GCC POWER

MARKET
PREPARED BY VENTURES ONSITE FOR

MIDDLE EAST ELECTRICITY 2018

www.venturesonsite.com NOVEMBER 2017

OVERVIEW OF THE GCC
POWER MARKET
OVERVIEW OF THE GCC POWER MARKET
Factors such as population growth, an expanding economy, and climatic changes are increasing
power demand in the GCC countries. According to APICORP, the GCC represents 43%, or 157
Gigawatts (GW), of current MENA power-generating capacity.

Despite this large capacity, APICORP predicts the GCC will require US$ 81 Bn. for the addition of
62 GW of generating capacity and another US$ 50 Bn. for transmission and distribution (T&D)
over the next five years (refer Figure 1). Few GCC countries have also recently increased electricity
prices and introduced power sector reforms, which will in turn help balance demand rises.

Required GCC investment from 2017-2021 in US$ Bn.

Figure 1. Note: T&D-Transmission and Distribution. Source: APICORP Research

Power sector investments are expected to remain unaffected and given importance
although GCC governments have registered budget deficits and tightened expenditures
due to fluctuating oil prices. Over the last two decades, the private public partnership
(PPP) model has become the most attractive financing mechanism for the GCC power
market. The model also helps reduce strain on government finances in delivering complex
engineering solutions and benefits from the most advanced technology solutions private
power companies have to offer.

According to industry experts, there also arises the need for the power sector to establish a
regulatory framework to push for private sector’s participation. The GCC countries’ reliance
on Independent Power Producers (IPPs) is set to witness a growing trend. APICORP
predicts that the GCC governments need to ensure that IPPs play a larger role power
generation and not be looked upon as a short-term fix to the increasing demand. Oman
was the first country to implement IPP and state utilities such as DEWA and ADWEA
although allow for IPPs but participate as major equity shareholders.
 

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 OUTLOOK OF THE GCC POWER CONSTRUCTION
CONTRACTOR AWARDS

The total GCC power construction contractor awards are expected to increase from US$ 13,895 Mn in
2017 to US$ 23,591 Mn in 2018 (refer Figure 2). KSA is forecast to register the highest power
construction contractor awards in 2018 followed by the UAE and Kuwait.
As of 27th October 2017, the total GCC power project value is anticipated to be worth US$ 318,141 Mn.
KSA’s share of project value (59%) is expected to be the highest among GCC countries followed by the
UAE (21%) (refer Figure 2).

GCC power construction contractor awards from 2016 to 2018 (US$ Mn)

Note: Project value is as of 27th October 2017. Source: www.venturesonsite.com

Share of GCC power construction project value as of 27th October 2017 (%)

Note: Project value is as of 27th October 2017. Source: www.venturesonsite.com

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SNAPSHOT OF GCC RENEWABLE ENERGY MARKET

GCC countries have realised that they can no longer be dependent on oil resources
alone for economic prosperity over the long term and hence have moved towards
economic diversification. Hence, GCC countries are shifting towards renewable
resources for energy generation to preserve their oil wealth. Currently, renewables
form the fastest growing energy source for electricity generation.

GCC countries are investing heavily on renewable energy to achieve significant

targets by 2030-2040. According to Masdar Institute experts, GCC countries are
expected to procure power from renewable sources by 2050 to address climate
change. In the GCC alone, which accounts for 47% of MENA generating capacity,
US$ 316 Bn. worth of renewables investments are needed by 2020, according to
Informa Energy Group. The GCC government has prioritised renewable energy
targets and plans into their policies and frameworks. There has been a strong focus
on solar power as the region’s climate is best suited for its deployment. According
to Frost & Sullivan, the GCC region’s installed solar capacity is forecast to reach 76
GW by 2020. 

The UAE is considered among the world’s leading countries to develop efficient
renewable energy solutions. The Emirate has announced a power strategy to
achieve 50% clean energy by 2050. Solar power is given high importance in its plans
and is expected to account for 25% of the generation mix once the US$ 13.7 Bn. (5
GW) solar park is fully commissioned in 2030. The UAE is the first Gulf country to
start on the new energy strategy, which involves the nuclear power and solar energy
in addition to natural gas, which covers the majority of the UAE's needs. The UAE
provides lucrative opportunities for launching solar energy generation projects.

