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
  • Brent hits $112 a barrel following Saudi oil field attack

    22 October 2026

    Register for MEED’s 14-day trial access 

    Oil prices climbed more than 3% on 22 October after a drone targeting Saudi Aramco’s Shaybah oil field development killed two people and injured two others a day earlier, adding to concerns over energy supplies as attacks on Saudi energy infrastructure intensified.

    Global benchmark Brent crude hit $112.30 in early trading on 22 October, but later pared gains and was trading at $111.52 a barrel as of 11am GST.

    Three residents and a Saudi citizen were killed in two separate incidents in Saudi Arabia’s Eastern Province on 21 October, authorities said, as attacks on the kingdom accelerated following an escalation of hostilities with the Iran-backed Houthi group in neighbouring Yemen.

    Overnight, the Saudi-led coalition fighting the Houthis in Yemen announced that it had intercepted and destroyed four drones in the Eastern Province.

    Saudi air defences intercepted a drone attempting to target a processing facility at Saudi Aramco’s Shaybah oil field development on the morning of 21 October, the Saudi Ministry of Energy said.

    The official Saudi Press Agency (SPA) carried a statement quoting an energy ministry official as saying the attempted attack resulted in the deaths of two residents – a Filipino and a Nepali – and injuries to two others – an Indian and a Pakistani – after debris fell due to the interception.

    Following the interception, a fire broke out in a vehicle belonging to a contractor at the Shaybah oil field, outside the facility’s perimeter, with no impact on operations.

    Dammam airport attack

    Separately, a Houthi attack on King Fahd International airport in Dammam on the evening of 21 October killed an Indian resident and a Saudi citizen.

    Eight people were also injured in the attack, including a Saudi national, a Nepali, and two nationals each from India, Yemen and Bangladesh. Injuries ranged from minor to critical, the Saudi General Authority of Civil Aviation (Gaca) said the next day.

    “The attack also caused property damage, the extent of which is currently being assessed. Further updates will be provided,” Gaca said, adding that operations had since resumed at Dammam airport.

    Saudi Arabia has come under sustained attack from the Iran-aligned Houthi rebel group in October, including strikes on Riyadh’s international airport in what authorities described as the kingdom’s deadliest incidents in years, as the war with the group escalates.

    The Houthi militias also struck an administrative building at Aramco’s headquarters in Dhahran, in the Eastern Province, on 13 October, resulting in a limited fire.

    The Houthi rebels opened a new front in the regional war between Iran and the US in mid-July, when they breached a four-year truce with Saudi Arabia in Yemen’s civil war, which began in 2014, and started attacking Saudi vessels and Aramco energy assets along the Red Sea, including repeated strikes on the Jizan refinery.

    The 1,200-kilometre East-West pipeline operated by Aramco was also hit by Houthi missiles in September, and once directly by Iran in April.

    The East-West pipeline transports crude from Saudi Arabia’s Eastern Province oil fields to the Red Sea port city of Yanbu on the kingdom’s west coast. It has a pumping capacity of 7 million barrels a day.

    Saudi Arabia relies heavily on the East-West pipeline to bypass the volatile Strait of Hormuz maritime chokepoint and ship crude from its Red Sea coast. Riyadh has increasingly used the line to route exports away from Hormuz since the US-Iran conflict began on 28 February – a tactical advantage most of its Gulf neighbours lack.

    Aramco resumed crude exports via the pipeline at the start of October.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20841984/main.jpg
    Indrajit Sen
  • Nebius agrees Neom AI data centre capacity deal

    22 October 2026

    Register for MEED’s 14-day trial access 

    Saudi artificial intelligence (AI) company Humain and data centre developer DataVolt have signed a preliminary framework agreement with Netherlands-based AI cloud company Nebius for up to 50MW of data centre capacity at Oxagon, Neom’s industrial city on the kingdom's Red Sea coast.

    Under the proposed agreement, Nebius will become an anchor customer at the planned AI data centre campus.

    The contemplated capacity represents half of the initial 100MW currently under construction, which forms part of a planned 360MW first phase.

    The capacity is expected to be commissioned in stages from the fourth quarter of 2027.

    Humain, which is owned by Saudi sovereign wealth vehicle the Public Investment Fund, and DataVolt began construction on the initial 100MW facility at Oxagon in September. The wider campus is planned to reach 1.5GW of capacity.

    The agreement was signed during Nvidia’s GTC event in Berlin, held on 20-22 October. The US graphics processing unit (GPU) designer hosts the GPU Technology Conference (GTC) to showcase advances in AI and accelerated computing.

    Nebius is expected to deploy Nvidia-powered computing infrastructure at the Oxagon campus to support its AI cloud business and international customer base.

