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  Oxagon discloses capacity of data centre phase

  29 April 2025

  The region's first planned net-zero and artificial intelligence (AI)-powered data centre project in Oxagon, the industrial cluster of Saudi gigaproject Neom, will have an initial capacity of 300MW.  

  The first phase of the data centre facility, which local data centre developer DataVolt will own and operate, is expected to begin operations in 2028.

  "Over time, the data centre’s total capacity is expected to reach 1.5GW, supporting anticipated local and global demand," Oxagon announced.

  It added that the projected output will place the kingdom among a "select group of countries boasting operational capacities of 1GW or more, comparable to those in the US, China, Japan, Australia and India".

  The project is estimated to require an investment of several billion dollars.

  The initial 300MW facility’s modular design will ensure scalability to meet future demand in terms of information technology infrastructure, rack power density and cooling systems, said Oxagon. 

  The DataVolt facility will be located on a 350,000 square-metre area and will ultimately be powered by renewable energy, primarily from solar and wind sources within the Neom region.

  The current plan entails deploying large-scale battery storage for system stability and gas turbines for redundancy, "enabling up to 48 hours of autonomous operation with green hydrogen fuel, if needed".

  According to Oxagon, these energy solutions will enable the facility to meet the enormous power demands of AI workloads with Tier 3 levels of redundancy and availability while maintaining net-zero emissions during operations.

  Founded in 2023, DataVolt has previously announced a plan to invest $5bn in developing data centres in Saudi Arabia, without specifying potential locations.

  DataVolt is a wholly owned subsidiary of Saudi public-private partnership-focused developer and investor Vision Invest.

  According to the International Energy Agency, data centres currently consume 1%-1.3% of global electricity demand. Advancements in generative AI mean that power consumption is expected to grow exponentially in the next decade.

  Photo credit: Oxagon

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  Jennifer Aguinaldo
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  Abu Dhabi reaches Shuweihat 1 plant conversion deal

  29 April 2025

  Abu Dhabi state offtaker and utility Emirates Water & Electricity Company (Ewec) has signed a new power purchase agreement (PPA) for the conversion of the existing Shuweihat 1 (S1) independent water and power project (IWPP) into an independent power plant (IPP).

  Under the new PPA, S1 will be converted to a natural gas-fired open-cycle power plant only, providing up to 1.1GW of "flexible" reserve supply for 15 years, with commercial operations beginning from 2027, Ewec said.

  It added: "S1 will be reconfigured from a cogeneration power and water desalination facility to a power plant only, providing flexible reserve supply to support the increased integration of renewable and clean energy sources."

  MEED reported in June 2023 that Ewec intended to seek interest from developers for the potential conversion or extension of the S1 IWPP as well as another plant, Taweelah A1.

  A team of France's Engie and Japan's Sumitomo won the contract to develop the S1 IWPP in 2001. The project reached commercial operations in 2004 under a 20-year PPA.

  Engie and Sumitomo each own a 20% interest in Shuweihat CMS International, the project company, while Abu Dhabi National Energy Company (Taqa) owns 60%.

  The plant's desalination units ran on multi-stage flash and multi-effect distillation technologies.

  Mohamed Al-Marzooqi, Ewec's chief asset development and management officer, said: “By strategically reconfiguring this power plant we are maximising the efficient use of existing infrastructure to deliver a reliable, flexible power supply while reducing carbon emissions associated with the project."

  He added that using natural gas as a "flexible transition fuel" enables the accelerated integration of renewable and clean energy projects, such as solar and wind, into the energy mix, and preserves resources.

  Located approximately 250 kilometres southwest of the city of Abu Dhabi, the Shuweihat IWPP features a 1,500MW combined-cycle power plant, a 120-million-gallon-a-day desalination plant, 220 kilovolt (kV) and 400 kV power substations and a 188-million-gallon-a-day water pumping station.

  At the time of commissioning in 2024, the plant was the largest IWPP ever procured.

  Germany's Siemens Energy executed the $895m power generation package and Italy's Fisia Italimpianti undertook the $500m contract for the plant's desalination package 24 years ago.

  https://image.digitalinsightresearch.in/uploads/NewsArticle/13774242/main0632.jpg

  Jennifer Aguinaldo
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  Unec wins $200m Dubai Tilal Al-Ghaf villas deal

  28 April 2025

  Register for MEED’s 14-day trial access 

  Local firm United Engineering Construction Company (Unec) has won a AED736m ($200m) contract from local real estate company Majid Al-Futtaim Development to construct its Plagette 32 and Amara residential developments in the Tilal Al-Ghaf community in Dubai.

  The scope of the contract covers the construction works on about 116 villas in the Amara cluster and 32 mansions in the Plagette 32 residential development.

  The contract award follows Majid Al-Futtaim Development's appointment of Unec in January last year for the construction of 130 villas across a 2 square-kilometre neighbourhood.

  The construction of both clusters has begun and is expected to be completed by the second half of 2026.

