French power developer Engie has retained its position at the top of MEED’s annual GCC power developer ranking, with only two solar powered independent power projects (IPPs) having been awarded since the table was last published.

Japanese developer Marubeni’s success in winning the 1,177MW Sweihan solar IPP in Abu Dhabi boosted its GCC equity capacity portfolio and cemented its position in the top three, but its total of 3,158MW was still significantly behind the 5,927MW equity capacity of second-placed Acwa Power from Saudi Arabia.

While the recent award of contracts for the 800MW third phase of Dubai’s Mohammed bin Rashid (MBR) solar park and the world’s largest solar scheme in Abu Dhabi looks set to usher in unprecedented clean energy project activity across the Gulf in the coming years, plans for much larger, conventional IPPs have stalled in recent months. This is reflected in the lack of movement in MEED’s latest ranking of the key players in the GCC’s private power developer market.

Engie established its dominant position in the GCC private power market following the merger of the non-European assets of the UK’s International Power (IP) and France’s GDF Suez in early 2011. The group’s 2014 successes with Abu Dhabi’s Mirfa independent water and power project (IWPP) and Kuwait’s first IWPP, Al-Zour North 1, further bolstered its position at the top.

Engie’s last success was for the 1,500MW Fadhili IPP in Saudi Arabia, for which it signed the contract in July 2016.

Despite Engie’s sizeable head start following the IP/GDF Suez merger, Acwa Power has made significant inroads into closing the gap at the top of the MEED ranking. In the 2013 developer survey, Engie (then called GDF Suez Energy International) had a 7,449MW equity capacity, almost 65 per cent more than the 2,634MW Acwa Power held at that time.

In the 2017 ranking, Engie’s GCC portfolio is only about 27 per cent larger than its second-placed rival. Acwa Power’s rapid rise is largely due to unprecedented success in 2015 and 2016, when it achieved a strike rate of more than 90 per cent of all tenders it participated in, including major renewable energy projects outside the GCC in Morocco.

The Saudi developer was also successful in winning the contract to develop the 2,400MW Hassyan coal project in Dubai, the GCC’s first major coal-fired plant, showing its aptitude to win tenders across various technologies.

Despite winning deals to develop further solar capacity in Morocco and most recently Egypt in the past nine months, Acwa Power’s GCC equity portfolio has declined slightly since the last ranking. This is due to the firm selling an 8 per cent stake in its Shuqaiq IWPP in Saudi Arabia to the local Arab Petroleum Investments Corporation (Apicorp) in March.

The Saudi developer may further boost its GCC equity capacity in the coming months, after submitting the lowest tariff for Dubai’s first concentrated solar power (CSP) scheme in June. However, with the emirate likely to proceed with only 200MW for its maiden CSP scheme, Acwa Power will not see a major leap.

While utility providers in the UAE, Saudi Arabia and Kuwait have all made progress with awarding or launching new renewable energy projects over the past year, there has been a distinct lack of progress with some of the largest capacity IPP and IWPP schemes planned in the GCC.

The Al-Zour North 2 IWPP in Kuwait is a prime example of this. Despite the country’s public-private partnership (PPP) body having received proposals from developers in June 2016 for the second IWPP project, as of August 2017, the deal had yet to be awarded. MEED reported in July that firms had been asked to extend bid bonds for a second time until March 2018. The two teams remaining in contention to win the contract are led by Marubeni and Japan’s Sumitomo Corporation, which is sixth in MEED’s latest developer table.

Slow progress with the Al-Zour North 2 evaluation process has delayed the tender of Kuwait’s next major scheme, the Al-Khiran IWPP. With more than 5.4GW of future IPP and IWPPs planned in Kuwait, progress with Al-Zour 2 project will clear the way for significant additional capacity to be let to the private developer market.

A similar story is unfolding in the region’s biggest utilities market, Saudi Arabia. While the kingdom’s power sector has made many headlines of late with the launch of the first projects under its ambitious 9.5GW renewable energy programme, progress has stalled with the planned 5,400MW PP15 IPP, which would be the largest privately financed fossil-fuel power plant in the region.

Developers were invited to submit expressions of interest for the IPP in November last year, but as of August the request for qualification (RFQ) had not been issued, and the client has provided no further news on a timeline for tendering the scheme.

As a result of the delays in awarding these major projects, there is likely to be a significant rise in capacity by the time of the next MEED developer ranking, which is due to be published in 2018. In addition to the major projects planned in Kuwait and Saudi Arabia, Bahrain intends to issue tenders for the Al-Dur 2 IWPP before the end of the year. The scheme will have a generation capacity of at least 1,500MW, according to sources close to the project.

New players

Although the top 10 GCC developers remain unchanged in 2017, there could be new regional and international entrants to the table in the coming years. Saudi Arabia’s Abdul Latif Jameel Energy is attempting to become the third regional developer in the ranking, following its success as a major stakeholder in the 800MW third phase of Dubai’s MBR solar park. The developer has also been successful further afield in Jordan.

Japanese and South Korean firms account for seven of the current top 10 positions in the GCC developer market, but they are likely to face increasing competition from Chinese companies moving forward.

China’s Harbin Electric and Jinko Solar both gained GCC equity capacity in the past 16 months, having been partners in successful consortiums for the 2.4GW Hassyan coal IPP in Dubai and the Sweihan solar scheme in Abu Dhabi respectively.

Chinese developers seeking to break into the top 10 will likely be able to rely on the support of their local financial institutions, with Chinese banks financing 78 per cent of the total $2.5bn debt for the Hassyan project.

In addition to several contract awards expected for major IPPs, another interesting development in the region’s power sector that could affect next year’s ranking is the planned privatisation of Saudi Arabia’s generation assets. With the kingdom planning to sell 15-20GW to the private sector as part of its first asset sales by the end of 2017, big changes could lie ahead.