Download - MENA Power Investment Report Chapter Summaries · 2018-08-16 · MENA, forecast 2017 to 2022. - Generation - mechanical generating equipment, solar, wind power. - Generation, Transmission

MENA Power Investment Report Chapter Summaries

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Chapter 1 - OVERVIEW

Chapter 2 - POWER INVESTMENT IN MENA

Electricity investment in MENA compared with other major countries and the world average.

Tables of power sector capex forecast by country 2017 to 2022,

Power and distribution equipment purchases by category of equipment at sales price and installed cost in

MENA, forecast 2017 to 2022.

- Generation - mechanical generating equipment, solar, wind power.

- Generation, Transmission & Distribution - transformers, switchgear, insulators & bushings.

- Transmission & Distribution - cable, towers, poles, meters & smart grid.

- Analysis by country from 2017 to 2022 for power and distribution transformers.

Chapter 3 - MENA ENERGY TRENDS

Chapter 4 - MENA INTERCONNECTIONS-++

The three interconnector systems in the MENA region, their development, current coverage and use, and

future plans.

Chapter 5 - MENA ELECTRICITY SECTOR STRUCTURES: BASIC FEATURES OF THE ELECTRICITY SECTOR

The electricity systems and markets in MENA countries are at various stages of development. These are

outlined and compared.

Chapter 6 - GULF COOPERATION COUNCIL, GCC

Overview of the GCC, oil and non-oil industrial development and investment. Detailed profiles of the

electrical sectors with operational and market analysis.

Detailed country profiles in four regions: Electricity sector, Generation, Renewables, Investment in the

power sector, Investment in the non-oil sector, Transmission, Distribution & Supply, Wholesale Markets,

Regulation, Interconnections.

1. GCC - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates

2. Rest of Middle East - Iran, Iraq, Jordan, Israel, Lebanon, Syria, Yemen

3. Turkey

4. North Africa – Algeria, Egypt, Libya, Morocco, Tunisia

89 pages

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MENA Power Investment Report Ed1 2018

Table of Contents

Table of Contents

1.OVERVIEW ............................................................................................................................................................... 10

2.POWER INVESTMENT IN MENA ............................................................................................................................... 11

Electricity investment in MENA compared with the world ................................................................................ 11

3.MENA ENERGY TRENDS ........................................................................................................................................... 16

4.MENA INTERCONNECTIONS .................................................................................................................................... 17

The Maghreb regional energy interconnection. ................................................................................................ 17

The Eight Countries [EIJLLPST] regional energy interconnection. ...................................................................... 18

Gulf Cooperation Council (GCC) regional energy interconnection. ................................................................... 18

5.MENA ELECTRICITY SECTOR STRUCTURES: BASIC FEATURES OF THE ELECTRICITY SECTOR ................................... 19

A tradition of monopolies................................................................................................................................... 20

Power sector reform. ......................................................................................................................................... 20

Renewables activity. ........................................................................................................................................... 20

Renewables auctions. ......................................................................................................................................... 20

Tariff subsidies. ................................................................................................................................................... 21

Revenue deficits. ................................................................................................................................................ 21

Distortion of consumption. ................................................................................................................................ 21

State dominance of the power sector. ............................................................................................................... 21

6.GULF COOPERATION COUNCIL, GCC ....................................................................................................................... 23

Bahrain - Kingdom. ............................................................................................................................................. 23

Kuwait - Emirate. ................................................................................................................................................ 23

Oman - Sultanate. ............................................................................................................................................... 23

Qatar - Emirate. .................................................................................................................................................. 23

Saudi Arabia - Kingdom (KSA). ............................................................................................................................ 23

UAE - United Arab Emirates. .............................................................................................................................. 23

The Parallel Economies of the GCC .................................................................................................................... 24

Power sector investment in the GCC countries ................................................................................................. 25

Population .......................................................................................................................................................... 27

Private sector development in the GCC ............................................................................................................. 27

Banking ............................................................................................................................................................... 27

Assets under Management ................................................................................................................................ 28

Dubai International Financial Centre (DIFC) ....................................................................................................... 28

Abu Dhabi Global Market (ADGM) ..................................................................................................................... 29

Diversification from hydrocarbons ..................................................................................................................... 29

Other minerals .................................................................................................................................................... 30

Water .................................................................................................................................................................. 31

Food .................................................................................................................................................................... 31

