amounted to over 400 MW at the end of 2021, up from 125 MW two years earlier [98].
There are a couple of reasons for the bias in favor of utility-scale renewable energy projects in the Gulf. Utility-scale photovoltaic solar power is cheaper than distributed solar and alternative forms of power generation [99]. The economies of scale, excellent sovereign credit rating of host countries in the Gulf, long-term power purchasing agreements with electricity offtake by a single state-owned buyer, availability of financing from foreign and local banks, well-designed and managed competitive auctions, and sharp falls in the price of solar and wind components combine to make renewable energy a viable and cost-effective option for Gulf states seeking substitutes to hydrocarbon for domestic power consumption [100,101,102,103]. Additionally, there is more available land in the Gulf. Solar and wind power, because of their much lower energy densities, have much larger spatial requirements than gas power plants to generate the same electricity output. The deserts in the Gulf are arid, largely uninhabited, and mostly unsuitable for agricultural purposes; pastoralism therefore does not compete with designating desert lands for solar or wind farms, particularly given that 14.3% and 16.9% of the total population live in rural areas in the UAE and Saudi Arabia, respectively, compared to 28% in Europe [104,105]. Conflicts and litigation over the siting of solar and wind farms have occurred in Europe and the U.S. and are expected to rise in tandem with higher uptakes of renewable energy [106,107].

3.1.2. Structure of Special Purpose Vehicles

A second feature of renewable energy projects in the Gulf is the role of special purpose vehicles (SPV). The latter are passive holding companies created to ring-fence liabilities for certain assets and are widely used in project finance. The amount of equity in a SPV held by the host government can range from 0 to 100%, with low levels of state equity being more common in developed countries. The point here is that the composition of SPVs in the Gulf is indicative of the region’s centralized development paradigm of state-led development partnered with private sector finance and technical expertise. For example, Abu Dhabi’s Shams 1, the Middle East’s first commercial concentrated solar plant, is owned by the SPV Shams Power Company, whose current shareholders are Abu Dhabi-owned Masdar (80% share) and foreign partner Total (20%). Saudi Arabia’s Dumat Al Jandal wind farm was awarded to a consortium comprising EDF of France and Masdar with stakes of 51% and 49%, respectively. Qatar’s Al Kharsaah power plant, the country’s first utility-scale solar project, which provided part of the electricity to cool football stadiums hosting the 2022 World Cup, is likewise owned by an SPV comprising foreign partners Total and Marubeni (40%) and Qatari state-owned entities (60%).
SPVs are in line with the model of state-directed economic development traditionally deployed in Gulf states; its twenty-first century iteration is known as ‘state capitalism’ [108], ‘Khaleeji capitalism’ [54] or ‘late rentierism’ [47]. Key features include selective economic liberalization and globalization in contrast to the more dirigiste approach in the past, a greater commitment to hydrocarbon-underwritten diversification, a private sector that is dependent to a significant degree on state spending, and a broadly dominant role for the state in development. Replicating this state-led economic governance model for renewable energy projects confers on the state increased legitimacy from citizens and prestigious recognition from external stakeholders like the Abu Dhabi-based International Renewable Energy Agency (IRENA). This is because science, technology, and the technopolitics of state-supported hyper-modern projects like low-carbon cities, transportation mega-projects, space applications, and solar parks have been important to governance resilience in the Gulf [58,109]. Additionally, the jobs offered through state-dominant SPVs could also replace much-sought-after but low-productivity public sector positions that account for an unsustainably high share of state budgets—up to 41% of total state expenditure in Kuwait’s case in 2019 while international norms average 20–30%—thereby reinforcing existing patterns of state dominance-society interactions [45,88] that facilitate governance stability.

