(MENAFN- Khaleej Times) Power demand in the Middle East and North African (Mena) countries is forecast to grow at around seven per cent over the next 10 years and an estimated $283 billion will be invested in the region's power sector between 2014 and 2018.
A report by Kuwait Financial Centre, or Markaz, said notes that Mena countries, with the exception of GCC states, though rich in natural resources that aid in power generation, are bereft of the necessary technology, infrastructure and in some cases, political and economic stability, to fully utilise and benefit from them.
"In addition, power sector in those countries is plagued with problems of transmission and distribution losses. These countries, therefore, intend to increase investments in the sector and to look at other alternative sources of power," the report said.
The International Renewable Energy Agency, or Irena, and Renewable Energy Policy Network for the 21st Century (Ren21) said in their joint report recently that strong economic and demographic growth associated with rapid urbanisation has led to an increase in energy demand to meet rising electricity and desalinated water needs in the Mena region.
The report estimates that investments worth $145.7 billion will be needed for power generation from 2013.
Of this, investments worth $63.1 billion will be in the GCC, $21.4 billion in Iran and approximately $53 billion in the combined other countries of the region.
According to the Irena report, global demand for renewable energy continued to rise during 2011 and 2012, supplying an estimated 19 per cent of global final energy consumption, with a little less than half from traditional biomass.
"Useful heat energy from modern renewable sources accounted for an estimated 4.1 per cent of total final energy use; hydropower made up about 3.7 per cent; and an estimated 1.9 per cent was provided by power from wind, solar, geothermal, and biomass, and by biofuels.
Total renewable power capacity worldwide exceeded 1,470 GW in 2012, up about 8.5 per cent from 2011. Hydropower rose three per cent to an estimated 990 GW, while other renewables grew 21.5 per cent to exceed 480 GW. Globally, wind power accounted for about 39 per cent of renewable power capacity added in 2012, followed by hydropower and solar PV, each accounting for approximately 26 per cent," the Irena report said.
Markaz pointed out that in Egypt, domestic oil consumption has grown by over 30 per cent over the last decade and the government planned to invest more than $100 billion dollars over the next decade. The economy has, however, been reeling under the negative consequences of political instability and security concerns since 2011.
The Markaz report said that surging power demand and shortage of domestic energy resources has compelled the Moroccan government to reduce dependency on non-renewable sources of power generation and strengthen efforts to tap the hydro and solar resources for power generation. Consumption has grown at an average rate of seven per cent per year over the past ten years, while the production has increased at the rate of four per cent for the same period.
The report said in 2011, the daily supply rate of natural gas to Jordan was approximately 95 million cubic feet as compared to the demand which was estimated at 255 million cubic feet. Jordan imports more than 96 per cent of its oil needs and is dependent on Egypt for its gas supplies. The country has not yet explored its energy reserves and there is a huge potential for investment opportunities.
"Oil and gas production remains the key source of foreign exchange income and fiscal revenues for Iran. Iran is estimated to have the second largest reserves of the natural gas and the fourth largest reserves of oil in the world. Iran also has abundant sunlight that is underutilised and can be developed as a major source of power. Over the past decade, the Iranian power sector has come under increased pressure to meet the growing consumption needs of the population," said Markaz.
Power consumption in Iraq grew at an average rate of 3.6 per cent over the last decade. But the power distribution networks of Iraq suffer from poor design, lack of maintenance and theft. Iraqi government has announced $28 billion of investments in power sector.
Markaz report points out that depleting natural resources and global environmental awareness have prompted many Mena governments to increase the share of renewable resources in power generation. Mena region possess 57 per cent of the world's proven oil reserves and 41 per cent of proven natural gas reserves, but population and economic growth are putting greater pressure on the power sector in the Mena region.
"Many countries in the Mena region have planned for the systematic reduction in subsidies, which should help in attracting investments. There is a long way to go for the Mena countries in terms of developing the power sector," said the report.
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