meed-logo

line1 line2 line3
SIGN IN / REGISTER

The way forward for the region’s energy transition

12 December 2022

Published in partnership with

Whichever way one looks at it, the world faces a climate emergency. In its most recent multi-agency report published in September, the World Meteorological Organisation (WMO) warns that there is an almost one in two chance that the annual mean temperature in at least one of the next five years will be 1.5°C higher than the 1850-1900 pre-industrial average. 

This figure is important because it would breach the maximum temperature rise set by countries under the terms of the 2015 Paris Agreement and underlines the lack of progress in reducing harmful emissions. 

“Floods, droughts, heatwaves, extreme storms and wildfires are going from bad to worse, breaking records with alarming frequency,” said UN secretary-general Antonio Guterres in the report.

“Heatwaves in Europe. Colossal floods in Pakistan. Prolonged and severe droughts in China, the Horn of Africa and the United States. There is nothing natural about the new scale of these disasters. They are the price of humanity’s fossil fuel addiction.”

There are multiple ways to reduce global greenhouse gas emissions, with a common thread among them being using technology as a solution. 

Whether by making gas turbines more efficient, producing new low-carbon or carbon-free fuels such as hydrogen, increasing renewable energy output, or ensuring homes, towns and cities are ‘smarter’ in their use of electricity, technological innovation presents a means for countries to lower their carbon outputs. 

All [the reports] stressed we are not on track to keep climate change below 2 degrees, or even keep the 1.5 degree target within reach. More work needs to be done

Mohamed Nasr, Egypt's lead negotiator at Cop27

Scale of the problem

In the series of six articles MEED has published in association with Siemens Energy, we have explored the chief challenges the Middle East and Africa regions are facing in the fight against global warming and some of the opportunities and potential solutions to overcome them.

The first hurdle is recognising the scale of the climate challenge. The Siemens Energy Middle East & Africa Energy Week in June highlighted the disconnect between the perception of progress and reality, even among industry professionals. 

When asked to quantify CO2 reductions in their country today and what they will be in 2030 compared to 2005, Energy Week participants estimated that total emissions had fallen by 23 per cent on average over the past 17 years. Only one-third correctly answered that emissions had not only failed to fall, but had actually risen by 50 per cent over the same period. 

“All [of the reports] stressed that we are not on track to keep climate change below 2 degrees, or even keep the 1.5 degrees target within reach. More work needs to be done,” emphasised Mohamed Nasr, director of the Environment & Sustainable Development Department at Egypt’s Foreign Affairs Ministry and lead negotiator for Egypt at Cop27 during the event.

The harsh reality of the situation has underscored the pressing need for more rapid action among countries in the region. For the wealthier oil-exporting nations of the Middle East, much of the emphasis over the past 18 months has been placed on developing a green hydrogen industry to produce cleaner fuels. This is reflected by the more than 50 new green hydrogen projects announced in the GCC and North Africa over the past 18 months, which have an estimated investment value of more than $150bn. 

On the other hand, the priority for many countries in sub-Saharan Africa is very different as they battle the energy trilemma of extending affordable and reliable electricity provision to their populations. Spending billions of dollars on greenfield hydrogen developments and their associated infrastructure is not an option for many. Instead, the focus has generally been on smaller, off-grid renewable energy capacity to resolve the trilemma.

Working in tandem

Regardless of the approach adopted, the private sector recognises that companies need to work more collaboratively in the drive toward net zero. A case in point is the newly formed Alliance for Industry Decarbonization.

Announced in early September by the International Renewable Energy Agency (IRENA) and Siemens Energy, the alliance has already grown nearly threefold from the original 13 international energy and industrial members. 

The new industry grouping aims to achieve country-specific net-zero goals faster by encouraging action to decarbonise industrial value chains and enhance the understanding of renewables-based solutions and their adoption by industry. 

The alliance met for the first time at Cop27, where its members played a prominent role in discussions and thought leadership. Ultimately governments recognise that without corporates worldwide investing in clean energy projects and technology, there is little hope that targets will be achieved.

