Middle East Electricity 2013 Day 1

MEE 2013

DAY ONE

17 - 19 FEBRUARY 2013 www.middleeastelectricity.com Doing Global Business the Power of Good

Open Daily: 10am - 6pm

GCC to award power contracts totalling US$32.4 billion in 2013 A

fresh flow of GCC construction contracts worth US$32.4bn will soon be awarded for new power and water projects, according to the latest GCC Power and Desalination Report from research firm Ventures Middle East.

Following a lull in 2011 amid uncertain economic conditions and political turmoil across the wider MENA region, GCC annual electricity demand is now growing at a rate of between 10 to 15 per cent annually and regional governments are attempting to catch up.

With power demand in the region therefore set to triple over the next 25 years, infrastructure developments backed by governments and public-private partnerships (PPPs) are surging ahead, providing opportunities for global energy sector players.

Anita Mathews, exhibition director of Middle East Electricity, said, “The GCC region will require an additional 60 GW of power capacity by 2015 and the coming years are likely to witness a substantial improvement in the development of regional utility infrastructure.

“Rapidly increasing population and expanding commercial, industrial and

INSIDE

Power demand across the GCC is set to triple over the next 25 years, according to a Ventures Middle East study.

residential sectors will ensure that regional demand for electricity and water will continue unabated, and the timing is perfect for international companies to showcase their products and services to a proven audience of key decision makers at Middle East Electricity.”

The report said that Saudi Arabia was set to experience the most activity in 2013, with US$17bn worth of contracts to be awarded.

Saudi Arabia will be followed by the UAE and Kuwait, which are both expected to sign off brand new contracts totalling US$4.2bn each.

In Qatar, meanwhile, power and water contracts worth US$3.2bn are expected in 2013, tailed closely by Oman with US$2.7bn, while Bahrain rounds off the figures with US$1.1bn worth of contracts expected this year.

Keynote insight

Carbon control

Jigar Shah answers our questions Page 5

The region’s efforts to implement CCS Page 8

Saudi targets solar growth

German innovation

Solar sector set for Saudi Arabian boost Page 6

Pavilion to showcase country’s best Pages 10-11

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News

Oman Cables and Samsung in worldwide cable deal

manufacturing and distribution of electrical wires and cables, as well as conductor solutions.

OCI’s cables have been certified according to international standards such as BS, IEC, VDE, and are tailor-made to meet the specifications of individual customer.

Jubaili Bros, a member of Jubaili Group Holdings, celebrated 10 years of business in Afghanistan in 2012.

Initially opening a small base in Kabul in 2002, the company has now expanded to include five further branches in Kandahar, Herat, Mazar Shariff, Jalalabad and Kunduz.

Supplied across the Middle East, Africa and Asia, the company’s gas and diesel generating sets range up to 2,200 KVA and are powered by engines from Perkins and Lister Petter and feature alternators from Leroy-Somer and Stamford.

Maher Jubaili, managing director of Jubaili Bros, said, “It's been an amazing 10 years and through our experienced 'on-theground' team, Jubaili Bros is able to offer true solutions to the region's power needs.”

The company also designs and installs power plants, which can be utilised as standalone applications, as well as in parallel with utility companies to serve the residential and commercial sectors.

Jubaili Bros’ Power for Rent department leases generators at competitive prices and offers 24-hour back-up services. It also stocks mobile light towers, spare parts and accessories, control panels, ATS and synchronising systems, load banks and fuel tanks. The company employs 1,600 people across seven countries.

Visit Oman Cables on Stand 5B20

Visit Jubaili Bros on Stand S3C25

Representatives from Oman Cables Industry accept their award from the Oman Economic Review.

Oman Cables Industry SAOG (OCI) signed an agreement with Samsung South Korea towards the end of 2012 to supply electrical cables for Samsung’s global engineering procurement and construction projects.

The agreement, which was signed at the Oman Embassy in the South Korean capital of Seoul, confirmed OCI’s continuing business

development across the world. This development was also demonstrated in 2011, when OCI was placed at number seven in Oman Economic Review’s top 20 largest companies in Oman.

Founded by Mustafa Mukhtar and Hussain Salman in 1984, the company has grown to become an industry leader in the

Jubaili Bros celebrates 10 years in Afghanistan

Honeywell opens new training hub Global technology firm Honeywell opened a research and training facility in Dhahran last year in the hope that it would open up career opportunities to Saudi Arabian nationals. Located in the Dhahran Techno Valley business cluster, the centre offers a platform for engineering research and training for Honeywell employees, industrial partners and customers.

The educational facility, the company’s first outside the USA, offers a range of industrial research and development courses, as well as customer training for Honeywell’s UOP oil and gas technology businesses.

Mohamed Al Mousa, Saudi Arabia country manager for Honeywell, remarked, “This centre provides a base to develop stronger relationships with our industrial partners and universities such as the King Fahd University of Petroleum and Minerals (KFUPM). The scholarships and internships we are providing to Saudi students also form part of our long-term investment in the country and its future.”

Honeywell has 132,000 worldwide emplyees, 19,000 of which are engineers and scientists.

Visit Honeywell on Stand S1C01

Hosts and guests at the opening of Honeywell’s research and training facility in Dhahran, Saudi Arabia.

Alfred Kuhse set to upgrade series of KEA control units Alfred Kuhse GmbH has announced it will upgrade its KEA control unit series by the end of the first quarter of 2013. The control technology, which has been designed for emergency power systems, is currently available as the KEA Sophisticated Line and KEA Standard Line. These lines have now been upgraded to comply with the new VDE 4105 directive for emergency power control units.

Meanwhile, the new KEA Compact Line is a compact automatic system with an integrated additional relay unit, designed in accordance with the directive’s new regulations. For the modernisation of existing emergency power control units, Kuhse has designed the KEA Retrofit Line. The Retrofit Line is suitable for the KEA 041, 071 or NC3 and NP1 from SEG, contains new processors without an additional relay unit and is replaceable on a 1:1 basis.

Founded in 1928, Alfred Kuhse began as a repair workshop for electric motors. The company started producing switchboards in 1938, developing from a small business into a medium-sized industrial company. The company also began developing and producing DC-solenoids in 1948.

Visit Alfred Kuhse on Stand S1C30

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Welcome/News

DEWA posts six per cent rise in profits for 2012 Dubai Electricity and Water Authority (DEWA) has posted a six per cent rise in year-on-year profits for 2012 to US$1.2bn.

DEWA said that investments to boost network reliability and operating efficiency had contributed to a rise in operational capacities with year-end electricity capacity at 9,646 MW and a water output capacity of 470 million imperial gallons per day.

Power demand last year in Dubai peaked in July at 6,637 MW, marking a 6.94 per cent increase on the year before.

Notable future projects the authority has outlined include the award of a 13 MW solar PV power plant contract for what has been called a prelude to the 1,000 MW Sheikh Mohammed Bin Rashid Solar Park planned for the emirate.

DEWA has also successfully registered a number of clean development mechanism (CDM) projects, which have helped to reduce up to 750,000 tonnes of carbon emissions annually, including a compact fluorescent lamps (CFL) distribution project, a solar farms programme and a thermal energy storage turbine inlet air chilling project in Jebel Ali. DEWA was recently honoured by the UAE's Ministry of Environment and Water for its

Power demand in Dubai last year peaked in July at 6,637 MW, marking a 6.94 per cent increase on the same period a year earlier.

efforts in supporting the ‘Green Economy for Sustainable Development’ initiative launched by HH Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister of the UAE and Ruler of Dubai.

DEWA also reported that a feasibility study into clean coal-based generation had been completed and would be pursued as part of an energy sources diversification programme.

