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• 
  Industrial projects enjoy sustained rise in spending

  27 December 2024

  

   

  The past two years have seen a significant upswing in the value of industrial project contract awards in the Middle East and North Africa (Mena) region, driven by development schemes in a diverse range of materials processing and manufacturing, and with an emphasis on pushing into higher value sectors.

  While in the past 10 years, the value of annual industrial project contract awards has averaged around $8bn a year, the regional awards figure surged to $13.5bn in 2023 and rose again in 2024 to $15.2bn by the end of October – placing the year on track to top the record $16.1bn awards figure in 2015.

  At the time of writing, the value of projects in bid evaluation and prospectively due for award in the final two months of 2024 was $3.8bn – only a quarter of which would need to be awarded to make 2024 a new record year for industrial projects awards in the Mena region.

  The lull in this sector until two years ago is a reflection of cyclical events, with the cash-rich oil-exporting countries coming down from an energy price high in 2015 and being further influenced in their industrial investment decision-making in 2020 by the impact of Covid-19.

  However, as a key focus for both the predominantly non-oil economies in the region and a diversification target for the energy-rich economies, the industrial sector is an area of perennial investment that was always bound to bounce back when the conditions were right.

  Top awards

  Many of the highest value project awards in the past two years have been in either heavy industry, and especially metals processing and refining, or in assembly and manufacturing. In a sign of the newer technologies and industries being invested in, top project contract awards in the past two years include: a $2.4bn green steel plant being developed by India’s Vulcan Green at Duqm in Oman; a $1.4bn solar polysilicon plant being developed by United Solar Polysilicon in Sohar Oman; a $1.3bn Ceer-brand electric vehicle manufacturing plant being developed by the Public Investment Fund and Taiwan’s Hon Hai Precision Industry in King Abdullah Economic City, Saudi Arabia; and a $1.4bn battery factory project being developed by China’s Gotion High Tech in Kenitra, Morocco.

  These examples reveal an emerging trend for regional investment into strategic and investor friendly sectors such as renewables, electrification and decarbonised industry. Such projects build upon a baseline of regional activity in mining and metals refinement, as well as local construction materials production, by diversifying away from more traditional industries and sectors towards the development of a higher tech manufacturing base with potentially higher returns.

   

  Several similar projects are in bid evaluation and up for award before the end of 2024 or in design and expected to be tendered in 2025. These include the $3.2bn plans by the US-based Statevolt to develop a battery cell factory in the Al-Hamra Industrial Zone, Ras Al-Khaimah, UAE; a $2bn green steel plant planned by the UAE’s Taqa and Emirates Steel in Abu Dhabi; a $2bn project being developed by Morocco’s Al-Mada and China’s CNGR Advanced Material to build a factory for electric vehicle batteries in El-Jadida, Morocco; plans for another $450m lithium hydroxide plant for the battery production supply chain to be developed by Australia’s EV Metals Group in Yanbu, Saudi Arabia; and a $400m Al-Damani electric vehicle manufacturing plant planned to be built by the UAE’s M Glory Group in Dubai Industrial City.

  Those projects alone represent over $8bn in combined value, or more than a third of the pipeline of projects due for award before the end of 2025, demonstrating the pace at which new investments are being made in more technologically advanced localised manufacturing capabilities and supply chain assets.

  High-tech investment

  With significant interest in the development of local data centres and artificial intelligence capabilities, the next wave of high-tech manufacturing investments in the region could well be into computer processor chips. In September, it was reported that both Taiwan TMSC and South Korea’s Samsung Electronics had expressed interest in building chip-manufacturing facilities in the UAE.

  While the mainstay of regional industry remains heavy industry, recent project awards and the project pipeline provide a clear sense of the shifting focus of regional industrial investment efforts. 

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  John Bambridge
• 
  Water sector braces for likely slowdown

  27 December 2024

  

   

  Geopolitical tensions, climate change and higher-than-average population growth have exacerbated the water demand and supply gap across the Middle East and North Africa (Mena) region, home to some of the world’s most water-stressed countries.

