Introduction

The wide availability of renewable energy resources in the MENA region is at the core of several large scale European initiatives to generate clean energy from the southern Mediterranean countries and import part of it to Europe via a panregional ‘super grid’ of high-voltage-direct-current lines. These initiatives, such as DESERTEC, are based on the argument that, with large investments and technology transfer efforts, MENA countries could potentially produce enough energy from renewable sources to satisfy their fast increasing energy demand as well as that of Europe.

Recent studies suggest that there is significant local potential for expanding technological capabilities in solar and wind power in the MENA region, such as production capabilities (manufacturing along various stages of the value chain) (World Bank 2011, Vidican 2012, Fraunhofer ISE 2012). But, for these positive outcomes to materialize, strong commitment from the MENA countries is needed to achieve unprecedented energy market integration and to transform the national and regional energy system.

Yet, the development challenges faced by the MENA region in the aftermath of Arab Spring are enormous, primarily in terms of unemployment and social equality. In addition, most countries, governed by neopatrimonial regimes, have relied for decades on a social contract aimed at maintaining social stability through heavy state intervention and distribution of rents, at the expense of social equality and private sector competitiveness. Hence, the driving force for expanding the renewable energy sector in the MENA region is primarily the promise it holds for job creation and revitalization of the private sector at a time of major political transformations.

But, the process of acquiring and expanding technological capabilities does not happen in a vacuum. Rather it is highly influenced by the institutional structure and dynamics that shape the development process locally. Hence, this chapter aims at probing beyond technical challenges to reveal the underlying interests, incentives and institutions that enable or prevent change. We pay particular attention to the evolving dynamics between alliances of stakeholders that are for and those that are against the development of renewable energy sector.