Required GCC investment from in US$ Bn.

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1 GCC POWER MARKET PREPARED BY VENTURES ONSITE FOR MIDDLE EAST ELECTRICITY 2018 N O V E M B E R

2 OVERVIEW OF THE GCC POWER MARKET

3 OVERVIEW OF THE GCC POWER MARKET Factors such as population growth, an expanding economy, and climatic changes are increasing power demand in the GCC countries. According to APICORP, the GCC represents 43%, or 157 Gigawatts (GW), of current MENA power-generating capacity. Despite this large capacity, APICORP predicts the GCC will require US$ 81 Bn. for the addition of 62 GW of generating capacity and another US$ 50 Bn. for transmission and distribution (T&D) over the next five years (refer Figure 1). Few GCC countries have also recently increased electricity prices and introduced power sector reforms, which will in turn help balance demand rises. Required GCC investment from in US$ Bn. Figure 1. Note: T&D-Transmission and Distribution. Source: APICORP Research Power sector investments are expected to remain unaffected and given importance although GCC governments have registered budget deficits and tightened expenditures due to fluctuating oil prices. Over the last two decades, the private public partnership (PPP) model has become the most attractive financing mechanism for the GCC power market. The model also helps reduce strain on government finances in delivering complex engineering solutions and benefits from the most advanced technology solutions private power companies have to offer. According to industry experts, there also arises the need for the power sector to establish a regulatory framework to push for private sector s participation. The GCC countries reliance on Independent Power Producers (IPPs) is set to witness a growing trend. APICORP predicts that the GCC governments need to ensure that IPPs play a larger role power generation and not be looked upon as a short-term fix to the increasing demand. Oman was the first country to implement IPP and state utilities such as DEWA and ADWEA although allow for IPPs but participate as major equity shareholders.

4 OUTLOOK OF THE GCC POWER CONSTRUCTION CONTRACTOR AWARDS The total GCC power construction contractor awards are expected to increase from US$ 13,895 Mn in 2017 to US$ 23,591 Mn in 2018 (refer Figure 2). KSA is forecast to register the highest power construction contractor awards in 2018 followed by the UAE and Kuwait. As of 27th October 2017, the total GCC power project value is anticipated to be worth US$ 318,141 Mn. KSA s share of project value (59%) is expected to be the highest among GCC countries followed by the UAE (21%) (refer Figure 2). GCC power construction contractor awards from 2016 to 2018 (US$ Mn) Note: Project value is as of 27th October Source: Share of GCC power construction project value as of 27th October 2017 (%) Note: Project value is as of 27th October Source:

5 SNAPSHOT OF GCC RENEWABLE ENERGY MARKET GCC countries have realised that they can no longer be dependent on oil resources alone for economic prosperity over the long term and hence have moved towards economic diversification. Hence, GCC countries are shifting towards renewable resources for energy generation to preserve their oil wealth. Currently, renewables form the fastest growing energy source for electricity generation. GCC countries are investing heavily on renewable energy to achieve significant targets by According to Masdar Institute experts, GCC countries are expected to procure power from renewable sources by 2050 to address climate change. In the GCC alone, which accounts for 47% of MENA generating capacity, US$ 316 Bn. worth of renewables investments are needed by 2020, according to Informa Energy Group. The GCC government has prioritised renewable energy targets and plans into their policies and frameworks. There has been a strong focus on solar power as the region s climate is best suited for its deployment. According to Frost & Sullivan, the GCC region s installed solar capacity is forecast to reach 76 GW by The UAE is considered among the world s leading countries to develop efficient renewable energy solutions. The Emirate has announced a power strategy to achieve 50% clean energy by Solar power is given high importance in its plans and is expected to account for 25% of the generation mix once the US$ 13.7 Bn. (5 GW) solar park is fully commissioned in The UAE is the first Gulf country to start on the new energy strategy, which involves the nuclear power and solar energy in addition to natural gas, which covers the majority of the UAE's needs. The UAE provides lucrative opportunities for launching solar energy generation projects. The Mohammed bin Rashid Al Maktoum Solar Park will generate 1,000 MW by 2020 and 5,000 MW by The Emirates National Oil Company (Enoc) is likely to power all of its future stations with solar power worth between US$ 20 Mn and US$ 30 Mn, and plans to open 48 new stations from 2017 to According to BMI Research, forecasts solar capacity to expand by an annual average of 55% between 2017 and 2026 wherein the segment would account for 7.9 % of total power generating capacity in the UAE in The UAE is expected to retain its leadership position in the solar market in Dewa has signed an agreement with the Ministry of Climate Change and Environment for the installation of solar carports (a total capacity of 220 kw/h) at the ministry s building in Dubai. This agreement is in line with the UAE Vision 2021 to create a sustainable environment in terms of air quality, decreasing carbon footprint, and increasing reliance on clean energy.