  For example, Jordan, where available water per capita is equivalent to only 12% of the absolute water scarcity level, hosts over 700,000 refugees fleeing wars and conflicts in neighbouring countries.

  Most regional governments have developed and started to implement water strategies aimed at narrowing this gap. Subsidies are being phased out, environmental campaigns are being developed and digital solutions are being deployed in order to manage demand and improve efficiency.

  Expanding desalination and treatment capacity, increasing treated sewage effluent (TSE) reuse, boosting reservoir capacity and building more efficient transmission and distribution networks are key levers used to improve supply.

  Strong spending 

  These efforts have prompted significant capital spending on more energy-efficient water production, distribution and storage facilities, typically in partnership with private investors, particularly among the more affluent states.

  According to data from regional projects tracker MEED Projects, the Mena region awarded $17bn of project contracts across the water desalination, treatment, transmission and distribution, storage and district cooling subsectors in the first nine months of 2024.

  This figure represents about 72% of the contracts awarded in 2023 and is slightly above the average value of annual contract awards in the preceding five years.

  With only a few more packages expected to be awarded before the end of the year, 2024 looks set to be one of the best years so far in terms of water project activity, even if it fails to match the record value of contracts awarded in 2023, which reached almost $24bn.

  In 2024, Saudi gigaproject developer Neom set the pace in January by awarding a $4.7bn contract to build dams at the Trojena Mountain Resort in Tabuk to Italian contractor WeBuild. 

  The contract covers the construction of three dams that will form a freshwater lake for the Trojena ski resort. The main dam will have a height of 145 metres and will be 475 metres long at its crest. It will be built using 2.7 million cubic metres of roller compact concrete.

  While this project does not necessarily belong to the band of solutions that aim to narrow the water supply and demand gap, the overall development is part of Saudi Arabia’s drive to boost tourism and diversify its economy away from oil.

  Meanwhile, 2024 also saw the award by UAE northern emirate utility Sharjah Electricity, Water & Gas Authority of the contract to develop its first independent water project (IWP), the 400,000 cubic-metres-a-day facility in Hamriyah, to Saudi utility developer Acwa Power, the contract’s sole bidder.

  In May, Saudi Arabia’s National Water Company announced that it had completed the award of 10 contracts under the first phase of its privatisation programme. Each rehabilitate, operate and transfer contract involves the retrofitting or expansion of existing sewage treatment plants and associated network, and their long-term operation and management. The facilities are expected to deliver water at the TSE level for irrigation reuse.

  On the greenfield sewage treatment front, Saudi Water Partnership Company (SWPC) awarded a $400m contract to develop the Al-Haer independent sewage treatment plant (ISTP) project to a team comprising the local Miahona Company and Belgium’s Besix. The facility is the largest and first to be tendered under the third round of the water offtaker’s ISTP procurement programme.

  In September, Chennai-headquartered VA Tech Wabag confirmed it had won a $317m contract to build the Ras Al-Khair seawater reverse osmosis (SWRO) facility in Saudi Arabia using an engineering, procurement and construction (EPC) model. The project client is Saudi Water Authority (SWA), formerly Saline Water Conversion Corporation.

  In Oman, Nama Water Services awarded two water distribution network packages, worth a combined $600m, catering to Al-Dhahirah Governorate.

  Jordan also appointed a team comprising Paris-based Meridiam, Suez and Vinci Construction Grands Projets, along with Egypt’s Orascom Construction, for the contract to develop the Aqaba-Amman water conveyance and desalination scheme. It is the country’s largest infrastructure project to date and the first phase is valued at an estimated $2bn-$3bn.

  The project is crucial to addressing Jordan’s severe water shortage problem, piping desalinated water over 445 kilometres from the southern Red Sea coast to the country’s northern regions. The consortium is talking to lenders and aims to reach financial close for the project in 2025.