LETTER FROM THE EDITOR

Welcome to MEE 2013 I would like to extend a warm welcome to all exhibitors, delegates and visitors to the first day of Middle East Electricity 2013.

This year’s event promises to be even bigger and better than previous editions, with a broad and exciting range of companies and key industry figures from across the world in attendance.

With the region's power sector set to benefit from a large number of investments throughout 2013, there can be no better place to feel the industry's pulse than at Dubai World Trade Centre over the course of the next three days.

As usual, a host of events will be taking place alongside the exhibition, with notable highlights including the Green Energy Conference, co-located exhibition Solar ME and the annual MEE Awards Gala Dinner, which will take place on site this evening.

I hope you enjoy the show and I would like to wish the best of luck to all of tonight's award nominees.

Ben Watts, Editor

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Feature

Gulf nuclear power industry advances Gulf states have shown great interest in nuclear power in recent times, with Saudi Arabia and the UAE gearing up to launch their first reactors within the coming years, writes Martin Clark.

E

mbracing nuclear energy is a costly investment strategy - civil nuclear power plants do not come cheap and one that would have seemed unlikely just a few years earlier.

The region’s traditional reliance on fossil fuels, plus a general stance to keep the Gulf nuclear-free – reiterated many times in the face of Iran’s own contentious research programme – made the nuclear option unappealing, politically and economically, until only recently. But the times are changing, it seems.

According to Laura el-Katiri, a research fellow at the Oxford Institute for Energy Studies, the introduction of civilian nuclear programmes is symptomatic of a shift in the way the region produces and consumes energy. She said fast-rising levels of domestic energy consumption have already made the Gulf a regional energy consumer to rival the combined energy demand of Latin America.

“This renders alternative sources of energy, including nuclear power, an increasingly attractive long-term solution in view of the region’s otherwise rapidly rising drag on its own main export products, crude oil and natural gas,” she commented in a recent research paper, GCC and the Nuclear Question.

Although there is a huge new wave of thermal power infrastructure building still taking place to meet this surge in demand, Gulf officials are clearly planning ahead. And it is not only meeting projected electricity demand that is forcing the issue. It is an investment strategy that goes beyond pure supply and demand economics.

For GCC states, civil nuclear power carries a wide range of strategic, political and energy security benefits that add to its attractiveness. Though it is clearly not for all: the 2011 Fukushima disaster in Japan, plus the thorny issue of nuclear waste disposal, will not endear it to environmentalists. But, away from the hullabaloo of Iran, there is now a huge

Atomstroyexport, part of Russia’s Rosatom, has proposed its 1,100 MWe capacity AES-92 reactor for use at Jordan’s first nuclear power plant (Photo: Rosatom)

4 Middle East Electricity

Saudi Arabia could be on the verge of building 16 nuclear power plants with a combined capacity of 17GW over the next two decades.

range of nuclear research initiatives underway across the Gulf.

UAE leadership Abu Dhabi began construction of the GCC’s most advanced project, the emirate’s first nuclear reactor, Barakah-1, in July 2012; the intention is to follow this with three further reactors. The fourreactor complex could add some 5.6GW of electricity to the UAE’s power sector by 2020, making a huge impact on the precarious energy supply/demand balance that the nation has to overcome.

This first GCC project (worth upwards of US$20bn) is unlikely to be costcompetitive with the UAE’s extensive natural gas-based electric power, however, though it will help to underpin energy security for years to come. It also places Abu Dhabi - and the Emirates Nuclear Energy Corporation (ENEC) - at the vanguard of nuclear research in the Gulf, just as it has emerged as a pioneer in the renewables segment, as world host to the International Renewable Energy Agency.

Saudi Arabia thinks big Saudi Arabia is rolling out a huge newbuild thermal generation programme to

help meet fast-rising energy demand. But it is also keen to reduce its heavy dependence on using its own gas and liquid fuels for power, hence the appeal of nuclear energy. The kingdom’s large population also presents an additional challenge, especially as the economy expands, sucking in even more energy.

Potentially, Saudi Arabia could become the region’s biggest nuclear power producer over the next 20 years or so, if current plans proceed. This could see the construction of some 16 nuclear power plants with a combined capacity of 17GW, providing roughly one-sixth of the country’s anticipated electricity needs around 2035. The total project cost could exceed a staggering US$80bn.

Other GCC interest Qatar was actively involved in the GCC decision of 2006 to pursue nuclear energy for peaceful purposes and announced plans to build its own plant in 2008. It has also raised the possibility of a regional project for nuclear power generation.

Likewise, Kuwait too has shown much interest in nuclear power. It has signed various nuclear cooperation agreements with countries such as the US, France, Russia and Japan. In 2010, it announced a

plan to build four reactors by 2022 but this was scrapped the following year.

Outside the GCC region, the other leading light in advancing nuclear power is Jordan, which is making great strides on its first reactor project.

So, all change in the Gulf then, as nuclear power begins to gain in popularity. But so many questions remain unanswered, including crucial details such as pricing and competitiveness.

Whether nuclear power will realistically offer the GCC the long-term solution as it attempts to manage its rising consumption remains uncertain.

The current absence of cost-recovering tariffs throughout the region already renders effective cost recovery for nuclear power unlikely, reckons el-Katiri. This, therefore, implies a substantial bill – in the form of nuclear power subsidies – to be picked up by the GCC governments.

And, potentially, the outlook is even bleaker for the more cynical-minded.

“The acquisition of nuclear technology

by GCC states, albeit for civilian purposes, provides fuel to those critics of nuclear power who fear a nuclear arms race in the Gulf should Iran pursue a nuclear weapons programme in the future,” said el-Katiri.

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QA Interview

Jigar Shah will be giving the keynote speech at today’s inaugural Solar Middle East conference, entitled ‘The Future of Solar Energy in the Middle East’. Shah is currently a partner at Inerjys, a US$1bn clean energy investment fund, and CEO of Jigar Shah Consulting. He was the first CEO of the Carbon War Room, the Richard Branson-founded organisation set up to help combat climate change, of which he is still a board member. Shah founded leading solar services company SunEdison in 2003, which had a major impact upon the global solar energy market, and now works closely with some of the world’s leading influencers and policy makers to implement solutions for global warming and sustainability.

He also sits on the boards of SolarNexus, KMR Infrastructure, Prometheus Institute and Greenpeace USA.

MEE DAILY: 2013 marks the inaugural edition of Solar Middle East. Do you believe the creation of such an event is indicative of the region's growing focus on renewables and how do you personally view the current state of the solar energy market within the Middle East?

investment. These are tough questions, but the technology is no longer a bottleneck.

JIGAR SHAH: The Middle East has been studying renewable energy for the past five years, but the recent drop in solar and other prices has accelerated interest. The interest is now moving quickly from study to deployment.

JIGAR SHAH: The technology is not the bottleneck. Today, solar is not at high enough penetrations to worry about storage. When a commitment is made to large amounts of storage, solutions can be implemented for storage such as advanced thermal storage, demand response, and battery storage.

MEE DAILY: To a casual observer, solar would seem plentiful in the Middle East. That alone, however, is probably not enough.

What are the factors challenging the efficient harnessing of solar in the region?

JIGAR SHAH: The Middle East is used to fossil fuels. Its energy intensive infrastructure is based on fossil fuel use.

Even with a compelling economic case, old habits die hard. It will take real leadership to change long standing practices – even when they make financial sense.

MEE DAILY: Unlike, say, northern Europe, much of the Middle East has a regular source of solar power supply. However, is that enough on its own or will it need to be integrated with conventional power? If it is, how can this approach be made as efficient and responsive as possible?

JIGAR SHAH: Given that 50 per cent of peak electricity now comes from solar in Germany, the technical aspects are known and can be solved. Today, it is a matter of leadership. Does the Middle East want to switch, if so, how fast and who shall lead the

MEE DAILY: Solar might be able to operate more efficiently at times of no sun if storage can be guaranteed. How efficient are systems for renewable power storage?