6 SNAPSHOT OF GCC RENEWABLE ENERGY MARKET The National Renewable Energy Program of KSA aims to substantially increase the share of renewable energy in the total energy mix, targeting the generation of 3.45 GW of renewable energy by 2020 under the National Transformation Program (NTP), and 9.5 GW by 2023, towards Vision Saudi companies are focusing towards solar electricity to protect the risk of rising power prices when energy subsidies are cut, according to one of the kingdom s biggest plant developers. KSA gets less than 1% of its power from renewables and plans to develop 30 solar and wind projects over the next 10 years as part of its US$ 50 Bn. programme to boost power generation and cut its oil consumption. The Saudi Electricity and Co-Generation Regulatory Authority has announced plans to launch an initiative to encourage setting up small-scale solar energy systems. According to this initiative, solar power companies will be able to sell off surplus energy generated to the national grid, or to be reduced from their energy bills. KSA is likely to invest US$ 500 Bn. from its Public Investment Fund on a fully automated city called Neom spanning an area of 26,500 square kilometres, stretching across the borders of northwest KSA into Jordan and Egypt. The city will be the world s largest city to be entirely powered by renewable energy and is part of the kingdom s Vision Neom will be powered entirely by green energy sources and one of the city s core pillars, mobility will cover the construction of a 100% green transportation system powered solely with wind power and solar energy. Crown Prince Mohammed bin Salman has announced that the main city is expected to be ready by The prince also announced that the Neom city project will provide benefits to other GCC countries. Qatar has set a goal to produce 20% of its electricity from solar energy by 2030, according to industry experts. The renewables sector is in the nascent development stage. However, Qatar has solar power potential and has set robust renewable energy targets, giving opportunities for projects in H and In January 2017, Abu Dhabi s Masdar signed a cooperation agreement with Qatar Electricity & Water Company (QEWC) and Nebras Power to develop renewable projects. The agreement aims to strengthen cooperation among Masdar, QEWC and Nebras in the development of commercially viable renewable energy projects in the UAE and Qatar. The agreement is likely to contribute to the evolution of QEWC as its objective is to become a leader in power generation and set a solar power target of 1.8 GW by 2020.

7 SNAPSHOT OF GCC RENEWABLE ENERGY MARKET Oman also plans to integrate renewables in the power mix, with the 50 MW Harweel wind farm, which is likely to be commissioned in The Sultanate is also expected to tender 200 MW of solar PV in OPWP has recently signed up a consortium of international consultants for a large-scale solar project, which will be developed on a Build-Own-Operate (BOO) model. The model forms a part of all privately developed power projects currently in operation in Oman. Bahrain has appointed CESI to help develop its solar power policies. In July 2017, CESI was hired to support Bahrain s sustainable energy unit (SEU) to develop the regulatory requirements related to connecting distributed renewable energy resources. The SEU s key objectives are to create an efficient and sustainable energy policy, encourage the use of renewables, and raise awareness towards energy conservation. Bahrain has increasingly recognised the growing importance of renewable energy as demand increases, with solar photovoltaic (PV) systems a particular interest area. In October 2016, the Bahrain Government endorsed Bahrain s National Plan for Energy Efficiency, which seeks a 6% national electrical energy efficiency by It also calls for a 5% contribution from renewable energies by 2025, rising further to 10% by Although renewables market in Kuwait is still in its nascent stages, it is currently a high focus area of interest on the government s development agenda. According to KUNA, Kuwait s Ministry of Electricity and Water is planning renewable energy projects with the help of the private sector. This is in line with its Vision 2030 plan to transform Kuwait as an alternate power dependent country, which aims to generate 15% total consumption of energy from renewables by 2035 that is over 4.5 GW capacity. According to the Undersecretary of the Ministry of Electricity and Water Engineer Mohammad Bushehri, the total power generating capacity of Kuwait amounts to 16,700 MW, with the electrical load in summer consuming 13,800 MW, which led to looking out for alternative energy options. Although the government and the oil sector form the largest investors in renewables, there has been rising interest in private sector s involvement from developers and operators as well. According to Oxford Business Group, another factor that may expedite renewable energy projects development is the liberalisation of PPP governing rules.

