meed-logo

line1 line2 line3
SIGN IN / REGISTER

Abu Dhabi and Riyadh compete for capacity

24 March 2025

Electricity generation installed capacity from renewable and nuclear energy sources is expected to overtake conventional installed capacity in Abu Dhabi by 2029.

Based on known projects that are under various stages of procurement and in line with a plan to procure 1.5GW of renewable capacity annually until the mid-2030s, as well as an assumption that the contracts for thermal capacities expiring between 2025 and 2029 will not be renewed, the UAE capital could see its total electricity generation installed capacity rise to approximately 38.5GW by 2029, up from around 22GW as of the end of 2024.

This figure includes the 5.2GW capacity from the solar photovoltaic (PV) project being built by Abu Dhabi Future Energy Company (Masdar), which is expected to come on stream in 2027. The project will supply up to 1GW of baseload capacity in tandem with a 19 gigawatt-hour battery energy storage system plant.

By 2029, the share of renewable energy is expected to reach 37% and nuclear energy 14% of total installed capacity. Capacity from gas-fired fleets is forecast to be 49%, down from 69% this year.

This scenario assumes that all projects under procurement and construction achieve commercial operations according to their timeline, that all four gas-fired fleets with a combined expiring capacity of 7.2GW are not extended, and that another 1.5GW solar PV project will be launched next year, following the Al-Zarraf solar IPP.

This further implies that at least 1.5GW of renewable energy capacity will start operating annually from 2026, and planned gas-fired power plants will be completed successively between 2027 and 2029. It precludes the launch of new thermal power projects apart from those already known or announced.

This massive capacity buildout, equivalent to between 16GW or 70% and 21GW or 94%, if the round-the-clock solar capacity is included, of its current installed capacity, requires Abu Dhabi to rapidly upgrade its grid infrastructure and deploy substantial battery energy storage capacity to ensure grid resilience and flexibility.

Competing for capacity

It also tests the capacity of developers and engineering, procurement and construction (EPC) contractors, which are equally beholden to pursue new contracts in Saudi Arabia.

The kingdom faces a pending deadline to decommission ageing liquid fuel-fired plants as part of an overall energy transition plan for its electricity sector. It aspires to procure 20GW of renewable energy capacity annually until 2030 "subject to demand growth", and have renewable sources account for half its electricity generation capacity at the end of the forecast period.

According to MEED Projects and MEED data, Saudi Arabia entered what could be the busiest period for power generation capacity buildout in its history this year, with over 50GW of power generation projects under construction, or about to start construction.

This is equivalent to over a quarter of its current installed capacity, which will also require a 60% expansion of its electricity grid coverage. 

Related reads: 

The scale and volume of contracts in both jurisdictions are a positive development for many developers and contractors, following a major slowdown in the years before and after the Covid-19 pandemic.

Even those extremely cautious about solar PV projects' ability to deliver desired profits, or those obliged to say no to thermal projects that do not offer a clear carbon capture path, can pivot to the rapidly expanding battery energy storage projects or, indeed, the potential hydropower projects in Neom in Saudi Arabia.

Retreating bidders 

It must be noted, however, that several international utility developers are shifting their geographical focus away from the region and have expressed a desire not to compete in the upcoming tenders for power generation projects.

As a result, the latest tenders in Riyadh and Abu Dhabi generally received fewer-than-expected bids. This trend may continue due to distinct factors affecting each fuel type.

“The volume of utility-scale gas projects is outstripping the availability of credible developers,” notes a senior executive with an advisory firm in the UAE. “Either they are already overloaded, withdrawing from the gas market, or uninterested in a particular country.”

Another key issue for developers and EPC contractors, regardless of the location of these projects, is the gas turbine original equipment manufacturer (OEM) gridlock, which affects delivery time and prices.

In general, top OEM manufacturers are caught between two choices: expand their capacity to accommodate rising demand and secure substantial cash flow going forward, or ignore the short to medium-term demand and eliminate the risk of building capacity that may be stranded beyond 2030, when clients may stop procuring new gas utility plants.

