Last updated on April 20, 2014 at 14:04 EDT

Gulf Countries to Save Minimum of $300m to $1bn Per Year with Smart Grid

June 4, 2012

WASHINGTON, June 4, 2012 /PRNewswire/ — The Middle East & North Africa (MENA) region is in the early stages of its smart grid development but stands to realize strong benefits, including minimum savings of $300 million to $1 billion per year for Gulf countries. Smart grid is an opportunity for MENA countries to incorporate their vast solar and renewable resources, manage growing demand, reduce carbon emissions and cut down on electricity system losses, according to a new study released today by Northeast Group, LLC.

The new study ‘Middle East & North Africa Smart Grid: Market Forecast (2012-2022)’ projects the smart metering market will reach 16.1 million units by 2022 with cumulative capital expenditure of $3.9 billion. The majority of near-term activity will be in the Gulf region, where Saudi Arabia and the United Arab Emirates are currently leading the way. By 2022, 86% of homes and businesses in the Gulf countries will have smart meters. Other MENA countries outside the Gulf will develop at a slower pace – due largely to political risk – but represent larger market sizes and also stand to realize strong benefits from smart grid technologies.

“All countries in the MENA region are facing high rates of electricity demand growth, and the Gulf countries have some of the highest levels of per capita electricity consumption and carbon emissions in the world. Demand side management is becoming increasingly important in these countries and smart meters will be an important tool in these efforts. By implementing smart metering, a conservative estimate is that Gulf countries could save a minimum of between $300 million to $1 billion per year on oil and natural gas used for electric generation. The actual savings could be much higher. Countries could then turn these savings into increased oil and gas exports,” according to Northeast Group.

“MENA countries are also aggressively pursuing renewable sources of energy, highlighted by Saudi Arabia’s recent announcement that it is aiming to spend $109 billion to develop 41 GW of solar capacity over the next 20 years. Smart grid technologies will be instrumental in helping these countries incorporate intermittent renewable resources,” according to Northeast Group.

Governments of several MENA countries are experimenting with a number of policies to help curb domestic consumption of fossil fuels, including feed-in tariffs for renewables, conservation outreach campaigns, and electricity pricing mechanisms that more closely reflect the costs of electric service (regional electricity prices are currently among the lowest in the world). Several high profile transmission interconnection initiatives are also helping these countries to use their systems more efficiently.

“Smart grid regulatory frameworks are in the early stages of development but progress is being made,” Northeast Group added. “Governments are realizing they must incentivize energy conservation and are beginning to invest in the technologies necessary to make their grids smarter. Smart city concepts such as Masdar City in the UAE and the Pearl-Qatar in Qatar show that smart grid technologies will be a feature of Gulf infrastructure investments over the next decade.”

Northeast Group forecasts 5 segments of the smart meter – or advanced metering infrastructure (AMI) – market, including meter hardware, communications, IT, professional services, and installation services for 12 countries across the MENA region. In addition to smart meter market forecasts, the report covers distribution automation activity, wide area measurement initiatives and home energy management. The report also highlights the positioning of domestic and international smart grid vendors in the region. Countries profiled in the study include:

  • Algeria;
  • Bahrain;
  • Egypt;
  • Jordan;
  • Kuwait;
  • Lebanon;
  • Morocco;
  • Oman;
  • Qatar;
  • Saudi Arabia;
  • Tunisia;
  • United Arab Emirates.

Northeast Group’s report is 119 pages long and includes over 70 charts, tables and graphics. The report was completed using both primary and secondary sources in the MENA region. To order a copy of the report, please visit www.northeast-group.com or email Ben Gardner at: ben.gardner@northeast-group.com

ABOUT: Northeast Group, LLC is a Washington, DC-based smart grid market intelligence firm. Our research is focused on the smart grid opportunity in emerging market countries.

