Meed | GCC leans towards battery energy storage

GCC leans towards battery energy storage

29 January 2024

The central tower of Noor Energy 1, the hybrid solar photovoltaic (PV) and concentrated solar power (CSP) fourth phase of the Mohammed bin Rashid Al Maktoum (MBR) Solar Park, is visible to motorists on the Saih Al Dahal Road on the outskirts of Dubai.

The 263-metre solar tower is part of the $4.3bn project that is touted as the largest CSP and thermal energy storage (TES) facility in the world.

It heats the salt stored in nearby tanks during the day to enable the production of energy at night.

Awarded in 2017 to a team led by Saudi utility developer Acwa Power, Noor Energy 1 will deliver electricity at a levelised tariff of $cents 7.30 a kilowatt-hour ($c/kWh), which Acwa Power says competes with fossil fuel-generated electricity without subsidy for reliable and dispatchable solar energy through the night.

Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, inaugurated the project in December.

The project’s higher levelised cost of energy (LCOE) compared to a plain solar PV plant accounts for the round-the-clock capability of the Noor Energy 1 plant to produce power.

The power-purchase agreement (PPA) for the project is for 35 years, which is 5-10 years longer than the average solar PPA in the Gulf region.

Competing technology

Six to seven years after the Noor Energy 1 contract was awarded, a competing technology addressing spinning reserve and intermittency when coupled with a renewable energy plant – battery energy storage – is gaining acceptance.

Lithium-ion batteries store excess energy produced during the day, which can then be discharged at night, providing grid stability that until recently has been supplied by gas-powered or liquid fuel-powered generation plants.

The cost of batteries is forecast to decline significantly over the next six years and beyond, although the LCOEs for solar or wind farms with storage capacity are still broadly considered significantly higher than those without.

Source: Lazard

According to the US-headquartered financial advisory firm Lazard, the average LCOE in an unsubsidised, utility-scale solar PV averaged between $24 and $96 a megawatt-hour (MWh) in 2023. In comparison, the added cost of lithium-ion batteries with four-hour storage capacity to a similar solar PV farm takes the LCOE to between $46 and $102/MWh.

Critical choices

Several CSP with TES (CSP+TES) projects have been awarded and completed in the Middle East and North Africa region. Kuwait and Abu Dhabi have built 50MW and 100MW CSP facilities, respectively, while Acwa Power has developed three CSP plants with a total combined capacity of 500MW in Morocco.

However, not many CSP+TES projects are forthcoming.

Saudi Arabia previously planned to procure a hybrid solar and CSP+TES project, but such a scheme is not included in the fifth and sixth procurement rounds of its National Renewable Energy Programme.

In 2019, Morocco awarded the contract for Noor Midelt 1, an 800MW solar CSP scheme, but it is understood that the project has yet to reach financial close and construction work has yet to start.

In comparison, half of the GCC states are planning to procure battery energy storage system projects using an independent power producer (IPP) model.

Saudi Arabia plans to procure 10GW of battery energy storage capacity, equivalent to 40 gigawatt-hours (GWh), by 2030. The procurement process is expected to start this year for the first phase, which will comprise a dozen sites with a total capacity of 2GW.

Abu Dhabi's Emirates Water & Electricity Company (Ewec) received expressions of interest from developers last year for its first 400MW battery energy storage project.

Oman, which does not plan to procure further gas-powered plants, is also considering a similar project.

"Broadly, battery energy storage solutions make more sense now than CSP+TES technology," a Dubai-based renewable energy expert tells MEED.

Others, however, remain convinced that there will continue to be a place for CSP+TES, especially in jurisdictions with plenty of barren and unused land. This is mainly due to the technology's ability to produce up to eight hours of energy, compared to an average of four hours offered by lithium-ion batteries.

The first utility-scale battery storage installation in the GCC is in Saudi Arabia. The 1,300MWh facility is designed to support the off-grid utility infrastructure of the Red Sea Project development. The smaller Amaala project will also feature a 700MWh battery storage capacity.

Neom Green Hydrogen Company has incorporated a 400MW battery facility as part of the more than 4GW renewable energy contract it awarded India's Larsen & Toubro last year. The infrastructure will support a 2GW electrolysis plant that will produce green hydrogen to be converted into ammonia for export to Europe.

However, some Middle East-based renewable energy developers remain cautious about the timeline and the scale of the planned battery storage independent power projects across the region.

"It is not clear if they have received an official mandate to proceed with the projects, but we are definitely interested in bidding," says a Dubai International Financial Centre-based executive from an international utility developer.

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Jennifer Aguinaldo

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The opportunities include airfield rehabilitation; a five-year construction framework covering multiple workstreams and facility types; a Terminal 3A (T3A) package; Terminal 1 (T1) optimisation; a fuel farm; and Concourse C works.

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The new packages add detail to Jedco’s wider expansion plans disclosed in 2023, when it was reported that the company would invest SR115bn ($31bn) to increase KAIA’s capacity to 114 million passengers a year, with an overall completion target of 2031.

Jedco has recently awarded several significant contracts linked to the airport’s upgrade programme.

