The award of the main EPC contract for Bahrain Aluminium’s (Alba’s) fifth captive power plant signals the return of Bahrain to the region’s energy projects market.

Peak demand growth for electricity fell significantly following the political unrest in 2011. This was followed by the commissioning the remaining 828MW of the 1,234MW Al-Dur 1 independent water and power project (IWPP) in the first quarter of 2012, and as a result the kingdom’s need for new major power projects fell far behind its GCC neighbours.

The award of Alba’s 1,792MW fifth power plant has put Bahrain back on the map.

With peak demand for electricity rebounding to reach 8.1 per cent in 2014, the Electricity & Water Authority (EWA) is demand for power will increase by an annual average of 6.4 per cent until 2020. As a result, close to $1.5bn and $1bn is planned to be invested on power generation facilities and transmission projects respectively in the next four to five years.

As a result of the increasing growth in domestic demand, the kingdom has started to move ahead with the next planned major power project, the second phase of Al-Dur IWPP. In June, EWA received a new round of bids for consultancy services for the proposed Al-Dur 2 scheme, which is expected to have a generation component of 1,500MW.

The award of the Alba fifth power plant is also a positive step for Bahrain’s industrial ambitions. The plant will form a central part of the aluminium producer’s long-awaited sixth smelter potline. The estimated $3bn sixth potline expansion will boost Alba’s production capacity by 540,000 tonnes a year (t/y) to 1.5 million t/y, and will make the plant the world’s largest single-site aluminium smelter. With oil prices showing no signs of recovering in the near future, the kingdom is aware of the importance of meeting its economic diversification targets.

While Bahrain will not offer the same raft of power projects as some of its GCC compatriots in the coming years, its return to the fold will be a welcome addition to the regional and international utilities sector.

Andrew Roscoe