MEE DAILY: Given breakthroughs in deepwater and shale oil recovery, as well as major gas finds in many regions, is the need to develop renewables slightly less urgent?

Or should we avoid a false sense of security?

JIGAR SHAH: There are many answers to this question. On oil, deepwater and other unconventional oil extraction is very expensive and therefore needs a consistent price above the historical norms to achieve a good profit. On gas, shale gas is only profitable at around US$5.50/mmBTU, at this price renewables are more competitive for electricity. In any case there need not be this competition. There simply needs to be a level playing field.

MEE DAILY: Can solar power incentive schemes be structured to encourage investment without undermining a competitive market environment?

JIGAR SHAH: Yes, very successful programmes in Japan and California prove that policy can be done smartly.

MEE DAILY: How important is the role of the various standards bodies in aiding the growth of the emerging solar energy industry in the Middle East?

JIGAR SHAH: Standards bodies are very important. The good thing is that many of these standard bodies have already conducted a lot of work on solar and are prepared to extend these standards to the Middle East.

MEE DAILY: Are you optimistic that standardisation can keep pace with technological breakthroughs given the speed with which this industry is growing?

JIGAR SHAH: You know, breakthroughs happen, but not as often as you would think. When a breakthrough occurs, it is usually at least five years to reach scale – there is plenty of time to include them in the standard if necessary.

MEE DAILY: Is there anything else you would like to add about solar energy in the Middle East?

JIGAR SHAH: The Middle East has intrigued the solar industry for some time.

The question is whether the Middle East can harness the enthusiasm within the industry to help them deploy solar at scale cost effectively.

TOMORROW Ahmed Sfar, Schneider Electric's vice president of infrastructure business for the UAE and Oman.

What is the Carbon War Room?

The Carbon War Room, of which Jigar Shah was the first CEO and is still a board member, is a global, independent non-profit organisation.

Founded by Sir Richard Branson and a variety of other CEOs and entrepreneurs in 2009, it states that its mission "is to harness the power of entrepreneurs to unlock market-driven solutions to climate change".

The Carbon War Room (CWR) has targetted the removal of 17 gigatons of anthropogenic carbon, and believes that this will not be achieved by government legislation and policies alone, but by the active participation of business. CWR states that US$550bn extra is needed in green investment and that this can be raised via private capital, with profit to be made from such investment.

CWR's funding sources, individuals, corporations and foundations, provide the capital for organisational overheads, new potential operations and active operations, including research programmes, while CWR's founders fund all core operational overheads. The organisation allows entrepreneurs, government and business leaders, and other key stakeholders to collaborate and work out how best to raise carbon-cutting strategies to an unprecedented scale.

Middle East Electricity 5

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Country Insight

Full steam ahead for Saudi Arabia power plan

King Abdullah Petroleum Studies and Research Centre inaugurated a 55,000 sqm solar energy field in Riyadh in late December 2012.

The recent news that ACWA Power International and its partners had been successful in their bid to build and operate the US$2.6bn, Rabigh II power plant on Saudi Arabia’s Red Sea coast, was just the latest statement of intent by the Kingdom’s government in its drive to dramatically increase capacity from all potential energy sources.

T

he contract, awarded by governmentcontrolled Saudi Electricity Co. (SECO), will see ACWA and partners build a facility that will have a 1,813 MW capacity when it is operational. Construction is expected to be complete by summer 2016, the Saudi Press Agency quoted SECO CEO, Ali al-Barrak, as saying, with financing details expected to be finalised by March.

Rapid population growth and increased industrial energy demand mean that energy usage in Saudi Arabia is increasing by around eight per cent per year. Some economists have warned that, if this continues, the Kingdom could burn two-thirds of its total current crude production capacity of 12.5mn bpd within two decades.

This has sparked a clear, proactive response from the Saudi Arabian authorities to ensure that their energy infrastructure is as futureproof as possible by embracing alternate energy sources such as renewables and nuclear energy. The King Abdullah City for Atomic and Renewable Energy (KACARE) recently announced that Saudi Arabia should increase its solar power capacity from the current 3 MW level to 41 GW: 16 GW from photovoltaic solar power and 25 GW from

6 Middle East Electricity

concentrated solar thermal power. The Kingdom is currently seeking investors for its ambitious US$109bn solar energy programme, with solar power predicted to provide a third of Saudi Arabia’s electricity by 2032.

The inauguration of the 55,000 sqm, 3.5 MW King Abdullah Petroleum Studies and Research Centre's (KAPSARC) solar energy field in Riyadh in late December 2012, formed an impressive step on Saudi Arabia’s path to a more solar powered future. The solar field uses 12,684 fixed-angle, polycrystalline PV panels, provided by Suntech, but this will be followed in the near future by even larger solar plants.

An estimated 3.5 GW of solar power will be installed in the Middle East and North Africa in 2015, compared to 149 MW in 2013, with Saudi Arabia responsible for much of this growth.

According to GTM Research’s recent Middle East and North Africa Solar Market Outlook report, demand for PV and solar-thermal systems will rise sharply in 2015 when “the large bulk” of Saudi Arabia’s solar projects go into operation. In fact, Saudi Arabia will be responsible for a third of the region’s demand for such systems.

The Kingdom’s increased solar capacity could also allow it to export power to other countries

in the region and further afield. There is the prospect of increased grid connectivity, with North Africa’s giant Desertec solar project playing a vital role, seeing Saudi Arabia’s solar energy being exported to Europe.

A third of Saudi Arabia’s electricity will be provided by solar power by 2032 The head of the International Renewable Energy Agency, Adnan Amin, recently told the UK’s Financial Times, “If you get the connection to Egypt then you can connect to the North African grid and if that’s connected into Europe, you have a motorway for renewable energy. Europe has a tremendous need to source renewable

energy to meet its emissions targets and its renewable energy targets and would be very open to importing competitively priced renewable energy. I think [Saudi Arabia] would be in a position in 15 years to be able to export substantial amounts.”

In the shorter term, the government has announced plans to switch to buying power from generators of renewable energy. SECO, the Kingdom’s electricity distributor, currently buys power from generators to sell to residents.

The restructured arrangement will see energy purchased from renewable generators by a separate company, or ‘offtaker’, then sold to the distributor. The company will then pay the difference between the cost of the electricity and the price the distributor pays.

Saudi Arabia’s plan to generate 50 per cent of its power from renewables and nuclear power by 2032 will also see the construction of 16 nuclear reactors by 2030. The plants, which will cost an estimated total of US$100bn, will take nine to 11 years to complete and have a combined capacity of 17 GW. KACARE vicepresident Khalid Al Sulaiman, said that the first plant would be operational by 2020.

It was revealed by French industry minister, Arnaud Montebourg, that the tender offer process for the reactors has yet to begin.

Montebourg visited Saudi Arabia with French utility executives and the head of CEA, France’s nuclear research organisation, as they sought to sell the Kingdom French reactors. The bidding process has yet to begin, however, as KACARE is currently assessing all of the proposals it has received.

"We expressed a certain number of proposals and it is up to KACARE to decide on the methodology they want to use to select the offers,” Montebourg was quoted as saying by Dow Jones.

This is clearly a time of unprecedented change for the Saudi Arabian energy market but the Kingdom’s willingness to act and invest in comprehensively altering its power infrastructure seems likely to ensure that the transition from oil-dependency to a cleaner energy future is as smooth as possible.

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News MENA renewables are ‘lagging behind’ - UNEP Global renewable energy investment reached a record high of US$257bn in 2011, but the MENA region lagged behind the rest of the world, accounting for just 2.1 per cent (US$5.5bn) of total renewables investment for the year.