On the other hand, interest in renewables may remain intact, subject to improving returns prospects, another expert tells MEED.

Nonetheless, these developments translate to significant opportunities, particularly for local developers, EPC contractors and other OEM manufacturers – such as Italy's Ansaldo Energia – which have remained on the fringes of the region's utility power projects markets for many years.

Chinese firms that previously only focused on EPC, for instance, are gradually stepping up to the role of utility developers, which can help ensure that the region's offtakers continue to secure world-record-low tariffs for future projects.

This, however, may also seal the decisions by more established developers to exit the region for good.

https://image.digitalinsightresearch.in/uploads/NewsArticle/13526524/main.jpg
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Abu Dhabi announces $15bn infrastructure PPP projects

    12 May 2026

    The Abu Dhabi Investment Office and the Abu Dhabi Projects and Infrastructure Centre have launched a AED55bn ($15bn) public-private partnership (PPP) pipeline of 24 projects to be tendered in 2026 and 2027.

    The projects will be tendered across the transport, infrastructure and social sectors.

    According to a statement published by the Abu Dhabi Media Office, the transport sector accounts for 11 road projects, with AED35bn ($9.5bn) of construction capex, covering more than 300 kilometres of new and upgraded roads, tunnels, intersections and related network works.

    The infrastructure pipeline includes five projects budgeted at AED11bn ($3bn), covering dams, water storage, flood control, stormwater upgrades and urban landscaping.

    Social infrastructure includes eight projects budgeted at AED9bn ($2.5bn), covering sports facilities, specialist healthcare assets, schools and university campuses.

    The statement added that the pipeline forms part of Abu Dhabi’s infrastructure delivery plan and will be executed through PPP structures.

    It is also intended to support company establishment in the emirate, local content objectives, and supply-chain and industrial capacity.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16793904/main.jpg
    Yasir Iqbal
  • Saudi Arabia tenders GCC rail link from Kuwait to UAE border

    12 May 2026

     

    Saudi Arabia has begun the procurement process to deliver its portion of the GCC railway, which will connect all six member states.

    Saudi Arabia Railways (SAR) issued a tender for design consultancy services for the project on 7 May.

    The kingdom’s section of the railway will start at Al-Khafji in the Eastern Province, near the border with Kuwait, and end at Al-Batha, at Saudi Arabia’s border with the UAE. The route length in Saudi Arabia will be about 672 kilometres (km).

    The railway will interface with the Kuwait National Rail Road (KNRR) project on the Kuwaiti side. Last year, MEED exclusively reported that the KNRR design contract was awarded to Türkiye’s Proyapi Muhendislik ve Musavirlik Anonim Sirketi.

    The KNRR forms part of the wider GCC rail network. GCC railway projects have been progressing with renewed impetus since the six member states signed the Al-Ula Declaration in January 2021.

    In October last year, the Qatari cabinet approved a draft agreement paving the way for a railway link between Qatar and Saudi Arabia as part of the GCC railway network.

    GCC railway line

    Under the overall plan, the railway will span 2,186 kilometres, beginning in Kuwait, passing through Dammam in Saudi Arabia, reaching Bahrain via a planned causeway, and continuing from Dammam to Qatar, the UAE and, ultimately, Muscat via Sohar in Oman.

    The network’s route length within each member state is as follows: 684km in the UAE, 672km in Saudi Arabia, 306km in Oman, 283km in Qatar, 145km in Kuwait and 36km in Bahrain.

    The railway is designed for passenger trains travelling at 220 kilometres an hour (km/h) and freight trains operating at 80-120km/h.

    With high levels of project activity, governments in spending mode and renewed cooperation under the Al-Ula Declaration, the latest efforts to restart the GCC railway project may make more progress than previous attempts. If completed, the railway could prove transformational for a region that is globally connected but divided between its constituent parts.

