Report: GCC needs $131bn in power investment over next five years
The GCC will require a combined $131bn worth of investment in electricity generation, transmission and distribution over the next five years, according a report.
The GCC will require a combined $131bn worth of investment in electricity generation, transmission and distribution over the next five years to cope with increasing demand from population growth, climatic changes, and expanding economies.
According to the GCC Power Market by Middle East Electricity (MEE), despite the GCC’s current power-generating capacity of 157 Gigawatts (GW), its six states will still require $81bn investment for another 62 GW of increased capacity and $50bn for additional transmission and distribution.
GCC power-generating capacity currently equates to about 43% of all Middle East and North Africa capacity.
Saudi Arabia accounts for the largest spend needs with $36bn required for generation and $23bn for transmission and distribution, followed by the UAE at $22bn investment needed for generation and $13bn for transmission and distribution.
Kuwait requires the third largest investment with $8.4bn needed for generation and $5.2bn for transmission and distribution, followed by Oman at $6.8bn and $4.2bn respectively. Bahrain will need the least investment at $1.9bn and $1.1bn.
The report, produced for the Middle East Electricity exhibition by Ventures Onsite, says much of the investment is likely to come from public-private partnerships (PPP) if a regulatory framework is introduced to incentivise independent power producers (IPP).
The report also outlines that reliance on IPPs is expected to grow, but warns: “According to industry experts, there also arises the need for the power sector to establish a regulatory framework to push for the private sector’s participation.
“GCC governments need to ensure that IPPs play a larger role in power generation and not be looked upon as a short-term fix to increasing demand,” it adds.
The trend towards change within the regional power sector has delivered a significant boost to MEE with the 2018 event, running at the Dubai World Trade Centre from 6-8 March.
Ryan O’Donnell, programme director for GSES, said: “There will be keen debate on energy models needed to fuel economic growth, including policy reform needed to accelerate the global transition to smart energy.
“This includes a review of successful policy rethinks from around the world. It will be a track that could well set a course for the region’s power industry future.”
Middle East Electricity (MEE) is expected to attract more than 1,000 exhibitors from 66 countries and 24 country pavilions so far, all demonstrating technology, systems and processes aimed at making the sector more efficient, productive, cost-effective and sustainable.