meed-logo

line1 line2 line3
SIGN IN / REGISTER

Solving Europe’s energy challenge

13 September 2022

Published in partnership with

One of the most apparent aspects of the Russia-Ukraine conflict is the rapid increase in energy prices brought on by Moscow’s reduction in exports to its European neighbours.

In 2021, Russia was the largest exporter of oil and gas to Europe, supplying some 40 per cent of its energy requirements, including 100 per cent of the total gas imports of five EU states, according to the International Energy Agency.

The continent’s three largest economies – Germany, Italy and France – depended on Russian gas for 46 per cent, 34 per cent and 18 per cent of their energy needs, respectively. 

The imposition of sanctions on Russia in March 2022, followed by Moscow’s threat to suspend hydrocarbon exports, has resulted in a surge in energy prices.

Opec’s crude basket price increased from $78 a barrel at the start of the year to $122 in early June, while Henry Hub natural gas prices more than doubled from $3.8 a million British thermal units (BTUs) to $8.7 a million BTUs over the same period.

Expensive energy bills

This rapid energy inflation has been passed on to consumers through higher electricity bills.

In the UK, for instance, the energy regulator Ofgem estimates that the default tariff price cap will more than double from £1,300 ($1,529) in January to £3,580 in October, and reach a peak of £4,266 in the first three months of 2023, when demand will be highest during the colder winter months.

Replicated across the continent, this is likely to result in millions of households entering ‘fuel poverty’ as they struggle to pay their energy bills. 

The Mena region is well-positioned to plug the shortfall in Russian gas exports as European governments scramble to source gas from new markets to reduce their dependence on Moscow

Reducing reliance on Russia

The subject was not surprisingly a central theme of debate at Siemens Energy’s Middle East & Africa Energy Week held in June, where attendees agreed on two main conclusions drawn from the crisis. 

The first was that the Middle East and North Africa (Mena) is well-positioned to plug the shortfall in Russian gas exports as European governments scramble to source gas from new markets to reduce their dependence on Moscow.

The GCC alone globally exports almost exactly half of the 411 billion cubic metres of gas that Russia supplies to Europe annually. Most of this is in the form of long-term liquefied natural gas (LNG) contracts to east Asia, but there is some limited capacity available – primarily from Qatar – to fill part of the shortfall.

European nations have been quick to recognise this. For example, following a visit to the region by its Vice-Chancellor and Climate & Energy Minister Robert Habeck in March, Germany – Europe’s largest energy market – is now fast-tracking the construction of two LNG import terminals and has entered a long-term energy partnership with Qatar, the world’s largest LNG exporter. 

Energy Week

The second principal finding from the Middle East & Africa Energy Week was that the conflict would act as an additional catalyst for renewable energy development as nations globally attempt to diversify their energy sources and reduce their dependence on imported fossil fuels. 

This was in keeping with the results of a poll of up to 400 of the event’s participants. The survey, which forms the central component of the Siemens Energy’s Middle East & Africa Energy Transition Readiness Index, revealed that attendees considered the acceleration of renewables as the highest priority among 11 energy policies in their efforts to tackle the climate crisis, as well as the one with the greatest potential impact.

The Middle East is already taking a clear lead in this as it sets ambitious targets for clean, renewable capacity. For example, Saudi Arabia is looking to scale up its share of gas and renewable energy in its energy mix to 50 per cent by 2030.

Similarly, the UAE has set ambitious targets for 2050: to improve energy efficiency by 40 per cent, reduce emissions from the power sector by 70 per cent and increase the share of renewables in the energy mix to 44 per cent.

While Europe is looking for alternative gas supplies to urgently fill the gap in the short term, there is little doubt that in the longer term renewable energies and hydrogen will dominate the energy markets

Dietmar Siersdorfer, Siemens Energy

Hydrogen

In the long run, the energy crisis also provides momentum for the development of hydrogen production in the region, one of four other central themes emerging from the Energy Week. 

