Dubai: To enhance power generation capacity, GCC region needs to invest USD 65 billion and atleast the same amount on expanding its transmission and distribution network to meet fast-growing demand, an industry forecast said.

"The task facing GCC utilities has just got harder," said the MEED report, adding that Saudi Arabia faced the biggest challenge.

"It had forecast that demand would reach 75,000 MW by 2019, up from 46,000 MW in 2010. However, the forecast does not take into account the February, 2011, announcement by King Abdullah that some 500,000 new housing units would be built. This alone will add a further 5,000-6,000 MW to the demand forecast," the MEED Insight's GCC Power & Desalination report series said.

According to the report, Abu Dhabi has also revised its 2020 power demand forecast upward by about 6,000 MW to 28,000 MW in light of the March, 2011, announcement by UAE President Shaikh Khalifa bin Zayed Al Nahyan for increased investment in the power and desalination sector of the North.

"Even before the announcements, demand for new power capacity was rising, 2010 peak power demand remained high across the GCC with both Qatar and Abu Dhabi each having to contend with a rate of 11 per cent, followed by Saudi Arabia at 10 per cent," said Angus Hindley, Research Director at Meed and author of the report.

The report noted that with some 11,000 MW of new capacity commissioned in 2010, utilities largely managed to accommodate the growth in peak demand, although in Bahrain and Sharjah, network and fuel issues led to some outages.

"At the same time, the amount of new capacity contracted from the market in 2010 reached its highest level for four years at an estimated 14,000 MW. This was largely due to an unprecedented capacity programme launched by Saudi Arabia, which delivered contracts for 11,000 MW," it added.

 

(Agencies)