Meeting the demand for power would require GCC countries to invest more in energy projects, leading energy experts have said.
To meet an estimated six to 10 per cent annual surge in demand for power, which is around eight gigawatts of additional capacity generation, GCC countries are projected to invest more than $300 billion in some 20 energy projects by 2020, it has been noted.
With governments in the six-nation GCC stepping up the drive to create new power production and distribution facilities to meet the growing demand, the region is set to witness the launch of a host of mega power projects over the next few years.
Energy industry analysts estimate that from the current peak power demand of around 85 gigawatts, consumption in the fast growing GCC region would grow by seven to eight gigawatts annually over the next 15 to 20 years.
Mega power projects
According to Prof Waheeb Essa Alnaser, President of the Arab Section of the International Solar Energy Society, the GCC governments have between 14 and 20 mega power projects at various stages of development to meet this demand hike.
The UAE, according to the Arab Petroleum Investment Corporation, or Apicorp, will invest around $74 billion during 2011-15. Besides this, the UAE Economy Ministry has estimated that investment opportunities in the market for alternative and sustainable energy projects for the private sector would be around $100 billion until 2020.
Qatar, which is set to spend $125 billion in new energy projects, will also the main driver of this ambitious power generation drive in the GCC, according to Epoc Messe Frankfurt, organisers of Light Middle East 2011.
Meed estimates that the region requires $130 billion for boosting power generation, transmission and distribution networks over the next few years.
The demand for new power capacity remained high across the GCC with both Qatar and Abu Dhabi each having to contend with a rate of 11 per cent followed by Saudi Arabia at 10 per cent, according to Angus Hindley, Research Director at MEED and author of MEED Insight?s GCC Power and Desalination report series.
Frost & Sullivan, a leading industry consultant, estimates that the power generation in the region is set to radically change with demand is expected to nearly double in this decade. ?With planned regional investments of more than $100 billion [led by Saudi Arabia, the UAE, Egypt and Iraq] in power generation, and more than $60 billion towards power transmission and distribution in the next 10 years, the region?s power sector is on the verge of change,? it said in a recent report.
The pan-Arab investment in energy is estimated to surge to $530 billion from $470 billion between 2011 and 2015 in the wake of a robust recovery in global oil demand, Arab Petroleum Investment Corporation, or Apicorp, said.
Saudi-based Apicorp, an affiliate of the 10-nation Organisation of Arab Petroleum Exporting Countries, in its annual review of future energy investments by member countries, said Saudi would allocate nearly $130 billion to new energy investment during 2011-2015 to retain its role as the sector?s leader in the region.
Paradigm shift – Alternative fuel initiative
Besides the installation of additional power plants to meet increasing demand, there are also plans to invest in renewable energy projects for power generation.
A paradigm shift to alternative fuels to power the country?s growing demand for power and water is also the strategic focus of every GCC nation with the leader Saudi Arabia marching ahead with plans to invest US $133 million for renewable energy projects in its 2011 budget, as electricity demand rises at a rate of 8% a year. It is expected to triple to 121,000 megawatts by 2032.
Despite being home to a quarter of the world?s oil reserves, the kingdom will require eight million barrels of oil a day by 2028 just to meet its own domestic energy needs. KSA announced plans last year to build a renewable energy city, which has since encouraged green?inclined businessmen to visit the country. The Kingdom o fSaudi Arabia aspires to lead the world in Solar power generation of 20 GW (Giga watts) over the next 20 years.
The second largest GCC hydrocarbon market, UAE too has laid its development path along the alternative fuel initiative through various projects such as US$ 600 million Solar project by Shams Power Company, considered to remain the largest ?concentrated solar power project in the world.
According to project partners Masdar, Shams 1 will be one of the largest concentrated solar power plants in the world with a capacity of 100MW and a solar field consisting of 768 parabolic trough collectors.
Meanwhile, the country?s commercial capital Dubai aims to generate 70 percent of its power from natural gas and the rest from coal, nuclear energy and renewable sources. By 2030, 12 percent of Dubai?s power will come from nuclear, either through importing from neighboring countries or by building their own plant, and another 12 percent from clean coal.
The fastest growing Qatari economy has also reinforced its commitment to the alternative energy sources for hosting the most coveted FIFA world cup through its plans to provide Photovoltaic Solar energy systems to power the stadiums.
Following the suit, the Sultanate of Oman is also committing major investment in solar PV projects from South Asian multi?modality renewable energy company Astonfield.
This balancing act of investment in power plants and additional power generation through renewable energy sources will see a surge in GCC countries’ ability to meet the demand for power.
Sources: khaleejtimes, adipec