Face to face: Frank Ackland, Eaton Middle East
Frank Ackland, general manager at Eaton Middle East, reveals the outlook for the power sector in the ME region
How has the year 2017 been so far for Eaton? What are some of your major projects?
We have had a positive start to the year, with Q2 earnings recently released and showing sales were $5.1bn, up 1% over the same period in 2016. The sales increase consisted of 2% growth in organic sales.
The [ME] region seeks solutions to help overcome challenges with growing power demand, as well as the need to take steps forward in putting sustainable solutions in place, which are core elements of Eaton’s business. So although market conditions have been more volatile in recent years, we still see investment in technology that supports more efficient and sustainable power for the future.
We work across the region’s core segments, including commercial construction, oil and gas, utilities and IT, and with some significant projects currently underway, such as Dubai Expo 2020 and the FIFA World Cup 2022, projects are ramping up quickly. Eaton’s product portfolio provides significant added value across infrastructure, safety and energy efficiency.
How do you see the market shaping up in 2017?
The first half of 2017 has been positive in the Middle East for Eaton, and our core segments as well as our power distribution channels have seen steady growth and activity this year. We see continued investments being made and new opportunities in a variety of segments throughout the region.
Although GDP growth has slowed in recent years, World Bank has predicted that this will pick up again in 2017. We work in a region where fast-paced change is inevitable, and can be seen through the bounce back after oil price slumps in 1991, 2003 and 2008. A report by IRENA states that during the 2000s, regional energy consumption grew at an average of 5% per annum, faster than India, China and Brazil; we work in a sector that continues to grow and requires the right technology to manage this demand in the right way.
What are the demand drivers for the power sector? What drives the industry?
The demand for power in the Middle East has been steadily increasing over the years, due to several reasons, most significantly population growth and urbanisation. As the demand is expected to continue rising in the coming years, the need to expand the region’s current generating capacity is growing at an even faster pace.
According to research by Altaaqa Global, a leading global provider of multi-megawatt temporary power solutions, the UAE’s gross domestic electricity consumption alone will reach 141TWh in 2020, up from 103TWh in 2014. Power consumption in the country has already more than doubled in the past 10 years.
The region’s largest country, Saudi Arabia, needs to invest at least $140bn by 2020 to generate capacity from 51.5GW to71GW. The demand in power has largely been attributed to the continuous industrial and construction industry, coupled with population growth.
To meet the demands, governments are looking towards developing cost-effective and efficient sources of electricity, sustainable opportunities to reduce overall energy consumption.
To this end, Eaton is well positioned to provide medium and low voltage solutions to the power sector to enable the Middle East countries to keep pace with the regions energy demands.
What are the challenges facing the power sector in this region?
The focus in the region is shifting towards sustainable, reliable and efficient energy. The population is growing at a rapid rate and this will bring additional demand for a reliable and efficient power supply.
To support this, we have seen a growing interest in energy storage, which helps to manage both grid stability, as renewable energy sources continue to be integrated into the grid, as well as peak demand, limiting the need to build dedicated peaking power plants and minimising CO2 emissions. The energy storage market is therefore entering a new growth phase and Navigant Research projects that more than 11GW of energy storage capacity will be installed annually by 2020 in 22 countries.