We provide a comprehensive overview of recent developments in the power and water generation sector and assesses the outlook for the sector up to 2015.
The GCC utility sector is entering a critical phase. Four years of strong economic growth has fuelled demand growth of about 10 per cent a year for electricity and 8 per cent a year for desalination. A lack of investment in the first half of the decade has meant that reserve power capacity has fallen significantly in all bar Abu Dhabi, raising the prospect of power shortages especially in Kuwait, Dubai and parts of Saudi Arabia. With little prospect of a regional economic slowdown, as a result of oil prices and investment levels remaining high, the GCC is facing an unprecedented capacity building programme. An estimated 60,000MW of new capacity, representing 80 per cent of current installed capacity, will be required by 2015, while desalination capacity will have to double to over 5,000 million gallons a day (g/d) to meet the projected demand. The actual capacity requirements will be even greater if planned decommissioning of existing capacity takes place on account of its age. In relative terms, Dubai faces the biggest new-build programme, with both power and desalination capacity forecast to triple in size to 16,000MW and 800 million g/d by 2015. In absolute terms, the highest new investment requirements will be in Saudi Arabia, where 15,000MW and about 1,000 million g/d of new capacity will be required. Based on 2007 unit costs, the GCC power sector will require about $50bn of investment in new power generating capacity and $20bn in desalination. However, a tightening engineering, procurement and construction (EPC) market, on account of the high volume of work and the limited pool of major contractors, is likely to see unit costs continuing to rise over the short term. The role of developers will expand further, with 2008 set to be the first year that new capacity contracted from the private sector exceeds that awarded on an EPC basis. All the major clients in Saudi Arabia are now committed to private power and desalination, leaving just Dubai and Kuwait following the traditional method of procuring new capacity. While Kuwait is unlikely to embark on the private route, as a result of political opposition in parliament, Dubai may, especially if developers can assist in securing new feedstock allocations. The most pressing issue facing the GCC utility market is obtaining new and competitively priced gas allocations. With competition for gas increasing from the oil sector and new industry, utilities are no longer assured of feedstock allocations. The tight gas market will have major cost implications for generators, which are likely to be hit on the one hand by higher gas prices, and on the other by the need to use more expensive liquid fuels. The gas situation is forcing utilities to assess for the first time the use and cost of new technology and alternative energy production, such as coal, nuclear and solar. However, none will provide a quick-fix solution to the capacity question, nor challenge the dominance of gas-fired generation in the medium to long term. Rising generation costs will increase pressure for a hike in customer tariffs, which in virtually all the GCC states are set well below the cost of production and distribution. With governments reluctant to sanction tariff increases for their own populations, non-national consumers will bear the brunt of any increases. Far more attention will have to be placed on demand supply management in the GCC in the coming years. Conservation measures, such as energy efficient buildings, district cooling, metering and grid interconnections, are slowly moving up the agenda but will need to be pursued and enforced much more rigorously. Public awareness campaigns also have a big role to play in curbing demand, as was proved in Kuwait in the summer of 2007, when a sustained programme by the government, highlighting the very real threat of impending power outages, resulted in peak demand actually falling by 10 per cent.