8 SNAPSHOT OF GCC RENEWABLE ENERGY MARKET Major GCC renewable energy projects. Source:

9 OVERVIEW OF THE GCC SMART GRID MARKET & SMART METERS The GCC smart grid market, which is gaining prominence, is projected to grow to US$ 1.68 Bn. by 2026 due to the deployment of smart grid infrastructure by GCC governments, according to TechSci Research. Factors such as rising electricity demand, and major events such as the FIFA World Cup 2022 and Dubai Expo 2020 are expected to present opportunities for the smart grid technologies market in the future. Smart grid technologies help in the integration of renewable energy to the grid. According to a report by Northeast Group, the UAE is the fourth largest market for smart grids and showcases potential for advanced metering infrastructure (AMI) and automatic metre reading activity (AMR) in the MENA region. The UAE s vision to deploy smart grid and metre solutions is expected to increase the renewables contribution, which is in line with the emirate s Energy Plan 2050, according to Networked Energy Services Corporation (NES). Siemens AG., ABB Ltd., Schneider Electric SE, General Electric Co., CISCO Systems Inc., IBM Corporation, Oracle Corporation, Accenture PLC, Landis+Gyr, DTS Solution, etc are some of the leading players in GCC smart grid market. Smart city projects in the GCC region are likely to provide the necessary incentives to the growth of the smart grid market. Dubai Electricity and Water Authority (DEWA) is a pioneer in innovations in smart grids. The authority invests heavily is influencing developments such as Shams Dubai, which connects solar power in homes and buildings to Dewa s grid. In the UAE, the Sharjah Electricity and Water Authority (SEWA) has replaced around 18,000 analogue meters with smart meters. The new meters were installed in SEWA s service territories including in Muwaileh and Shuwaihean cities. SEWA is targeting to install smart meters in all of its residential, commercial and industrial customers by The project is in line with SEWA s efforts to utilise smart grid technologies and contribute towards ensuring global energy efficiency level reaches 50% by The trend in energy storage systems is catching up fast in the GCC as it forms a crucial component in the development of smarter grids. New technologies are helping deployment of renewable generation, which helps people have control over their energy supply and consumption, according to Frank Ackland, managing director, Eaton Middle East. Battery-based energy operating systems help in expediting response balancing services to the electric grid. According to Dun & Bradstreet, GCC countries grid inter-connectivity is expected to generate US$ 33 Bn. in investments, economic and energy savings over the next 25 years. The GCC Interconnection Authority (GCCIA) reported that the grid interconnection contributed over US$ 1 Bn. in savings over the past three years. Currently, the GCCIA is working on the development of GCC region s power market.