The statistics, featured in the latest Global Trends in Renewable Energy Investment report, indicated that although the MENA countries have an abundance of renewable sources, socio-political turmoil has delayed progress.

The report, which was written by the United Nations Environment Program (UNEP) and the Frankfurt School of Finance and Management, suggested that electricity price subsidies have stalled renewables deployment within the region.

Countries spared by the turbulence, such as the UAE and Morocco, have however made significant progress.

MEE exhibition director Anita Mathews said, “By 2030, almost 15.7 per cent of the world’s energy will be coming from renewable sources.

With global hydrocarbon resources dwindling amid a

concerted effort to build a green environment while reducing carbon emissions, countries across the world are now turning to green energy.

“While the MENA region has a long way to go to catch up with the rest of the world in terms of renewable energy investment, governments are definitely reviewing their strategies and aiming at increasing the shares of renewable energy in their energy mix of the future.

“For example, the UAE, Kuwait, Oman, Egypt, Jordan and Morocco are all moving forward with at least 10 solar power facilities worth a combined US$6.8bn and we believe that more regional renewable energy projects will be announced in the next 12 months.”

Mathews’ confidence has been backed

by Informa Exhibition’s decision to launch Solar Middle East alongside MEE. The three-day, co-located event is dedicated to the regional solar industry, which is set to become the largest gathering of solar technology suppliers ever seen in the Middle East.

Ducab awarded ‘Superbrand’ status for fourth year running Ducab announced late last year that it had been awarded ‘Superbrand’ status by the international Superbrands organisation for the fourth consecutive year, after achieving record sales of US$1.3bn for 2011. Out of 1,341 companies shortlisted, Ducab was one of the 54 to be awarded ‘Superbrand’ status, an award for consumer and retail marketing excellence.

Ashish Chaturvedy, marketing manager of Ducab, said, “We are absolutely delighted to receive this recognition for the fourth time. The consistency with which the Ducab brand is growing is a testament to the dedication of our team, to whom I wish to dedicate this award.

“Ducab’s success is based on a continuous commitment to the highest standards of quality, rigorous testing and safety compliance, and locally producing cables, wires and high-grade copper products.”

Established in 1979 by the Dubai government and BICC Cables, the Dubai Cable Company (Pvt) Ltd (Ducab) offers a range of cables up to 400 kV for the energy industry. The company’s products are currently sold in more than 40 countries worldwide.

Visit Ducab on Stand 7E10

One of Ducab’s cable manufacturing facilities.

Political and social turbulence across parts of the Middle East and North Africa has affected investment in renewable power.

Cummins Power Generation to launch new products at MEE Cummins Power Generation, a division of Cummins Inc, will be showcasing its latest products at MEE 2013, including its new solution for the telecommunications market and a new high-horsepower generator set.

During the exhibition Cummins Power Generation will launch its new hybrid solution for the telecommunications market, aimed at reducing operating expenses where grid supply is inadequate.

The company will also showcase the Cummins QSK50 generator set, part of its high-horsepower range of generator sets specifically developed to meet today’s demands for emission-optimised and seismic-certified generator products.

Visitors to the Cummins Power Generation stand will be welcomed by experts from the company who will be available to discuss the complete range of new diesel and gas generator products.

Visit Cummins Power Generation on Stand S3D40

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Feature

EOR operators such as ADNOC and Sonatrach have continued to pursue CCS technology in order to reduce their carbon emissions.

Keeping carbon under control Getting rid of CO2 is the goal of energy producers everywhere. Coal-based power generators are the main targets, but those using gas can contribute too.

C

arbon capture and storage (CCS) has slipped down the agenda recently, but scientists and their respective institutions contend the various technologies still have a major contribution to make to ameliorating global warming. The cost-conscious power generation industry is the main target for change and offers plenty of potential here in the Gulf, even though carbon sequestration (the alternative term) has so far been applied locally – and globally – to enhanced oil recovery.

The basic hurdle to overcome is that CCS is calculated to add something like 10-40 per cent to the fuel cost, right at the top end of this range in the case of conventional coal-fired thermal plants, probably at the lower end with gas (whether baseload steam or top-up gas turbine). This is because so much energy has to be expended in actually capturing and processing the unwanted gas; the result is that nearly all the carbon is safely removed for sale or disposal.

In addition the projected capital cost remains excessively high, partly because the plants have yet been built (or retro-fitted) to bring in the sort of economies of scale we are now seeing so clearly with renewables.

Some say that expenditures like this could be better made on the latter with its much simpler hardware, ultra-clean history and plug-in applications.

Although pioneering EOR operators like ADNOC and Sonatrach continue to pursue the CCS route, to squeeze more out of

8 Middle East Electricity

mature resources such as Rumaitha and In Salah, elsewhere the fervour seems to have cooled with the world economy. In part this is because the rate of increase in carbon emissions seems to be on the way down anyway. Not nearly fast enough say the climate experts.

However the main reason for waning interest is the extra fuel (whether coal, the main target application, but also potentially gas) costs that the various flue-gas scrubbing technologies associated with clean power generation bring with them. These are the costs that

the highly uncertain price of carbon (where such a concept exists at all) fails to compensate for. And as the absence of any working commercial-scale CCS system in the highly competitive power market shows the various technologies have yet to be proved affordable, let alone widely adopted.

The common-sense approach at this stage of such a step forward in climatechange control is to regard expensive and groundbreaking CCS as just one ‘tool’ in a complete emissions-reduction kit. As seen throughout MENA this includes much more wind and PV power (the capital costs of which are falling fast anyway), more informed customers and smarter grids to serve them, that could all make better use of the kilowatt hours that are available. Less deforestation, cleaner vehicle engines and so on could help too.

This could match the contributions of probably hundreds of costly new or adapted existing power plants.

Carbon capture and storage has been calculated to add between 10-40 per cent to fuel costs for power plant operators.

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Feature/News ● continued from previous page

Only with such a ‘package’ up and running could the different technologies be tried on a commercial as distinct from research scale by power generators here, whether they are based on the scrubbing of existing exhausts or modifying the pre-combustion processes such as gas processing that remove the carbon before it ever reaches the burner. Both routes are being extensively tested in China, where unfortunately the energy market is significantly different from most other countries; hard to draw conclusions from therefore.

Compared to these challenges the problems surrounding the storage and transportation of CO2 – a valuable industrial commodity used in refrigeration, inerting and pressurising - are relatively minor. Indeed wherever CCS has been adopted to aid EOR in North Africa and the Gulf this is already a proven aid to boosting output, in some Gulf countries new sources like the steel industry having to be investigated. With CCS scaled up to the potential needs of the power industry what will be needed is larger underground reservoirs to hold the carbon securely.

Wherever CCS has been adopted to aid EOR in North Africa and the Gulf, it has become a proven aid to boosting output So the main problem is the issue of fixed capital and variable running costs, highly uncertain as they both are. What is needed right now is a guaranteed system of financial support to those power and other energy operators who are brave enough to have a go; the Clean Development Mechanism should be considered.

A guaranteed and unavoidable carbon price of at least US$60 tonne – offset by any available sales of the CO2, as already achieved by ammonia and other steam-reforming intermediates producers here in the Gulf - is thought to be needed, far above the maximum US$20-30 that seems to prevail right now, and that not in any of the main coalburning targets such as the USA.

In short, a combination of government subsidies and a well understood flat playing field are needed. OPEC’s active participation in the International Energy Forum, as seen here in Kuwait last March, could make a major contribution to these developments.

Meanwhile two completely new technologies are currently being tested on a commercial-scale twin-stream plant (80,000tpa combined based on rival amine and ammonium carbonate scrubbing processes) at Mongstad in Norway. There, gas-based power is just part of the refinery’s product mix, giving hope to the Gulf ’s generators who are being encouraged to invest in a cleaner and cooler future.