Real estate .......................................................................................................................................................... 31

BAHRAIN ............................................................................................................................................................. 33

Electricity sector ................................................................................................................................................. 33

Generation .......................................................................................................................................................... 33

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Table of Contents

Renewables......................................................................................................................................................... 33

Investment in the power sector ......................................................................................................................... 34

Investment in the non-oil sector ........................................................................................................................ 34

Transmission ....................................................................................................................................................... 35

Distribution & Supply.......................................................................................................................................... 35

Wholesale Markets ............................................................................................................................................. 35

Regulation ........................................................................................................................................................... 35

Interconnections ................................................................................................................................................. 35

KUWAIT ............................................................................................................................................................... 36

Generation .......................................................................................................................................................... 36

Renewables......................................................................................................................................................... 36



Transmission, Distribution & Supply .................................................................................................................. 37


Regulation ........................................................................................................................................................... 37


OMAN ................................................................................................................................................................. 39

Generation .......................................................................................................................................................... 39

Renewables......................................................................................................................................................... 39



Transmission ....................................................................................................................................................... 40



Regulation ........................................................................................................................................................... 40


QATAR ................................................................................................................................................................. 42

Generation .......................................................................................................................................................... 42

Renewables......................................................................................................................................................... 42

Smart cities ......................................................................................................................................................... 42



Transmission ....................................................................................................................................................... 43



Regulation ........................................................................................................................................................... 43


SAUDI ARABIA ..................................................................................................................................................... 45

Generation .......................................................................................................................................................... 45

Renewables......................................................................................................................................................... 46

Smart cities ......................................................................................................................................................... 46

Table 26: Tunisia transmission and distribution ................................................................................ 89

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Table of Contents



Transmission ...................................................................................................................................................... 48

Distribution & Supply ......................................................................................................................................... 48

Wholesale Markets ............................................................................................................................................ 48

Regulation .......................................................................................................................................................... 48

Interconnections ................................................................................................................................................ 49

UNITED ARAB EMIRATES .................................................................................................................................... 50

UAE generation .................................................................................................................................................. 51

Dubai generation ............................................................................................................................................... 51

Abu Dhabi generation ........................................................................................................................................ 51

Northern Emirates generation ........................................................................................................................... 52

Desalination ....................................................................................................................................................... 52

Renewables ........................................................................................................................................................ 52

Abu Dhabi renewables ....................................................................................................................................... 52

Dubai renewables .............................................................................................................................................. 53

Sharjah renewables ............................................................................................................................................ 54

Northern emirates renewables .......................................................................................................................... 55

Smart cities......................................................................................................................................................... 55


Abu Dhabi investment in the power sector ....................................................................................................... 55

Dubai investment in the power sector .............................................................................................................. 55

Northern emirates investment in the power sector .......................................................................................... 56


Transmission ...................................................................................................................................................... 57

Emirates National Grid, ENG .............................................................................................................................. 57



Regulation .......................................................................................................................................................... 58

Abu Dhabi regulation ......................................................................................................................................... 58

Dubai regulation ................................................................................................................................................ 58

Northern emirates regulation ............................................................................................................................ 58

Sharjah regulation .............................................................................................................................................. 58

Ras Al Khaymah regulation ................................................................................................................................ 58


7.MIDDLE EAST, NON-GCC ......................................................................................................................................... 60

IRAN ................................................................................................................................................................... 60

Generation ......................................................................................................................................................... 60

Transmission ...................................................................................................................................................... 60



Regulation .......................................................................................................................................................... 61


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Table of Contents

IRAQ .................................................................................................................................................................... 63

Generation .......................................................................................................................................................... 63

Renewable energy .............................................................................................................................................. 64

Transmission, Distribution & Supply ................................................................................................................... 64

Investment .......................................................................................................................................................... 64


Regulation ........................................................................................................................................................... 64


ISRAEL ................................................................................................................................................................. 66

Generation .......................................................................................................................................................... 66



Regulation ........................................................................................................................................................... 66


JORDAN ............................................................................................................................................................... 68

Generation .......................................................................................................................................................... 68

Transmission ....................................................................................................................................................... 68

Distribution & Supply .......................................................................................................................................... 68


Regulation ........................................................................................................................................................... 68

LEBANON ............................................................................................................................................................ 70

Generation .......................................................................................................................................................... 70

Transmission ....................................................................................................................................................... 70