The Mohammed bin Rashid Al Maktoum Solar Park will generate 1,000 MW by
2020 and 5,000 MW by 2030. The Emirates National Oil Company (Enoc) is likely to
power all of its future stations with solar power worth between US$ 20 Mn and US$
30 Mn, and plans to open 48 new stations from 2017 to 2020.

According to BMI Research, forecasts solar capacity to expand by an annual average

of 55% between 2017 and 2026 wherein the segment would account for 7.9 % of
total power generating capacity in the UAE in 2026. The UAE is expected to retain
its leadership position in the solar market in 2017.  Dewa has signed an agreement
with the Ministry of Climate Change and Environment for the installation of solar
carports (a total capacity of 220 kW/h) at the ministry’s building in Dubai. This
agreement is in line with the UAE Vision 2021 to create a sustainable environment in
terms of air quality, decreasing carbon footprint, and increasing reliance on clean
energy.

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SNAPSHOT OF GCC RENEWABLE ENERGY MARKET

The National Renewable Energy Program of KSA aims to substantially increase the
share of renewable energy in the total energy mix, targeting the generation of 3.45 GW
of renewable energy by 2020 under the National Transformation Program (NTP), and
9.5 GW by 2023, towards Vision 2030. Saudi companies are focusing towards solar
electricity to protect the risk of rising power prices when energy subsidies are cut,
according to one of the kingdom’s biggest plant developers. KSA gets less than 1% of
its power from renewables and plans to develop 30 solar and wind projects over the
next 10 years as part of its US$ 50 Bn. programme to boost power generation and cut
its oil consumption.

The Saudi Electricity and Co-Generation Regulatory Authority has announced plans to
launch an initiative to encourage setting up small-scale solar energy systems.
According to this initiative, solar power companies will be able to sell off surplus energy
generated to the national grid, or to be reduced from their energy bills. KSA is likely to
invest US$ 500 Bn. from its Public Investment Fund on a fully automated city called
“Neom” spanning an area of 26,500 square kilometres, stretching across the borders of
northwest KSA into Jordan and Egypt. The city will be the world’s largest city to be
entirely powered by renewable energy and is part of the kingdom’s Vision 2030. Neom
will be powered entirely by green energy sources and one of the city’s core pillars,
mobility will cover the construction of a 100% green transportation system powered
solely with wind power and solar energy. Crown Prince Mohammed bin Salman has
announced that the main city is expected to be ready by 2025. The prince also
announced that the Neom city project will provide benefits to other GCC countries.

Qatar has set a goal to produce 20% of its electricity from solar energy by 2030,
according to industry experts. The renewables sector is in the nascent development
stage. However, Qatar has solar power potential and has set robust renewable energy
targets, giving opportunities for projects in H2 2017 and 2018. In January 2017, Abu
Dhabi’s Masdar signed a cooperation agreement with Qatar Electricity & Water
Company (QEWC) and Nebras Power to develop renewable projects. The agreement
aims to strengthen cooperation among Masdar, QEWC and Nebras in the
development of commercially viable renewable energy projects in the UAE and
Qatar. The agreement is likely to contribute to the evolution of QEWC as its objective
is to become a leader in power generation and set a solar power target of 1.8 GW by
2020. 

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SNAPSHOT OF GCC RENEWABLE ENERGY MARKET

Oman also plans to integrate renewables in the power mix, with the 50 MW Harweel
wind farm, which is likely to be commissioned in 2017. The Sultanate is also expected
to tender 200 MW of solar PV in 2017. OPWP has recently signed up a consortium of
international consultants for a large-scale solar project, which will be developed on a
Build-Own-Operate (BOO) model. The model forms a part of all privately developed
power projects currently in operation in Oman.

Bahrain has appointed CESI to help develop its solar power policies. In July 2017, CESI
was hired to support Bahrain’s sustainable energy unit (SEU) to develop the regulatory
requirements related to connecting distributed renewable energy resources. The SEU’s
key objectives are to create an efficient and sustainable energy policy, encourage the
use of renewables, and raise awareness towards energy conservation. Bahrain has
increasingly recognised the growing importance of renewable energy as demand
increases, with solar photovoltaic (PV) systems a particular interest area. In October
2016, the Bahrain Government endorsed Bahrain’s National Plan for Energy Efficiency,
which seeks a 6% national electrical energy efficiency by 2025. It also calls for a 5%
contribution from renewable energies by 2025, rising further to 10% by 2035.