  Slower momentum

  Despite 2024 being a good year for contract awards, it fell short of the expectation built over the past few years, when the region’s largest economies began to execute their long-term water strategies.

  For example, in Saudi Arabia, the years-long restructuring of the domestic water sector took a significant turn in 2024, with Water Transmission Company (WTCO), the kingdom’s licensed desalinated water transmission operator, gaining a broader portfolio of projects. As a result, the mandate to procure upcoming water transmission pipelines has been transferred to WTCO from SWPC.

  The slower pace of IWP contract awards in Saudi Arabia was somewhat offset by a slew of tenders from SWA. The authority received bids for the EPC contracts to build four SWRO facilities in 2024, although as of November it had only managed to award one.

  Earlier in 2024, Saudi gigaproject developer Neom also shelved a project to develop a zero-liquid discharge (ZLD) SWRO plant.

  “The year may not have been as strong as 2023, but it is still a good year,” says Robert Bryniak, CEO of Dubai-based Golden Sands Management (Marketing) Consulting. “Some projects have been delayed or cancelled – for instance a few in Saudi Arabia – but all in all [2024 has been] a good year for the water business.”

  Bryniak adds that Neom’s ZLD scheme is one of the year’s shelved projects that he would like to see revived in the future.

  Beyond the GCC states, Morocco and Egypt are endeavouring to move their planned SWRO projects into the tendering phase.

  In Morocco, Office National de L’Electricite et de L’Eue Potable (Onee) extended the review of its second IWP in Nador while waiting for its first IWP in Casablanca to reach financial close.

  The first batch of renewable energy- powered desalination plants in Egypt has yet to reach the proposals stage despite the Sovereign Fund of Egypt having completed the bid prequalification process in 2023.

  

  Potential contract awards

  According to data from MEED Projects, an estimated $34bn-worth of water projects are in the tendering stage across the Mena region. A further $40bn-worth is in the prequalification stage and $57bn is in the design and study phases.

  The $22bn Dubai Strategic Sewerage Tunnels (DSST) scheme stands out among the upcoming projects due to its scale, as well as for the chosen procurement approach.

  The project aims to convert Dubai’s existing sewerage network from a pumped system to a gravity system by decommissioning the existing pump stations and providing a sustainable and reliable service that is fit for the future.

  In April, Dubai Municipality launched the procurement process for the DSST project, which is to be developed as a public-private partnership (PPP).

  While a dose of pessimism persists over the chosen PPP model – in part due to the project’s scale and strong civil works orientation, and Dubai’s dismal track record in procuring PPP schemes outside the utility sector – the project has managed to attract strong interest from EPC contractors, as well as from potential investors and sponsors.

  Some of those that have sought to prequalify as investors, such as Begium’s Besix, Beijing-headquartered China Railway Construction Corporation and South Korea’s Samsung C&T, have previously been prequalified as EPC contractors for the DSST project, which suggests that the preferred approach of prequalifying EPCs ahead of investors could offer advantages.

  In Saudi Arabia, WTCO, SWA, SWPC and Neom’s utility subsidiary Enowa are each expected to let several contracts in 2025, while Bahrain and Abu Dhabi could award one IWP contract each.  

  However, a robust overall pipeline does not necessarily guarantee that 2025 will resemble the upward trajectory that the sector has seen in the past two years.

  “This year could be a turning point for the water industry throughout Mena,” says Bryniak, alluding to the possibility that, come January, the foreign and climate policies of the new occupant of the White House could affect the trend of water production capacity buildout in the Mena region.

  Bryniak says that if US President-elect Donald Trump follows through with his promises, then we may be in store for, among other events, lower energy prices as the US drills more oil; a dampening of world trade as the US places tariffs on imports, especially on Chinese goods and services; less focus on the environment; and, generally, a more isolationist America.

  “In my view, much depends on how much oil prices fall,” he continues. 

