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Market survey: Experts all behind Smart Grid plan

by Utilities ME Staff on Mar 13, 2012

Experts say that subsidies and tax exemption mechanisms will need to be structured to encourage utilities to invest in new technology.
Experts say that subsidies and tax exemption mechanisms will need to be structured to encourage utilities to invest in new technology.

With smart grids looking set to be a prominent force behind Middle Eastern utilities over the next decade, where will the investment come from and how will renewables be integrated?

Despite the fact that experts are agreed smart grids are an essential part of the Middle East’s future infrastructure, there are currently none under development in the GCC.

The next ten years will see significant investment in future-proofing our existing networks, and following Europe’s lead might not be a bad idea.

“European countries do have weaknesses, but they also have strengths when it comes to reception of new technologies to make other countries and stakeholders work together,” says Dr Maher Chebbo, VP EMEA, Utilities and Service Industries, SAP.

“In 2005 the European Technology Platform for the smart grid was created, which brought together all of the stakeholders of the market to define the vision, the research and the deployment. That’s what we have to do in the region here.”

“We have to bring together all the stakeholders – not just the existing companies but the suppliers, the regulators and consumers, too. We need to put them all together with the research and academia experts as well, as ask them to define, according to the priorities of the region, what should be the investments in the next ten years in terms of research and demonstration, and then deployment.”

According to a recent report by Frost and Sullivan, the GCC is expected to invest almost $73 billion in power generation and T&D projects, adding 36 gigawatts of generation capacity over the next five years.

This investment in power generation and transmission and distribution is essential to meet the demand emanating from the aggressive diversification attempts and infrastructure led by development commitments by the GCC countries.

Investments in power generation will supplement the expansion and modernisation of the transmission and distribution network, to cater to the increased power generation and the urbanisation and industrialisation of the GCC.

“The main benefit is energy optimisation - one day there will be fewer and fewer resources, so we should be looking at how to optimise the energy – and the resources of energy – by being smarter in terms of consumption,” says Chebbo.

“It’s also an opportunity to be greener – if there are better international agreements, and if we have to comply with a 20 per cent reduction in fuel used, then we are creating a trend for having more renewables here in the region, preparing for a high increase in demand, and preparing for a time when there is no more oil. Those are the benefits of a smart grid system for the region.”

Despite there being no actual grids under development in the GCC, a number of countries in the region are either in the pilot or planning stages, and Frost and Sullivan is expecting this to accelerate in the next five to seven years.

Infrastructure expansion, upgrading of transmission and distribution infrastructure, reducing demand, increasing reliability and stability and flexible tariffs are all factors that are expected to drive smart grid adoption in the Middle East.

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