3.1.3. Limited Role for Distributed Energy

A third feature of Gulf renewable energy is the limited role of distributed energy. Four of the Gulf monarchies—Bahrain, Oman, the UAE, and Saudi Arabia—have net metering policies to promote distributed solar systems. Oman’s remote mountain settlements encourage small-scale, roof-mounted photovoltaic solar generation projects; some are grid-connected while others are off-grid. Solar roofs have been installed on a handful of schools and ministry buildings in Kuwait. In the UAE, Dubai’s Shams solar rooftop net metering scheme is particularly popular with industrial and commercial users. Solar rooftop systems, usually through a long-term solar leasing model where clients do not pay upfront costs, have been installed by small, privately-owned developers at warehouses operated by GAC Logistics, Landmark Group, and Majid Al Futtaim, at fuel retail outlets owned by Emirates National Oil Company and Abu Dhabi National Oil Company, and at other buildings such as Al Bateen School in Abu Dhabi and the Dubai World Trade Center. In the case of port operator DP World, solar rooftops across its facilities in Dubai will meet 40% of its power requirements. At Mai Dubai’s water bottling factory, the solar rooftop provides 100% of the facility’s electricity needs.
By contrast, distributed solar has not caught on at residential properties in the Gulf. Explaining the low demand for solar rooftop systems in Abu Dhabi, a senior government advisor noted that “there could be a dozen people or so who are emotional about this issue and who have a view. But it’s certainly not a large constituency of people that are interested in having control of their own system of energy generation. By a large, large margin, the public debate about energy continues to be dominated by tariffs [110]”. Low, state-subsidized electricity tariffs (see Figure 3) are arguably the biggest obstacle to the uptake of distributed energy. Nevertheless, renewable energy advocates in the Gulf remain hopeful that distributed solar at the residential level would “promote a more energy-conscious citizen” while “helping to rebuild a sense of community that has been severely eroded by rapid modernization [111]”.
Despite the centralizing tendencies of states in the Gulf, the private sector has been allowed to participate in the rollout of distributed renewable energy. This is because the smaller role of distributed solar is unlikely to undermine the centrality of a hydrocarbon-based economy (see the next section) within the next decade, the tenets of the state-directed economic model, or state control over a significant portion of the economy. Companies specializing in distributed solar like Yellow Door (a spin-out of Adenium Energy, owned by the Saudi AK Bakri family conglomerate and based in Dubai) and Siraj Power (co-founded by prominent Emirati businessman Abdul Ghaffar Hussain of Green Coast Enterprises) emerged out of well-established family businesses. While broadening the base of non-oil stakeholders in the renewable energy transition in the Gulf, these companies are at the same time mindful of the dependence of business on state procurement contracts, on policies that enable the recruitment of plentiful and affordable labor, and on the perpetuation of non-tariff barriers that limit market entry for competitors [54,113].
In any case, the growth of distributed energy and the role of the private sector in the Gulf face headwinds. The Dubai Electricity and Water Authority (DEWA) announced in May 2020 that net metering incentives would henceforth be limited to rooftop installations—ground-mounted PV systems would be excluded—and capped at 2.08 MW. Saudi Arabia’s newly introduced net metering scheme similarly caps the size of distributed systems at 2 MW. Abu Dhabi’s net metering scheme, announced in 2017, has been quietly put aside. All this is presumably in response to concerns from state-owned utilities about the impact on revenues, grid stability, and free-riding. In the case of DEWA, for example, industrial and commercial customers account for just over half of all electricity consumption in Dubai [114]. Some customers with large, distributed solar systems have actually become net exporters of green electricity to the emirate’s grid [115].
To recap, the foregoing paragraphs argue that the way renewable energy is rolled out in the Gulf—through utility-scale projects, the use of SPVs where the state holds most of the equity, and allowing the private sector to partake in new avenues of growth in distributed energy—sustains and widens a patron-client network of social and economic actors who are only too happy to reaffirm the centrality, largesse, and ultimately legitimacy of the Gulf state. Thanks to renewable energy, therefore, governance resilience has improved.