Key questions answered in this report:

  • How large will the smart meter market – including 5 segments – in MENA become over the next decade?
  • Which countries are developing smart grid regulatory frameworks and what do they look like?
  • Which international vendors are already active in MENA? How will rules on local participation affect international investment in the smart grid market?
  • Which communications technologies will be favored by utilities in the MENA region?
  • How will the development of renewable sources of energy affect smart grid in the MENA region?
  • What pilot projects are in place and what hurdles have they faced?
  • How will recent political events in the region shape smart grid development?
    Table of Contents
    i. Executive Summary                                                                                                            1
    ii.Methodology                                                                                                                  8
    1. Introduction                                                                                                                10
                                                                             1.1 What is smart grid?                                       10
                                                                             1.2 Smart grid's role in regional interconnection             17
                                                                             1.3 How has smart grid been used elsewhere in the world?      21
    2. MENA smart grid snapshot                                                                                                    25
                                                                             2.1 The region in comparison                                  26
                                                                             2.2 Regional drivers                                          29
                                                                             2.3 Regional challenges                                       33
                                                                             2.4 Most recent developments                                  35
    3. Regional market forecast                                                                                                    37
    4. United Arab Emirates                                                                                                        41
                                                                             4.1 Electricity industry structure                            41
                                                                             4.2 Smart metering regulatory environment                     43
                                                                             4.3 Market forecast                                           46
                                                                             4.4 Utility activity                                          48
    5. Saudi Arabia                                                                                                                52
                                                                             5.1 Electricity industry structure                            52
                                                                             5.2 Smart metering regulatory environment                     56
                                                                             5.3 Market forecast                                           58
                                                                             5.4 Utility activity                                          60
    6. Qatar                                                                                                                       62
                                                                             6.1 Electricity industry structure                            62
                                                                             6.2 Smart metering regulatory environment                     65
                                                                             6.3 Market forecast                                           66
                                                                             6.4 Utility activity                                          68
    7. Oman                                                                                                                        70
                                                                             7.1 Electricity industry structure                            70
                                                                             7.2 Smart metering regulatory environment                     73
                                                                             7.3 Market forecast                                           74
                                                                             7.4 Utility activity                                          75
    8. Kuwait                                                                                                                      77
                                                                             8.1 Electricity industry structure                            77
                                                                             8.2 Smart metering regulatory environment                     80
                                                                             8.3 Market forecast                                           80
                                                                             8.4 Utility activity                                          81
    9. Bahrain                                                                                                                     83
                                                                             9.1 Electricity industry structure                            83
                                                                             9.2 Smart metering regulatory environment                     86
                                                                             9.3 Market forecast                                           86
                                                                             9.4 Utility activity                                          88
    10. Beyond the Gulf                                                                                                            89
                                                                             10.1 Market drivers and barriers                              89
                                                                             10.2 Jordan                                                   92
                                                                             10.3 Egypt                                                    94
                                                                             10.4 The rest of the region                                   95
    11. Vendor activity                                                                                                            99
                                                                             11.1 Domestic vendors                                        100
                                                                             11.2 International vendors active in smart grid in MENA      102
                                                                             11.3 International vendors poised to expand in MENA          105
    12. Conclusion                                                                                                                107
    13. Appendix                                                                                                                  108
                                                                             13.1 List of companies mentioned in this report              108
                                                                             13.2 List of acronyms                                        109
    List of Figures, Boxes, and Tables

