In a region where there is an abundance of sun, it seems common sense that solar energy would be the best solution to meet the region’s energy needs. Khalid Burashid, deputy CEO of planning and projects at the Electricity and Water Authority in Bahrain, said Kuwait has the highest rate of radiation in the region with 8000 watts per square metre, followed by Qatar which has 5900 watts per square metre, the equivalent of 9.3 sunshine hours a day.

Mr Burashid was less enthusiastic about the opportunities for wind energy, however, describing the wind zone in the region as “inactive” compared with the rest of the world.

In Saudi Arabia, for example, the wind speed is only 4.5 metres per second, at most. This means wind alone is unlikely to contribute significantly to electricity generation, he said, but suggested a hybrid solar/wind scheme as an option.

It is up to policy-makers to ensure that the right incentives are in place to encourage private sector investment, according to speakers at the event. To date, most renewable energy projects in the region are government-backed.

The main reason private sector investment in renewable energy solutions is lacking is because current tariff structures make renewable energy uncompetitive, said speakers. Water and electricity prices in the region are not cost-reflective and do not put renewables on the same business footing as conventional energy. Cost-reflective tariffs for water and gas and feed-in tariffs for renewable energy solutions, common in North America, Europe and Asia, would encourage the implementation of large-scale renewable solutions. By introducing these types of pricing policies, small and large suppliers would be encouraged to enter the renewable energy market and offer electricity to utilities.

Lucia Dore is the Gulf correspondent at mergermarket, part of The Financial Times Group.

E-mail: lucia.dore@mergermarket.com