3.2. Renewable Energy and Revenue Streams

There are several ways in which the relationship between the deployment of renewable energy and revenue streams in the Gulf monarchies is likely to unfold.
First, assuming that enough of a surplus of renewable power generation capacity is built over and above domestic needs and that the politics of cross-border grid interconnections are overcome, renewable electricity exports to Iraq or Egypt are unlikely to be a significant source of revenue [116]. Consider, for instance, that France, which accounted for the highest share (12.2%) of global electricity exports, earned USD 4.2 billion from such exports in 2018 [117]; in comparison, Saudi Arabia earned an equivalent amount with just ten days’ worth of oil exports in 2018. In addition, the average return on investment for solar projects of 6.6–10% is of a far smaller magnitude than the average of 21% for upstream hydrocarbon projects [118,119]. Other factors inhibiting transnational electricity trade include long-distance transmission and distribution losses—which are already staggering at 51% within Iraq itself due to aging infrastructure and theft, and at 11% in Egypt or slightly above the world average of 8% [120]—and the preference for indigenous, rather than imported, generation of renewable power. All things considered, the current revenues derived from hydrocarbon exports and the social, economic, and political peace they engender in the Gulf are unlikely to be easily replaced with renewable electricity exports.
Second, the use of renewable energy to ‘green’ key pillars of economic diversification in the Gulf, including the production of aluminum, steel, cement, and petrochemicals, is likely to shore up the sustainability of these revenue streams. This is because renewable energy sources are increasingly able to generate the high heat required for these industrial processes at a competitive price point compared to power supplied by gas or coal plants [121]. For example, Aluminum Bahrain (Alba), one of the largest smelters in the world, accounts for 11.5% of Bahrain’s total exports, 30% of its total non-oil exports, and consumes one-quarter of its non-associated gas production [122,123]. With Europe as the destination for almost one-quarter of its exports [124], Alba will be obliged to integrate renewable electricity into its smelting operations in order to minimize taxes imposed by the European Union’s Carbon Border Adjustment Mechanism in the near future. Less wealthy hydrocarbon exporters like Oman, where non-oil diversification is even more crucial, may also be able to benefit from the increasing number of renewable projects in other Gulf states. A Chinese company has signaled interest in manufacturing solar panels in Duqm, while Oman Cable won a contract to supply photovoltaic cables to Qatar’s Kharsaah solar plant.
Third, the production of green hydrogen for use in steelmaking and as an energy export can contribute to rentier income flows. Using ammonia as the green hydrogen carrier can be economically competitive when leveraging low-cost renewables at scale [125,126,127,128]. According to a conservative estimate, green hydrogen revenues in GCC countries could amount to USD 70–140 billion per annum by 2050 [83]. The Gulf monarchies appear well-positioned as green hydrogen exporters given their renewable energy ambitions and existing expertise in hydrogen production, although they face stiff competition from Australia and Chile in the Asian and European markets, respectively [129]. Numerous industry collaborations abound, including the world’s largest USD 5 billion green hydrogen plant at NEOM in Saudi Arabia in a collaboration with Air Products, as well as research on fuel cell vehicles by Saudi Aramco/South Korea’s Hyundai, and Abu Dhabi’s ADNOC/Masdar/Japan’s Toyota. Compared to previous failed attempts to mainstream hydrogen, the large-scale adoption of cheap renewables that would benefit from seasonal storage and avoiding curtailment for balancing the grid, along with political will and the availability of green funding such as the EU’s Hydrogen Strategy, may work in hydrogen’s favor this time around. In any case, while the learning and experimentation gained from initiatives in the Gulf will be invaluable to any hydrogen-fueled future, the centralized and costly infrastructure for green hydrogen reinforces the dominance of the state and the resilience of Gulf monarchies.
Finally, the deployment of renewable energy enables the monetization of valuable hydrocarbon resources. One pathway is fuel switching. In Saudi Arabia and Kuwait, the burning of crude oil, diesel, and heavy fuel oil accounts for 70% and 40% of power generation, respectively [130]. Accordingly, as acknowledged by Saudi Arabia’s Minister of Energy, “the more we use renewables and gas for our consumption, the more we will be freeing liquids which are exportable to the world market” [131]. Similarly, freeing up gas and oil from power consumption means that they can be better deployed as feedstock for creating higher-value added petrochemicals. The other pathway is the use of solar thermal steam injection in place of natural gas to force oil from mature wells in Oman. With only 15 years of oil remaining at current production rates, Oman is keen to recover as much oil as possible to fund economic diversification.
In other words, the revenues accruing from renewable energy, especially in terms of exporting green hydrogen and decarbonizing the emissions of key non-oil export commodities, are likely to provide a non-hydrocarbon source of wealth to Gulf states in a low-carbon future. Consequently, they contribute to governance resilience in these states.