Although renewables market in Kuwait is still in its nascent stages, it is currently a high
focus area of interest on the government’s development agenda. According to KUNA,
Kuwait’s Ministry of Electricity and Water is planning renewable energy projects with
the help of the private sector. This is in line with its Vision 2030 plan to transform
Kuwait as an alternate power dependent country, which aims to generate 15% total
consumption of energy from renewables by 2035 that is over 4.5 GW capacity.
According to the Undersecretary of the Ministry of Electricity and Water Engineer
Mohammad Bushehri, the total power generating capacity of Kuwait amounts to
16,700 MW, with the electrical load in summer consuming 13,800 MW, which led to
looking out for alternative energy options. Although the government and the oil
sector form the largest investors in renewables, there has been rising interest in private
sector’s involvement from developers and operators as well. According to Oxford
Business Group, another factor that may expedite renewable energy projects
development is the liberalisation of PPP governing rules. 

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SNAPSHOT OF GCC RENEWABLE ENERGY MARKET

Major GCC renewable energy projects.

Source: www.venturesonsite.com

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OVERVIEW OF THE GCC SMART GRID MARKET & SMART
METERS
The GCC smart grid market, which is gaining prominence, is projected to grow to US$ 1.68
Bn. by 2026 due to the deployment of smart grid infrastructure by GCC governments,
according to TechSci Research. Factors such as rising electricity demand, and major events
such as the FIFA World Cup 2022 and Dubai Expo 2020 are expected to present
opportunities for the smart grid technologies market in the future. Smart grid technologies
help in the integration of renewable energy to the grid. According to a report by Northeast
Group, the UAE is the fourth largest market for smart grids and showcases potential for
advanced metering infrastructure (AMI) and automatic metre reading activity (AMR) in the
MENA region. The UAE’s vision to deploy smart grid and metre solutions is expected to
increase the renewables contribution, which is in line with the emirate’s Energy Plan 2050,
according to Networked Energy Services Corporation (NES). Siemens AG., ABB Ltd.,
Schneider Electric SE, General Electric Co., CISCO Systems Inc., IBM Corporation, Oracle
Corporation, Accenture PLC, Landis+Gyr, DTS Solution, etc are some of the leading players in
GCC smart grid market.

Smart city projects in the GCC region are likely to provide the necessary incentives to the
growth of the smart grid market. Dubai Electricity and Water Authority (DEWA) is a pioneer
in innovations in smart grids. The authority invests heavily is influencing developments such
as Shams Dubai, which connects solar power in homes and buildings to Dewa’s grid.
In the UAE, the Sharjah Electricity and Water Authority (SEWA) has replaced around 18,000
analogue meters with smart meters. The new meters were installed in SEWA’s service
territories including in Muwaileh and Shuwaihean cities. SEWA is targeting to install smart
meters in all of its residential, commercial and industrial customers by 2020. The project is
in line with SEWA’s efforts to utilise smart grid technologies and contribute towards
ensuring global energy efficiency level reaches 50% by 2020.

The trend in energy storage systems is catching up fast in the GCC as it forms a crucial
component in the development of smarter grids. New technologies are helping
deployment of renewable generation, which helps people have control over their energy
supply and consumption, according to Frank Ackland, managing director, Eaton Middle
East. Battery-based energy operating systems help in expediting response balancing
services to the electric grid.

According to Dun & Bradstreet, GCC countries’ grid inter-connectivity is expected to

generate US$ 33 Bn. in investments, economic and energy savings over the next 25 years.
The GCC Interconnection Authority (GCCIA) reported that the grid interconnection
contributed over US$ 1 Bn. in savings over the past three years. Currently, the GCCIA is
working on the development of GCC region’s power market.

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ANALYSIS OF THE POWER
MARKET BY EACH GCC
COUNTRY
UNITED ARAB
EMIRATES
According to APICORP, the UAE needs to invest US$ 35 Bn. to meet the 17 GW capacity
addition needed over the medium term. The UAE is expected to highly diversify its energy
sources in the power mix; APICORP estimates that 10.4 GW of capacity additions are
already in execution. The majority of power is generated using natural gas, but Abu
Dhabi’s Barakah nuclear power plant will see four reactors come on line between 2017 and
2020. The UAE plans to open the US$ 20 Bn. Barakah plant in Abu Dhabi in 2018, which is
being constructed by a consortium led by Korea Electric Power Corp. 84% of the
construction is already completed at all the four units of the plant.

