The song remains the same

But the region is starting to dance to a different tune.

Power generation in the Middle East makes for an interesting story.
Power generation in the Middle East makes for an interesting story.

The year is drawing to a close, and it is time to look to 2011.

Journalists tend to be more concerned with change than continuity. On the surface, however, the story of the region’s power and water sector is very much unchanged. Enormous sums are being spent on expanding and upgrading the generation and grid infrastructure, as utilities struggle to keep up with the relentless increase in demand.

Yet no one can accuse the Middle East of being a boring place to report on. Like any developing part of the world, the region is undergoing significant economic and social change. Its leaders have come to realise that, due to the finite amount of fossil fuels, relying on crude and gas exports is unsustainable in the long term.

As a result, GCC governments are engaged in a concerted effort to industrialise their societies.

In the desert lands of Saudi Arabia, vast refineries and petrochemical complexes are emerging from the sand. In Abu Dhabi, billions are poured into the Khalifa Port and Industrial Zone, a port that will be surrounded by an astonishing 367 square kilometres of industry by 2030, if things go to plan.

The oil and gas industry and its wealth creation have already emptied the countryside of its inhabitants, sucking the population into growing urban centres. As befits urban peoples in monied countries, the citizens of Jeddah, Doha or Kuwait have developed excessive consumption patterns.

The GCC is not undergoing the turmoil that has characterised radical change in nineteenth and twentieth century Europe, which has sparked wars and revolution and led to new political movements and a different social composition. The gradual change that is underway is nevertheless fascinating, and it is having a direct impact on every aspect of the utilities sector.

Saudi Arabia alone has pledged a staggering US$80 billion of investment in power generation over the period between 2008 and 2018. Further billions will be spent on expanding the transmission and distribution network, and in building up desalination and wastewater treatment capacity.

On the consumer side, political considerations are more evident. As utilities are racing to keep up with demand, sensible heads are calling for measures to reign in the wasteful consumption that characterises this region. In Abu Dhabi, for example, the average person uses 450 litres of water per day, a world record.

Power and water providers all over the world are starting to turn to smart metering, part of the movement towards smart grids that are able to deal with a two way flow of energy and information. Smart meters allow power companies to establish the consumption patterns of its customers, and adopt tariffs that encourage moderation and the flexibility needed to avoid extreme peaks and troughs in generation.

This touches upon a very hot potato indeed. Both electricity and water is subsidised across the region, part of an informal social contract between rulers and subjects which stipulates that as long as the people are well provided for with basic (and sometimes not so basic) comforts, the powers that be will not be questioned.

But as the region is orbiting invariably closer towards the modern world, old taboos will have to fall. With the interconnection of power and water to industry and politics and society, the sector is sure to notice any repercussions, and Utilities Middle East will be sure to write about those.


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