    The project combines Humain’s AI capabilities with DataVolt’s experience in developing, financing and operating digital infrastructure. It is intended to support large-scale AI and cloud workloads for Saudi and international customers.

    Oxagon is seeking to position itself as a location for energy-intensive digital infrastructure, supported by pre-zoned industrial land, power resources and subsea cable connectivity to Europe and Africa. The development is also expected to incorporate renewable energy and advanced cooling systems.

    The Oxagon campus builds on an agreement signed in February 2025 by Neom and DataVolt to develop data centre infrastructure at the site. That deal involved an investment of about $5bn and envisaged a 1.5GW development.

    In September 2025, DataVolt signed a memorandum of understanding with South Korea’s LG Electronics covering cooling systems for the Oxagon data centre project.

    DataVolt was founded in 2023 and is a wholly owned subsidiary of Saudi infrastructure developer Vision Invest. Humain was launched in May 2025 to develop capabilities across the AI value chain, including data centres, high-performance computing infrastructure, cloud platforms and AI models.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20837696/main.jpg
    Yasir Iqbal
  • Riyadh awards $301m Sheikh Jaber Road contract

    22 October 2026

     

    Register for MEED’s 14-day trial access 

    The Royal Commission for Riyadh City (RCRC) has awarded an estimated SR1.13bn ($301m) contract to local firm Alomaier Trading & Contracting Company to upgrade a section of Sheikh Jaber Al-Ahmad Al-Sabah Road in the capital.

    The project covers the construction of an urban road about 3 kilometres (km) long, with a right-of-way width of about 120 metres.

    The scope of work includes the delivery of three interchanges featuring post-tensioned, voided-slab concrete bridges; a cut-and-cover tunnel; and three box culverts designated IC02, IC03 and IC04.

    The contract also encompasses pumping and lifting stations, stormwater drainage and irrigation networks, earthworks, asphalt paving, roadway lighting, power distribution systems, mechanically stabilised earth retaining walls and landscaping works.

    The award forms part of RCRC’s wider programme to upgrade Riyadh’s arterial road network, decongest critical bottlenecks and expand transportation capacity in the city ahead of Expo 2030 and the 2034 Fifa World Cup.

    The contract award follows RCRC’s appointment in May of a joint venture of Riyadh-based Al-Rashid Trading & Contracting Company and Turkiye’s IC Ictas for an estimated SR5bn ($1.3bn) contract to construct another section of Sheikh Jaber Al-Sabah Road.

    That project covers 12km from Khurais Road to Al-Thumama Road and is a component of Riyadh’s Second Eastern Ring Road scheme.

    Alomaier Trading & Contracting Company has secured several contracts in recent months.

    In August, Saudi Arabian Railways awarded the contractor an estimated SR4bn-plus ($1.1bn) contract to add a second track to the first section of the existing phosphate railway in the kingdom’s Eastern Province.

    The railway package covers about 100km between AZ1/Nariyah Yard and Ras Al-Khair. Works include track doubling, alignment modifications, utility bridges, culvert widening, hydrological structures, conversion of the AZ1 siding into a mainline track, and enabling works for signalling and telecommunications systems.

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

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20833960/main.jpg
    Yasir Iqbal
  • Dewa International signs energy and infrastructure MoUs

    22 October 2026

    Dubai Electricity & Water Authority’s (Dewa) new development arm, Dewa International, has signed four memorandums of understanding (MoUs) with international partners to explore investment and project development opportunities in the energy, water and infrastructure sectors.

    The agreements, signed during Dubai’s Water, Energy, Technology and Environment Exhibition (Wetex 2026), follow the launch of the wholly owned subsidiary in June, as reported by MEED.

    At the time, the utility said the arm would be used to export Dubai’s energy and water infrastructure model, with a focus on developing conventional and clean energy projects for global markets.

    At Wetex, Dewa International signed an MoU with France’s EDF Power Solutions to explore potential joint participation in solar, wind, battery energy storage and pumped-storage hydropower projects.

    A separate agreement with China Energy International Group explores the company’s potential role as an engineering, procurement and construction (EPC) partner for major energy, water and infrastructure projects. The MoU also covers cooperation in project development and EPC services.

    A further agreement with UK-based Capital Dynamics focuses on potential joint investments in operational clean energy assets in Europe. The parties will also explore establishing an investment vehicle for future clean energy infrastructure investments.

    Dewa International also signed a fourth agreement with Mumbai-Headquartered Tata Consultancy Services, exploring the company’s potential role as a technical consultancy partner. The scope covers technology strategy, information technology and operational technology integration, and asset performance management solutions.

