Dubai January 20, 2003
MID EAST POWER SUMMIT
US $150 Billion for future GCC Electricity needs
100 Gigawatts generation capacity needed by 2020
January 20, 2002
Arab Gulf states will have to build 100 gigawatts of power generation capacity before 2020, at a cost of US$ 150 billion, to meet rapidly expanding demand for electricity, according to Hisham Khatib, Vice Chairman of the World Energy Council. Addressing the Middle East Electricity Ministers’ Summit, being held at the Dubai International Exhibition Centre (DIEC) alongside Middle East Electricity 2003 - the region's leading power generation and electricity industry exhibition - Khatib said regional power needs are growing faster than previously forecast, at three times the world average. "In order to meet the huge demand for electricity, GCC countries will have to invest an average of US $8 billion every year, more than half of which, US $4.5bn, will have to be spent by Saudi Arabia alone," said Khatib.
"The big question is where will the money come from? Only a few Arab electricity utilities can attract reasonable foreign investment, as international investors consider the Middle East too risky." Khatib said there was an urgent need for the region's governments to look at other ways to meet the cost of new energy projects, including accessing local stock markets and utilising financial instruments, such as bonds.
"Self-financing, on its own, will not be enough to pay for expansion,’ Khatib said. "Most Arab utilities collect less than half their bills. This is a financial disaster. Other sources of funding are needed."
He called on Arab governments to privatise electricity utilities, starting with the distribution networks. "This will improve the utilities’ financial viability and give them the clout to collect their bills."
Khatib also urged government's to end subsidies, saying energy tariffs should reflect the actual cost of electricity. "Subsidies divert resources from their optimal use. They lead to waste, over-use and mis-use," Khatib said.
The three-day Middle East Electricity Ministers’ Summit has brought together government decision-makers, leading regional and international power companies and respected industry advisors, to discuss how new strategies and technologies can meet the region's burgeoning energy needs.
Organised by IIR, the Summit is being held alongside the first annual showing of Middle East Electricity . The event, that closes tomorrow night (January 21), features over 600 exhibitors, from 34 countries and includes nine national pavilions from Germany, the UK, Switzerland, Italy, France, Turkey, Iran, Spain, and for the first time, Taiwan.
Many of the world's biggest power industry names are participating in the exhibition. The event also has a large regional presence, in addition to a host of companies representing the international Small to Medium Enterprise (SME) sector, making their Middle East debut. And, for the first time, there is a dedicated lighting arena, showcasing world leaders in commercial lighting and associated products.
Sponsored by Novar and Lucy Switchgear, Middle East Electricity 2003 is supported by the UAE Ministry of Electricity and Water and the Federal Electricity and Water Authority. It is open from 10.00am until 6.00pm for trade visitors. No children under the age of 16 years will be admitted.
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