Emissions reduction and economic implications of renewable energy market penetration of power generation for residential consumption in the MENA region M. El Fadel n , G. Rachid, R. El-Samra, G. Bou Boutros, J. Hashisho Faculty of Engineering and Architecture, American University of Beirut, Bliss str., PO Box 11-0236 Beirut, Lebanon HIGHLIGHTS c Heterogeneity in GHG emissions in MENA region with Turkey contributing the most. c Average regional GHG tCO 2 e/capita of 0.42 decreases to 0.17 with RE penetration. c GHG emissions regional reduction reaches 8–36% depending on RE target penetration. c Return on investment in RE promises up to 54% savings excluding positive externalities. c Carbon credits offer economic incentives rendering RE investment more attractive. article info Article history: Received 21 March 2012 Accepted 4 October 2012 Available online 31 October 2012 Keywords: Renewable energy Power sector GHG emissions abstract This paper examines the implications of renewable energy (RE) deployment in power generation for residential consumption in the Middle East and North Africa (MENA) region under various RE penetration targets. A comparative assessment revealed a great heterogeneity among countries with Turkey dominating as the highest emitter. At the sub-regional level, the Middle East sub-region contributes more than double the GHG emissions estimated for the Gulf and North Africa sub-regions with all sub-regions achieving reductions in the range of 6–38% depending on the RE target penetration and promising up to 54% savings on investment excluding positive externalities associated with the offset of greenhouse gas (GHG) emissions savings. & 2012 Elsevier Ltd. All rights reserved. 1. Introduction Historically, the use of fossil fuels has dominated the energy supply to meet the continuously increasing energy demand for economic and human development worldwide. Provision of energy services including power generation, however, has greatly contrib- uted to the increase in anthropogenic greenhouse gas (GHG) emissions and concentrations in the atmosphere, resulting in global warming and climate change (IPCC, 2007). World statistics show that in four years (2004–2008), while the world population increased by 5%, the gross energy production and annual CO 2 emissions increased by 10%, reaching 12 billion tons of oil equiva- lent of total primary world energy supply and 29.4 billion tons of CO 2 emissions in 2008 (IEA, 2010). By the end of 2010, ambient CO 2 concentrations have reached  390 ppm (39% above pre-industrial levels) and continue to rise (IPCC, 2011; NOAA, 2010). With lower carbon intensity in emissions per energy output, renewable energy (RE) sources are promoted worldwide as measures to mitigate climate change (IPCC, 2011). Beyond emissions’ reductions, invest- ment in RE is highly driven by efforts for social and economic development due to associated benefits including environmental protection, diversification, and economic gains. It is estimated that various RE sources accounts for 14% of worldwide total primary energy supply, with a potential to reach  50% of the global energy demand by 2050 (Bilen et al., 2008). Research on the development, application and implications of RE systems is continuously growing (Lin et al., 2010; Akella et al., 2009; Manish et al., 2006; Tsioliaridou et al., 2006). A plethora of studies have also investigated the benefits of RE use on energy production and GHG emissions reduction, mainly, through simu- lating scenarios of RE penetration (Foyn et al., 2011; Blumsack and Xu, 2011; Chiu and Chang, 2009; Tsoutsos et al., 2008; Cai et al., 2007; Chedid et al., 2001). Common tools and models of energy input and output analysis used for RE penetration simula- tions include Energy PLAN and LEAP (Connolly et al., 2010; Lund and Mathiesen, 2009; Giatrakos et al., 2009). Simulation studies Contents lists available at SciVerse ScienceDirect journal homepage: www.elsevier.com/locate/enpol Energy Policy 0301-4215/$ - see front matter & 2012 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.enpol.2012.10.015 n Corresponding author. Fax: þ961 1 744 462. E-mail address: mfadel@aub.edu.lb (M. El Fadel). Energy Policy 52 (2013) 618–627