10 ANALYSIS OF THE POWER MARKET BY EACH GCC COUNTRY

11 UNITED ARAB EMIRATES According to APICORP, the UAE needs to invest US$ 35 Bn. to meet the 17 GW capacity addition needed over the medium term. The UAE is expected to highly diversify its energy sources in the power mix; APICORP estimates that 10.4 GW of capacity additions are already in execution. The majority of power is generated using natural gas, but Abu Dhabi s Barakah nuclear power plant will see four reactors come on line between 2017 and The UAE plans to open the US$ 20 Bn. Barakah plant in Abu Dhabi in 2018, which is being constructed by a consortium led by Korea Electric Power Corp. 84% of the construction is already completed at all the four units of the plant. According to Emirates Nuclear Energy Corporation (ENEC), the work at Unit 1 is more than 96% cent over, while Unit 2 has witnessed over 87% of the job completed, Unit 3 with more than 78%, and Unit 4 now 58 per cent complete. By 2020, the UAE Peaceful Nuclear Energy Program will be come into force, with four nuclear reactors providing nearly 25% of the UAE's electricity needs, according to Enec. Dubai consumes over 37,000 GW hours of electricity per annum by the commercial and residential sectors. By 2030, UAE s installed power generation capacity is expected to reach 60 GW, comprising of 44 GW from CCPPs, and the remaining 20 GW from simple cycle power plants, renewables, nuclear and others (APICORP estimates). Sharjah Electricity and Water Authority (SEWA) intends to construct three 132 kv and five 33 kv distribution stations in 2017 to meet rising electricity demand. The UAE leads among the GCC countries in building of smart cities. It launched the Energy Plan 2050 to increase the contribution of clean energy and cut dependence on natural gas to generate power in line with UAE Vision In March 2017, the UAE s Ministry of Energy signed a contract with Pricewaterhouse Coopers (PwC) to conduct a technical and economic study of its electricity sector. The deal is in line with the UAE s clean energy strategy. This includes plans to invest US$ Bn. to meet demand and aims to generate efficiency savings of around US$ 190 Bn.

12 UNITED ARAB EMIRATES Dubai Electricity and Water Authority (DEWA) is working towards achieving the Dubai Clean Energy Strategy 2050 by extracting 25% from solar energy, 7% from nuclear power, 7% from clean coal, and 61% from gas by Clean energy sources is expected to increase to 75% by 2050, making Dubai the least carbon footprint city in the world. To achieve this vision, Dewa has launched a number of exciting projects. Dewa in order to increase its total production capacity, which is currently 10,000 MW of electricity per day, has initiated plans to build the GCC s biggest hydroelectric power station near the Al Hattawi Dam as part of the UAE Vision The project will be produce 250 MW of power, which will last for decades. Dewa is also working to expand the M-Station, which will add an additional 700 MW to the installed generating capacity of the station, thereby increasing its capacity to 2,760 MW when the project is completed in Emirates National Oil Company (Enoc) is also partnering with DEWA to reduce carbon footprint. Dewa has installed photovoltaic systems with a combined capacity of around 18.7MW on the roofs of residential, commercial, and industrial buildings in Dubai. Dewa has implemented a total of 453 photovoltaic installations in line with its Shams Dubai initiative. The initiative is anticipated to result in large number of installations, gradually covering all Dubai buildings by Dewa is in talks with French civil engineering firm Colas Group for the installation of solar roads, which would produce clean energy through patches of PV (photovoltaic) cells embedded in the road s surface. The panels are expected to help power the fleets of autonomous vehicles, which will make up 25% of the total transportation Dubai by In May 2017, Dewa changed all its independently-operating power stations into a network of smart grid-enabled power plants. The project includes the development of information systems at each station to transmit joint performance data and development of the one-way data diode (ODD) to protect each station from cyber-attacks.

13 UNITED ARAB EMIRATES Dewa s smart power plants system allows for the monitoring of equipment at each station and compares it with other stations, which expedites solutions for problems. Honeywell is to supply 150,000 additional smart meters to Dewa and has already supplied 250,000 smart meters. The new batch will help Dewa manage electricity more efficiently across housing areas. By 2020, Dewa intends to have a Mn smart meters installed, replacing all mechanical and electromechanical meters in the UAE. The value of the new deal has not been revealed. As per the Dubai Plan 2021, smart meters forms part of Dewa s smart grid initiative aimed at turning Dubai into a smart sustainable city. Smart meters is expected to support Dewa s demand-side management, which aims to lower water and energy consumption by 30% by 2030 by educating the public to use less energy and high-load times. The power construction contractor awards in the UAE are estimated to decrease from US$ 5,783 Mn in 2017 to US$ 5,530 Mn in 2018.