According to Emirates Nuclear Energy Corporation (ENEC), the work at Unit 1 is more than
96% cent over, while Unit 2 has witnessed over 87% of the job completed, Unit 3 with
more than 78%, and Unit 4 now 58 per cent complete. By 2020, the UAE Peaceful Nuclear
Energy Program will be come into force, with four nuclear reactors providing nearly 25% of
the UAE's electricity needs, according to Enec. Dubai consumes over 37,000 GW hours of
electricity per annum by the commercial and residential sectors. By 2030, UAE’s installed
power generation capacity is expected to reach 60 GW, comprising of 44 GW from CCPPs,
and the remaining 20 GW from simple cycle power plants, renewables, nuclear and others
(APICORP estimates). Sharjah Electricity and Water Authority (SEWA) intends to construct
three 132 kv and five 33 kv distribution stations in 2017 to meet rising electricity demand.

The UAE leads among the GCC countries in building of smart cities. It launched the Energy
Plan 2050 to increase the contribution of clean energy and cut dependence on natural gas
to generate power in line with UAE Vision 2021. In March 2017, the UAE’s Ministry of Energy
signed a contract with Pricewaterhouse Coopers (PwC) to conduct a technical and
economic study of its electricity sector. The deal is in line with the UAE’s clean energy
strategy. This includes plans to invest US$ 163.3 Bn. to meet demand and aims to generate
efficiency savings of around US$ 190 Bn.

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 UNITED ARAB
EMIRATES

Dubai Electricity and Water Authority (DEWA) is working towards achieving the Dubai Clean
Energy Strategy 2050 by extracting 25% from solar energy, 7% from nuclear power, 7% from
clean coal, and 61% from gas by 2030. Clean energy sources is expected to increase to 75%
by 2050, making Dubai the least carbon footprint city in the world. To achieve this vision,
Dewa has launched a number of exciting projects. Dewa in order to increase its total
production capacity, which is currently 10,000 MW of electricity per day, has initiated plans
to build the GCC’s biggest hydroelectric power station near the Al Hattawi Dam as part of
the UAE Vision 2021. The project will be produce 250 MW of power, which will last for
decades. Dewa is also working to expand the M-Station, which will add an additional 700
MW to the installed generating capacity of the station, thereby increasing its capacity to
2,760 MW when the project is completed in 2018. Emirates National Oil Company (Enoc) is
also partnering with DEWA to reduce carbon footprint.

Dewa has installed photovoltaic systems with a combined capacity of around 18.7MW on the
roofs of residential, commercial, and industrial buildings in Dubai. Dewa has implemented a
total of 453 photovoltaic installations in line with its Shams Dubai initiative. The initiative is
anticipated to result in large number of installations, gradually covering all Dubai buildings
by 2030.

Dewa is in talks with French civil engineering firm Colas Group for the installation of solar
roads, which would produce clean energy through patches of PV (photovoltaic) cells
embedded in the road’s surface. The panels are expected to help power the fleets of
autonomous vehicles, which will make up 25% of the total transportation Dubai by 2030.
In May 2017, Dewa changed all its independently-operating power stations into a network of
smart grid-enabled power plants. The project includes the development of information
systems at each station to transmit joint performance data and development of the one-way
data diode (ODD) to protect each station from cyber-attacks. 

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 UNITED ARAB
EMIRATES

Dewa’s smart power plants system allows for the monitoring of equipment at each station
and compares it with other stations, which expedites solutions for problems. Honeywell is to
supply 150,000 additional smart meters to Dewa and has already supplied 250,000 smart
meters. The new batch will help Dewa manage electricity more efficiently across housing
areas. By 2020, Dewa intends to have a Mn smart meters installed, replacing all mechanical
and electromechanical meters in the UAE.

The value of the new deal has not been revealed. As per the Dubai Plan 2021, smart meters
forms part of Dewa’s smart grid initiative aimed at turning Dubai into a smart sustainable
city. Smart meters is expected to support Dewa’s demand-side management, which aims to
lower water and energy consumption by 30% by 2030 by educating the public to use less
energy and high-load times.
The power construction contractor awards in the UAE are estimated to decrease from US$
5,783 Mn in 2017 to US$ 5,530 Mn in 2018.