The intergovernmental summit ended on 20 November with a historic accord on setting up a fund to help compensate poorer nations for the economic and social destruction caused by climate change. 

But while the agreement, a culmination of some 30 years of negotiations between developed economies and developing nations, was a major step in the right direction, there remains a lot more that needs to be done to avoid an environmental catastrophe, such as setting legally-binding emission reduction targets, for example. 

The good news is that technologies and know-how are increasingly available to solve many of these challenges.

What is now needed is the political will and collaboration among nations and companies to work together to overcome our greatest threat. 

In the words of Siemens Energy president and CEO Christian Bruch: “The energy transition is the biggest investment programme since the dawn of industrialisation. If governments, business and society work together, energy transition is a massive opportunity. There is no excuse for waiting any longer.” 

Related reads:

Click here to visit Siemens Energy 
https://image.digitalinsightresearch.in/uploads/NewsArticle/10426502/main.gif
MEED Editorial

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

Click here to register
Exclusive from Meed
Related Articles
  • Oman prepares for wave of IPP awards

    3 December 2025

     

    Contract activity in Oman’s power sector slowed in 2025, yet the sultanate is entering the new year with its diversification plans advancing and procurement for independent power projects (IPPs) gathering pace.

    In the renewables segment, progress continued in September with the award of the sultanate’s fourth large-scale solar IPP. The 500MW Ibri 3 solar IPP was awarded to a consortium of Abu Dhabi Future Energy Company (Masdar), Korea Midland Power and local firms Al-Khadra Partners and OQ Alternative Energy.

    The project also incorporates a 100MWh battery system, making it Oman’s first utility-scale solar-and-storage development.

    Ibri 3 accounted for almost 60% of the power contract awards in 2025. While this reflects a quieter year for investment, it also highlights the transition taking place in the market, with attention shifting towards grid reinforcement and preparations for a series of IPPs expected to advance over the coming period.

    The inauguration of the 500MW Manah 1 and Manah 2 solar IPPs earlier in the year added further capacity, building on the operational Ibri 2 plant, which came online in 2021.

    Wind procurement also continues to advance. In November, Nama Power & Water Procurement Company (Nama PWP) signed a 20-year power purchase agreement with a joint venture of Singapore’s Sembcorp Utilities and OQ Alternative Energy for the Dhofar 2 wind IPP.

    The 125MW plant is scheduled to begin operations in the third quarter of 2027 and will add capacity to the Dhofar Power System (DPS), where Oman’s first commercial wind farm, the 50MW Dhofar project, already operates.

    In the DPS, peak demand is anticipated to grow by 5% a year, from 612MW in 2022 to 837MW in 2029. The Sadah wind IPP, which will add around 99MW to the system once operational, is expected to move forward in the coming months.

    Overall, the direction of the sector remains aligned with national plans to increase renewable energy’s share of electricity generation to 30% by 2030 and expand steadily thereafter.

    Oman’s renewable energy programme is expected to expand considerably by 2030, with about 4.5GW of solar IPPs and around 1GW of wind farms planned across multiple sites.

    Increasing wind power

    The wider wind programme includes the Duqm and Mahoot wind IPPs, which are moving forward and will have a combined generation capacity of more than 600MW. In October, Nama PWP issued a supervisory consultancy services tender for the Duqm project.

    Several awards are expected in the near term. Jalan Bani Bu Ali, a wind IPP of about 100MW, and the 280MW Al-Kamil Wal Wafi solar photovoltaic IPP are among four IPPs currently under bid evaluation.

    While Oman continues to scale up renewable capacity, the need for firm generation remains. Peak demand in Oman’s Main Interconnection System (MIS) is expected to grow at an average of 3.4% a year over the current planning period, reaching about 8,350MW in 2029, up from 6,628MW in 2022. 

    Demand in the MIS is likely to continue rising through the decade, supported by industrial growth, population increases and development in economic zones such as Duqm.