3.3. Renewable Energy and the Exogenous Environment

On the one hand, as noted earlier, hydrocarbon-rich Gulf monarchies are confronted with an increasingly challenging operating environment due in part to climate concerns that identify the energy sector as the source of almost three-quarters of climate-warming greenhouse gas emissions [132]. For instance, among the top 50 fossil fuel producers that have emitted over 70% of cumulative greenhouse gas emissions since 1988, a share of 7.5% is attributed to the Gulf’s state-owned energy companies [133]. Led by the EU, the Gulf’s main trading partners that have already declared net-zero ambitions may eventually consider policies that penalize carbon-intensive products from the Gulf.
On the other hand, some Gulf states have been pro-active in positioning themselves as part of the solution to climate change, in contrast to their earlier obstructionist efforts [134]. Bar Qatar, all Gulf monarchies have set national net-zero carbon emissions goals that include the deployment of renewable energy, although short-term targets in some cases are vague. All of them have also joined the Global Methane Pledge to reduce methane emissions by 30% between 2020 and 2030. Doha has hosted (2012) and Dubai will host (2023) the major UN climate change gathering known as the Conference of the Parties.
More significantly, the Gulf states have contributed to knowledge production and transfer with regard to green hydrogen (discussed above) and the use of auctions for renewable energy projects. Taking a cue from Brazil, which was the first to pioneer a successful solar auction in 2009, the Gulf states have organized and awarded a number of such auctions for solar and wind. In so doing, they are leading the charge to increase the competitiveness of global solar PV and CSP prices, even in countries with less solar irradiance, by scaling up demand for and reducing the price of solar and wind components [135]. Moreover, the low prices achieved with auctions in the Gulf and elsewhere have resulted in a shift in the popularity of other policy mechanisms used to scale up renewable energy adoption worldwide. The number of countries that have deployed auctions to build capacity has also increased nearly twofold between 2014 and 2019, while the initial popularity of feed-in-tariffs has stagnated.
Better known for their long-standing practice of petrodollar recycling in the developing economies [136,137], the Gulf monarchies have more recently facilitated the deployment of renewable energy with a focus on developing countries. Since the latter currently account for almost two-thirds of global carbon emissions [138], a share that is likely to increase over the coming decades, but for only one-fifth of global investment in clean energy [139], ramping up climate finance for developing countries and/or participating in renewable power projects there will enable Gulf states to play a significant role in bringing renewable energy to the Global South. Since 2014, for example, the Abu Dhabi Fund for Development has allocated USD 350 million to renewable energy projects in mostly lower-income developing countries based on criteria set out by IRENA, based in Abu Dhabi. Outside of the IRENA framework, the emirate’s Masdar has developed/operated, or acquired equity in Uzbekistan’s solar and wind farms, the Baynouna solar plant in Jordan, and India’s Hero Future Energies’ projects in India and Africa. In November 2022, the UAE upped the ante by announcing its partnership with the US to catalyze USD 100 billion in clean energy financing. Not to be outdone, the extensive portfolio of Saudi Arabia’s Acwa Power includes solar power plants in South Africa, Egypt, and Morocco, as well as wind power plants in Morocco, Uzbekistan, and Azerbaijan.
The Gulf monarchies have been able to leverage the global momentum in favor of increasing uptake of low-carbon energy sources and of financing low-carbon energy technologies, particularly in less developed countries. This does not mean they are unconcerned about their antipathy towards fossil fuels and the countries that produce them [140]. Clean energy diplomacy is sometimes decried as “greenwashing” to maintain a social license to continue exporting lucrative hydrocarbons [141,142]. Equally, however, there is a strong strategic and business case for the Gulf to align their interests with an international operating environment that largely privileges renewable sources of power in line with the United Nations’ Sustainable Development Goal of clean and sustainable energy for all.
By somewhat aligning themselves with the mainstream global narrative in favor of scaling up and speeding up renewable energy adoption domestically, within MENA, as well as globally, some of the Gulf states have won international praise and a more positive profile in climate leadership. Such endorsement by external stakeholders in turn confers legitimacy—and thereby governance resilience—to the Gulf states from domestic audiences.

