Monday , September 24 2018

UAE needs to invest $33bn to meet power demand

DAMMAM / WAM

The UAE needs to invest at least $33bn to meet its expected additional 16GW capacity requirement over the medium term, the Arab Petroleum Investments Corporation (Apicorp) forecasted in its latest research report, published on Tuesday.
The country is pushing strongly to diversify its energy sources in the power mix, and Apicorp estimates that nearly 10GW of capacity additions are already in execution, including 5.6GW of nuclear, the monthly report noted, adding, “Solar power also features heavily in the UAE’s plans and is expected to account for 25% of the generation mix once its latest $13.7bn (5GW) solar park is fully commissioned.”
As for the Mena region, the report pointed out that it will require $260 billion of investment to meet rising and suppressed electricity demand.
In the GCC, governments have coped well with rising electricity demand, the report of the multilateral development bank’s report for this month said.
However, recent increases in electricity prices in Saudi Arabia will slow demand growth. In the Mashreq region, inadequate investment and political instability have weighed on the power sector.
Apicorp’s report also noted that electricity demand and consumption have been growing rapidly in the Mena region, driven by population growth and urbanisation, rising income levels, industrialisation and low electricity prices. While economic growth has slowed compared with historical highs, the International Monetary Fund (IMF) still expects an increase of 3.2% in 2018 and 2019, rising to 3.5% in 2022. The region’s population is also expected to grow at an average rate of 1.5% per year in that same period, the report noted.
In order to meet this rising demand, Apicorp estimates that Mena power capacity will need to expand by an average of 6.4% each year between 2018 and 2022, which corresponds to additional capacity of 117GW.
Apicorp forecasts that $152 billion will be needed to deliver this additional capacity, with a further $108 billion needed for transmission and distribution.
Turning to more specific parts of the Mena region, the GCC dominates the landscape. Whilst it currently represents 47%, or 151GW, of current Mena power generating capacity, Apicorp forecasts that the it will need to invest $55bn to create 43GW of additional generating capacity and another $34bn in transmission and distribution over the next five years.

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