Qatar will need to invest around $9bn in the power generation sector to add 5.2GW to meet rising demand in the medium term; $6bn in generation and $3bn in transmission and distribution (T&D).
Qatar has not built additional capacity over the past five years because it already boasts adequate capacity of 8.8GW. But with increasing demand and peak load reaching a record 7.1GW in 2015, the country sanctioned two new projects that will add nearly 4.5GW in the medium term, said Apicorp Energy Research.
MENA governments are prioritising investments in the power sector to feed rapidly rising electricity demand. It estimates that in the period 2016-20, the region will need to invest $334bn in its power sector. Of this, $198bn will be needed to add 147GW of generating capacity, while the rest should be invested in T&D.
In the GCC, governments have coped well with rising electricity demand. As well as adding capacity, some of these countries have recently introduced limited energy-reform programmes. In the Mashreq region, inadequate investments and instability have weighed on the power sector and persisting blackouts continue to put pressure on governments to act; while in the Maghreb region, renewable-energy projects are at the forefront of long-term government plans to diversify power-generation capacity. But governments will need to find solutions for lower budgets, security concerns and a more challenging environment to secure finance.
According to Apicorp, the GCC represents 47 percent, or 148GW, of current MENA power-generating capacity. Despite this large capacity, the GCC will require $85bn for the addition of 69GW of generating capacity and another $51bn for T&D over the next five years.
But declining oil revenues mean that GCC governments can no longer continue to support the provision of cheap power. Subsidy reforms announced earlier this year are part of a programme that aims to liberalise domestic energy prices over the medium term.
Saudi Arabia leads the drive to make the necessary capacity additions by 2020. Estimated capacity stood at around 80GW in 2015, with SEC representing around 60GW. Apicorp estimate that the country w ill need to invest $71bn to increase capacity to 114GW. Saudi will meet rising demand with 28GW of capacity already in the pipe line. Major projects include the 3.1GW Yanbu 3 plant, expected on line in 2016, and the 2.6GW Shuqaiq plant.
The UAE needs to invest $34bn to meet the 17GW capacity addition needed over the medium term. The country experiences periodic blackouts and hopes to alleviate this by integrating the seven emirates natural gas-distribution networks. The UAE is pushing strongly to diversify its energy sources in the power mix.