Demand for hydrogen in Europe alone is forecast to double to 30 million tonnes a year (t/y) by 2030 and to 95 million t/y by 2050. Thanks to its geographical position, the Middle East is ideally located to meet this demand either by ship or pipeline. 

Today, there are at least 46 known green hydrogen and ammonia projects across the Middle East and Africa, worth an estimated $92bn, almost all of which are export-orientated.

“While Europe is looking for alternative gas supplies to urgently fill the gap in the short term, there is little doubt that in the longer term renewable energies and hydrogen will dominate the energy markets. That the robust mix of the energy (gas and renewables) will make the energy system more resilient and support energy supply security while we, at the same time, move us at a fast pace into a renewable future,” says Dietmar Siersdorfer, Siemens Energy’s Managing Director for the Middle East and UAE.

Electricity to Europe

Another unintended consequence of the Ukraine crisis is to turn attention to direct electricity supply from the Mena region to Europe. 

Although plans for exploiting the high solar irradiation levels and space provided by the Sahara desert through initiatives such as DESERTEC have long been mooted as an alternative solution, a combination of the crisis, lower costs and improving technologies are increasing impetus.    

Some projects are already capitalising on the trend. For example, a joint venture of Octopus Energy and cable firm Xlinks recently received regulatory approval for a 3.6GW subsea interconnector between Morocco and the UK, using energy produced from vast solar arrays in the desert. 

A similar project is the 2GW high-voltage EuroAfrica connector currently under construction linking Egypt with Greece via Crete. Plans are also under way for a third power connection between Morocco and Spain, which today is the only operational electricity link between Africa and Europe.

With the Egyptian-Saudi interconnector now under construction, and agreements recently reached for interconnectors between Saudi Arabia and Jordan and Kuwait and Iraq, the region is growing closer to supplying power to Europe directly.

“The development of regional grids has brought the prospect of direct current connection with Europe ever closer,” says Siemens Energy’s VP and Head of Grid Stabilisation in the Middle East, Elyes San-Haji. “Due to its plentiful solar resources, the Mena region could become an energy hub with a global network of high-voltage highways and super grids.”

Connection benefits

Interconnection makes sense on many levels. Not only would Europe benefit from a diversified, economical and renewable energy source, but its season of peak demand, winter, coincides with when supply is lowest in the Middle East, and vice-versa. Power transfer would not necessarily have to be in one direction only. 

The Ukraine conflict and ensuing energy crisis have created an unprecedented opportunity for the Middle East and Africa to become more closely integrated with Europe. Whether in the form of fuel exports, either gas or potentially green hydrogen fuels, or direct electricity supply, the Arab world has never had a better chance to become the energy partner of choice for its European neighbours.

Related reads:

Click here to visit Siemens Energy 
https://image.digitalinsightresearch.in/uploads/NewsArticle/9998557/main.gif
MEED Editorial

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

Click here to register
Exclusive from Meed
Related Articles
  • Egypt tenders 500MW solar IPP

    19 February 2026

    Register for MEED’s 14-day trial access 

    Egyptian Electricity Transmission Company (EETC) has issued a request for qualifications for a 500MW solar photovoltaic (PV) independent power producer project in Egypt’s West of Nile area.

    The bid submission deadline is 11 May.

    The project is being supported by the European Bank for Reconstruction & Development and will be developed under a build-own-operate model.

    Developers will be responsible for designing, financing, constructing, owning and operating the plant, with EETC acting as the offtaker for generated electricity.

    US/India-based Synergy Consulting is acting as lead, financial and commercial advisor for this transaction.

    The project forms part of Egypt’s strategy to strengthen long-term electricity supply and increase renewable generation capacity.

    Egypt is targeting 42% renewable energy in its power mix by 2030. The country aims to raise this share to 65% by 2040.

    EETC previously had plans to build a 200MW solar plant in a west Nile area but cancelled the tender for the project in 2020.