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16793841/main.jpg
    Yasir Iqbal
  • Kuwait tenders upstream oil project

    12 May 2026

    State-owned upstream operator Kuwait Oil Company (KOC) has tendered a contract to develop power infrastructure to provide electricity to the country’s Bahra oil field.

    The project focuses on constructing an 11kV, 72MW main intake in the Bahra-A area.

    It also includes the development of 11kV, 20MW substations in the Bahra-A2 area, and the conversion of a substation in the Bahra-A1 area in northern Kuwait.

    An initial meeting for the project is scheduled for 7 June, and bids are due by 9 August.

    Kuwait’s oil and gas sector has been severely impacted by the blockade of the Strait of Hormuz, through which all of its crude exports are normally shipped.

    The country recorded zero crude oil exports in April for the first time since the end of the Gulf War in 1991, according to shipping monitor TankerTrackers.com.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16792080/main.png
    Wil Crisp
  • Chinese company signs deal to develop Syria cement plant

    12 May 2026

    China’s Jiangsu Pengfei Group has signed a deal with Damascus-based Al-Hasan Holding Group (HHG) to develop a cement plant in Syria’s Raqa governorate.

    The “strategic agreement” was signed on 29 April, according to a statement from HHG.

    The clinker production line will have a capacity of 5,000 tonnes a day (t/d).

    Syria is seeking to expand cement production capacity to meet demand from the domestic construction sector.

    HHG is an integrated investment conglomerate headquartered in Damascus with a portfolio of companies across sectors including industry, trade, energy, construction, tourism and services.

    It was founded by the Syrian businessman Hassan Kamel Al-Hasan.

    Jiangsu Pengfei Group is a manufacturer of rotary kiln and grinding equipment.

    The company is involved in the design, manufacture and service of equipment in the fields of building materials, metallurgy and the chemical industry.

    It is also an engineering, procurement and construction service provider that has completed more than 100 cement production line projects.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16792079/main.jpg
    Wil Crisp
  • Libya’s national oil company takes control of key refinery

    12 May 2026

    Libya’s state-owned National Oil Corporation (NOC) has signed an agreement to take full control of the country’s Ras Lanuf refinery.

    The agreement marks the end of a decade-long dispute with UAE-based Trasta Energy.

    NOC has signed a final agreement with Trasta to end their partnership in the Libyan Emirates Oil Refining Company (Lerco), giving the NOC full ownership of the Ras Lanuf refinery and petrochemical complex, according to a statement.

    In its statement, NOC said the deal was one of the most important developments in Libya’s oil sector since the 2011 uprising and closed one of the industry’s most complex disputes.

    NOC also said that the deal has paved the way for a new phase of rehabilitation, operation and development.

    Some analysts have linked tensions in the partnership to political divisions in Libya and the UAE’s support for eastern military commander Khalifa Haftar.

    Lerco was established as a joint venture to operate and develop the Ras Lanuf complex, but operations were disrupted after Libya’s civil war, which started in 2011 and overthrew Muammar Gaddafi.

    The Ras Lanuf complex is located about 600 kilometres east of Tripoli on Libya’s northeastern coast and has the capacity to refine about 220,000 barrels of oil a day (b/d), which would make it the country’s largest if it comes online.

    It includes a refinery, storage facilities, export terminals and petrochemical units.

    Under the agreement, all of Trasta’s shares will be transferred to the NOC, allowing the complex to operate under full Libyan management.

    Political instability and security problems have led to repeated problems in Libya’s downstream sector over the past decade.

    On 10 May, it was announced that the Zawiya refinery, which is the country’s largest functioning oil refinery, and the nearby oil port were resuming operations after military clashes forced the refinery to shut down for two days.

    Azzawiya Oil Refining Company, which operates the facility, said it had decided to lift the state of emergency, allowing work to resume at the site.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16792076/main.jpg
    Wil Crisp