ABU DHABI, United Arab Emirates, Nov. 1 (UPI) -- Saudi Arabia and the United Arab Emirates, two of the world's leading oil producers, are spearheading a Middle Eastern drive to develop solar energy, with plans for projects requiring $1.5 billion in investment by the end of 2014.

The program, designed to free up for export increasing amounts of oil and gas being used domestically for power generation, got a major endorsement from the Arab Forum for Environment and Development Monday.


It urged Arab states to re-evaluate their relationship with oil, the economic mainstay of the Arab world since the 1950s, and phase out state energy subsidies to focus investment in developing renewable energy.

"Oil and gas are important, they will continue to be important," said Najib Saab, the forum's secretary-general. "We call for more careful use of oil and gas and for more serious development of renewable energy."

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Saudi Arabia, the world's top oil exporter with declared reserves of 267 billion barrels, and the neighboring Emirates, a federation of seven gulf sheikdoms with reserves of 98 billion barrels, seek to add 1,000 megawatts of solar capacity over the next few years to meet fast-growing industrial and social demand.

That's enough to provide electricity for 200,000 homes.

While the producers want to conserve more of their oil output for exports, particularly with prices above $100 a barrel, Arab countries that rely on imported fuel see carbon-free power as a cheaper alternative.

From Morocco on the Atlantic Ocean eastward to the gulf sultanate of Oman on the Indian Ocean, governments are turning to alternative energy, driven primarily by a lack of gas for power generation, the fall in the cost of renewable technologies and their constantly improving efficiency.

Funding for solar projects and other renewable is more available in the gulf region -- ironically, because of oil and gas production -- than in the poorer Arab states like Yemen and Morocco, so it's leading the way in developing alternative energy sources.

A major milestone was reached in March when Abu Dhabi, the oil-rich economic powerhouse of the United Arab Emirates, inaugurated the Masdar Shams 1 solar project using arrays of photovoltaic panels that convert the region's abundant sunlight to electricity.

With a planned capacity of 100MW, it's the biggest facility of its kind in the Middle East.

The desert facility, which covers the equivalent of nearly 300 football fields, can power 20,000 homes. It's operated by Masdar, the state-owned renewable energy company.

Other projects include a 100MW photovoltaic plant known as Nouri-1 and a 30MW wind farm. By 2020, Abu Dhabi, which holds almost all of the Emirates' oil reserves, plans to be able to generate 7 percent of its electrical power from renewable sources.

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Dubai, the Emirates' financial center, is expected shortly to inaugurate the first phase of the Mohammed Bin Rashid solar park, a photovoltaic plant that will be the largest of its kind in the Middle East.

The Emirates is rich in natural gas, but this is largely exported and, with market dynamics changing, "the days of reliable and inexpensive domestic natural gas are long gone," observed Vahid Fotuhi, president of the Emirates Solar Industry Association.

"Dubai imports 99 percent of its fuel requirements and even Abu Dhabi has started to build terminals to import natural gas for power generation ... .

"International prices for natural gas have skyrocketed. The current cost of importing natural gas is five times greater than what it was just 10 years ago," Fotuhi said. "Meanwhile the price of solar photovoltaic systems has dropped by more than 50 percent in the past five years. As a result, generating electricity from solar power is now cheaper than using diesel. Financially, solar power is now able to compete with fossil fuels."

Saudi Arabia is seeking $100 billion in solar investment to generate one-third of its power -- about 41,000MW -- by 2032 to meet rising demand from a rapidly growing population, a rising requirement for desalinated water and an economy that's being diversified away from oil.

The Saudis completed their biggest photovoltaic plant with a 3MW-5MW capacity in January.

The King Abdullah University for Science and Technology, a key mover for alternative energies, has the lead role in a consortium that will eventually produce 50 million gallons of drinking water a day through solar-powered desalination.