4 THE RISE OF RENEWABLES IN THE GULF STATES …
115
and the earlier proliferation of solar PV in neighboring Jordan, support
this. This chapter has argued that this ‘rentier effect’ played out on
two levels. At the utility scale, states in the region were able to put
off large-scale renewable energy development before 2015 because the
period between 2011 and 2015 (when states could have reasonably begun
widespread adoption) was marked by high oil prices and relative fiscal
abundance. This allowed states to ignore the opportunity costs associated
with not exporting hydrocarbon resources at international prices, using
them instead for domestic power production. This dynamic came to an
end as oil prices declined at the end of 2014, forcing budget rationalization. The second level was at the distributed scale, where distributive
expectations placed on the state by domestic constituencies prevented or
slowed the removal of energy subsidies. This delayed the point at which
solar PV in particular was able to compete against electricity from the grid
in a number of segments and markets.
In the period following 2015, however, states in the region, led by the
UAE, have begun embarking on plans to develop large-scale renewable
energy, with some states setting targets that, if met, would make them
global leaders in this space over the coming decade. This chapter assessed
the credibility of these targets among the states in the region, arguing that
the political economies and regulatory capacities of these states had not
been ready in years past to engage in a serious attempt at the energy transition. Looking more closely at the case of Saudi Arabia, however, which
has mirrored earlier developments in the UAE, it appears now that the
political economy landscape is undergoing structural change; important
constituencies of the state, often elements of the state itself, now stand to
benefit from the renewable energy agenda, and are helping to shape and
ensure the implementation of these plans. The late rentier state, characterized by the state capitalist model deployed in the UAE and Saudi Arabia,
has now coopted the renewable energy agenda, setting the stage for a new
and accelerated phase in the energy transition of the region.
Notes
1. Mills, Robin. “How Countries Can Learn from Jordan’s Renewable
Energy Pivot.” The National, June 9, 2019. https://www.thenational.
ae/business/energy/how-countries-can-learn-from-jordan-s-renewableenergy-pivot-1.872412.
115
and the earlier proliferation of solar PV in neighboring Jordan, support
this. This chapter has argued that this ‘rentier effect’ played out on
two levels. At the utility scale, states in the region were able to put
off large-scale renewable energy development before 2015 because the
period between 2011 and 2015 (when states could have reasonably begun
widespread adoption) was marked by high oil prices and relative fiscal
abundance. This allowed states to ignore the opportunity costs associated
with not exporting hydrocarbon resources at international prices, using
them instead for domestic power production. This dynamic came to an
end as oil prices declined at the end of 2014, forcing budget rationalization. The second level was at the distributed scale, where distributive
expectations placed on the state by domestic constituencies prevented or
slowed the removal of energy subsidies. This delayed the point at which
solar PV in particular was able to compete against electricity from the grid
in a number of segments and markets.
In the period following 2015, however, states in the region, led by the
UAE, have begun embarking on plans to develop large-scale renewable
energy, with some states setting targets that, if met, would make them
global leaders in this space over the coming decade. This chapter assessed
the credibility of these targets among the states in the region, arguing that
the political economies and regulatory capacities of these states had not
been ready in years past to engage in a serious attempt at the energy transition. Looking more closely at the case of Saudi Arabia, however, which
has mirrored earlier developments in the UAE, it appears now that the
political economy landscape is undergoing structural change; important
constituencies of the state, often elements of the state itself, now stand to
benefit from the renewable energy agenda, and are helping to shape and
ensure the implementation of these plans. The late rentier state, characterized by the state capitalist model deployed in the UAE and Saudi Arabia,
has now coopted the renewable energy agenda, setting the stage for a new
and accelerated phase in the energy transition of the region.
Notes
1. Mills, Robin. “How Countries Can Learn from Jordan’s Renewable
Energy Pivot.” The National, June 9, 2019. https://www.thenational.
ae/business/energy/how-countries-can-learn-from-jordan-s-renewableenergy-pivot-1.872412.