This January marks the return of the POWER-GEN Middle East conference and exhibition to Bahrain, which last hosted the event in 2004. During the intervening years, the Gulf region has enjoyed a period of spectacular economic growth, which is manifesting itself in a huge construction programme – financed to a large extent by the strength of oil prices. This construction boom threatens to put a strain on the ability of utilities to deliver adequate power and water supplies. The current demand for electricity from the Gulf Co-operation Council (GCC) countries is some 60 GW and is expected to triple over the next 25 years. Not surprisingly, the power industry is busy responding to the challenge.
There is a host of power and water infrastructure activity in the region, from genset manufacturers supplying the construction trade through to major power and water project development and strengthening of transmission systems. It all adds up to interesting business opportunities for both local and international firms.
There promises to be plenty to discuss and debate over the three-day event in Bahrain and a good number of potential customers will be on the look-out for the latest technology options. Those interested in an external perspective on the region’s opportunities will have an opportunity to listen to the views of business leaders from four leading European OEMs in one special session on the first day of the conference.
Many Middle East electricity and water projects have progressed in the last three years and several new ones have been announced. GCC states like Qatar and Abu Dhabi, who have opted for private participation in their power sector, have pursued this course with renewed vigour and have been joined by more recent converts.
There has also been a noticeable willingness among industry professionals in the Middle East to discuss the role of different fuel alternatives in the future fuel mix of the region. The assumption that gas will always be the preferred fuel is being challenged as soaring demand is putting pressure on existing gas stocks. Oman for example is considering building a coke burning power station, which would be the first in the GCC. And while power generation from renewable energy sources is still a fringe activity in the Middle East, the number of pilot projects, hybrid plants and renewable energy research areas are on the increase.
In early December, a high committee of the GCC, which includes Saudi Arabia, Kuwait, Bahrain, Oman, the UAE and Qatar, ordered a study to be carried out into the creation of a joint programme of nuclear technology for peaceful purposes. This move follows an earlier announcement by Egypt that it was planning to develop nuclear technology. The move by the GCC countries was seen as having political connotations given Iran’s development of uranium enrichment technology and the presence of nuclear weapon technology in Israel.
Planned gas and electricity links between the Gulf States also threaten to change the existing dynamics. The $7 billion Dolphin project due to come on stream in 2007 will mean the creation of a true GCC gas grid – linking Qatar, the UAE and Oman. Meanwhile the GCC Grid Interconnection project will reduce the amount of investment required in new generating plants in each state by creating a means for reserve sharing, and ultimately trading, between states.
In Bahrain itself, GDP growth levels are running in the 5-7 per cent per annum range. The emergence of new construction projects like the planned offshore resort and Bahrain Investment Wharf has meant new installed capacity being added and additional desalination plant built.
The responsibility for planning lies with Bahrain’s Ministry of Electricity and Water (MEW) that has had to cope with a ten per cent increase in the demand for electricity in 2006. The ministry remains confident that blackouts will be avoided. “The challenge is to keep up with demand arising from the number of construction projects,” says Adnan Fahkro, assistant undersecretary of Distribution and Customer Services at the MEW. With all this new installed capacity coming online, Fahkro believes the emphasis should be put on the grid system, “If anything, the pressure is now on the distribution network, where there is still room for improvement.”
Bahrain power sector issues are a microcosm of those across the region. Those gathering in Manama next month are the industry professionals charged with addressing the region’s current and future challenges and learning from Bahrain’s experiences is a good place to start.
Nigel Blackaby, Associate Editor