Special Report: Power & Water - Utilities plan for slow growth
Few people would have thought it feasible this time last year, but the Middle East’s electricity and water utilities now face the prospect of having over-invested in capacity.
The impact of the global economic slump means that many of the region’s largest real estate projects are being shelved and many expatriates are leaving. This in turn translates into less need for new power and water supplies over the medium term.
The demand picture is not the same across the six GCC states: Saudi Arabia is not expected to experience a significant downturn in power and water demand, although uncertainty over the kingdom’s industrial sector means this outlook could change.
The upside from all this is the opportunity for regional authorities to capitalise on a softer climate in engineering, procurement and construction costs to restructure their pipelines of future projects.
The interruption in rapacious demand growth also presents a time for some utilities to widen their supply options, and new technologies, such as floating desalination, are now entering the Gulf’s orbit.
But for some, there is no such luxury. The Kurdish area of northern Iraq, for example, needs to quickly ramp up power generation capacity to put an end to the perennial blackouts that persist many years after the overthrow of Saddam Hussein.
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