    Nama PWP aims to meet this requirement with two major thermal schemes: the $1.53bn gas-fired Misfah IPP and the $753m Duqm IPP. The state offtaker has received three bids for the development and operation of the plants, which together will supply 2,400MW and are scheduled to begin delivering early power by April 2028.

    Developing the grid

    Similar to previous planning cycles, grid development remains a priority. In September, the GCC Interconnection Authority signed a $500m interim financing agreement with Sohar International Bank to support the development of the direct Oman-GCC electricity interconnection.

    The project involves constructing a 400-kilovolt double-circuit line stretching approximately 530km between the Al-Sila station in the UAE and a new Ibra substation in Oman.

    Once completed, the link will enhance regional power exchange capability, improve reserve margins and support the integration of intermittent renewable power.

    These regional works complement domestic transmission upgrades, including the continued expansion of the Rabt North-South Interconnection. The first phase, completed in 2023, connected the MIS with the Duqm Power System.

    Construction works are ongoing on the second phase, which is expected to reinforce the 400kV backbone southwards toward Dhofar.

    New technologies are also emerging in Oman’s power programme. Ibri 3 represents the first deployment of utility-scale battery storage in the sultanate, setting a precedent for integrating storage with future renewable projects. 

    In parallel, Nama PWP and Oman Environmental Services Holding Company (Beah) are preparing to tender the main contract for a 100MW waste-to-energy (WTE) project in Barka.

    Estimated to cost almost $1bn, the scheme would be Oman’s first major WTE facility and reflects broader efforts to embed circular-economy principles into the national infrastructure programme.

    Water sector

    The water sector recorded a solid year, with about $1bn in contract awards, although activity remained below 2024 levels.

    In March, China National Electric Engineering Corporation (CNEEC) won the main contract for a $200m deep-sea desalination project, heading a list of smaller wastewater and transmission packages awarded across 2025.

    Following the commissioning of the Barka 5 independent water project (IWP) and continued construction on the Ghubrah 3 IWP, planning attention has shifted to the next cycle of capacity.

    The next major scheme expected to move forward is a $150m desalination plant in Dhofar, with a planned capacity of 22 million imperial gallons a day.

    Rising water demand in Sharqiyah and Dhofar continues to guide long-term planning with more than $800m-worth of water transmission and treatment schemes set to be awarded in the near to medium terms.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15196122/main.gif
    Mark Dowdall
  • Local contractor wins Saudi substation deal

    3 December 2025

    Saudi Arabia-based Nesma Infrastructure & Technology has signed a contract with state-owned utility Saudi Electricity Company (SEC) to replace the Jubail Southeast 230/115/34.5kV substation.

    The project includes overhead transmission line (OHTL) works and is valued at more than SR840m ($224m). It is scheduled to be delivered within 20 months.

    The award forms part of SEC’s ongoing programme to upgrade ageing substations and reinforce network capacity in the Jubail industrial area.

    In September, local contractor Al-Fanar Projects was appointed to replace the Jubail Southwest 230/115KV substation, one of several transmission assets in the region undergoing phased renewal.

    As MEED recently reported, SEC has plans to invest SR220bn ($58.7bn) in power projects by 2030. This includes SR135bn ($36bn) and SR85bn ($22.7bn) for transmission and distribution, respectively.

    According to the utility, its planned upgrades will cover 130 high-voltage substations, 135,000 MVA of capacity, 12,900 kilometres of overhead transmission lines and 1,100km of underground cables.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15195824/main.jpg
    Mark Dowdall
  • SEC signs $347m power works deal for Soudah Peaks

    3 December 2025

    Register for MEED’s 14-day trial access 

    Saudi Electricity Company (SEC) has announced that its transmission subsidiary, National Grid, has signed a SR1.3bn ($347m) agreement with Soudah Development to deliver the electrical infrastructure for Saudi Arabia’s Soudah Peaks project.

    Soudah Peaks is a major high-altitude tourism and real estate development in the Asir mountains, led by Soudah Development, a wholly owned Public Investment Fund (PIF) company.