Distribution & Supply .......................................................................................................................................... 70


Regulation ........................................................................................................................................................... 70


SYRIA ................................................................................................................................................................... 71

Generation .......................................................................................................................................................... 71

Renewables ......................................................................................................................................................... 71



Regulation ........................................................................................................................................................... 71


YEMEN ................................................................................................................................................................ 73

Generation .......................................................................................................................................................... 73



Regulation ........................................................................................................................................................... 73

8.TURKEY..................................................................................................................................................................... 74

Generation .......................................................................................................................................................... 74

Renewables ......................................................................................................................................................... 74

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Table of Contents


Transmission ...................................................................................................................................................... 75



Regulation .......................................................................................................................................................... 76


9.NORTH AFRICA ........................................................................................................................................................ 77

ALGERIA.............................................................................................................................................................. 77

Generation ......................................................................................................................................................... 77

Renewables ........................................................................................................................................................ 77


Transmission ...................................................................................................................................................... 77



Regulation .......................................................................................................................................................... 78


EGYPT ................................................................................................................................................................. 79

Generation ......................................................................................................................................................... 79

Renewables ........................................................................................................................................................ 79


Finance ............................................................................................................................................................... 80

Transmission ...................................................................................................................................................... 80



Regulation .......................................................................................................................................................... 81


LIBYA .................................................................................................................................................................. 82

Generation ......................................................................................................................................................... 82

Renewables ........................................................................................................................................................ 82


Transmission, Distribution & Supply ................................................................................................................. 82

Regulation .......................................................................................................................................................... 83


MOROCCO .......................................................................................................................................................... 85

Generation ......................................................................................................................................................... 85

Renewables ........................................................................................................................................................ 86


Transmission ...................................................................................................................................................... 86



Regulation .......................................................................................................................................................... 86


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Table of Contents

TUNISIA .............................................................................................................................................................. 88

Generation ......................................................................................................................................................... 88

Renewables ........................................................................................................................................................ 88


Transmission ...................................................................................................................................................... 89



Regulation .......................................................................................................................................................... 89


Figures Figure 1: Comparison of electricity sector investment, MENA, GCC and the World ................................................. 11 Figure 2: Capital expenditure, equipment cost and installed cost of all power investments in MENA, 2017 to 2022. 12 Figure 3: MENA oil and gas reserves .......................................................................................................................... 16 Figure 4: Electricity interconnections in MENA ......................................................................................................... 17 Figure 5: Shares of oil and non-oil GDP ..................................................................................................................... 24 Figure 6: Dubai in 1990 and 2013, Sheik Zaid Road ................................................................................................... 26 Figure 7: The development of the GCC ...................................................................................................................... 32 Figure 8: Share of Bahrain’s non-oil GDP by industry ................................................................................................ 34 Figure 9: Tehran regional electric company .............................................................................................................. 61 Figure 10: Jordan interconnections ........................................................................................................................... 69 Figure 11: Yemen transmission and distribution ....................................................................................................... 73 Figure 12: Areas of excess and short supply in Libya due to isolation of systems .................................................... 83

Tables Table 1: MENA purchases of power equipment at selling price by country, 2017 to 2022………………...............……..13 Table 2: Capex, and all power and distribution equipment purchases at sales price and installed cost in MENA ... 13 Table 3: Generation and transmission equipment purchases in MENA .................................................................... 14 Table 4: Distribution equipment purchases in MENA ............................................................................................... 14 Table 5: Annual transformer sales in MENA in MVA by country ............................................................................... 14 Table 6: Annual power transformer sales in MENA in MVA by country .................................................................... 15 Table 7: Annual distribution transformer sales in MENA in MVA by country ........................................................... 15 Table 8: Oil and Non-oil CGP growth in real terms in the GCC, 2013 to 2018 ........................................................... 24 Table 9: Bahrain transmission and distribution ......................................................................................................... 35 Table 10: Kuwait transmission and distribution ........................................................................................................ 38 Table 11: Oman transmission and distribution .......................................................................................................... 41 Table 12: Qatar transmission and distribution .......................................................................................................... 44 Table 13: Saudi Arabia transmission and distribution ............................................................................................... 49 Table 14: UAE transmission and distribution ............................................................................................................. 59 Table 15: Iran transmission and distribution ............................................................................................................. 62 Table 16: Iraq transmission and distribution ............................................................................................................. 65 Table 17: Israel transmission and distribution ........................................................................................................... 67 Table 18: Jordan transmission and distribution ......................................................................................................... 69