KNIPEX opens fourth global branch in Dubai KNIPEX Tools Middle East (KTME) opened its fourth international branch in Dubai last year, adding to those it has already established in Chicago, Moscow and Shanghai.

The company’s Middle East headquarters serves customers across 20 countries, supplying them with its specialised German manufactured pliers.

Ralf Putsch, managing partner of the Dubai KNIPEX facility, said, “With one of the largest man-made sea ports, Dubai acts as a hub in the Middle East and therefore offers the ideal conditions to support the surrounding Arabian countries as well as the strongly

expanding markets in Asia. This enables us to achieve greater proximity to customers there.”

Currently supplying more than 100 countries throughout the world, KNIPEX has been selling its tools in the Middle East since the 1960s. The company’s export ratio is 60 per cent, with some 20 per cent of sales achieved outside Europe.

KNIPEX is a family-owned business, aiming to achieve economic, social and ecologically sustainable development.

Visit KNIPEX on Stand S1C18

Ensto Chago electric motor charge points introduced Ensto has recently introduced a selection of electric vehicle charging points products as part of its Ensto Chago range.

Products from the Ensto Chago range offer safe and easy-to-use solutions for electric vehicle charging in both public and private parking areas.

Ensto EV Charging Solutions director Allan Ahlgren said, “To emphasise the ecological side and the quietness that comes with electric motoring, the name [Ensto Chago] is complemented by the promise, ‘Because green sounds better’.”

The Ensto Chago Pole is a charging solution for normal electric vehicle charging (16A). The poles, available for both ground and wall mounting, are made from durable stainless steel and include one or two 16A power outlets and a watthour meter to measure the amount of energy obtained. As standard, the pole can be controlled remotely from, for example, a parking-ticket machine.

Alternatively, the Ensto Chago Station requires a fee to be paid in order for it to operate and can be used for both normal and fast charging (three-phase, 32A).

The station is made of robust materials and it is easy to clean, making it ideal for street-side installations. The Ensto Chago Station can be installed with a user identification system and a data link to external information systems over a GPRS connection or a RS485 cable.

The Ensto Chago Point is a wall-mounted solution for locations that require multiple charging points, such as large workplaces and apartment-building parking facilities.

This charging point was awarded the Red Dot design award in 2012.

The range includes the Ensto Chago Master, a master unit for installations of five to 20 charging points, and the browserbased Ensto Chago Server charging-point management program.

Established in Finland in 1958, Ensto specialises in electrical solutions, placing particular emphasis on energy efficiency and sustainability.

Visit Ensto on Stand 3H19

The KNIPEX headquarters in Wuppertal, Germany.

Netcontrol launches Netcon 100 for secondary substation systems Netcontrol Oy recently launched Netcon 100, a new type of control and monitoring solution for secondary substation systems.

Netcon 100 has been developed for the monitoring and control of medium-voltage networks, and the monitoring of low-voltage networks. Thanks to standard protocols and interfaces, connectivity to other systems is straightforward. The compact all-in-one platform combines all necessary functions,

including fast fault location, reliable control of switching devices, advanced electricity quality measurement, intelligent battery monitoring and charging and a diverse set of data communication features. The product will be one of many energy automation systems showcased by Netcontrol and its local UAE distributor, Autochim Systems, at this year’s MEE. Founded in Finland in 1991, Netcontrol’s headquarters are located in Helsinki, with four

other offices located in Sweden (Västerås and Karlskrona), Norway (Oslo) and the UK (Manchester), all of which provide sales, engineering and support services. In addition to its own offices, Netcontrol has partners and distributors all over the world, located in Poland, the Balkans, the Middle East, South Africa and Malaysia.

Visit Netcontrol on Stand 4A14

Middle East Electricity 9

S03 MEE 2013 Day 1_Layout 1 26/02/2013 12:39 Page 10

Country pavilion profiles

German exhibitors to showcase pioneering solutions Germany's regional trade presence has enjoyed rapid growth in recent years and the country is one of the UAE's five most important trade partners. Within the German Pavilion at MEE, exhibitors will be presented with the latest developments in the fields of power engineering, energy efficiency and electrical engineering. Below we have selected some of the best at the show.

Doepke Walther-Werke, Schaltgeräte GmbH Ferdinand Walther Sheikh Saeed Hall 1, GmbH

Stand A21

German technological innovation has helped it to become one of the UAE’s largest trading partners.

10 Middle East Electricity

Founded in 1956, Doepke Schaltgeräte specialises in RCCBs, residual current control technology and special solutions.

Today, its product range comprises residual current circuit breakers (RCCBs), miniature circuit breakers (MCBs), circuit breakers providing residual current protection (CBRs), modular residual current protective devices, residual current monitors, load disconnectors, installation relays, impulse relays, as well as twilight, float and manometric switches.

Products on display will include type F RCCBs, which recognise mixed frequencies when using equipment with installed singlephase frequency converters (for example, washing machines or rotary hammers). The product also complies with all requirements for conventional type A RCCBs. Meanwhile, the company’s 2- and 4-pole RCCB with overcurrent protection (RCBO) for the protection of smaller installations up to 32A are now also available in AC-DC sensitive versions.

The DMRCD modular RCCBs and the DRCM residual current monitors ensure that the legal requirements regarding fire protection and protection of persons are being met by monitoring residual operations currents (30 to 3,000 mA).

Sheikh Saeed Hall 1, Stand A30 Walther-Werke, Ferdinand Walther GmbH, is a manufacturer of industrial plugs and sockets, including CEEtyp (IEC standard), ‘Procon’ heavy-duty connectors, combination units with sockets and breakers and charging infrastructure for electrical vehicles.

The company will showcase its newest product range, the CEE 63A, along with customised solutions for industrial customers.

Walther-Werke is the only company to offer customers in the Middle East portable rubber combination units, which are of German quality, but manufactured locally in Dubai.

Thomas Kalthoff, management assistant at the company, said, “Due to our local assembly in Dubai we can serve our high quality products in a very short time to the market. That gives us a strong position in industrial projects.

“Our best-selling products are combination units with CEE sockets and breakers, wall-mounted or portable, made of high-quality thermoplastic material or solid rubber. That makes the products very long-lasting and stable, which is very important regarding the Middle East climate conditions,” Kalthoff added.

S03 MEE 2013 Day 1_Layout 1 26/02/2013 12:39 Page 11

Country pavilion profiles Weihe GmbH

Helmut Mauell GmbH

Sheikh Saeed Hall 1, Stand D17 Weihe GmbH has a 30-year history in the industrial sector and is an OEM supplier to major companies such as MTU, Deutz, Cummins and Volvo and most genset manufacturers in Europe.

The company specialises in exhaust systems, exhaust after-treatment, piping and special insulations, and engineering (including FEA analysis and flow and temperature simulations).

Among the new products that Weihe will be showcased at this year’s exhibition is the company’s efficiency system for engines, hydraulic systems and gear boxes, designed to reduce operation costs. The system takes a part of the oil stream and cleans it by removing solid, liquid and gaseous contaminants down to one micron.

Axel Weihe, managing director of the company, said, “Due to the fact that Weihe GmbH designs and constructs complete systems by in-house engineering and inhouse production, cost savings are on the one hand a huge benefit that you will get by working together with Weihe.

“On the other hand you will also save time because Weihe will deal with the whole process from engineering and construction to production and delivery.

“Weihe would like to extend the business to an international level in the UAE. In the future we would like to open a branch in the UAE,” Weihe added.

Sheikh Saeed Hall 2, Stand G19 Helmut Mauell GmbH specialises in process control systems, power distribution control, station control and remote control systems, control room technology, security solutions and automation equipment.