    Egypt's power sector had its strongest year in over a decade last year, accounting for $4.2bn of total contract awards.

    Despite dipping from the previous year, solar accounted for about $1bn of total awards. 

    In November, a consortium of local firms Hassan Allam Utilities and Infinity Power won contracts to develop two solar PV projects with a combined capacity of 1,200MW, supported by 720 megawatt-hours (MWh) of battery storage.

    The UAE’s Amea Power and Japan’s Kyuden International Corporation also recently reached financial close on a $700m project comprising a 1,000MW solar plant and 600MWh battery system in Aswan.

    The scheme is backed by a $570m debt package led by the International Finance Corporation and is expected to become Africa’s largest single-asset solar and storage facility when it enters operation later this year.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15701778/main.jpg
    Mark Dowdall
  • Local contractor wins $143m Jeddah sewage contracts

    19 February 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s National Water Company (NWC) has awarded two sewage network contracts worth a combined SR536.3m ($143m) to local contractor Civil Works Company.

    The projects will be implemented over 32 months from site handover and will serve northern Jeddah districts.

    The first contract, valued at SR278.5m ($74.3m), covers incomplete main lines and secondary sewage networks serving parts of the Al-Bashair, Al-Asala and Al-Falah neighbourhoods.

    The scope includes pipelines ranging from 200mm to 800mm in diameter with a total length of about 54.8 kilometres (km).

    The package also includes sewage tunnels with diameters ranging from 600mm to 1,800mm and a total length of approximately 6.5km. Works will also serve the Taybah, Abhar Al-Shamaliyah and Al-Hamdaniyah districts.

    The second contract is valued at SR257.8m ($68.8m). It covers the implementation of main lines and sub-networks to serve part of the Al-Hamdaniya neighbourhood.

    The works include pipelines ranging from 200mm to 1,500mm in diameter with a total length of about 78.5km. The scope also includes horizontal drilling works for sewage tunnels with diameters from 1,200mm to 1,400mm and a total length of approximately 205 metres.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15699620/main.jpg
    Mark Dowdall
  • Saudi Arabia prequalifies firms for gas transmission grids

    19 February 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia's Energy Ministry has prequalified companies to develop natural gas distribution networks in five industrial cities in the kingdom on a build-own-operate (BOO) basis.

    The industrial zones earmarked are Al-Kharj Industrial City; Sudair City for Industry and Business; and the First, Second and Third Industrial Cities in Jeddah, the Energy Ministry said in a statement.

    The contractors prequalified to bid for the natural gas transmission grids BOO scheme include eight standalone firms and seven consortiums:

    • East Gas (Egypt)
    • Natural Gas Distribution Company (Saudi Arabia)
    • Egyptian Kuwaiti Advanced Operation and Maintenance (Saudi Arabia)
    • Modern Gas (Egypt)
    • Saab Energy Solutions (Saudi Arabia)
    • Sergas Contracting (Saudi Arabia)
    • Bharat Petroleum Corporation (India)
    • UniGas Arabia (Saudi Arabia)
    • Best Gas Carrier / Khazeen / Mubadra (Saudi Arabia)
    • Al Sharif Contracting (Saudi Arabia) / Anton Oilfield Services Group (China) China Oil and Gas Group
    • Hulul (owned by Saudi Arabia’s National Gas and Industrialization Company) /Al-Fanar Gas Group (UAE)
    • Indraprastha Gas (India) / Masah Contracting (Saudi Arabia)
    • Expertise Contracting / PGL Pipelines (UK)
    • National Gas Company (Egypt) / Egypt Gas (Egypt)
    • Taqa Arabia (Egypt) / Taqa Group (UAE)

    The Energy Ministry has set a deadline of 23 April for these prequalified contractors to submit technical bids.