14 SAUDI ARABIA KSA is the fastest-growing energy consumer in the MENA region, resulting in the power sector to register phenomenal growth. Currently, KSA relies on liquid petroleum for approximately 60% of its electricity generation due to heavily subsidised domestic oil prices. Consequently, increases in electricity demand each year are cutting directly into the kingdom s oil export volume and earnings, according to industry experts. To reduce consumption of oil in the generation of power, KSA is eager to upgrade its entire power sector. The kingdom s peak electricity is forecast to increase from the installed capacity rates of around 70,000 MW in Q to 90,000 MW in 2022 (nearly 30% increase), according to industry experts estimation. The National Transformation Program highlights the following initiatives to be carried out in the power sector over the next five years: Expand fuel efficiency in power generation Increase percentage of power plant electricity generation through strategic partners from 27% to 100% by 2020 Increase power generation capacity of 3.45 GW from a baseline of zero; and Eliminate subsidies on electricity The government had announced the second phase of reforms for liberalising electricity prices by July 2017 for the residential sector and aims to do the same for the non-residential sector in The new prices are expected to reflect the export value of feedstock fuels and higher generation costs. KSA s government plans to reform the power sector along with lifting tariffs. The Saudi Electricity Company (SEC) announced that it would break up into four power-generating companies, which is a first step towards market liberalisation that has been pending. However, uncertainty still remains on the timing of these reforms, which were first announced to take effect by 2016-end. The plan is likely to be on allocating SEC s power-generating assets to four companies, with the probability of being offered to local and international investors. SEC heavily relies on domestic and international financing to help with its expansion plans, the latest example being a US$ 1.3 Bn. loan from local banks. By 2030, KSA is estimated to generate 70 % of its electricity from natural gas and 30% from renewables and other sources.

15 SAUDI ARABIA KSA is striving towards making the necessary capacity additions by According to APICORP, in order to meet rising demand, the country will need to invest US$ 59 Bn., increasing capacity to 114 GW. Over 25 GW of capacity is already in the pipeline. KSA is expected to invest US$ 133 Bn. in electricity projects over the coming decade. Major projects include the 3.1GW Yanbu 3 plant and the 2.6 GW Shuqaiq plant. KSA plans to privatise all electricity generation by 2020, which are likely to require huge investments to increase efficiency, meet environmental standards, and replace old power plants. Consequently, the government is expected to seek active participation from the private sector through the construction and financing of public-private partnerships (PPP). Currently, KSA is also currently conducting feasibility and design studies for its first two commercial nuclear reactors. KSA recently announced the launch of Phase 1 of US$ 1.2 Bn. Green Duba generating power station. The project will have an output capacity of over 605 MW, including 50 MW in renewable energy, which has the capacity to generate power needed to supply approximately 600,000 homes each year. This will make Tabuk a gateway to the export electric power worldwide. KSA plans to build around 17.6 GW of nuclear capacity by 2032 and is expected to pass laws for its nuclear programme. The kingdom also plans to set up all of the regulations for its nuclear regulator by Q The power construction contractor awards in KSA are estimated to increase from US$ 3,109 Mn in 2017 to US$ 6,556 Mn in 2018.

16 QATAR According to industry experts, Qatar is set to increase its power capacity by 50% by 2018 in preparation for the FIFA World Cup According to APICORP, Qatar will need to invest around US$ 9 Bn. to add 4.3 GW to meet rising demand in the medium term: US$ 6 Bn. in generation and US$ 3 Bn. in T&D. As Qatar has adequate capacity of 8.8 GW, it has not built additional capacity over the past five years. The US$ 3 Bn. Umm Al Haul power and desalination project with capacity of 2.5 GW and the 2 GW Ras Laffan D independent water and power project are expected to meet the rising demand. BMI experts predict that natural gas fired thermal power will remain the main component of the domestic energy mix with capacity receiving a boost in 2017 and 2018 as new power plants come into effect. Qatar Electricity and Water Company (QEWC) announced that land has been allocated for the solar power project in Al Kharsaah, which is set to produce 500 MW to 1,000 MW of electricity. Phase 1 of the project is expected to cost approximately US$ 500 Mn for producing 500 MW of electricity by mid The power construction contractor awards in Qatar are estimated to increase from US$ 2,298 Mn in 2017 to US$ 3,523 Mn in 2018.