    Dewa currently has almost $7bn-worth of power and water projects under execution across the UAE, according to regional projects tracker MEED Projects.

    Its flagship Mohammed Bin Rashid Al-Maktoum Solar Park is the largest single-site solar park in the world. The utility is currently advancing the project’s seventh phase, with Abu Dhabi Future Energy Company (Masdar) recently submitting the lowest bid for the project, as exclusively reported by MEED.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20828111/main0128.jpg
    Mark Dowdall
  • EGA’s Al-Taweelah restoration reaches 50% completion

    22 October 2026

    Register for MEED’s 14-day trial access 

    The UAE’s Emirates Global Aluminium (EGA) has announced that half of the reduction cells at its Al-Taweelah smelter in Abu Dhabi, which sustained damage from Iranian attacks in late March, have been restarted.

    On 28 March, drone and missile attacks by Iran on Khalifa Economic Zone Abu Dhabi (Kezad), where the smelter is located, led to an emergency shutdown of the facility and injured two EGA employees, who were later discharged from hospital.

    To restore hot metal production, EGA said it must progressively repair and restart each reduction cell. So far, 631 of the 1,262 reduction cells at Al-Taweelah have been restarted.

    EGA – which is jointly owned by the governments of Abu Dhabi and Dubai – is working on all three potlines at Al-Taweelah in parallel, to accelerate the rate of reduction cell start-ups. Potline 1 was energised on 26 May, followed by Potline 3 on 13 July and Potline 2 on 3 August.

    After being restarted, a reduction cell typically takes a week to stabilise and reach full production. Some hot metal is used to restart subsequent reduction cells, with the balance being delivered to EGA’s Al-Taweelah casthouse, to be cast into finished premium aluminium products.

    Following the emergency shutdown, molten aluminium froze in every reduction cell at Al-Taweelah, leaving solid metal pads weighing up to 45 tonnes, which needed to be removed. Almost 80% of the reduction cells can then be restarted. The remaining reduction cells require repairs, potlining demolition and relining, depending on how long the reduction cells had been operating before the incident.

    Periodically cutting out, repairing and relining reduction cells at the end of their operating life is routine in aluminium smelting. Compared to the normal rolling maintenance programme, EGA has more than tripled its capacity in order to safely repair and restart reduction cells at Al-Taweelah, by optimising workflows, adding equipment, strengthening employee capability and deploying industrial process innovations.

    ALSO READ: EGA to receive first Guinea bauxite post-settlement

    About 1,000 employees are working on the restoration of hot metal production at the Al-Taweelah smelter, EGA said in a statement on 26 August.

    During the restoration, EGA has accelerated the deployment of a technology pilot at Al-Taweelah that would otherwise have required operating reduction cells to be shut down. The pilot E40 upgrades to 13 DX technology reduction cells will be used to prove the performance of the technology before industrialisation across all 808 DX technology cells at Al-Taweelah.  

    If applied to all DX reduction cells, EGA’s E40 technology has the potential to increase hot metal production by 67,000 tonnes a year (t/y).

    EGA’s Al-Taweelah alumina refinery is located next to the Al-Taweelah smelter.

    Alumina is the feedstock for aluminium smelters. It is transferred to storage and then into the smelter by a system of conveyor belts.

    The Al-Taweelah alumina refinery continues to produce alumina at approximately 50% capacity, EGA said. While the alumina refinery is technically ready to ramp-up further, timing will be based on supply chain dynamics and the optimisation of EGA’s alumina sourcing strategy.

    The company announced on 10 July that it had restarted alumina production at its main refinery in Al-Taweelah, adding at the time that it expected to have the technical capability to ramp up to full alumina production by the end of this year.

    The Al-Taweelah alumina refinery began production in 2019 and has a nameplate capacity of 2 million t/y. 

    EGA’s Al-Taweelah smelter consists of 1,262 reduction cells and produced 1.6 million tonnes of cast metal in 2025.

    The Al-Taweelah alumina refinery produced 2.4 million t/y of alumina in 2025, and met 46% of EGA’s alumina needs.

    EGA also said in July that its site in the Jebel Ali area of Dubai is continuing aluminium production at full capacity. Average daily inbound deliveries of all major raw materials exceed EGA’s requirements to maintain metal production at Jebel Ali and meet the demands of restoration at Al-Taweelah, with raw material stocks in the UAE increasing.

    Separately, the ramp-up of production at EGA’s new Al-Taweelah recycling plant remains on track, with full production expected by late in the fourth quarter of this year.

    EGA’s recycling plants in the US and Germany, meanwhile, have continued production throughout 2026.

    ALSO READ: EGA to receive first Guinea bauxite post-settlement

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20827987/main1007.jpg
    Indrajit Sen