    MENA smart grid: key takeaways                                  2
    Smart grid development in Gulf countries                        6
    AMI forecast by country                                         7
    AMI forecast data by country                                    7
    Figure 1.1: Smart grid value chain                             10
    Figure 1.2: Smart grid model highlighting focus in MENA        11
    Table 1.1: Benefits of AMI in the Gulf                         14
    Table 1.2: Demand response options                             16
    Figure 1.3: GCC Interconnection                                17
    Figure 1.4: Proposed European "super grid"                     19
    Figure 1.5: Smart grid activity in emerging markets            22
    Figure 2.1: Emerging markets smart meter potential             26
    Figure 2.2: Per-capita electricity consumption                 27
    Figure 2.3: Per-capita CO2 emissions                           27
    Figure 2.4: GDP growth in MENA and the Gulf                    28
    Table 2.1: Smart grid market drivers and barriers in the Gulf  29
    Figure 2.5: Per-capita consumption in MENA                     30
    Figure 2.6: Renewable sources of energy in MENA                31
    Figure 2.7: Distribution losses in MENA                        32
    Figure 2.8: Electricity prices in MENA                         34
    Figure 3.1: Timeline of smart grid developments in MENA        37
    Figure 3.2: AMI forecast by country                            38
    Table 3.1: AMI forecast data by country                        38
    Figure 3.3: MENA smart meter penetration rate                  39
    Figure 3.4: Gulf smart meter penetration rate                  39
    Figure 3.5: AMI cost breakdown                                 39
    Figure 3.6: AMI forecast by segment                            40
    Table 3.2: AMI forecast data by segment                        40
    Figure 4.1: UAE AMI penetration rate                           41
    Table 4.1: Smart grid indicators in the UAE                    42
    Figure 4.2: Voluntary dynamic pricing in Abu Dhabi             44
    Box 4.1 Political risk in the UAE                              45
    Figure 4.3: UAE AMI forecast                                   47
    Table 4.2: UAE AMI forecast data                               47
    Box 4.2: Masdar City-a carbon neutral smart city               49
    Figure 5.1: Saudi Arabia AMI penetration rate                  52
    Table 5.1: Smart grid indicators in Saudi Arabia               53
    Box 5.1: Political risk in Saudi Arabia                        55
    Figure 5.2: Saudi Arabia AMI forecast                          59
    Table 5.2: Saudi Arabia AMI forecast data                      59
    Figure 6.1: Qatar AMI penetration rate                         62
    Table 6.1: Smart grid indicators in Qatar                      63
    Box 6.1: Political risk in Qatar                               65
    Figure 6.2: Qatar AMI forecast                                 67
    Table 6.2: Qatar AMI forecast data                             67
    Box 6.2: The Pearl Qatar project                               68
    Figure 7.1: Oman AMI penetration rate                          70
    Table 7.1: Smart grid indicators in Oman                       71
    Box 7.1: Political risk in Oman                                72
    Figure 7.2: Oman AMI forecast                                  74
    Table 7.2: Oman AMI forecast data                              74
    Figure 8.1: Kuwait AMI penetration rate                        77
    Table 8.1: Smart grid indicators in Kuwait                     78
    Box 8.1: Political risk in Kuwait                              79
    Figure 8.2: Kuwait AMI forecast                                81
    Table 8.2: Kuwait AMI forecast data                            81
    Figure 9.1: Bahrain AMI penetration rate                       83
    Table 9.1: Smart grid indicators in Bahrain                    84
    Box 9.1: Political risk in Bahrain                             85
    Figure 9.2: Peak demand in Bahrain                             86
    Figure 9.3: Bahrain AMI forecast                               87
    Table 9.2: Bahrain AMI forecast data                           87
    Figure 10.1: Distribution losses in MENA                       90
    Figure 10.2: Jordan AMI penetration rate                       92
    Figure 10.3: Jordan AMI forecast                               93
    Table 10.1: Jordan AMI forecast data                           93
    Figure 10.4: Egypt AMI penetration rate                        94
    Figure 10.5: Egypt AMI forecast                                95
    Table 10.2: Egypt AMI forecast data                            95
    Table 11.1: Vendors based in the Gulf                          99
    Figure 11.1: International AMI vendors in MENA                103
    Table 12.1:  The next steps and necessary actions             107

Companies covered in this report

  • ABB (Switzerland)
  • Advanced Electronics Company (Saudi Arabia)
  • Al Mostajed (UAE)
  • Al Wataniya (Kuwait)
  • Alstom (France)
  • BPL Global (US)
  • Consolidated Gulf Company (Qatar)
  • Desertec (US)
  • DEWA (UAE)
  • Electricity Distribution Company (Jordan)
  • Electricity Holding Company (Oman)
  • Electricity and Water Authority (Bahrain)
  • Elster (Germany)
  • FEWA (UAE)
  • GE (US)
  • Global Energy Technologies (UAE)
  • Gulf Investment Corporation (UAE)
  • Irbid District Electricity Company (Jordan)
  • Itron (US)
  • Jordanian Electric Power Company (Jordan)
  • Kahramaa (Qatar)
  • Landis+Gyr (Switzerland)
  • Larsen & Toubro’s (India)
  • Masdar (UAE)
  • Mubadala (UAE)
  • National Trading Company (Oman)
  • Oracle (US)
  • QEWC (Qatar)
  • Petra Solar (US)
  • Saudi Aramco (Saudi Arabia)
  • Saudi Electricity Company (Saudi Arabia)
  • SEWA (UAE)
  • Siemens (Germany)
  • Sonelgaz (Algeria)
  • Suez-Tractebel (Belgium)
  • SWCC (Saudi Arabia)
  • Technology Partners (UAE)
  • Tropos Networks (US)

SOURCE Northeast Group, LLC

Source: PR Newswire