  “A significant drop in oil prices could result in cut-backs in a lot of development projects, and this, in turn, will adversely impact water demand and the overall build programme.”  

  However, the impact will not be uniform across asset types and procurement models, Bryniak notes. He expects water PPP projects to continue to grow, especially if capital availability is reduced by lower oil prices, as this is one way to preserve capital for use in other areas. 

  “I do not see any reason for tariffs to fall further in 2025. Tariffs, in my view, will remain roughly where they are now or increase slightly,” adds Bryniak.  

  However, the executive says that EPC contracts will likely have “a higher opportunity cost”, so there might be a reduced focus on this type of procurement model.  

  He concludes: “To the extent that development projects get trimmed down due to less capital being available as a result of significantly lower oil prices, then water procurers and other developers will likely scale back their projects.”

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  Jennifer Aguinaldo
• 
  Iraq 2025 country profile and databank

  27 December 2024

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  MEED Editorial
• 
  Middle East’s evolving alliances continue to shift

  26 December 2024

  

   

  Within and without, alliances in the Middle East are in a state of flux.

  The brittle tensions that pitted three Gulf states against Qatar, before the January 2021 Al-Ula Agreement found an amicable resolution, have given way to burgeoning rapprochement between the UAE and Qatar.

  On the other hand, the UAE-Saudi rivalry has intensified in recent years, culminating in late March 2024 in Riyadh’s lodging of an official complaint at the UN General Assembly, rejecting the UAE’s designation of territory adjacent to the kingdom as a protected maritime area.

  Differences over the two countries’ Opec strategies, and their approaches to regional conflicts – notably Yemen and Sudan – have also come to the fore.

  Latterly, a de-escalation has helped to defuse those tensions. Saudi Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud and UAE President Sheikh Mohamed Bin Zayed Al-Nahyan have strived to improve relations, with a meeting between the two leaders in late May doing much to stem the fraying of a once-close relationship.

  Thawing enmities

  The bigger shift in regional relations involves Iran. The Gaza conflict, fanning out to Lebanon, has helped reframe Gulf states’ ties with Tehran.

  This was evident in the landmark visit of Iranian Foreign Minister Abbas Araghchi to Bahrain in October for a meeting with King Hamad Bin Isa Al-Khalifa – the first such visit in 14 years.

  With a reputation as the Gulf state most hostile to Iran, Bahrain’s recent diplomatic outreach to Tehran reflects its sense that talking to the enemy is better than isolation, in the context of the current heightened regional tensions.

  The Chinese-orchestrated Saudi-Iran agreement of 2023 at least provides a template for Manama to follow.

  Bahrain’s overtures to Iran also reflect a new security dynamic in the region.

  With Iran-backed militias in Iraq showing themselves capable of dispatching missiles as far as Israel, some regional analysts say the Gulf states’ leaders are increasingly anxious that these Shia militias could just as easily target them.

  In this sense, building relationships with the Islamic Republic is one way of ensuring that domestic territory is not targeted by Iranian proxy militias.

  China is playing to the crowd. It … is looking to put a wedge between the US and the wider world, including Southeast Asia
  Bill Hayton, Chatham House

  Beijing’s broadening reach

  The region has also found itself increasingly engaged east of the Suez. 

  China’s regional role remains a work in progress, with the Saudi-Iran agreement arising out of Beijing’s willingness to offer a non-Western alternative to conflict mediation.

  From Riyadh’s point of view, China’s leverage with Iran, primarily through extensive trade and investment links, made it the ideal broker for an agreement that Saudi Arabia views as key to helping dial down the threat posed by Iran.

  The backdrop to such Gulf engagements with the likes of Iran and China is the evident reluctance of the US to provide the blanket security guarantees to its regional allies that it once did.

  This has incentivised the Gulf states to attempt diplomatic entreaties with regional adversaries, compelled by an understandable need for self-preservation.