The company will be showcasing its new Smart RTU ME 4012 PA-N small telecontrol system, which links new hardware components to the existing software functionality used in modern utility companies’ transport and distribution systems.

Helmet Mauell will also be showcasing its ‘intelligent distribution substations’ (iNES) solution, developed in association with Mainova AG, SAG GmbH and the University of Wuppertal. iNES measures the load flow in a grid and then intelligently controls power distribution on the basis of these measurements.

An additional focal point will be the ME multiView X omnium visualisation system, which captures diverse sources of applications, desktops, cameras and graphics signals via an IP network independent of any spatial limitations. Distributed processing ensures a high degree of efficiency and independent and comprehensive management of any display arrangement in a control room.

Uwe Kimmeskamp, head of marketing at the company, noted, “Products ‘Made in Germany’ stand for high quality and have a good reputation in the UAE.”

Located in Hall 1 of the Dubai International Exhibition and Conference Centre, the Germany Pavilion will be showcasing a selection of power solutions from the country during Middle East Electricity.

KNIPEX Tools Middle East FZE Sheikh Saeed Hall 1, Stand C18 KNIPEX Tools Middle East FZE is a 130year-old German brand specialising in pliers. The company produces more than 1,400 different types of pliers, with 60,000 manufactured daily at its factory in Wuppertal.

Active in the Middle East for almost four decades, KNIPEX offers a large range of VDE tools, with a large market share in the Americas and the Far East. The company is now keen to penetrate the power and electricity sector in the Middle East.

Eckhard Schirm, general manager of the company, said, “In April 2012, we opened our own regional office in JAFZA to take care of the Middle East, Levant, Africa and the markets in the Indian sub-continent.

We have professionals based here in Dubai to quickly react and provide solutions to the needs of the market.”

KNIPEX last year launched more than 10 new types of pliers at the Cologne Fair, with one of the new pliers, the TWINFORCE, winning several awards since then. These and other new products will be showcased at the exhibition.

“We are confident in making Knipex the number one pliers brand in the Middle East,” Schirm added.

BSD GmbH Sheikh Saeed Hall 2, Stand F13 BSD GmbH develops and sells tools, equipment and technical solutions for those who work on electrical systems, specialising in live working up to 36 kV and arc protection personal protective equipment (PPE).

As one of the biggest supplier for highclass arc protection face shields in Germany and Switzerland, the company wants to expand the number of its international partners.

Lutz Gruschka, director of sales and marketing at the company, said, “It is known that employers in the Middle East are very open to innovative products with a high level of quality and competitive prices.”

The most important BSD products for foreign markets are arc protection PPE for working on electrical installations. The most innovative product is the electrician face shield BSD ErgoS and the arc protection hoods. These are unique high protection face shields (Box-Test: arc protection class 2, ATPV: up to 14 cal/cm²) with a clear visor.

Thomas Jordan, director of research and development at the company, commented, “Face shields of the BSD ErgoS family provide not only protection against thermal hazards on an electric arc; they increase the personal safety at the work place because of their clear not tinted visor.”

As a GERMAN BASED GROUP, we are a leading designer, manufacturer and supplier of cables, wires and accessories for all industrial applications.

We have subsidiary companies in Europe, USA, Africa and in the Far East.

We would like to expand our business in the Middle East and seeking for a

Regional Sales Manager who can build up and manage a HELUKABEL representation office (preferably in the UAE).

The ideal candidate have the following profile: - Qualification in electromechanical engineering - Project Business experienced - Several years of sales experience in cable business - Conducting technical seminars - Good communication skills and cost – conscious - Able to travel throughout the Middle East in order to build up a customer base.

We offer a complete training package at our headquarters in Germany.

If you are interested in working for an expansive GERMAN company please respond by e-mail to: Hartmut.KellnervonBergen@helukabel.de or apply directly on the Middle East Electricity Fair Stand- No. S1C10.

HELUKABEL GmbH . Headquarters Dieselstr. 8-12 . 71282 Hemmingen Germany . www.helukabel.de ®

Middle East Electricity 11

S04 MEE 2013 Day 1 Version1_Layout 1 26/02/2013 12:41 Page 12

Feature

Oil exporters to weather difficult financial conditions

proved oil reserves, the equivalent of 495bn barrels - is expected to slow from 7.5 per cent in 2011 to 3.7 per cent this year, largely due to a tapering off of oil production, especially in Saudi Arabia, Kuwait and Qatar. Concurrently, oil GDP growth may turn negative in 2013, after rising by 2.6 and 1.3 per cent respectively over the previous two years, based on estimates from the IMF. In Iran, crude production fell heavily thanks to stringent US sanctions, plus the EU oil embargo, which took effect in July 2012 and pushed the country into a technical recession. Meanwhile, Libya staged an impressive post-conflict recovery, with 2012 output reaching almost 1.5mn barrels per day (bpd), up steeply from 500,000 bpd in 2011. But expanding production beyond its pre-crisis capacity of 1.8m bpd requires major investments in new field development, reservoir management, drilling, and enhanced oil recovery (EOR) techniques, pressure maintenance

Despite a generally sluggish global environment, the oil exporters – led by Iraq, Kuwait, Libya, Qatar and Saudi Arabia – experienced continued economic growth in 2012 and the outlook for 2013 is also positive, writes Moin Siddiqi.

R

eal gross domestic product (GDP) amongst the region’s oil exporting nations grew by 6.6 per cent last year, up from 3.9 per cent in 2011, according to the International Monetary Fund (IMF). This contrasted with anaemic growth rates among oil importers in the Middle East and North Africa (MENA) region, averaging just 2.1 per cent.

The combination of four factors have underpinned buoyant growth, namely the hydrocarbons sector, expansionary fiscal policy with significant ‘multiplier effects’ on the non-oil private sector, growing domestic consumption and supportive bank lending to private businesses. The prospects for 2013, however, depend on global developments and geopolitical

conditions, as well as brisk growth in emerging market’s energy demand and oil price trends.

GDP growth among MENA oil exporters is forecast to return to 2011 growth rates of almost four per cent during 2013.

Economic growth in the six-member Gulf Cooperation Council (GCC) bloc – endowed with one-third of the globe’s

