Which factors are leading to the rise in power rental market in the Middle East region?
The power rental market has been constantly growing in the Middle East, owing to the region’s continuous economic growth, sustained industrial and infrastructure activities, rapid growth in population, improvement in the standards of living, occasional utility shortages in key areas, and observed unreliable electricity connection in various cities and provinces.
The above mentioned factors lead to the requirement for alternative power sources, such as multi-megawatt temporary power plants, to support the region’s existing power infrastructure. For instance, the intense industrial and construction activities, coupled with a massive electricity requirement on the part of residents especially during summer months put a heavy load on the region’s utilities, so that occasionally they are unable to supply the required power. This is where turning to temporary power becomes beneficial, particularly in maintaining the productivity of construction or industrial operations, and in avoiding power interruptions, load shedding or peak shaving.
Furthermore, temporary power plants are also employed to bring electricity to areas where power connection remains unreliable or absent, like in remote locations or mountainous regions.
Which is the biggest genset market in the region? Recent reports suggest Saudi Arabia, the UAE and Qatar are leading the way. What are the countries, you think, follow the list?
We observe that Saudi Arabia, UAE and Qatar remain the biggest markets for multi-megawatt temporary power solutions in the region.
Although the decrease in oil prices has had, to some extent, an effect on the economy of Saudi Arabia, economic experts agree that it has not restricted the country’s investments in various projects. The experts recognize the country’s extensive cash reserves for the continuous development in Saudi Arabia’s public infrastructure, utilities, healthcare and education, to name a few. Thus, the sustained construction and industrial activities in the country, coupled with a constantly increasing electricity demand from its residents and businesses, are spurring the buoyancy of the power rental market in Saudi Arabia. In fact, market research firm 6W Research estimates the CAGR of the power rental market in Saudi Arabia to be at 12.6% from 2015-2021.
Similarly, the demand for electricity has, over the years, tremendously increased in the UAE. The constantly increasing public and private infrastructure, together with an expanding population, has caused the country’s electricity requirement to surge in the last decade. The same research firm predicts the CAGR of the temporary power market in the UAE to be at 16.8% from 2015-2021, taking into keen consideration the upcoming World Expo 2020, during which about 25 million tourists are expected to visit the country. Preparations for the global event, including the construction of trade centers, hotels, hospitals, rail networks and airports are seen to be driving the growth of the rental power sector in the country.
The rental power market in Qatar is heavily influenced by the country’s preparations for the upcoming FIFA World Cup 2022. The increasing infrastructure development (building of eight new stadiums, renovation of three existing stadiums, establishment of Lusail City), expanding transportation network (building of Doha Metro Rail and expressways), surging public and private investments, rising hospitality sector and continuous economic reforms are driving the growth of the temporary power business in the country. Research firm 6W Research pegs the growth of the rental power sector in the country at 23.3% from 2014-2020.
Other significant markets for multi-megawatt rental power solutions in the region include Kuwait, Oman and Bahrain, which are also economically and industrially viable countries.
It is worth noting that temporary power solutions can also prove beneficial for countries that may require infrastructure rebuilding and rehabilitation, or re-establishment of a reliable power connection, like Yemen, Iraq and Syria. As the governance of these countries become more stable in the coming years, we believe that they will represent excellent market opportunities for temporary power providers.
Between gas and diesel gensets, which has a better growth prospect and why? With solar generation being tapped in a big way today especially in Saudi Arabia, the UAE and Egypt, do you think it may affect the genset industry?
It is expected that the diesel generator market will continue to grow in the next several years, owing to easy availability, safety and economy of fuel, and ease of installation of diesel equipment.
However, we are noticing a gradual increase in the requirement for natural gas and dual-fuel power generation technologies, largely influenced by the increasing availability of fuel resources and government initiatives towards reducing carbon emissions.
In the past, fuel availability and the costs of installing safe and reliable fuel delivery infrastructure have been limitations on the growth of the natural gas generator market. Today, however, gas is becoming increasingly available and gas generation technologies are progressively finding application in bigger and longer-duration projects, making the upfront investment for the gas infrastructure economically sensible. The availability of dual-fuel generators (which significantly simplifies the transition from diesel-run to gas-run generators), is also helping overcome these obstacles.
As for the observed gradual shift in solar and other renewable power generation technologies, we see this as a welcome development in increasing the availability of electricity in areas that require it, and in diversifying the energy mix to encourage long-term energy security.
Multi-megawatt temporary power technologies are primed to work in tandem with renewable energy sources to help surmount issues of power supply unpredictability and intermittency, especially in power-intensive industries like oil & gas, construction, and utility power generation, transmission and distribution.
Temporary power plants can also provide supplemental power to renewable energy facilities during planning, manufacturing, installation, commissioning, operations and maintenance. Temporary power plants can help ensure that renewable energy plants are constructed and delivered on time and as planned, and that they remain efficient, reliable and in optimum condition at all times.
What are the preferred ranges that are most popular in the region and the industries that are catered to? Which are Altaaqa Global’s most popular genset ranges and contracts it has been awarded in the region?
The amount of required power vary from industry to industry. For instance, construction projects may require a few hundred kVA during the building phase to a few MW during the commissioning stage. Refinery maintenance and rehabilitation often requires several MW of power. The utility industry has the biggest demand, usually requiring power plants of tens or hundreds of MW to provide supplementary power to the grid.
For our part, we provide multi-megawatt temporary power plants, focused on utility markets, extractive industries such as mining and oil and gas, large process industries and major construction infrastructure projects.
End