  This has wider significance, placing China in a more prominent role in influencing regional politics – a sharp contrast with its previous low-key strategy and one that China watchers such as Bill Hayton, Asia-Pacific associate fellow at the thinktank Chatham House, see as being driven by interests rather than by tactical power politics.

  For Beijing at least, its involvement in 2023’s Saudi-Iran deal affords an opportunity to reinforce its regional influence, while demonstrating its support for the Palestinian cause – an issue that resonates with many across the region. 

  “China is playing to the crowd,” says Hayton. “It has decided that large parts of [the world] don’t like Israel and it is looking to put a wedge between the US and the wider world, including Southeast Asia.”

  China is meanwhile looking to deepen relations beyond Iran.

  Despite the evident importance it places on maintaining close relations with the Islamic Republic – most notably as the main buyer of the latter’s crude oil exports – China also sees value in building ties with Saudi Arabia.

  The recent accession of Saudi Arabia, alongside the UAE, Egypt and Iran, to the Brics geopolitical bloc affords further means for China to expand its influence in the region.

  From Saudi Arabia’s point of view, Brics membership could provide opportunities to broaden its engagement beyond the Western powers with which it has been allied for generations.

  The Trump factor

  Given that when Donald Trump resumes his occupancy of the Oval Office in late January the US is likely to take a maximum-pressure approach towards Iran once again, a more multipolar disposition could offer the Gulf states something of a hedge.

  Saudi Arabia could equally find itself in a position to be a conduit between the wider region and the Trump White House.

  With inbound Trump appointees including the fiercely pro-Israel Mike Huckabee as the proposed US ambassador to Israel, there is a concern that the White House could give a green light to Israel to annex the West Bank and embed its occupation of Gaza.

  The region may then find itself counting on Riyadh’s clout in Washington to restrain Trump from pursuing positions that would only escalate regional tensions.

  Between the likes of the EU, the UK and China looking to revive relations with Saudi Arabia, and Russia still being a partner in the Opec+ group, the Saudi leadership may find itself the centre of regional attention in 2025.

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  James Gavin
• 
  Power sector awards momentum accelerates

  26 December 2024

  

   

  The Middle East and North Africa (Mena) region’s power sector awarded over $60bn of contracts between January and early November 2024, up 47.5% compared to the value of awarded contracts in the previous full year.

  This figure is more than double the average value of annual contract awards recorded between 2014 and 2023, based on data from regional projects tracker MEED Projects.

  It also exceeds by 21% the total combined value of contracts awarded between 2018 and 2020, when some regional governments and utilities began pivoting to renewable energy and freezing the expansion of thermal plant capacities, in line with goals aimed at decarbonising their electricity systems.

  In 2020, the Covid-19 pandemic slowed down project activity and temporarily delayed the awarding of some contracts.

  The market staged a short-lived comeback in 2021, when Saudi Arabia awarded a string of contracts for solar photovoltaic (PV) independent power projects (IPPs), including a contract to develop the 600MW Shoaiba solar PV scheme, which holds the world record for the lowest unsubsidised solar PV production at $cents1.04 a kilowatt-hour.

  A slight contraction occurred the following year due to a spike in raw materials and engineering, procurement and construction (EPC) costs.

  Last year saw a stunning recovery, however, helped by the award of new renewable energy projects in Saudi Arabia, the UAE, Egypt and Oman, as well as by a resumption of contract awards for new gas-fired power plants, particularly in Saudi Arabia, Libya and Iraq.

  Yet 2024 is set to outshine 2023 in terms of awarded contracts for thermal, renewable energy and nuclear power generation plants, as well as for power transmission and distribution (T&D) infrastructure such as substations and overhead transmission lines.

  Major 2024 awards

  In 2023, power generation projects accounted for an estimated 79% of total contract awards, with T&D projects accounting for the rest.

  A different picture is emerging in 2024, with data in the first nine months of the year suggesting that generation contract awards are retreating to about 64% of the total. This is due to increased T&D capital spending that has so far driven a 150% increase in award value compared to full-year 2023.

