The Middle Easts power and water sector has come a long way since the early part of the 20th century. Back then, electricity generation was the preserve of small companies that generally sold power at a local level.
Much of the region was un-electrified as late as 1960, with Abu Dhabi first receiving municipal power in 1968. Water has a longer track record. Desalination took hold in the 1950s.
But the pace of change since then has been impressive, and there is no sign of momentum slowing down. The 1970s and 1980s saw countries in the Middle East and North Africa (Mena) region build hydro and thermal power plants as demand ballooned on the back of rampant economic growth. Overall electricity production in the GCC nearly doubled from 238 terawatt-hours (TWh) in 2001 to 462 TWh in 2011.
From the outset, the regions power and water sector has been dominated by megaprojects. One of the most prominent was the Aswan High Dam in Egypt, opened in 1970 by President Gamal Abdel Nasser as a means of generating hydro-electricity for the country and preventing flooding. The complex has a capacity of more than 2,600MW, equating to some 10 per cent of Egypts total power generation capacity.
The focus on scale continues to this day, as the Gulfs huge independent water and power projects and under-construction nuclear plants demonstrate.
The private sector initially played a key role in developing electricity and water facilities in the region. But governments soon took control, creating state utilities and regulators that have evolved into the drivers of change, today pushing for price reform, deregulation, energy efficiency and renewables.
In 1961, Saudi Arabia set up a Department of Electricity Affairs within the Ministry of Commerce, with a mandate to establish rules and regulations to govern the activities of the power generation sector, and to encourage investment. Other Gulf states established energy ministries and then national power and water companies.
One trend where the Middle East has taken a global lead is in marrying power and water
The 1990s saw utility providers start to think more actively about addressing the need for reform, as rising consumption began to test the capacity of these state-led sectors to meet demand from finite resources.
It was in the 1990s that Oman and Abu Dhabi first dipped their toes into private power financing and operation, with schemes such as the Manah independent power project. This mode of delivery swiftly became the norm in the GCC states.
One trend where the Middle East has taken a global lead is in marrying power and water. The GCC states began the association of the water and power sectors as a result of the adoption of thermal desalination technology five decades ago. This gave rise to the major independent water and power projects that dominate the regions utilities sector to this day.
This trend may soon come to an end with the advent of nuclear power and cost-efficient renewable energy technologies both areas where the UAE has taken a pioneering role. Abu Dhabis $20bn Baraka nuclear plant is a significant game changer for the regions energy sector. As other countries such as Egypt, Jordan and Saudi Arabia look to move into nuclear, it will start to provide bulk supply from 2018.
Perhaps the most exciting development is the regions adoption of renewables as the fuel sources of the future. Such projects are growing in ambition. In February, the contract was signed for the worlds largest solar plant in Abu Dhabi, a 1.1GW photovoltaic (PV) project. This exceeds the 800MW third phase of Dubais Mohammed bin Rashid al-Maktoum solar park, which was previously the largest single-site solar project.
One reason why renewables will be so important to the future energy mix is the cost advantage
Elsewhere, Kuwait is inviting interest in a 1GW solar development and Algeria has plans to procure a 4GW solar PV programme. Morocco has earned its stripes as a leader in developing solar and wind power, with schemes such as the 160MW Ouarzazate solar plant. Rabat aims to have 42 per cent of its power sourced from renewables by 2020.
Saudi Arabias ambitious National Renewable Energy Programme is set to play a key role in building up the regions clean energy credentials. The kingdom plans to develop a total of 9.5GW of renewable energy by 2023. This is being led by King Abdullah City for Atomic & Renewable Energy (KA-Care), which was launched in 2010 and will monitor the robustness of the programme.
One reason why renewables will be so important to the future energy mix is the cost advantage. In 2015, Saudi Arabias Acwa Power was awarded a deal to develop a 200MW PV solar plant with a world-record low tariff of 5.85 cents a kilowatt hour. Within a year, tariffs in the UAE had sunk to less than half this level. Cost, as much as good intentions, means renewables will play a critical part of the next wave of power projects.