4. Intra-Gulf Differences in Renewable Energy Deployment

The foregoing section already indicated that Gulf monarchies are far from homogenous in their approach towards deploying renewable power; space constraints allow for little more than highlighting three differences. The first is a variation in the share of power generated by renewable energy. The UAE is far and away the current regional leader, with renewable energy a higher priority energy issue for its leadership than those in the kingdom [143]. Saudi Arabia is expected to be the regional leader by 2030 with an installed capacity of nearly 60,000 MW, or twice that of the UAE’s [144], due to the size of its economy and its pipeline of renewable energy projects. According to an estimate by the Arab Petroleum Investments Corporation [145], renewables will account for 22% of the value of all power projects in Saudi Arabia between 2021 and 2025, compared to Qatar’s (1%) and the UAE’s (8%).
The UAE’s relatively early and quick rollout of renewable energy was partially driven by energy insecurity when net imports of natural gas since 2008 obliged it to consider alternative and indigenous energy sources; Qatar and Saudi Arabia did not face this level of domestic energy constraints and therefore were less incentivized to move quickly. This, coupled with the UAE’s higher state capacity, a strategic intention to lead the energy transition (cf. the early start of the Masdar project) among its peers, and a supportive business environment facilitated the use of PPPs in quickly deploying renewable energy. Explaining Saudi Arabia’s belated push for renewable energy, Bahgat [146] observed that “Watching the race for nuclear and renewable energy, Saudi leaders do not want to fall behind other regional powers. Rather, they aspire to be at the forefront leading other countries in utilizing these important sources of energy”. The micro-competition between the Gulf’s two largest economic powerhouses should not obscure the sub-national variation in renewable energy uptake within the UAE. Differences in renewable energy targets and the acceptability of distributed solar in Dubai and Abu Dhabi are a function of hydrocarbon endowments, electricity prices [147], and a federal structure [148] that gives individual emirates control of—and freedom to experiment with—energy resources and policies.
The second difference relates to corporate actors in the renewable energy domain. Three of the Gulf states have created specific ‘national champions’ to upscale renewable energy domestically and abroad, namely Acwa (Saudi Arabia), Masdar (Abu Dhabi), and Nebras Power (Qatar). There are, however, subtle differences among them. In terms of scope of activities, Acwa and Masdar are primarily power developers and investors, while Nebras Power provides only financing; moreover, Masdar is the only one of the three with an exclusive focus on renewable energy projects. Although all three are currently backed by sovereign wealth funds, Acwa was set up by private investors in 2002, with the PIF becoming a shareholder only after 2013, whereas Masdar and Nebras have always been fully state-owned entities. In the case of Nebras, its creation in 2014 coincided with the intra-Gulf crisis over Qatar and was arguably an attempt to use clean energy diplomacy to emerge from the shadow of Saudi Arabia’s traditional regional influence [149]. The more assertive foreign policies of these three Gulf states [150,151] therefore seem to be echoed in their more pronounced pursuit of economic statecraft through these ‘national champions’.
Renewable energy ‘national champions’ are, however, absent in Kuwait despite the fact that it was an early adopter of solar power in the 1970s and 1980s. Oman and Bahrain, both of which do not have renewable energy ‘champions’, have instead relied on their respective national oil companies, Petroleum Development Oman and Tatweer Petroleum Company, to deploy their own on-site utility-scale solar plants.
The third difference is the significance of exogenous considerations as the source of domestic adoption of renewable energy. In the case of Saudi Arabia, internal factors were arguably more decisive than external, and particularly global, challenges [152]. To shape and shore up his internal powerbase, for example, the political and economic influence of oligarchic families was reshuffled and expanded to co-opt newer groups, including the Abunayyan and al-Muhaidib, who founded Acwa. Similarly, external pressures had a limited impact in Kuwait, where neopatrimonial networks greased by oil have largely resulted in a business-as-usual scenario; the country’s belated ratification of the Paris Agreements in 2018 (unlike Saudi Arabia, Bahrain, Qatar, and the UAE’s two years earlier) is a case in point. By comparison, exogenous and endogenous factors play an equally large role in the calculus of the UAE. Apart from domestic energy security considerations, the reputational, branding, and prestige gains [82,153] from domestic and foreign audiences thanks to the modernist spectacles typical of renewable energy projects in the Gulf—solar farms and towers, wind turbines—help maintain the ruling status quo.
For private companies in the UAE, global pressures also drive their uptake of renewable power. For example, as the exclusive franchisee for Carrefour in the Middle East, Dubai-based Majid Al Futtaim (MAF) is obliged to align with Carrefour’s net-zero ambitions. The large 6 MW rooftop solar plant developed and operated by Dubai’s Yellow Door for the Bahrain Mall, which is operated by MAF/Carrefour, is hence one way of achieving this. Likewise, solar installations at Nestle’s three manufacturing plants in Dubai are partly driven by the parent company’s net-zero pledge. The fact that the UAE leads its Gulf peers on measures of financial, trade, and economic interdependence [154,155] suggests the significance of global conditions for local deployment of renewable energy.

