An economic study advises Yemen to expand solar energy investments

English - Thursday 01 June 2023 الساعة 03:08 pm
Aden, NewsYemen, exclusive:

A new economic study recommended Yemen to address the energy crisis and reduce its heavy financial burden on the state budget, by expanding its investments in generating electricity through solar energy, and with the help of donors and the private sector in providing capital, expertise and implementing projects.

The study "Expanding Solar Energy Investments in Yemen" confirmed that the lack of electricity services in Yemen is still a major obstacle to sustainable economic development, noting that solar energy provides the capabilities that will help Yemen in facing these challenges.

The study, issued by the Initiative to Reconceive the Economy of Yemen, considered electricity a prerequisite for getting out of the current humanitarian crisis and achieving economic growth in Yemen.

Given that Yemen has high levels of solar radiation and high average hours of daily sunshine throughout the year, solar energy is a suitable and cost-effective alternative to the current prevailing electricity supply that relies on fossil fuels.

The study said that the private sector can play a decisive role in expanding solar energy generation in Yemen, especially in the implementation of large projects and small networks.

The study cited that the lowest solar PV prices were achieved in the Kingdom of Saudi Arabia at 1.04 cents per kWh in 2021, and in the United Arab Emirates at 1.35 cents per kWh in 2020.

The study compared the prices of photovoltaic solar energy in neighboring countries, with an average price of more than 25 cents per kilowatt-hour that the government of Yemen currently pays for energy purchased from private sector producers. The price includes generator rental fees in addition to the cost of fuel.

According to the study, there are opportunities in Yemen for the possibility of implementing three categories of solar photovoltaic energy projects: large solar energy projects, small solar energy networks, and small and medium solar energy systems.

The study said that for international donors, especially major regional donors such as the GCC countries, they should consider allocating some funds to create innovative financing mechanisms to stimulate private sector investment in renewable energy. 

It indicated that since the Yemeni parliament is unlikely to pass legislation or enact any new laws in the near future, it should focus on setting policies and procurement procedures, and developing contract models for public-private partnerships. This is to regulate the relationship between the public sector and private investors.