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 SAUDI ARABIA

KSA is the fastest-growing energy consumer in the MENA region, resulting in the power
sector to register phenomenal growth. Currently, KSA relies on liquid petroleum for
approximately 60% of its electricity generation due to heavily subsidised domestic oil prices.
Consequently, increases in electricity demand each year are cutting directly into the
kingdom’s oil export volume and earnings, according to industry experts. To reduce
consumption of oil in the generation of power, KSA is eager to upgrade its entire power
sector. The kingdom’s peak electricity is forecast to increase from the installed capacity rates
of around 70,000 MW in Q1 2016 to 90,000 MW in 2022 (nearly 30% increase), according to
industry experts’ estimation.

The National Transformation Program highlights the following initiatives to be carried out in
the power sector over the next five years:

Expand fuel efficiency in power generation

Increase percentage of power plant electricity generation through strategic partners
from 27% to 100% by 2020
Increase power generation capacity of 3.45 GW from a baseline of zero; and 
Eliminate subsidies on electricity

The government had announced the second phase of reforms for liberalising electricity
prices by July 2017 for the residential sector and aims to do the same for the non-residential
sector in 2018. The new prices are expected to reflect the export value of feedstock fuels and
higher generation costs. KSA’s government plans to reform the power sector along with
lifting tariffs. The Saudi Electricity Company (SEC) announced that it would break up into
four power-generating companies, which is a first step towards market liberalisation that has
been pending. However, uncertainty still remains on the timing of these reforms, which were
first announced to take effect by 2016-end.

The plan is likely to be on allocating SEC’s power-generating assets to four companies, with
the probability of being offered to local and international investors. SEC heavily relies on
domestic and international financing to help with its expansion plans, the latest example
being a US$ 1.3 Bn. loan from local banks. By 2030, KSA is estimated to generate 70 % of its
electricity from natural gas and 30% from renewables and other sources.

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 SAUDI ARABIA

KSA is striving towards making the necessary capacity additions by 2021. According to
APICORP, in order to meet rising demand, the country will need to invest US$ 59 Bn.,
increasing capacity to 114 GW. Over 25 GW of capacity is already in the pipeline. KSA is
expected to invest US$ 133 Bn. in electricity projects over the coming decade. Major projects
include the 3.1GW Yanbu 3 plant and the 2.6 GW Shuqaiq plant.

KSA plans to privatise all electricity generation by 2020, which are likely to require huge
investments to increase efficiency, meet environmental standards, and replace old power
plants. Consequently, the government is expected to seek active participation from the
private sector through the construction and financing of public-private partnerships (PPP).
Currently, KSA is also currently conducting feasibility and design studies for its first two
commercial nuclear reactors.

KSA recently announced the launch of Phase 1 of US$ 1.2 Bn. Green Duba generating power
station. The project will have an output capacity of over 605 MW, including 50 MW in
renewable energy, which has the capacity to generate power needed to supply
approximately 600,000 homes each year. This will make Tabuk a gateway to the export
electric power worldwide.

KSA plans to build around 17.6 GW of nuclear capacity by 2032 and is expected to pass laws
for its nuclear programme. The kingdom also plans to set up all of the regulations for its
nuclear regulator by Q3 2018.
The power construction contractor awards in KSA are estimated to increase from US$ 3,109
Mn in 2017 to US$ 6,556 Mn in 2018.

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 QATAR

According to industry experts, Qatar is set to increase its power capacity by 50% by 2018 in
preparation for the FIFA World Cup 2022.  According to APICORP, Qatar will need to invest
around US$ 9 Bn. to add 4.3 GW to meet rising demand in the medium term: US$ 6 Bn. in
generation and US$ 3 Bn. in T&D. As Qatar has adequate capacity of 8.8 GW, it has not built
additional capacity over the past five years. The US$ 3 Bn. Umm Al Haul power and
desalination project with capacity of 2.5 GW and the 2 GW Ras Laffan D independent water
and power project are expected to meet the rising demand.

BMI experts predict that natural gas fired thermal power will remain the main component of
the domestic energy mix with capacity receiving a boost in 2017 and 2018 as new power
plants come into effect.