  Unec was also awarded a contract in 2021 to deliver more than 900 three- and four-bedroom townhouses as part of the Elan project at Tilal Al-Ghaf.

  The 300-hectare Tilal Al-Ghaf project will be developed in phases over 10 years and will feature 6,500 freehold apartments, townhouses, bungalows and luxury villas upon completion in 2027.

  Earlier in April, MEED reported that Dubai-based firm Dutco Construction had won a AED1.5bn ($427m) contract from Majid Al-Futtaim Development to construct 109 mansions in the Tilal Al-Ghaf community.

  The project, known as Serenity Mansions, was designed by South African architectural firm Saota and Lebanon’s Nabil Gholam.

  According to the official statement, Dutco’s scope of work comprises the construction of the Serenity Mansions, including interior fitout, public realm landscaping, gatehouses, ancillary buildings and infrastructure works.

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  Yasir Iqbal
• 
  Thermal plants resurgence creates crossroads

  25 April 2025

  Commentary
  Jennifer Aguinaldo
  Energy & technology editor

  The GCC states awarded $27bn-worth of gas-fired power plant contracts in 2024, up 127% from the previous year's figure, and nearly 300 times the value of similar contracts awarded in 2019, which sat at a record low of $93m.

  And, while the values of awarded thermal plant and renewable energy plant contracts achieved parity in 2023, clients awarded thermal power plant contracts with a total value that was 172% higher than all awarded renewable contracts put together last year.

  This trend establishes the return of gas as a feedstock for power generation plants across the GCC states, following years where only a handful of deals came through as a result of offtakers and utilities expanding their scope for renewable energy in line with their energy diversification plans.

  The energy transition focus and the muted electricity demand growth throughout Covid-19 and shortly after the pandemic has meant that the comeback of thermal power plants has been fraught with challenges.

  There is a squeeze on top original equipment manufacturers' capacity, with the top suppliers having clipped their capacity expansion plans in line with the anticipation that demand would fall, rather than rise, as the implementation of energy transition programmes took hold.

  The sheer volume of new combined-cycle gas turbine (CCGT) projects in the GCC – and nearly everywhere else – has also put pressure on engineering, procurement and construction (EPC) contractors, which are now becoming more selective about which projects to bid on, in an effort to manage project delivery risks. 

  This has led or is leading to a higher levelised cost of electricity (LCOE), as a diminished number of utility developers and investors that are still interested in bidding for thermal plant projects seek to protect their profit margins from elevated market risks. 

  This, in turn, collides with the mandates of most offtakers and utilities to achieve "least-cost" energy transition.

  It is also unclear whether the demand spike in CCGT, as well as the so-called peaker – or open-cycle gas turbine – plants, is short-lived, as a means to address the intermittency of renewables or replace liquid fuel-fired fleets, as is the case in Saudi Arabia. Or whether it is long-lasting, as a permanent solution to achieving security of supply that will have to co-exist with the emerging battery energy storage systems (bess) technology.

  Based on data from regional projects tracker MEED Projects, the existing project pipeline for thermal power plants in the GCC remains robust, with about $10bn under bid, $9.4bn in prequalification and over $22bn under study and design.

  However, this pipeline is significantly smaller compared to the more than $90bn of planned and unawarded renewable projects.

  The continued deployment of renewables with or without bess, and the need to interconnect grids, will dictate to a large extent the pace at which offtakers and utilities in the region continue to procure thermal power plants.

  It requires everyone in the supply chain to adopt an adroit and flexible strategy that will enable them to meet their net-zero targets while keeping their shareholders happy.

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  Jennifer Aguinaldo
• 
  Siemens Energy starts construction on Iraq plant

  25 April 2025

  Iraq and Germany’s Siemens Energy have broken ground on a project to build a new combined-cycle gas turbine (CCGT) plant in Nasiriyah in Iraq’s southern Dhi Qar governorate.   

  The project is part of a $1.68bn development package that Iraqi Prime Minister Mohammed Shia Al-Sudani recently launched.

  In addition to the CCGT plant, the other projects include the Nasiriyah Integrated Medical City, a 700-bed hospital complex and infrastructure works in the Suq Al-Shuyukh district.

  The Nasiriyah CCGT plant is understood to be “hydrogen-ready”.

  This development follows the Council of Ministers’ approval in August last year of a project to rehabilitate the Baiji 2 gas-fired power station, which Siemens Energy and Beijing-based China State Construction Engineering Corporation (CSCEC) will undertake.

  CSCEC will be responsible for financing the Baiji 2 project, supplying and installing auxiliary equipment such as the fuel system, fire suppression systems, compressors, pipelines and valves, and the civil works. 

  For finance, the contractor will explore securing export credit support from China.

  Photo credit: Siemens Energy, for illustrative purposes only

  https://image.digitalinsightresearch.in/uploads/NewsArticle/13754307/main.jpg

  Jennifer Aguinaldo