17 OMAN Oman s power generation is set to register 3% annual growth in demand for natural gas over the next seven years within its Main Interconnected System (MIS) areas, according to Oman Power and Water Procurement Company (OPWP). Peak demand for electricity is estimated to increase at an annual average of 6% every year. According to APICORP, the country will need to add 5.3 GW in the medium term, requiring investment of US$ 11 Bn.. According to APICORP, Oman will need US$ 6.8 Bn. investment in power generation and US$ 4.2 Bn. in T&D from 2017 to Companies in fields such as power plant construction, power generation equipment, and power plant operations and processes are likely to find attractive opportunities in Oman. Oman has made privatisation of future power projects high priority due to rising personal income, housing starts, and government infrastructure projects, which contribute to increase in electricity demand. OPWP s seven-year outlook statement ( ) outlines that the Sultanate is focused on increasing its power generation capacity as by 2022, it expects demand to exceed supply. OPWP estimates that with contracted capacity at 7,394 MW in 2022, the need for additional capacity under the expected demand is approximately 1,300 MW in 2022, and 1,800 MW in OPWP is planning to issue a number of power generation tenders in 2017 to meet the rising demand. It has also issued an RFP to seek legal advisors for commercial-scale solar power plant tender to be connected to Oman s MIS. The Seven-Year statement of the utility mentions that the tender for the project is expected to be launched in Q with construction contract anticipated to be awarded by Q OPWP is expected to make power procurement process more flexible. The Power 2022 procurement process is likely to have a tender round to allow players with expiring contracts and potential bidders to participate. The key project documents is then expected to be published so that all parties could review and comment on these documents.

18 OMAN Duqm s demand for electricity is expected to increase as SEZAD plans to transform it into a world-class investment destination. The first phase of the SEZAD master plan expects electricity demand to reach 650 MW by An engineering, procurement and construction (EPC) contract will build Duqm's first large-scale natural gas-fired power-cum-water desalination project is expected to be awarded in Q The new project will have a contracted capacity to generate 183 MW of power and is expected to be operational in Q4 2020, according to the seven-year outlook report of OPWP. Oman s power market is set to witness robust growth due to its strategies in place, high demand growth and a strong regulatory framework supporting private investment. The power construction contractor awards in Oman are estimated to increase from US$ 1,257 Mn in 2017 to US$ 2,268 Mn in 2018.

19 KUWAIT Kuwait s electricity rates have been changed to rationalise consumer consumption. Dr. Mashaan Al Otaibi, assistant undersecretary of the ministry of electricity and water for planning and training said that the new tariffs took effect in the commercial sector on May 2017 and the tariffs of the government sector will rise from two fils to 25 fils (some $0.082) per kwh as of November 22nd, According to the Ministry of Electricity & Water, Kuwait uses over 14 MW of electricity per day during temperatures over 50 degrees Celsius. Kuwait is eyeing 9,000 MW in new capacity by 2020 from the current levels, according to industry experts. Kuwait will need to reach an estimated capacity of 23 GW by 2021, requiring US$ 14 Bn. of investment. The government has earmarked US$ 9.9 Bn. for infrastructure projects including power, and progress is being made on greenfield thermal and renewable projects. Kuwait has five power projects in the pipeline, which will use the PPP model. The Ministry of Electricity and Water is expected to buy electricity supplied from the power plant for 40 years. Kuwait also plans to launch its first IPO for the Al-Zour North power plants. Kuwait is set to rely heavily on IPPs and has chartered out huge plans for 2018 and Three projects are expected to be awarded in 2017, which include 1.5 GW Al-Zour North 2 IWPP, the 1.5 GW Al-Khiran IWPP and the 280 MW Al-Abdaliya ISCC. According to Oxford Business Group, the private sector is likely to have a fair proportion of power generation capacity in Kuwait within the next 10 years. Kuwaiti Oil Minister Essam al- Marzouq has announced that the New Kuwait 2035 launch that a 50% stake in Ku wait s power and water company would be sold to the private sector. The move is expected to help in the creation of three new power companies with particular focus on renewable energy. Kuwait is expected to issue a tender to build US$ 1.2 Bn. Dibdibah solar-power plant in Q The plant is likely to produce half of Kuwait s estimated renewable output goal, according to Shukri AbdulAziz Al-Mahrous, deputy chief executive officer of planning and finance at Kuwait National Petroleum Co. The power construction contractor awards in Kuwait are estimated to increase from US$ 1,366 Mn in 2017 to US$ 4,698 Mn in 2018.

