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GCC to invest $100 billion in power sector

According to the World Energy Council, the region will also require additional investments in water desalination projects.

The UAE will account for a major share of the new investment in power and water desalination projects, with Dubai alone poised to spend Dh50 billion to almost double its power generating capacity to 9,500 MW.

Last week, Dubai Electricity and Water Authority (Dewa) unveiled its new Dh6.3 billion 1,300 MW power and desalination project in Jebel Ali, and said it would be adding 4,500 MW of power generation capacity to its existing 5,000 MW by 2010.

According to Dewa officials, in tandem with Dubai's exponential growth, the rise in demand for electricity and water services reached record levels, possibly the highest worldwide.

Power consumption grew 15.2 per cent in 2006, and this trend is expected to continue in the foreseeable future. Similarly, demand for water also rose by 12.4 per cent during 2006.

Glenn Ensor, Director of Power-Gen Middle East, a conference and exhibition for the power generation, transmission & distribution and water industries, said five per cent of the world's population lives in the Middle East, but the region possesses only one per cent of the renewable water resources of this planet. "It is estimated that $100 billion will be invested in Middle East water and desalination projects over the next 10 years. As water becomes an increasingly precious resource, issues of water quality, quantity, management and planning are essential to the future of the regions population," he said.

In Saudi Arabia, investment is required for existing water pipes and waste water systems and spending on waste water systems will double in the course of the next ten years. According to estimates, $4.5- $6 billion investment is needed annually in Saudi Arabia over the next 15 years to cope with demand.

Saudi Arabia has one of the largest per capita electricity consumption rates in the Middle East. With a population of approximately 25.8 million, which is growing at a rate of 2.4 per cent per year, demand for electricity is high. Saudi Arabia needs to expand its power and network capacity to support the country's industrialisation plan as power demand grows by 7 per cent or more each year.

Saudi Arabia's Industry and Electricity Ministry estimates that the country will require up to 20 gigawatts (GW) of additional power generating capacity by 2019 at a cost of $4.5-$6 billion per year.

Electricity demand in the UAE has been rapidly increasing in recent years. Total Electricity production increased from 45,119 million kilowatts per hour (Kw/h) in 2002 to 48,163 Kw/h in 2003. Currently, 32 per cent of Abu Dhabi's generation and desalination capacity is in private hands, with this figure likely to increase to 54 percent for power by 2007. Sharjah Electricity and Water Authority announced in early 2003 the approval of a $440 million budget by the Emirate for an ongoing expansion plan.

Bahrain also has seen an increase in water consumption of 25 million gallons per day over the past five years. Kuwait, which has one of the highest rates of per capita consumption of electricity in the world, is to invest $4 billion over ten years to cope with demand. The construction of two new power plants is planned under this programme, the 2400 MW Al-Zour North plant and the 1000 MW Al-Zour South II plant.

Demand for electricity in Oman is growing at a rapid pace, due to the growth of tourism in the country, therefore necessitating a large amount of construction, the population growth, and industrialisation. Research indicates that consumption is now increasing at an average rate of five per cent annually and the government is forecasting that demand for electricity will be 75 per cent higher by 2015 than it is today. Research also indicates that additional generation capacity of 60MW will need to be added between 2005 and 2009, meaning an addition of 30MW generating capacity every three to five years.

The multi billion-dollar GCC power grid project, which will link the six GCC states with an integrated electricity network will be commissioned by the year 2010. The project, whose aim is to reduce the cost of power generation in the six GCC states of Saudi Arabia, Qatar, Bahrain, Kuwait, Oman and the UAE is being carried out in three phases.