5. Conclusions and Discussion

The deployment of renewable energy in the Gulf is still in its early stages. Nevertheless, the article hypothesizes and finds that it is likely to support monarchial resilience through three specific pathways. First, renewable energy projects sustain and co-opt an ever-wider patron-client network of social, economic, and political actors through public-private partnerships and non-oil avenues of economic growth; at the same time, the largely utility-scale model of these projects reaffirms the centrality, largesse, and legitimacy of the Gulf state. Secondly, increasing the share of renewable energy in the domestic energy mix augments the contribution by hydrocarbons to export revenues; it also directly generates alternative, non-hydrocarbon revenue streams via green hydrogen and its by-products, as well as greening industrial processes such as those for steel and aluminum. Third, increasing the uptake of renewable energy and facilitating the transfer of renewable technologies to developing countries aligns the Gulf states with global norms associated with advancing a low-carbon energy transition that is also equitable; this reduces exogenous pressures for more political inclusivity, which in turn facilitates monarchial resilience. There is no indication of renewable energy’s ‘repression’ pathway in supporting governance in the Gulf.
The findings in our article have policy implications for the geopolitical power of Gulf monarchies that may serve as further avenues for scholarly research. Contrary to some claims [156,157,158], we find that countries in the Gulf are not destined to be ‘losers’ in a world that uses higher shares of renewable energy. Existing studies that differentiate the adaptability of national oil companies [6,159] can be meaningfully combined with measures of their renewable energy deployment and ambitions to produce a framework that redefines the future geopolitical power of at least some Gulf states. Our article also suggests that the impact of renewable energy on Jordan, a non-hydrocarbon semi-rentier monarchy in the Middle East boasting the third largest output of renewable power in the region, may offer a fruitful area for future research. In this connection, the efficacy of clean energy diplomacy by the UAE, Saudi Arabia, and Qatar, Gulf rivals who are significant developers and investors in renewable energy in Jordan, will enrich existing studies on intra-Gulf rivalry over influence in Jordan. The same may be said of renewable energy in Egypt, a country that has long been a theater of competition among these same Gulf states. Finally, decision-makers in the Gulf should find comfort in our findings that renewable energy as it is deployed in the region appears to have almost no significant downside risk to governance resilience. Consequently, scaling and speeding up renewable power is not just environmentally desirable but also politically feasible.

Funding

This research received no external funding.

Data Availability Statement

Not applicable.

Acknowledgments

The author wishes to acknowledge helpful suggestions by Sgouris Sgouridis, Aristotle University of Thessaloniki, as well as by two anonymous reviewers. Nevertheless, all perspectives in this article belong solely to the author.

Conflicts of Interest

The author reports no conflict of interest.

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Energies 16 03225 g001 550
Figure 1. Political stability and * absence of violence in the Middle East. Source: Worldwide Governance Indicators [2]. Note: the higher the percentile rank, the more stable.
Figure 1. Political stability and * absence of violence in the Middle East. Source: Worldwide Governance Indicators [2]. Note: the higher the percentile rank, the more stable.
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Energies 16 03225 g002 550
Figure 2. Protests and riots in the Middle East during COVID-19. Source: Armed Conflict Location and Event Data Project [3]. Note: No data was available for the UAE.
Figure 2. Protests and riots in the Middle East during COVID-19. Source: Armed Conflict Location and Event Data Project [3]. Note: No data was available for the UAE.
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Energies 16 03225 g003 550
Figure 3. Electricity prices in the Gulf and selected countries, March 2020 [112].
Figure 3. Electricity prices in the Gulf and selected countries, March 2020 [112].
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Table
Table 1. Renewable energy power generation targets in Gulf monarchies.
Table 1. Renewable energy power generation targets in Gulf monarchies.
CountryOverall Target
Bahrain a5% by 2025
10% by 2035
Kuwait15% by 2030
Oman10% by 2025
Qatar20% by 2030
Saudi Arabia a10% by 2025
50% by 2030
UAE a
Abu Dhabi
Dubai		44% by 2050 b
55% by 2025 b
75% by 2050 c
Note: a Targets for Bahrain, Saudi Arabia, and the UAE are likely to increase given the net zero announcements by these states. b includes nuclear energy. c includes ‘clean’ coal, although it was announced early in 2022 that the project would be converted to a gas-fired plant. Source: APICORP [94].
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