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Table of Contents

Table 19: Lebanon transmission and distribution ..................................................................................................... 70 Table 20: Syria transmission and distribution............................................................................................................ 72 Table 21: Turkey transmission and distribution ........................................................................................................ 76 Table 22: Algeria transmission and distribution ........................................................................................................ 78 Table 23: Egypt transmission and distribution .......................................................................................................... 81 Table 24: Libya transmission and distribution ........................................................................................................... 84 Table 25: Morocco transmission and distribution ..................................................................................................... 87 Table 26: Tunisia transmission and distribution ........................................................................................................ 89

MENA Power Investment Report Sample Pages

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1. POWER INVESTMENT IN MENA

Electricity investment in MENA compared with the world

Investment in electricity in MENA is driven by the price of oil in the public sector and by private finance

and economic development in the non-oil sector and amounts to 2.5% of GDP. The two sectors operate

almost independently, and while the price of oil is subject to large fluctuations up and down, private

investment and economic development in MENA and especially in the GCC countries has maintained a

more stable upwards trend for two decades. In Figure 1, investment in electricity is expressed as a fraction

of GDP. The comparison shows that investment in electricity, including public utility supply and private

developments in GCC and MENA is two and a half times higher than the global average investment. Only

China approaches this level but does not reach it.

Figure 1: Comparison of electricity sector investment, MENA, GCC and the World

Source: IMF, StatPlan

In 2017 the combined installed generating capacity of the MENA countries (including Turkey) was XXX GW.

According to Siemens, MENA will need to construct XXX GW of new power plants by 2035, as well as

replacing ageing infrastructure. It is estimated …………………

……………………….


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Table 1: MENA purchases of power equipment at selling price by country, 2017 to 2022

2017 2018 2019 2020 2021 2022

GCC

Bahrain

Kuwait

Oman

Qatar

Saudi Arabia

UAE

GCC

Iran

Israel

Rest of ME

Middle East

Turkey

North Africa

Algeria

Egypt

Morocco

Sudan

Tunisia

North Africa

MENA

The following tables itemise expenditure on different items of power equipment in MENA.

Table 2: Capex, and all power and distribution equipment purchases at sales price and installed cost

in MENA

$ million 2017 2018 2019 2020 2021 2022

Transformers

Switchgear

Insulators & Bushings

Cable

Towers

Poles

Mechanical

Meters & smart grid

Oher electrical

Solar & wind

Total purchases

Installed cost

MENA Capex


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Table 3: Annual transformer sales in MENA in MVA by country

MVA 2017 2018 2019 2020 2021 2022

GCC

Bahrain

Kuwait

Oman

Qatar

Saudi Arabia

UAE

GCC

Iran

Israel

Rest of ME

MIDDLE EAST

Turkey

Algeria

Egypt

Morocco

Sudan

Tunisia

NORTH AFRICA

MENA


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The Parallel Economies of the GCC

2017 was a bad year for the public finances of the GCC countries as the price of oil fell. GDP growth

dropped from XX% in 2015 to XX% in 2016 and then collapsed to XX% in 2017. However, the GCC countries

have two parallel economies, oil and non-oil and they are largely insulated from each other. According to

the IMF, the growth of the oil GDP of the six countries combined collapsed from 3.0% in 2016 to -2.3% in

2017, but growth of the non-oil GDP increased from XX% to XX%.

The non-oil economy has prospered for the last two decades, fuelled by industry, a growing financial sector

and private investment, spurred on by population growth, urbanisation and improved living standards.

The GCC countries, meanwhile, control XX% of the world’s known oil reserves and XX% of proven natural

gas reserves.

The development of the non-oil segments in the economies of the GCC countries vary with Kuwait still

having the largest share of oil at XX% and Bahrain the most diversified at XX% non-oil. These figures

fluctuate, depending on the performance of non-oil segments and the oil price. Nevertheless, the chart

demonstrates the progress being made in the GCC to developing an alternative economic basis.

Figure 2: Shares of oil and non-oil GDP

Source: Central banks

Table 4: Oil and Non-oil CGP growth in real terms in the GCC, 2013 to 2018

2013 2014 2015 2016 2017 2018

GDP

Oil GDP

Non-oil GDP

Source: IMF