Qatar Electricity and Water Company (QEWC) announced that land has been allocated for
the solar power project in Al Kharsaah, which is set to produce 500 MW to 1,000 MW of
electricity. Phase 1 of the project is expected to cost approximately US$ 500 Mn for
producing 500 MW of electricity by mid-2020.

The power construction contractor awards in Qatar are estimated to increase from US$ 2,298
Mn in 2017 to US$ 3,523 Mn in 2018.

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 OMAN

Oman’s power generation is set to register 3% annual growth in demand for natural gas over
the next seven years within its Main Interconnected System (MIS) areas, according to Oman
Power and Water Procurement Company (OPWP). Peak demand for electricity is estimated
to increase at an annual average of 6% every year.

According to APICORP, the country will need to add 5.3 GW in the medium term, requiring
investment of US$ 11 Bn.. According to APICORP, Oman will need US$ 6.8 Bn. investment in
power generation and US$ 4.2 Bn. in T&D from 2017 to 2021. Companies in fields such as
power plant construction, power generation equipment, and power plant operations and
processes are likely to find attractive opportunities in Oman.

Oman has made privatisation of future power projects high priority due to rising personal
income, housing starts, and government infrastructure projects, which contribute to increase
in electricity demand. 

OPWP’s seven-year outlook statement (2017-2023) outlines that the Sultanate is focused on
increasing its power generation capacity as by 2022, it expects demand to exceed supply.
OPWP estimates that with contracted capacity at 7,394 MW in 2022, the need for additional
capacity under the expected demand is approximately 1,300 MW in 2022, and 1,800 MW in
2023.

OPWP is planning to issue a number of power generation tenders in 2017 to meet the rising
demand. It has also issued an RFP to seek legal advisors for commercial-scale solar power
plant tender to be connected to Oman’s MIS. The Seven-Year statement of the utility
mentions that the tender for the project is expected to be launched in Q4 2017 with
construction contract anticipated to be awarded by Q3 2018.

OPWP is expected to make power procurement process more flexible. The Power 2022
procurement process is likely to have a tender round to allow players with expiring contracts
and potential bidders to participate. The key project documents is then expected to be
published so that all parties could review and comment on these documents.

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 OMAN

Duqm’s demand for electricity is expected to increase as SEZAD plans to transform it into a
world-class investment destination. The first phase of the SEZAD master plan expects
electricity demand to reach 650 MW by 2025. An engineering, procurement and construction
(EPC) contract will build Duqm's first large-scale natural gas-fired power-cum-water
desalination project is expected to be awarded in Q1 2018. The new project will have a
contracted capacity to generate 183 MW of power and is expected to be operational in Q4
2020, according to the seven-year outlook report of OPWP.

Oman’s power market is set to witness robust growth due to its strategies in place, high
demand growth and a strong regulatory framework supporting private investment. The
power construction contractor awards in Oman are estimated to increase from US$ 1,257 Mn
in 2017 to US$ 2,268 Mn in 2018.

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 KUWAIT

Kuwait’s electricity rates have been changed to rationalise consumer consumption. Dr.
Mashaan Al Otaibi, assistant undersecretary of the ministry of electricity and water for
planning and training said that the new tariffs took effect in the commercial sector on May
2017 and the tariffs of the government sector will rise from two fils to 25 fils (some $0.082)
per kWh as of November 22nd, 2017.

According to the Ministry of Electricity & Water, Kuwait uses over 14 MW of electricity per day
during temperatures over 50 degrees Celsius. Kuwait is eyeing 9,000 MW in new capacity by
2020 from the current levels, according to industry experts. Kuwait will need to reach an
estimated capacity of 23 GW by 2021, requiring US$ 14 Bn. of investment. The government
has earmarked US$ 9.9 Bn. for infrastructure projects including power, and progress is being
made on greenfield thermal and renewable projects. Kuwait has five power projects in the
pipeline, which will use the PPP model.

The Ministry of Electricity and Water is expected to buy electricity supplied from the power
plant for 40 years. Kuwait also plans to launch its first IPO for the Al-Zour North power
plants. Kuwait is set to rely heavily on IPPs and has chartered out huge plans for 2018 and
2019. Three projects are expected to be awarded in 2017, which include 1.5 GW Al-Zour North
2 IWPP, the 1.5 GW Al-Khiran IWPP and the 280 MW Al-Abdaliya ISCC. 

