Frost & Sullivan Report

GCC’s Distributed Energy Market is propelled by Rooftop Solar PV and Hybrid Power Systems’ expansion

The UAE and Saudi Arabia will lead the sector, while Oman will emerge as the fastest-growing market, shares Frost & Sullivan in this special report

Frost & Sullivan’s recent analysis on the distributed energy market in the Gulf Cooperation Council (GCC) finds that it is gathering momentum with declining technology costs, resource availability, and favorable policies.

This encourages customers to self-generate electricity through distributed renewable sources and sell excess electricity back to the grid, transforming customers into prosumers (an individual who consumes as well as produces goods or services).

The region’s total distributed energy market, which encompasses distributed solar photovoltaic (PV), distributed wind power, hybrid systems, diesel gensets, and gas gensets, is estimated to garner a revenue of US$ 602mn by the end of 2021 from US$ 480mn in 2020, registering strong double-digit growth at a compound annual growth rate (CAGR) of 25.4%. This will be driven by the recovery in the diesel gensets market along with strong growth in rooftop solar PV and hybrid power systems. The UAE and Saudi Arabia will lead the market for distributed energy, with Oman set to emerge as the fastest-growing market in the region.

“As utility-scale and distributed renewable resources become a crucial aspect of the region’s decarbonization mandates, utilities will invest in grid modernization

solutions, digital platforms, software solutions, and systems associated with asset performance, modeling, and predictive analysis,” affirmed Neeraj Sanjay Mense, Energy & Environment Industry Analyst at Frost & Sullivan.

“Additionally, distributed solar PV will drive the market for distributed energy resources (DERs) as an increasingly wider customer base is expected to adopt rooftop solutions, buoyed by the regulatory mechanisms supporting such installations,” he added.

“Business models have evolved, and customers would prefer operation and output-based operating expenses (OPEX) contracts that include maintenance, performance guarantees, and availability, especially across residential, commercial, and industrial consumers. Further, behind-the-meter energy storage is set to become a game-changer for DERs in the region as it enhances the value proposition of the DERs and enables revenue stacking,” he added.

The rise in prosumerism will present tremendous growth opportunities to the stakeholders, which include: - OEMs, System Integrators, and Service Providers: Project developers and installers should move up the value chain to offer complex energy solutions, such as solar storage or microgrid solutions based on DER aggregation, load management optimization, digital services, and aftermarket services. This will translate into diversification of revenue streams. - Consumer to Prosumer: System integrators should leverage the end-user need for energy security, diversification, and cost optimization to provide packaged solar and battery storage solutions. Commercial & Industrial (C&I) companies should focus on hybrid systems with battery storage to improve system reliability and ensure optimal consumption of available renewable resources. - Market Entry into DER: Utilities should actively pursue DER and storage, sharing their costs with customers, so they can deploy assets that help manage peak demand and provide an additional revenue stream. They should also adopt new business models and forge new partnerships to diversify service offerings in an evolving electricity landscape. - Expanding Solution Offerings: Energy service companies (ESCOs) should focus on raising customer awareness about the types of contracts available for DER projects and acquiring distributed generation (DG) solutions either independently or through partnerships with installers. - Mergers & Acquisitions: OEMs should tap into this opportunity of technological evolution and acquire companies or make partnerships to release new products to meet the evolving needs. Distributed Energy Rejuvenating the Power Sector in the GCC through Innovation and Efficiency, 2021 is the latest addition to Frost & Sullivan’s Energy & Environment research and analyses available through the Frost & Sullivan Leadership Council, which helps organizations identify a continuous flow of growth opportunities to succeed in an unpredictable future.

Technology-powered Circular Economy to Propel Waste Management in the GCC

Frost & Sullivan’s recent analysis, Circular Economy Redefining the GCC Waste Management Market, 2021, finds that the Gulf Cooperation Council (GCC) member nations’ aspirations for sustainability are driving the replacement of linear waste management models with circular models, creating a new wave of opportunities.

Population growth and accelerated economic development are increasing total waste generation in the region (including construction and demolition (C&D) waste, municipal solid waste (MSW), plastic waste, and lead-acid battery waste).

If unchecked, this could result in an increase from 130.6 million metric tons in 2021 to 163.9 million metric tons by 2025. A transition toward circular models is already underway, as with the UAE’s Circular Economy Policy 2021-2031 and the KSA’s Circular Carbon Economy. The policies reflect the region’s commitment to meeting the United Nations Sustainable Development Goals (UN SDGs) while enhancing the quality of life for residents.

“Existing environment service providers can be left behind if they do not embrace and contribute to the region’s drive to go circular,” said Nideshna Varatharajan, Senior Consultant, Industrial Practice, Frost & Sullivan. “The adoption of circular models and advanced recycling methods in the region, like those for plastics and food, will successfully result in new opportunities across the value chain and convert waste into valuegenerating secondary materials,” she added.

Frost & Sullivan forecasts some key trends that would define this transition, including:

Plastic to fuel to enable a circular economy and reduce the environmental impact. Waste management companies should focus on developing waste collection networks and waste sorting facilities to divert plastic waste from landfills to recycling centers and eliminate illegal dumping.

Used lead-acid battery recycling solutions for environmentally safe disposal of hazardous waste. Lead smelting companies should leverage the market potential in the GCC by developing a strong technology understanding and garnering experience in operating secondary smelting plants.

Use of recycled products in the construction sector. C&D waste recycling companies should focus on developing new products for high-end applications such as bricks, tiles, and plastic waste for roads. This will give them a competitive edge in the market.

Waste-to-energy plants for treating non-recyclable solid waste. By investing in waste-to-energy projects, waste management companies can develop innovative business models and ensure a complete diversion of waste while producing clean, sustainable energy.