20 BAHRAIN In Bahrain, capacity will need to grow at 6% per annum, according to industry experts, which is considered as one of the lowest by GCC standards. According to APICORP, the kingdom needs US$ 3 Bn. to be invested over the next five years to meet capacity additions of 1.4 GW, bringing the total to 5.8 GW by In 2017, Bahrain is expected to open two substations in Al Hamal (220 kilovolt (kv) capacity) and Ras Zuwaid (66 kv capacity). Bahrain plans to build a 100 MW solar power plant in association with the private sector as part of its renewable energy agenda. The plant is expected to be completed and ready for power production by 2018-end. The tendering process is expected to begin in February The solar power plant project is in line with Bahrain s National Energy Efficiency Plan and the National Renewable Energy Plan. According to Oxford Business Group, Bahrain s power generation capacity is expected to expand due to new projects, which aim to meet rising residential and industrial consumers demand. The Electricity and Water Authority (EWA) closed its pre-qualification process for developers who evinced interest in the tender round for the Al Dur 2 Independent Water and Power Project during June 2017-end. The project will be awarded on a build-own-operate (BOO) basis (tenders have yet to be announced) after the project is reviewed by the authority. The tender document lists that the US$ 1.5 Bn. gas-fired plant is expected to have a generation capacity of MW, with construction to commence in Q and to commission second phase by 2020-end. The new plant is expected to help Bahrain meet its rising power demand that is increasing by 7-10% each year. According to Word Bank data, this is expected to reach nearly 20,000 GWh by 2020 with peak demand in the interim averaging 4,312 MW per month. Oxford Business Group adds that among Bahrain s key initiatives in line with technological advancement and development of sustainable electricity are the wide adoption of smart metering and network tools. This also includes strategic planning and an efficient and adaptable regulatory framework. The power construction contractor awards in Bahrain are estimated to increase from US$ 82 Mn in 2017 to US$ 1,016 Mn in 2018.

21 MAJOR ACTIVE GCC POWER PROJECTS Source:

22 FUTURE OUTLOOK Population growth, urbanisation, rising income levels, industrialisation and low electricity prices are expected to place a greater thrust on GCC power, both from the generation and T&D perspectives. Due to rising domestic consumption and increasing competitiveness of renewable energy especially solar power, all GCC countries will seek greater involvement from the private sector. The deployment of smart grid technologies and smart metering will form the future of the GCC power sector as it is expected to help the region save up to US$ 10 Bn. in infrastructural investment by If smart grid is rolled out in the right manner, it will lead to sustainable electricity supply in the future, according to experts. The GCC VAT expected to be introduced in 2018 is likely to bring some changes to the power sector, especially for companies dealing with solar power. Building smart cities with state-of-the-art facilities and renewable energy solutions is anticipated to contribute to the development and sustainability of future communities, which in turn is expected to lead to economic growth. Overall, the GCC power sector is expected to register unprecedented growth in the coming years. GCC countries are set to invest billions of dollars in projects for setting up new power production plants, distribution systems and supply grids in the next five years. The UAE, KSA and Kuwait will remain the top attractive power sector investment destinations in the GCC region.

23 This report was created for Middle East Electricity by Ventures ONSITE Middle East Electricity is the region s leading international trade event for the power industry, with dedicated product sectors for Power Generation, Transmission & Distribution, Lighting, Solar and brand new in Energy Storage & Management Solutions. Ventures ONSITE, a product by Ventures Middle East, has been a market leader in tracking construction projects across the Middle East and Africa region for more than 15 years. Ventures ONSITE provides accurate and detailed information on completed, current, and future construction projects. Image Sources: image by Carl Suurmond