The Middle East and North Africa (MENA) region needs US$250bn in electricity investments over the next five years in order to meet a fast-growing energy demand. This is according to the MENA Energy Investment Outlook: Capturing the Full Scope and Scale of the Power Sector report (published by Arab Petroleum Investment Corporation APICORP) which shows that the region’s power capacity is set to increase by 7.8% annually, equivalent to 124GW.
Due to a rapidly-growing population and increased spending on infrastructure, the MENA region needs a new energy policy formation to address energy demand and supply issues, writes Utility Products. The region’s demand for energy has increased 500 times over the last three decades. Energy officials point out that the new energy policy should aim to ensure the sustainable supply of energy and it should help to protect the environment.
The total investment amount will cover power generation, transmission and distribution expansion projects. There are already over 200 planned energy-related projects in the MENA region, valued between US$100m and US$20b, which require funding.
According to the report, the Gulf Cooperation Council’s (GCC) power sector alone requires US$105bn or 42% of total investments. The GCC area is made up of six Gulf Arab states, the United Arab Emirates UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman. The area’s population stands at about 40 million currently and is expected to grow by 3.2% annually, according to the Qatar National Bank Capital.
The state of Iran, which also falls under the MENA region, requires US$4b (almost 20% of the total value of investment) for power projects by 2017.
The United Arab Emirates’ (UAE) population has doubled to 8.5 million in the last eight years. As part of its power expansion plans, the government will be building four nuclear energy plants, valued at US$20bn. The first reactor will be developed by Korea Electric Power and is expected to deliver power by 2017. The country is aiming for 17% nuclear energy power by 2030. Currently, the UAE relies heavily on oil and gas for its power needs.
Saudi Arabia, Bahrain and Kuwait also intend to develop nuclear energy in the future.
Renewable energy sources such as solar and wind power are also on the region’s agenda. At least 10 solar power facilities, valued at US$6.8bn, are currently under way in the UAE, Kuwait, Oman, Egypt, Jordan and Morocco.
MENA needs good energy policies…
Crescent Petroleum CEO Majid H Jafar says: “To create a sustainable energy grid, the MENA countries need clear and good energy policies that will help the region offer sustainable energy with a good energy mix to power their economies."
A young, urbanizing and fast growing population has led to a growing demand for power…
Anita Mathews, the exhibition director of Middle East Electricity, points out that a “young, urbanizing and fast growing population, combined with the massive diversification and industrial expansion plans across the Mena region” has led to growing demand for power. She adds: “Some Mena countries have been struggling to keep up with the escalating demand amid political turmoil in parts of the region. By catching up with power demand being perceived as socially, economically and politically desirable, however, we see a concerted private and public sector effort to ramp up investment in power-related industries,”
The MENA region has seen much global interest from many foreign investors in the power sector. Its abundance of renewable energy sources and the enthusiasm of the governments in the area to develop their power sectors have resulted in much development already. Desertec, a plan involving the export of renewable power from the MENA region to the EU, is one such project.