GCC not to cut spending on power infrastructure

The GCC is not expected to decrease its spending on power infrastructure due to the continuous increase in electricity demand. Date from ProLeads show there are 284 power projects in the GCC with a total value of $333bn (Dh1.2trn).

“The financial crisis has very little impact on electricity demand,” Khalid Al Awadi, a Dubai-based energy expert told Emirates Business. “Yes there has been a little reduction but demand is still growing. The region needs to continue investing in energy infrastructure.” But to further address the growing demand, the region should start preparing for energy market unbundling and restructuring as well as on maximising return on assets.

According to Dr Maher Chebbo, Vice-President for Energy and Head of Utilities and Services industries, SAP Emea, the GCC countries’ current demand for electrical power is about 70 GW and this is expected to triple over the next 25 years.

“GCC countries are reforming their power sector to allow competition at the generation level through the introduction of independent power providers. The stages in each country is different and each has its own stage of unbundling,” Chebbo told the Wetex Conference yesterday.

In Saudi Arabia, for instance, the government has permitted the private sector to invest in power generation. It also has developed a reform plan for a three-stage electricity market evolution over 2008-2016.

In the case of the UAE, which is recording 10 per cent increase in demand per year, more than four-fifths of the production of electricity and water has been sold to independent water and power providers (IWPPs).

However, with the privatisation of some of the six IWPPs the government still retains full ownership of the monopoly businesses of procurement, transmission and distribution.



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