Abu Dhabi: The Gulf Cooperation Council (GCC) countries are likely to invest as much as $50 billion (Dh184 billion) in power projects between 2009 and 2015, according to the Economist Intelligence Unit (EIU).
The EIU says economies of the Middle East and North Africa (Mena) region are set to consistently outperform every other region in the world over the next five years.
"This economic growth, coupled with increases in population, is placing extra pressure on governments to provide enough power capacity to meet demand. As such it is expected that the Gulf Cooperation Council (GCC) countries will invest $50 billion to increase power generation capacity between now and 2015," the EIU said.
According to power industry experts, an unprecedented economic and population growth in the GCC, which comprises Bahrain, Kuwait, Qatar, Oman, Saudi Arabia, and the UAE, is creating a massive strain on the power infrastructure. The GCC has an installed power capacity of 75,000 megawatts, but with demand growing annually at a rate of 9.5 per cent, more than 55,000 MW of additional power will be required by 2015.
"In terms of power sector growth, the GCC countries are a bit behind, but this can be accelerated as they have the money available to develop the sector and they can woo private investments too into the industry," Dalton Garis, Associate Professor of Economics and Petroleum Market Behaviour at the Petroleum Institute in Abu Dhabi, told Gulf News.
"A futures market for electricity would also help in developing the power sector," he added.
For the UAE, a recent analysis showed that the national annual peak demand for electricity is likely to be 40,858 megawatts by 2020, up 162.82 per cent from present, based on an annual growth rate of about 9 per cent from 2007 onwards. To meet its growing demand for electricity, the UAE, the world's third-largest oil exporter, is planning to build a number of nuclear reactors.
The UAE's current installed electricity generation capacity of about 18,000 megawatts (MW), almost 85 per cent of the power generated is from natural gas, while the other plants are oil-fired.
The first phase of a joint power grid for GCC countries was completed last month with the linking of the grids of Saudi Arabia, Qatar, Bahrain and Kuwait. The UAE and Oman will link to the grid in 2011.
