Gulf requires $100 billion investment for power sector over the next five years

• 5 years ago (2018-11-06)
• David Flin

Middle East 310 Transmission 181

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The MENA Power Industry Outlook 2019, a report prepared by Ventures Onsite, says that the GCC region is expected to require power infrastructure investment totalling $109 billion over the next five years. This is due to a rapidly growing population, urbanisation, rising income levels, and industrialisation.

According to the report, the GCC alone will require $55 billion for an additional 43 GW of generating capacity, and $34 billion for transmission, with much of the funding for development coming from both the public and private sector. The report says: “Investments in the GCC’s power sector will continue to remain a priority, with the private sector increasingly playing a significant role.” The report points to a range of opportunities for public-private partnerships in the region’s power sector.

“The GCC region appears best suited for PPP opportunities considering the sustained lowered hydrocarbon prices. While a few countries are more advanced than others in the legislative process, supported by authorised institutions, the others seem to be focusing on exploring this project delivery model.”

The report also said that much of the investment will be focused on diversification and conservation of electricity, with a renewed emphasis on solar, renewables, and smart grids. The report said: “The GCC smart grid market, which is gaining prominence, is projected to grow to $1.68 billion by 2026 due to the deployment of smart grid infrastructure by GCC governments. Energy storage systems are also becoming attractive in the GCC, as it forms a crucial component in the development of smarter grids. The GCC countries’ grid interconnectivity is expected to generate $33 billion in investments, economic and energy savings over the next five years.”