Middle Eastern promise: power plans for the region4 July 2014
The Middle East is blessed with vast hydrocarbon resources, a benefit reflected in the region’s heavy reliance on oil and gas for power generation. In fact, every country in the region has its power needs met by these two fossil fuels, with several relying on both and, in some cases, just one for 100% of electricity generation. GlobalData investigates.
In 2011, Qatar, Yemen, Kuwait and Bahrain all relied at least 80% on oil and gas for power generation, with Qatar using 100% gas-fired generation assets and Yemen relying solely on oil-fired power plants. In other Middle Eastern countries, the balance between these two fuels depends on the reserves available domestically or which can be imported more cheaply.
Qatar's absolute dependence on gas-fired electricity generation is thanks to the abundant supply of gas from the North Field, which yields gas in volumes that are used not only for power generation but also for exports.
Jordan, however, is dependent on oil and gas imports for electricity generation, due to a lack of indigenous natural resources. As a result of attacks on the Egyptian oil pipeline, the country relies more on gas for power, accounting for 81% of the total generating capacity in 2011.
As the economic development and population of the region continues to grow, energy consumption is also expected to rise over the next 20 years and beyond. This momentum can be seen in the compound average growth rate of electricity consumption over the past decade, with Qatar's thirst for energy growing by an average of 10.9% a year over the
last 10 years (see map, opposite).
However, this is where the similarities end, with the region's political leaders choosing a diverse range of means to meet future demand: some choosing to stick with the status quo, some turning to renewables and others to nuclear energy.
Three countries, Jordan, Egypt and Qatar, have set ambitious targets for the percentage of renewables that will make up the power mix over the next decade or so (see Power plans, right).
In Jordan, the government has ambitious plans to augment the existing 6MW of renewable installed capacity, with renewable sources accounting for 10% of the total energy mix by 2020. For this purpose, the government passed the Renewable Energy Law in January 2010, in order to increase the focus and investment in clean energy sources. The law provides a framework for increasing investments in the power sector and encourages investors to actively participate in the upcoming renewable power plants. As per the law, National Electric Power Company (NEPCO) is obligated to purchase all power produced by these plants.
To promote renewable energy development in Egypt, the government established the New and Renewable Energy Authority (NREA) in 1986. The ministry has also set a target of achieving 20% of the total generation from renewable sources by 2020. Of the 20%, 12% is expected to come from wind power generation and the remaining 8% through other renewable energy sources like solar and hydro. The wind power potential in Egypt stands at 20,000MW.
The Qatari Government has announced intentions to derive 20% of its energy requirements from renewable sources by 2024 with a number of projects already underway. As of 2012, the government announced the launch of a 200MW solar power project. It has also announced that a 3.5GW solar power generation complex is to be built, which will be used to cool the football World Cup stadium in Doha, in 2022.
Nuclear power has been chosen as the possible answer to Bahrain's growing power needs. As a result, Bahrain has signed a memorandum of understanding (MoU) with the US for the peaceful development of nuclear power. The Bahraini Government is also exploring wind and solar potential in the country and plans to construct power plants based on wind and solar technology. Two pilot projects using a hybrid of solar and wind technology are expected in the near future.
Cleaner thermal power
Other countries in the region have chosen to continue making use of their abundant hydrocarbon resources; however, many have now decided to switch from oil-fired plants to gas-fired plants in future.
Israel has potential gas reserves of around 1,000 billion cubic metres (bcm) and proven gas reserves of about 300bcm, mostly in the offshore Tamar field. It is expected that, by 2030, the majority of planned power plants will be using gas as the primary fuel, which will be a reversal of the current dominance of oil-fired plants.
Kuwait will also see the dynamics of the country's power market exhibit a complete reversal of historic trends, with gas contributing more than 60% by 2020 and oil contributing the remaining share. Furthermore, after 2014, there will be no new capacity additions of oil-fired power plants. The government is presently focusing on increasing gas production to more than four billion cubic feet per day of gas by 2030.
Oil-fired power plants have also traditionally dominated the power generation segment in Yemen. The government is now planning to develop power plants based on natural gas. All the new constructions planned are for gas-fired or for oil-fired power plants that are convertible to gas-fired power plants. By 2020, gas is expected to dominate the share of thermal installed capacity over oil-fired power plant installed capacity.