    The ministry added in its statement that it has identified a total of 36 industrial cities in Saudi Arabia for gas infrastructure development.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15699582/main0334.png
    Indrajit Sen
  • Consultants bid for Abu Dhabi airport delivery partner role

    19 February 2026

     

    Abu Dhabi Airports Company (Adac) received bids from major international firms on 19 January for a contract covering the delivery partner role for the upcoming packages at Zayed International airport (AUH).

    The project is part of the AUH satellite terminal programme, estimated at AED10bn ($2.7bn).

    MEED understands that the following firms have submitted bids:

    • Aecom (US)
    • AtkinsRealis/Egis/Mace (Canada/France/UK)
    • Bechtel (US)
    • Hill International (US)
    • Jacobs / Surbana Jurong (US/Singapore)
    • Parsons Corporation / Arup  (US/UK)

    The plan includes a new satellite concourse east of Terminal A, linked by an underground tunnel housing both an automated people mover and a baggage handling system.

    It also includes apron stands, taxi lanes and taxiways, East Midfield landside access and utilities, additional bus gates and the reconfiguration of the North and South aprons and Apron 6.

    The latest tendering activity follows the start of construction works on the East Midfield cargo terminal located at AUH, as MEED reported in December 2024.

    Local firm Raq Contracting is undertaking the construction works on this project. 

    The terminal will cover an area of 90,000 square metres and will have the capacity to handle about 1.5 million tonnes of cargo annually.

    The project is part of a broader plan to enhance the new airport's profile.

    Abu Dhabi opened a new passenger terminal in November 2023 as part of the airport’s plan to increase its passenger traffic in line with the UAE’s wider growth plans, along with projects such as the rail network being built by Etihad Rail.

    In May 2024, MEED reported that AUH's new Terminal A could connect to the Etihad Rail network in the future, as part of its growth and interconnectivity plans. 

    Plans are in progress to link the new terminal at AUH to the UAE’s growing rail network, according to the CEO of Adac.

    Speaking to UK analytic firm GlobalData's Airport Technology during a tour of the new Terminal A at AUH, CEO Elena Sorlini said that Abu Dhabi Aviation is planning to improve the transport links to the site. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15698728/main.png
    Yasir Iqbal
  • Qatari firm wins Damascus airport MEP works

    19 February 2026

    Qatari firm Elegancia MEP, which is owned by local investment firm Estithmar Holding, has won a contract to undertake the mechanical, electrical and plumbing (MEP) and extra-low-voltage (ELV) systems works for the Damascus International airport Terminal 2 project.

    In a statement, Elegancia MEP said that its scope covers the execution of MEP and ELV systems works to support terminal operations, passenger facilities, safety systems and overall operational efficiency.

    The MEP works for the airport project include electrical installations; heating, ventilation and air conditioning (HVAC) systems; safety and security systems; firefighting systems; surveillance and monitoring systems; control systems; and plumbing works.

    The contract award follows the signing of the final concession contracts in November last year by Qatar’s UCC-led consortium to redevelop Damascus airport, formalising the prior memorandum of understanding (MoU) inked in August 2025 with Syria’s General Authority of Civil Aviation.

    The contract will see the consortium redevelop and expand the airport in several phases under a build-operate-transfer framework, with a view to raising total capacity to 31 million passengers annually upon the completion of all phases.

    The agreement is valued at an estimated $4bn and includes plans for the overhaul of all existing terminals, the construction of other passenger facilities and 500 kilometres of access roads, as well as the development of a commercial complex centred around a five-star hotel.

    The signing of the final concession contracts followed UCC Holding’s provisional signing in October last year of five consultancy and design agreements for planned work on the project.

    The earlier MoU designated UCC Holding as the primary developer through its investment arm UCC Concessions Investment, alongside three Turkish partners – Cengiz, Kalyon and TAV – and the US-based Assets Investments USA.

    US-based firm Synergy Consulting is the financial adviser for the consortium.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15698666/main.png
    Yasir Iqbal