In November 2024, a joint venture of local Algihaz Contracting and Turkey’s TAV was awarded a contract to rehabilitate the South Terminal to serve Umrah and Hajj pilgrims, with Singapore’s Surbana Jurong acting as consultant.

Earlier that year, Jedco also awarded France’s Alstom a contract to increase the capacity of the Innovia automated people mover at Terminal 1, including new cars and upgrades to signalling, communications and controls.

Surbana Jurong is expected to play a leading role in future KAIA expansion plans and is currently providing technical advisory and project management consultancy for more than 100 capital projects for Jedco, valued at over SR6bn ($1.6bn).

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Located on King Khalid Road along Medina’s Third Ring Road, the teaching hospital will have a capacity of 563 beds.

The contract duration is three years, with delivery targeted for late 2029.

The latest award follows a prolonged procurement cycle that began more than a decade ago as part of a public budget drive to expand Saudi Arabia’s higher education infrastructure.

The project’s first phase was initially signed in December 2011 with local firm Al-Muhaidib Contracting under a SR500m ($133.3m) contract.

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Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:

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Oman’s Public Establishment for Industrial Estates (Madayn) has tendered an estimated RO15m ($39m) contract to develop infrastructure for Thumrait Industrial City.

The tender was issued on 14 September, with bids due by 12 November.

The scope covers site-wide utilities and services, including an internal road network, stormwater channels and culverts. It also includes installing sewerage and water networks, along with landscaping works.

In addition, Madayn intends to build plug-and-play industrial units and a facilities building.

The first phase of the development will cover about 120,000 square metres (sq m).

Thumrait Industrial City is located in Oman’s Dhofar Governorate and spans an area of more than four million sq m.

The project location is close to concession blocks, quarry sites and the Najd agricultural areas. It is positioned to attract industrial investments in sectors such as mining and minerals processing (including gypsum and cement), food production, and a range of light and general manufacturing activities.

In March, Madayn said it is preparing to invest more than RO245m ($637m) to upgrade and expand infrastructure across its industrial cities between 2026 and 2030, as part of efforts to attract new investment and advance economic diversification.

According to media reports, Madayn chief executive Dawood Bin Salim Al-Hadabi said the programme is part of an expanded, phased plan aligned with Oman Vision 2040 and the authority’s long-term Madayn 2040 strategy.

The objective is to deepen Oman’s industrial base and spread growth across the sultanate’s governorates.

Madayn said the pipeline comprises about 90 strategic projects to improve industrial-city infrastructure, extend serviced land and increase the overall ease of doing business for investors.

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State-owned upstream operator Kuwait Oil Company (KOC) has reduced the number of approved contractors for onshore drilling and shallow-well maintenance from 51 to 24.

Firms that are no longer qualified include major contractors such as Italy’s Saipem, Oklahoma-based Helmerich & Payne and Houston-based Patterson-UTI Energy.

The latest list still includes a wide range of Kuwaiti, regional and international companies, according to the latest update on its electronic system, published on 21 September 2026.

The full list of contractors that are now qualified to participate in tenders is:
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- Arabian Drilling Company (Saudi Arabia)
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- Nabors Drilling International (US)
- National Drilling & Services Company (Oman)
- Sea & Land Drilling Contractors (Oman)
- Sinopec International Petroleum Service Corporation (China)
- Karamay Jianye Energy (China)
- Modern Drilling Company (Egypt)
- Grey Wolf Drilling International (US)
An earlier list, which was published on 11 February, included 51 qualified companies.

The reduction in qualified drilling contractors follows KOC’s notice on 27 April this year, informing existing qualified contractors that they would need to reapply.
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Wil Crisp

Abu Dhabi expects 45% emissions cut as electricity demand rises

21 September 2026

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Abu Dhabi-based Emirates Water & Electricity Company (Ewec) expects carbon emissions from power and water production to fall by more than 45% by 2035 as the UAE expands renewable energy and reverse osmosis (RO) desalination.

The state offtaker's latest long-term system planning forecasts emissions will decline from about 42 million tonnes in 2019 to approximately 23 million tonnes in 2035.

The reduction is expected despite annual electricity demand that is forecast to rise by about 70% in 2026-33.

Ewec said the expansion of renewable energy and the shift towards RO desalination will be the principal drivers of the reduction.

The company plans to increase Abu Dhabi's solar capacity to 14GW by 2030 and more than 35GW by 2035. This will be supported by up to 15GW of battery storage capacity.

According to regional project tracker MEED Projects, Ewec has over $16bn-worth of power and water projects in the execution stage as part of its long-term procurement programme to increase renewable energy and low-carbon water production capacity.

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It also comprises the 1GW Al-Dhafra open-cycle gas turbine power plant, the 2.5GW Taweelah C combined-cycle gas turbine (CCGT) plant and a separate 400MW bess IPP.

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The offtaker also expects RO desalination to account for more than 95% of total water production by 2035, with the procurement programme supporting the Abu Dhabi Department of Energy's Clean Energy Strategic Target 2035 for electricity production and the UAE Net Zero by 2050 Strategy.