According to Oxford Business Group, the private sector is likely to have a fair proportion of
power generation capacity in Kuwait within the next 10 years. Kuwaiti Oil Minister Essam al-
Marzouq has announced that the New Kuwait 2035 launch that a 50% stake in Ku¬wait’s
power and water company would be sold to the private sector. The move is expected to help
in the creation of three new power companies with particular focus on renewable energy.
Kuwait is expected to issue a tender to build US$ 1.2 Bn. Dibdibah solar-power plant in Q1
2018. The plant is likely to produce half of Kuwait’s estimated renewable output goal,
according to Shukri AbdulAziz Al-Mahrous, deputy chief executive officer of planning and
finance at Kuwait National Petroleum Co.

The power construction contractor awards in Kuwait are estimated to increase from US$
1,366 Mn in 2017 to US$ 4,698 Mn in 2018.

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 BAHRAIN

In Bahrain, capacity will need to grow at 6% per annum, according to industry experts, which
is considered as one of the lowest by GCC standards. According to APICORP, the kingdom
needs US$ 3 Bn. to be invested over the next five years to meet capacity additions of 1.4 GW,
bringing the total to 5.8 GW by 2020. In 2017, Bahrain is expected to open two substations in
Al Hamal (220 kilovolt (kV) capacity) and Ras Zuwaid (66 kV capacity).

Bahrain plans to build a 100 MW solar power plant in association with the private sector as
part of its renewable energy agenda. The plant is expected to be completed and ready for
power production by 2018-end. The tendering process is expected to begin in February 2018.
The solar power plant project is in line with Bahrain’s National Energy Efficiency Plan and
the National Renewable Energy Plan. 

According to Oxford Business Group, Bahrain’s power generation capacity is expected to

expand due to new projects, which aim to meet rising residential and industrial consumers’
demand. The Electricity and Water Authority (EWA) closed its pre-qualification process for
developers who evinced interest in the tender round for the Al Dur 2 Independent Water and
Power Project during June 2017-end. The project will be awarded on a build-own-operate
(BOO) basis (tenders have yet to be announced) after the project is reviewed by the
authority. The tender document lists that the US$ 1.5 Bn. gas-fired plant is expected to have
a generation capacity of 1200-1500 MW, with construction to commence in Q1 2019 and to
commission second phase by 2020-end. The new plant is expected to help Bahrain meet its
rising power demand that is increasing by 7-10% each year. According to Word Bank data,
this is expected to reach nearly 20,000 GWh by 2020 with peak demand in the interim
averaging 4,312 MW per month.

Oxford Business Group adds that among Bahrain’s key initiatives in line with technological
advancement and development of sustainable electricity are the wide adoption of smart
metering and network tools. This also includes strategic planning and an efficient and
adaptable regulatory framework.
The power construction contractor awards in Bahrain are estimated to increase from US$ 82
Mn in 2017 to US$ 1,016 Mn in 2018.

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MAJOR ACTIVE GCC POWER PROJECTS

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 FUTURE
OUTLOOK
Population growth, urbanisation, rising income levels, industrialisation and low electricity prices are
expected to place a greater thrust on GCC power, both from the generation and T&D perspectives.

Due to rising domestic consumption and increasing competitiveness of renewable energy

especially solar power, all GCC countries will seek greater involvement from the private sector.

The deployment of smart grid technologies and smart metering will form the future of the GCC
power sector as it is expected to help the region save up to US$ 10 Bn. in infrastructural investment
by 2020.

If smart grid is rolled out in the right manner, it will lead to sustainable electricity supply in the
future, according to experts. The GCC VAT expected to be introduced in 2018 is likely to bring some
changes to the power sector, especially for companies dealing with solar power.

Building smart cities with state-of-the-art facilities and renewable energy solutions is anticipated to
contribute to the development and sustainability of future communities, which in turn is expected
to lead to economic growth.

Overall, the GCC power sector is expected to register unprecedented growth in the coming years.
GCC countries are set to invest billions of dollars in projects for setting up new power production
plants, distribution systems and supply grids in the next five years. The UAE, KSA and Kuwait will
remain the top attractive power sector investment destinations in the GCC region.  

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This report was created for Middle
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Image Sources:
http://www.finolexblog.com/importance-of-electricity/, http://tattoostuff.tk/on-top-of/,
http://www.valuementor.com, https://fineartamerica.com/ image by Carl Suurmond