    The $7.7bn project includes hotels, resorts, residential units, entertainment facilities and outdoor activity zones at elevations of up to 3,000 metres. It will be developed over three phases, with full completion scheduled for 2033.

    Under the agreement, National Grid will develop a full integrated electrical network to support the project’s phased construction.

    The scope includes a central 380/132kV transmission substation with a capacity of 500MVA and two 13.8/132kV substations. The company will also build the electrical interconnection needed to supply all stages of the development.

    The first phase of the initiative will see the development of 454 residential units, 1,010 hotel keys and retail space with a gross leasable area of 20,625 square metres by 2027.

    The overall project includes the development of six main areas: Red Rock Mountain, Tahlal gateway to Soudah Peaks, Sahab, Sabrah, Jareen and Rijal.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15194632/main.jpg
    Mark Dowdall
  • Jeddah Economic Company appoints new CEO

    3 December 2025

    Register for MEED’s 14-day trial access 

    Jeddah Economic Company (JEC), the developer of the world’s tallest tower project, has appointed Fabian Toscano as its new CEO.

    In an official statement, JEC said: “Toscano will lead the next phase of development for Jeddah Economic City and the Jeddah Tower. His focus will include accelerating development activity, strengthening global collaborations, and shaping a world-class destination aligned with the ambitions of Saudi Vision 2030.”

    Toscano has previously served as the CEO of AlUla Development Company.

    Last year, JEC signed an estimated SR8bn, 42-month contract with SBG to resume construction work on the tower. SBG then began engaging with the supply chain to work on the project. SBG awarded Beijing-headquartered Jangho Group a facade works contract that involves engineering design and technical services for the project’s structural glass and adhesive curtain walls. 

    At the time, Jeddah Tower’s superstructure was about one-third complete, with 63 floors out of a total 157. SBG was the main contractor on the project in the early and mid-2010s. Germany’s Bauer completed the tower’s piling work.

    The architect is US-based Adrian Smith & Gordon Gill, and the engineering consultant is Lebanon’s Dar Al-Handasah (Shair & Partners).

    Jeddah Tower is the centrepiece of the Jeddah Economic City development. The project’s first phase, which includes the main tower, covers an area of 1.5 million square metres.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15194477/main.gif
    Yasir Iqbal
  • Saudi Arabia approves 2026 state budget

    3 December 2025

    Saudi Arabia has approved a SR1.313tn ($349bn) state budget for fiscal year 2026, maintaining an expansionary spending stance as it pursues its Vision 2030 economic transformation agenda.

    The Ministry of Finance’s Final Budget Statement, released on 2 December, projects revenues of SR1.147tn, leaving an estimated deficit of SR165bn, equivalent to about 3.3% of GDP. The figures are broadly in line with the projections set out in October’s pre-budget statement.

    Finance Minister Mohammed Aljadaan said the 2026 budget underlines Riyadh’s commitment to sustaining economic diversification and social development while preserving fiscal sustainability over the medium term. He stressed that citizens remain the core focus of spending plans, with continued allocations for education, health and social services, alongside investments in infrastructure and quality-of-life improvements across the kingdom’s regions.

    Non-oil activities are expected to remain the main engine of growth. Initial estimates for 2025 point to a 5% expansion in non-oil GDP, supported by higher investment and consumption, while real GDP is forecast to grow by 4.6% in 2026, driven primarily by non-oil sectors.

    Public debt is projected to rise to SR1.457tn in 2025 (31.7% of GDP) and SR1.622tn in 2026 (32.7% of GDP). Aljadaan said the debt profile remains sustainable by international standards and confirmed that the government will continue to tap local and international debt markets and alternative financing channels to cover the deficit and refinance maturing obligations.

    Government reserves held at the Saudi Central Bank are expected to remain stable at around SR390bn through the end of 2026, supporting the kingdom’s capacity to absorb external shocks. The minister said ongoing structural and fiscal reforms have strengthened public finance management and enhanced the resilience of the Saudi economy amid a challenging and uncertain global environment.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15194673/main.gif
    Colin Foreman