Trend two: natural gas will remain primary fuel
Even with the step change in spending on renewables projects, natural gas will remain the primary fuel for power generation in the Middle East long into the future. The energy produced through solar and wind is intermittent and storage technologies have not yet evolved sufficiently to make renewables a reliable form of power generation. To achieve optimal grid stability and uninterrupted power supply, the Middle East will use a mix of renewables and baseload power. Gas currently meets about 65 per cent of the region’s electricity needs, and as countries phase out oil-fired power plants, its share is expected to rise to more than 70 per cent by 2035. The greater reliance on gas will undoubtedly be accompanied by an ongoing energy efficiency drive, which has seen many of the region’s power plants converted to a combined-cycle configuration, which exploits waste heat to drive an additional steam turbine. Whereas a simple cycle power plant has an efficiency rate of 25-40 per cent of its total capacity, the fuel efficiency of a combined-cycle plant is more than 60 per cent.
Trend three: digitalisation will streamline processes
Like so many other industries across the world, digital technology is transforming the power sector, enhancing safety and delivering cost and efficiency savings. The electricity industry is seeing digital technology optimise processes right along the value chain, from the power plant to the end consumer. On the generation side, the digitalisation of power systems with real time sensors is allowing for the better monitoring and control of assets, preventing shutdowns with predictive maintenance. Sensors are also helping to detect losses in transmission and distribution, and improve power quality analysis. At the customer end, smart meters in homes are providing valuable data on consumption patterns, helping utility providers achieve better load forecasting, ensuring grid stability and reducing idle capacity, while also supporting billing operations. In the near future, we expect to see drones being more widely deployed to inspect assets, such as wind farms and power lines, and augmented reality will also likely become an invaluable inspection tool. The increased use of the technology, of course, must come hand in hand with robust cyber security systems to protect the Middle East’s strategic power assets.
Trend four: increased focus on energy conservation
Demand for electricity in the Middle East is projected to more than double by 2035 as a result of population growth and industrial expansion. This represents a key challenge for the region’s governments, which have committed to help keep global temperature rise to less than 2°C. As a result, conservation is rising to the top of the energy agenda along with investment in cleaner forms of energy such as renewables and nuclear. The Gulf countries have the highest per capita power and water consumption rates in the world. Recent years have seen the gradual reduction of energy subsidies and the introduction of energy efficiency programmes and targets. Dubai has the boldest goals: its Clean Energy Strategy 2050 commits to a 30 per cent reduction in electricity and water consumption by 2030. It has rolled out a number of initiatives to help it achieve this including green building regulations, a programme to replace street lights with LED bulbs and systems to support private sector investment in solar power. Energy efficiency services companies (ESCOs) are being encouraged to establish themselves in the region as demand for energy audits and energy savings projects will grow strongly in the years ahead. The benefit is not just for the environment. According to one ESCO based in Dubai, its clients have managed to reduce their energy bills by an average of 23 per cent, with an investment payback of just under two years.
Trend five: hydrogen will become a fuel of the future
Hydrogen has been identified as a fuel of the future because its production from renewable energy sources is sustainable. Its potential as a fuel and an energy carrier is the basis for a landmark project being undertaken by Siemens, DEWA and Expo 2020 Dubai to build the region’s first solar-driven green hydrogen electrolysis facility at the Mohammed bin Rashid Al Maktoum Solar Park in Dubai. One of the challenges that has been holding back faster growth in renewables is the fluctuating nature of the energy produced and the lack of reliable storage technology. This project marks a breakthrough in the area of storage of renewable energy. Hydrogen can be used to store electrical energy for several weeks. It can be deployed for re-electrification or used as a process gas in industry or as an emissions-free transportation fuel. We’re going to be hearing a lot more about hydrogen in the coming years.