MACRO-FINANCIAL INDICATORS ON THE MIDDLE EAST & NORTH AFRICA OIL-EXPORTERS Nominal GDP

Real GDP

Non-Oil GDP

Fiscal Balance

Breakeven

Total Exports

Total Imports

Current Account

Breakeven

Official Reserves

US$ bn

Annual % chg

Annual % chg

% of GDP

Oil price $/bbl *

US$ bn

US$ bn

US$ bn

Oil price $/bbl **

US$ bn /

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

ALGERIA

206.5

214.4

2.6

3.4

5.0

4.8

-3.9

-1.3

117.9

99.5

76.0

75.5

61.0

59.0

12.9

13.1

74.4

71.6

196.4

211.4

BAHRAIN

26.5

27.7

2.0

2.8

1.9

1.9

-3.9

-3.6

118.2

111.4

22.9

23.3

14.8

14.6

2.6

2.9

70.4

66.0

5.0

5.3

IRAN

483.8

514.8

-0.9

0.8

1.1

1.3

-2.9

-3.9

134.0

150.0

101.9

93.1

85.5

86.3

16.5

6.9

80.0

92.0

89.2

84.6

IRAQ

130.6

154.3

10.2

14.7

5.5

5.5

-1.9

3.7

112.0

94.1

93.6

113.9

85.6

99.8

0.3

9.3

89.5

83.8

67.7

73.6

KUWAIT

174.6

175.2

6.3

1.9

5.1

5.3

30.2

26.4

49.0

56.4

124.2

120.2

43.1

46.8

77.0

68.7

23.9

33.4

26.2

28.5

LIBYA

85.1

97.6

122.0

16.7

30.0

25.0

19.4

7.7

88.5

98.8

58.6

60.4

38.0

47.8

18.6

10.0

77.0

88.0

121.4

125.4

OMAN

80.0

82.9

5.0

3.9

5.9

5.5

7.1

5.8

81.3

83.3

52.5

53.7

31.7

35.3

11.2

8.3

80.3

87.3

15.1

16.6

QATAR

184.6

190.9

6.3

4.9

9.0

9.0

9.6

8.5

40.4

68.0

119.1

119.0

49.4

53.2

54.6

51.1

54.3

58.0

28.7

32.0

SAUDI ARABIA

657.0

682.6

6.0

4.2

6.5

5.6

16.6

11.2

74.4

85.2

409.4

404.2

217.5

228.7

171.3

155.1

57.2

61.2

699.3

848.2

UAE

361.9

374.9

4.0

2.6

3.3

3.5

7.5

7.5

79.0

77.5

312.7

330.0

267.0

279.1

33.6

37.9

72.4

67.3

40.8

43.6

36.4

41.3

-1.9

4.1

-1.6

3.0

-5.7

-6.0

237.0

10.1

10.9

218.0

4.1

3.6

6.5

3.8

4.8

4.7

6.1

4.4

YEMEN Total

2,427.0 2,556.7

1,381.0 1,404.1

13.2

12.6

-1.0

-1.7

9.6.7

963.2

397.6

361.8

1,293.9 1,472.8

* The oil price at which the fiscal balance is zero. ** The oil price at which the current account balance is zero. / Excludes overseas assets of sovereign wealth funds in Kuwait, Qatar and the UAE. Sources: Data provided by National authorities and IMF estimates and projections.

12 Middle East Electricity

S04 MEE 2013 Day 1 Version1_Layout 1 26/02/2013 12:41 Page 13

Feature Table 2: Hydrocarbons Data on MENA Producers Oil GDP growth

Oil output *

Proven Oil

R/P

Natgas output

Proved

R/P

(Annual % chg)

Mn bpd

reserves /

ratio#

Bn cubic metres

Bn cubic metres

ratio# 2011

2012

2013

2012

2013

End-2011

2011

2010

2011

End-2011

ALGERIA

-1.6

0.7

1.27

1.28

12.2

19.3

80.4

78.0

159.1

57.7

IRAN

-22.2

-6.5

2.81

2.63

151.2

95.8

146.2

151.8

1,168.6

100+

IRAQ

13.1

20.0

3.00

3.60

143.1

100+

1.3

1.9

126.7

100+

KUWAIT

8.4

-3.4

2.90

2.80

101.5

97.0

11.7

13.0

63.0

100+

LIBYA

200.4

13.6

1.48

1.68

47.1

100+

16.8

4.1

52.8

100+

OMAN

3.2

0.9

0.91

0.92

5.5

17.0

27.1

26.5

33.5

35.8

QATAR

2.9

-0.3

0.74

0.71

24.7

39.3

116.7

146.8

884.5

100+

SAUDI ARABIA

4.5

0.0

10.05

10.05

265.4

65.2

87.7

99.2

287.8

82.1

UAE

5.3

1.0

2.69

2.71

97.8

80.7

51.3

51.7

215.1

100+

YEMEN

-4.8

14.0

0.18

0.23

2.7

32.0

6.2

9.4

16.9

50.7

Regional Total

1.3

-0.2

26.23

26.82

851.2

78.7

545.4

582.4

3,008.0

100+

17.1

18.0

41.0

63.6

MENA (%) World

31.0

51.5

* Including condensates and natural gas liquid (NGL). / Billions of barrels. # Reserves-to-Production ratio (calculated in terms of years). // Trillion cubic feet.

Sources: IMF estimates and projections and BP statistics.

technology and stream injecting, as well as transformers/ transmission equipment.

Libyan officials estimated that the civil war left between 10-15 per cent of related oil infrastructure damaged.

In non-oil sectors, public-private investments coupled with sustained low interest rates in the Gulf are expected to underpin economic growth at a healthy pace of five per cent in 2013, despite tepid growth in Bahrain and Iran due to political unrest and declining foreign direct investment (FDI) inflows. However, non-oil GDP growth rates are unlikely to match those observed before 2008, reflecting difficult global trading conditions.

Moreover, increased sovereign risk premiums could hike borrowing costs for some oil exporters, notably Iran and Libya.

GDP growth among MENA oil exporters is forecast to return to 2011 rates Downside risks The price of oil is expected to remain above US$100 per barrel; concurrently, the oil exporters’ combined current account surplus for 2013 is anticipated to be about US$362bn, albeit below its historic high of US$419bn in 2011. The resultant balance of payments surplus – equivalent to 14 per cent of 2013’s GDP –

is projected to increase gross official reserves by a further US$179bn after net financial outflows to sovereign wealth funds (SWFs) and other destinations.

Several factors could underpin a benign growth scenario for the region’s oil exporters. The most immediate risk is a sharp recession in Europe, coupled with a financial slowdown in East Asia (notably China) and the US, thus leading to depleted energy usage and lower crude prices. Although most countries have accumulated large official reserves to withstand short-term price volatility, a 10 per cent fall in oil prices would reduce exporters’ combined current account surplus by about US$150bn.

Analysts at the IMF warn that “steppedup spending has increased the vulnerability to oil price declines in case of further deterioration in the global economy”. Swelling oil revenues have fuelled an investment boom in the Gulf and oil-producing North Africa and at current projected oil prices and levels of production, revenue gains should more than offset higher levels of public spending in these countries.

Strong regional consumption The MENA region is, of course, both a major consumer and producer of natural gas. Although the region possesses twofifths of global proved gas reserves, most of the natural gas produced in this region is also consumed there. Regional gas usage is predicted to grow by three per cent per year on average during 2011–17.

Middle East gas production growth is, however, slowing. Any increase in output is now directed largely towards meeting incremental domestic demand – mainly in Algeria, Egypt, Qatar, and Saudi Arabia, but not towards generating additional exports revenues – in terms of piped gas or liquefied natural gas (LNG) and other derivative products.

While crude oil export volumes in 2012 were about the same level as in 2007, natural gas exports have surged markedly, chiefly in Qatar. On aggregate for MENA hydrocarbon exporters, natural gas export volumes comprise about one-fifth of hydrocarbon exports, but exceed crude oil export volumes in Algeria, Qatar and Yemen. Despite declining gas prices in some international markets, MENA hydrocarbon exporters have benefited from selling gas at long-term contracted values indexed to oil prices.

About one-third of global retail gas consumption is priced on a spot basis,

whilst one-fifth is indexed to crude oil, 40 per cent is subject to direct price regulation, and the remainder is sold locally at subsidised prices. Wholesale contracts on Asian and European markets, which are critical for many MENA gas exporters, are mostly indexed to crude prices. Consequently, gas exporters have benefited from strong oil prices.

Furthermore, the long-term nature of some of these contracts insulates gas prices from short-term oil price volatility, though very large or sustained falls in crude prices could also trigger declines in gas prices.

Challenges “Looking ahead, the main issue facing Middle East oil exporters is how to take advantage of their current positive position to strengthen their resilience against oil price declines and diversify their economies to boost private-sector job creation,” said Masood Ahmed, director of the IMF’s Middle East and Central Asia Department. “Fiscal policy could gradually shift to bolstering national savings, and countries could ease the pace of government spending, especially on expenditures that are hard to reverse, like public-sector hiring.”

Over the next decade, both oil and nonoil countries face daunting challenges of creating 40mn jobs for their youth with an estimated 10.7mn new entrants projected to join the labour market.