  This is a clear indicator of T&D capacity buildout catching up with the generation capacity expansion, especially as larger economies such as Saudi Arabia strive to set up stronger and more efficient electricity links domestically, and as the energy-rich GCC states seek to establish stronger electricity links with one another and with their neighbours, including Egypt, Iraq and Jordan.

  Saudi Arabia has dominated the overall Mena power contracts landscape. Its share of 29% in 2022 soared to 61% in 2023 and 67% in the first 10-11 months of 2024.

  In May, principal buyer Saudi Power Procurement Company (SPPC) signed two power-purchase agreements with Japan’s Marubeni Corporation for contracts to develop two wind IPPs under the fourth round of the National Renewable Energy Programme (NREP). The Al-Ghat and Waad Al-Shamal wind IPPs have a total combined capacity of 1,100MW. 

  The contract for a third wind IPP, tendered as part of round four of the NREP, is also expected to be awarded soon.

  In June, Saudi sovereign wealth vehicle the Public Investment Fund (PIF) let the fourth batch of solar PV schemes, which it is implementing bilaterally through the Price Discovery Scheme.

  A team comprising Acwa Power, PIF-backed Water & Electricity Holding Company (Badeel) and Saudi Aramco Power Company (Sapco), a subsidiary of the state majority-owned oil giant Saudi Aramco, will develop the three solar projects, which will have a total combined capacity of 5,500MW and will require an investment of about $3.3bn.

  The Haden solar PV and Muwayh solar power plants, which will each have a capacity of 2,000MW, will be located in Saudi Arabia’s Mecca region. The third project, the 1,500MW Al-Khushaybi solar PV plant, will be located in the Qassim region. The three new solar PV facilities are expected to become operational in the first half of 2027.

  In early November, SPPC also announced the winning bidders for the contracts to develop four combined-cycle gas turbine plants comprising the second batch of thermal capacity that it has tendered since 2023. The four plants, located in Riyadh and the Eastern Province, will each have a capacity of 1,800MW and will require an investment of about $2bn each.  

  A developer consortium comprising the UAE-based Abu Dhabi National Energy Company (Taqa), Japan’s Jera Company and the local Albawani Company successfully bid for the contracts to develop and operate the Rumah 2 and Nairiyah 2 IPPs. Meanwhile, Saudi Electricity Company (SEC), Riyadh-based utility developer Acwa Power and South Korea’s Korea Electric Power Corporation (Kepco) won the contracts to develop and operate the similarly configured Rumah 1 and Nairiyah 1 IPPs.

  State utility SEC is also understood to have issued the limited notices to proceed for six greenfield thermal power plants with a total combined capacity of over 16,000MW.

  Power generation projects for which final contracts are expected to be awarded before the end of 2024 include:

  • Hajr: 3,600MW
  • Marjan: 1,800MW
  • Riyadh PP12: 1,800MW
  • Qurayyah: 3,600MW
  • Ghazlan 1: 2,400MW
  • Ghazlan 2: 2,900MW

  The $5.3bn high-voltage direct current network project connecting the central, western and southern regions of Saudi Arabia was the single largest power contract awarded in Saudi Arabia in 2024.

  The UAE, meanwhile, has awarded three key power contracts this year, including for the Al-Ajban solar IPP, which was won by a team of France’s EDF and South Korea’s Korea Western Power Company (Kowepo), and for the Dhafra waste-to-energy project, which a team of Japan’s Marubeni Corporation, Japan Overseas Infrastructure Investment Corporation and Zurich-headquartered Hitachi Zosen Inova is developing.

  Dubai Electricity & Water Authority (Dewa) is also understood to have awarded the contract to complete the Jebel Ali K-Station to Egypt-based Power Generation Engineering & Services Company.

  2025 outlook

  The Mena power projects pipeline remains robust, with over $45bn-worth of contracts under bid evaluation and another $50bn in the prequalification stage as of late 2024, according to MEED Projects.