Water Distribution And Treatment Industry in Bahrain
Preface 4
Executive summary 5
Introduction 7,
CHAPTERS
Bahrain 18
Kuwait 22
Oman 29
Qatar 35
Saudi Arabia 40
UAE – Abu Dhabi 48
UAE – Dubai 54
UAE – Federal Electricity & Water Authority 62
UAE – Sharjah Electricity & Water Authority 64
Appendix 66
TABLES, CHARTS, MAPS
Introduction
GCC power demand forecasts 7
GCC power demand forecasts: additional capacity by 2015 8
GCC power demand forecasts: projected cost 8
GCC desalination demand forecasts 9
GCC desalination demand forecasts: additional capacity by 2015 10
GCC desalination demand forecasts: projected cost 10
Cost of building desalination capacity in Dubai 10
Cost of building power capacity in Dubai 10
Total power contracted from IWPPs/IPPs in the GCC 11
Major power and desalination projects planned in the GCC 12
Major power EPC contract awards in the GCC 13
Major desalination EPC contract awards in the GCC 13
Alternative energy projects, planned 14
Levelised costs in dollars for power generation 15
Selected GCC electricity tariffs 16
Selected GCC water tariffs 16
Per capita electricity consumption in the GCC 17
Per capita water consumption in the GCC 17
Bahrain
Bahrain’s annual growth in peak power demand 18
Bahrain’s annual growth in water consumption 18
Bahrain’s power and desalination capacity 19
Power generation and demand 20
Water sources and demand 20
Map: Major power and desalination plants in Bahrain 21
Kuwait
Peak electricity load and installed capacity 22
Peak power demand growth 22
Peak water demand and installed desalination capacity 23
Planned major power and desalination projects 23
Selected contracts on the Electricity & Water Ministry’s emergency power programme 24
Projected installed power generating capacity 25
Projected installed desalination capacity 25
Planned power generation projects 26
Planned desalination projects 26
Consumption of fuel by power and desalination plants 27
Map: Major power and desalination plants in Kuwait 28
Oman
Oman IWPPs, IPPs and IWPs 29 Major Omani power developers 30
Major Omani desalination developers 30 Peak power demand growth 31
Forecast demand in the main interconnected system 32
Contracted main interconnected system generation capacity 32
Contracted main interconnected system desalination capacity 33
Total gas requirements for power and desalination generation 33
Map: Major power and desalination plants in Oman 34
Qatar
Annual growth in power demand 35
Annual growth in water demand 35
Qatar IWPPs and IPPs 36
Major Qatari power developers 37
Major Qatari desalination developers 37
Future power and water capacity additions 38
Map: Major power and desalination plants in Oman 39
Saudi Arabia
Saudi Arabian generators 40
SEC power demand summary 41
ECRA power demand forecast 41
SWCC desalination forecast 41
Future additional power capacity requirements 42
Future desalination capacity requirements 43
Saudi Arabia IWPPs and IPPs 44
Planned IWPPs and IPPs in Saudi Arabia 45
Major Saudi power developers 46
Major Saudi desalination developers 46
Map: Major power and desalination plants planned and under construction in Saudi Arabia 47
UAE – Abu Dhabi
Abu Dhabi IWPPs 48
Major Abu Dhabi power developers 49
Major Abu Dhabi desalination developers 49
Power capacity growth 50
Desalination capacity growth 50
Annual growth in power demand 50
Annual growth in water demand 50
Peak power demand forecast 51
Peak water demand forecast 51
Adwea annual fuel consumption 52
Fuel consumption by type of power and desalination plants 52
UAE – Dubai
Peak power demand growth 54
Peak desalination demand growth 54
Installed power capacity 55
Installed desalination capacity 55
Peak power demand growth forecast 55
Peak desalination demand growth forecast 55
Dewa generation projects 56
Dewa planned installed power capacity 56
Dewa planned installed desalination capacity 56
Dewa major awards 57
Dewa’s fuel bill 58
Dewa’s fuel costs and electricity purchases 58
Dewa’s income statement 59
UAE – Sharjah Electricity & Water Authority
Peak power demand growth 63
Installed power capacity and peak electricity demand 63
Desalinated water production 64
Map: Major power and desalination plants in the UAE 65
Appendix GDP economic growth in the GCC 66
Populations in the GCC 66
GCC projects market 66
GCC: top developers by equity power capacity 67
GCC: top developers by equity desalination capacity 68
Bahrain: top developers by equity capacity 69
Oman: top developers by equity capacity 69
Qatar: top developers by equity capacity 69
Saudi Arabia: top developers by equity capacity 69
UAE: top developers by equity capacity 69
Major developers in the Gulf IWPP and IPP sector 70
Selected projects won by major power and desalination EPC contractors in the GCC 73
Gulf IWPPs 78