With nearly one in five people between the ages of 15 and 24, the region has one of the youngest populations in the world.

Caroline Freund, MENA chief economist, noted that the employment response must be well above average to employ both current and future jobseekers.

Policymakers are increasingly relying upon the private sector to address chronic joblessness. Qatari Economic/Finance Minister Youself Kamal explained: “We see the private sector as the main driver for future growth and the key to realising the region’s potential for robust and sustained job creation, technological innovation, and regional economic integration that are urgently needed.” But for this to happen, the region needs to foster an enabling environment that promotes both competition and innovation.

Excluding Saudi Arabia and the UAE, almost all MENA oil exporters rank exceptionally low in the World Bank’s ‘Ease of Doing Business’ ratings. For example, of the 185 countries surveyed during 2012, Iraq, Algeria and Iran were ranked 165, 152

and 145 respectively. Regulators urgently need to simplify procedures for business start-ups, registering property, access permits, enforcing contracts and hiring workers. The oil exporters should also reduce restrictions on international trade in services, which hinders competition and access to basic services, particularly in Iran where local firms provide costly and poor services, like telecoms and financials, to the general public.

Investments in human resources and business eco-system, such as skills, vocational training, funding start-ups and small-medium sized enterprises (SMEs), in the form of seed finance, and venture capital, will help make the non-oil economy more productive and vibrant.

Improving the efficiency of banks, and external linkages for firms to expand and flourish will also be key. This can be achieved through strengthening business incubation services and nurturing SMEs in value-adding technology and innovative industries. The IMF stressed, “reforms of the labour markets, educational systems, the business environment, and governance, will help leverage the many assets of the region to achieve higher growth rates and employment over the medium and long term.”

The MENA is a region critical to global energy security for the foreseeable future.

Vast hydrocarbon-related investments will flow into oil exporting countries, which in turn, should benefit the wider regional economy.

Middle East Electricity 13

S04 MEE 2013 Day 1 Version1_Layout 1 26/02/2013 12:41 Page 14

Exhibition Map/Conference Middle East Electricity 2013 Facility Overview

17 - 19 February 2013 | Dubai World Trade Centre

SUNDAY 17TH FEBRUARY 9.30am -10.50am

Registration

10.50am – 11.10am

Chairman's Opening Remarks

2.45pm – 3.00pm

This presentation will focus on the latest developments in research and development, unique climate and environmental conditions for testing of solar panels, best practices and provide recommendations for moving forward to enable the countries of the Middle East to attract investments in the solar energy field.

Keynote: The Future of Solar Energy in the Middle East Jigar Shah, Partner, Inerjys

Dr. Raed Bkayrat, Manager Technology and Advancement Group (TAAG), KAUST

Solar Policy Update for the GCC and MENA Region 11.10am – 11.25am

The Importance of an Apt Legal Policy for the Establishment & Maintenance of a Solar Market

3.00pm – 3.15pm

The Existing Legal Policies for Renewables in the Gulf/MENA Region

Abdulaziz Saleh Al-Showair, Senior Standards Researcher, GCC Standardisation Organisation (GSO)

Martin Preston, Partner, Norton Rose (Middle East) 11.40am – 11.55am

The Do's and The Don'ts: Lessons Learnt Cristiano Spillati, Regional Manager Middle East, SkyPower

11:55am – 12:10pm

3.15pm - 3.30pm

1.00pm - 2.30pm

Dr. Tamis Ali Khalid Al Hammadi, Director of Laboratories, Deputy Director of Dammam branch, Saudi Standards, Metrology & Quality Organisation (SASO)

Panel Discussion: The Legal and Policy Track for the Solar Industry The aim of this panel discussion is to discuss how an incentive scheme for the United Arab Emirates (and/or other countries in the region) can be structured in order to serve as a proper basis for a solar market to develop. Incentive schemed have worked well in some countries and failed in others. There are lessons to be learned. Drawing from this experience, the aim of the panel discussion will be to shed some light on how an incentive scheme for the United Arab Emirates should be structured in order for it to ‘work’ effectively.

3.30pm - 4.30pm

Panel Discussion: MENA Solar Energy Quality Infrastructure

Moderator: Dr. Michael Krämer, Senior Associate, Taylor Wessing

This panel will discuss the components of QI: Metrology, Standardisation, Testing and Quality Management including Certification and Accreditation as they pertain to the emerging solar energy industry in the Middle East. These components are essential to production and trade, and for the ME countries to enter the global market. Subject matter experts have been invited to participate on this panel and address each component. Panelists will discuss the latest developments in their fields, best practices, and provide recommendations for moving forward to enable the countries of the ME to attract investments in the solar energy field.

Panelists: Nimer AbuAli, Executive Manager – Clean Tech, Ernst & Young Abu Dhabi

Moderator: Khaled Masri, Managing Director, Standards Associates

Jigar Shah, Partner, Inerjys Cristiano Spillati, Regional Manager Middle East, SkyPower

Panelists: Rajnikath Umakanthan, Business Development Manager, Underwriters Laboratory (UL)

Martin Mock, Managing Director, Belectric Middle East

Dr. Raed Bkayrat, Manager Technology and Advancement Group (TAAG), KAUST

Martin Preston, Partner, Norton Rose (Middle East)

Dr. Tamis Ali Khalid Al Hammadi, Director of Laboratories, Deputy Director of Dammam branch, Saudi Standards, Metrology & Quality Organisation (SASO)

Lunch and Networking Opportunities

Jigar Shah, Partner, Inerjys Abdulaziz Saleh Al-Showair, Senior Standards Researcher, GCC Standardisation Organisation (GSO)

Solar Standards for the GCC and MENA Region 2.30pm – 2.45pm

Metrology & Calibration for Solar Systems This presentation will focus on the latest developments in Metrology and calibration for solar systems, best practices and provide recommendations for moving forward to enable the countries of the Middle East to attract investments in the solar energy field.

Exploring Current Policies: Which Policy would "Work" in the MENA Region?

Dr. Michael Krämer, Senior Associate, Taylor Wessing

12.10pm – 1.00pm

Standards, Conformity Assessment & Certification Schemes for Solar Panels This presentation will focus on the latest developments in standards, conformity assessment and certification schemes for solar panels, best practices and provide recommendations for moving forward to enable the countries of the Middle East to attract investments in the solar energy field.

Martin Mock, Managing Director, Belectric Middle East 11.25am – 11.40am

Developing Solutions for the Environmental Challenges to Deploying PV Plants in Desert Areas

Performance, Reliability, Testing & Certification of Solar Planels This presentation will focus on the latest developments in performance, reliability, testing and certification of solar panels, best practices and provide recommendations for moving forward to enable the countries of the Middle East to attract investments in the solar energy field.

Rajnikath Umakanthan, Business Development Manager, Underwriters Laboratory (UL)

14 Middle East Electricity

12.10pm – 1.00pm

Close of Conference

S04 MEE 2013 Day 1 Version1_Layout 1 26/02/2013 12:41 Page 15

Photo Gallery

The MEE Gallery As day one of Middle East Electricity 2013 gets underway, we take a look back at some of the images from last year's successful exhibition and awards evening.

Above: His Excellency Dr. Rashid Ahmed Bin Fahad, UAE Minister of Environment and Water, opening last year's MEE. Right: Guests at the Middle East Electricity Awards 2012 Gala Dinner await the names of the winning nominees.

Bottom Left: Exhibitor stands at last year's event.

Bottom Right: Exhibitors and visitors at MEE 2012 meet with His Excellency Dr. Rashid Ahmed Bin Fahad during his walkthrough of the show.

Middle East Electricity 15

S04 MEE 2013 Day 1 Version1_Layout 1 26/02/2013 12:41 Page 16

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