  Saudi Arabia is likely to remain dominant, particularly if SPPC and the PIF activate a plan by the Energy Ministry to procure 20,000MW of renewable energy capacity annually until it reaches its target for renewables to account for half of its energy production mix by 2030.

  Morocco has the second-largest power projects pipeline thanks to several planned schemes to export clean energy and green hydrogen to Europe. Notably, the tender is under way for the country’s first two solar PV plus battery energy storage system (bess) projects, Noor Midelt 2 and 3.

  Abu Dhabi also maintains a substantial renewables and gas-fired generation project pipeline. It has several upcoming IPPs with a total combined capacity of over 7,000MW, of which more than 6,000MW is in the tendering stage.

  While the procurement process for Saudi Arabia’s first nuclear power plant in Duwaiheen has been delayed, the UAE has plans to procure the next phase of its nuclear power plant project in Barakah.

  Green industrial development in steel and aluminium, as is being undertaken in the UAE, is a driver for ongoing clean energy capacity buildout, notes Karen Young, senior research scholar at Columbia University’s Centre on Global Energy Policy.

  Egypt, Iran, Kuwait and Iraq have the next largest power projects pipelines. The key drivers in each state vary, with populous countries Egypt and Iran seeking to develop integrated green hydrogen hubs and nuclear power capacity, respectively, while Kuwait remains a promising market with extended plans to procure both conventional and renewable energy capacity to address peak demand.

  There are indications that Iraq’s first utility-scale solar PV scheme – a 1GW project being developed by France’s TotalEnergies – will head into the construction stage in the coming months, along with other similar projects for which preliminary agreements were signed by Iraqi authorities in 2021-22.

  Oman is actively pursuing renewable energy capacity, with the state offtaker having tendered the contracts for two wind IPPs in September 2024.

  In Oman and Qatar, the main downstream companies, Petroleum Development Oman and QatarEnergy, are developing renewable energy capacity as a means of mitigating their greenhouse gas emissions, as well as to support their respective government’s net-zero targets.

  In November, Bahrain started the procurement process for its fourth independent water and power project (IWPP) in Sitra, which replaced the previously planned Al-Dur IWPP 3 scheme.

  

  Other trends

  SEC affiliate National Grid Saudi Arabia has awarded EPC contracts for several bess packages to local firm Algihaz this year. In August, it tendered a contract for the construction of a further 2,500MW of energy storage capacity. 

  In parallel, the procurement process is under way for the first independent bess packages in Saudi Arabia and Abu Dhabi, with other utilities expected to follow suit in procuring bess using an IPP model. Bess will boost grid flexibility and spinning reserves in the face of increased renewable energy capacity and demand.

  In addition to bess and several gigawatts of solar and wind capacity, Saudi Arabia gigaproject developer Neom, which plans to be powered 100% by renewable energy by the end of the decade, is also considering a network of large-scale pumped hydropower storage plants.   

  However, despite the ongoing capacity buildout across the Mena states, some end-users – particularly in fossil fuel-
  scarce jurisdictions such as Morocco – continue to struggle with supply.

  “I’ve been part of a research project in Morocco looking at the renewable power landscape and green economy more broadly. In that case, we do see massive buildout, but it is tailored for offtake to state-related industrials,” says Columbia University’s Young.

  She adds that a telephone survey of 1,000 small and medium-sized businesses in Morocco about their perception of the accessibility and affordability of renewable energy yielded surprising results.

  “They strongly suggested a lack of support, given that smaller enterprises continue to see power outages and this has in many cases caused damage to their equipment and abilities to stay open and service customers.

  “The disconnect between power buildout and industrial advances in a green supply chain and how small and medium firms see power accessibility and reliability is very stark. In a Mena-wide sense, we might start to question how the delivery and transmission of power in an equitable way affects economic growth opportunities overall.”

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  Jennifer Aguinaldo