Despite revenue accrued from the oil sector and the seemingly stable infrastructure, many MENA countries continue to suffer from strained power resources. According to Philipp Lotter, senior vice-president at Moody’s Investors Service, power shortages and temporary blackouts have already affected countries with particularly tight supply margins, such as Kuwait and Saudi Arabia, and these are likely to increase, particularly where utilities are unable to fully execute their expansion plans.
Estimates suggest that up to $50 billion could be spent in the Gulf Cooperation Council (GCC) countries by 2015, to add 60GW of capacity although even more will be needed to modernize the region’s transmission and distribution networks. With a power demand growth of around 7%, Saudi Arabia plans to increase its industrialization plan adding an additional 37 GW of generation capacity by 2017.
Iran is planning to add nearly 30GW of electricity generation capacity with the building of new plants and the overhaul of existing ones and the UAE is planning to expand its 9.5GW of installed capacity by more than 50% over the next decade.
Studies are being conducted to connect Egypt, Libya, Tunisia, Algeria, and Morocco that would upgrade their networks from 220kV to 500kV systems. Jordan, Egypt, and Syria are linked via co-operation arrangements, Jordan buys up to 150MW of electricity a day from Egypt to satisfy peak load demand.
Until now, MENA states have tended to go for large combined-cycle gas-powered electric plants, due to high thermal efficiency, the low cost and the availability of cheap gas feedstock. But the new requirements will call for a wider array of energy forms. Thus nuclear energy is becoming more of a possibility.
Most importantly, renewable energy is making headway across the region as there is an abundance of solar with major solar energy project, Masdar City in Abu Dhabi, underway. Solar projects are also under way in Egypt, Algeri,a and Morocco and are being encouraged in the countries bordering the Mediterranean through the Mediterranean Solar Plan, which is being developed in the framework of the Union for the Mediterranean.