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Middle East & North Africa Region Forecast to Invest $17.6 Billion in Smart Grid Infrastructure

Investment over next decade to be led by Saudi Arabia, Egypt, and the UAE

Many Middle East & North African (MENA) country power sectors suffer from unsustainable tariff subsidies, high per-capita electricity consumption and high non-technical losses. Grid modernization is finally finding its way onto the agenda at many MENA countries, creating momentum for smart grid infrastructure investment. Nearly all MENA countries remain in the early stages of smart grid development but many have announced ambitious national implementation plans. A diverse array of drivers will lead to $17.6 billion in smart grid investment from 2018 to 2027, according to a new study published by Northeast Group, LLC.

“The MENA region has been characterized by false starts and long-planned tenders that over the years failed to materialize,” according to Ben Gardner, president of Northeast Group. "But in the last year, this has finally changed and large-scale rollouts are ready to begin moving forward. We’re already seeing activity take place, most notably in Saudi Arabia and Egypt, two of MENA’s largest markets.”

The region exhibits a diverse array of drivers, with vastly different power sector scenarios in wealthy Gulf countries versus countries outside of the Arabian Peninsula. Gulf governments are looking to modernize their countries’ infrastructure and better manage high electricity consumption rates. Other countries in the region are mostly concerned with alleviating costly non-technical losses in their power grids. Other characteristics are shared across the region, namely subsidized electricity prices, which have impeded power sector investment, and major growth in renewable energy sources, which will help cultivate the region’s nascent battery storage market.

Major international and local smart grid vendors have already completed projects in the region, including ABB, ADD Grup, El Sewedy Electrometer, Ericsson, GE, Honeywell, Iskraemeco, Itron, Landis+Gyr, Sagemcom, and Siemens, among others. Chinese vendors including Hexing, Holley Metering, Huawei, and ZTE are also making a strong push to expand their MENA presence. Many projects are being implemented in collaboration with domestic prime contractors, as many MENA countries have rules or norms requiring local partnerships for market entry.

Northeast Group’s 230-page study Middle East & North Africa: Market Forecast (2018-2027) Volume IV is currently available at: www.northeast-group.com.

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