The Rise of Power and Energy Industry in the MENA Region
The rise of power and energy industry in MENA : the fastest-growing sector of the economy.
By 2050, the MENA area will supply 10-20% of the worldwide hydrogen market, with the GCC and North Africa preparing to become global export hubs. This market is steadily growing by supplying blue and grey hydrogen, energy made from natural gases, and green hydrogen come from splitting water by electrolysis. Hydrogen technologies will accelerate renewable energy and pave the way toward the transition to a sustainable future with energy efficiency in UAE. Building energy efficiency with smart buildings in UAE and promoting EVs are the insights of the developments.
Arab Petroleum Investments Corporation (APICORP), based in Saudi Arabia, has released its MENA Power and Energy Investment Outlook 2022-2026. According to the report, total planned and committed investments in the MENA area are likely to expand by 9% to exceed $879 billion over the next five years, up $74 billion from last year’s estimate of $805 billion.
According to Apicorp, the Mena region is predicted to add 5.6 gigawatts of installed renewable power and energy sources in 2022, up from 3 gigawatts in 2021. The region is on track to add 33 gigawatts of installed capacity by 2026. The investments in the power and energy industry have given rise to the forging vs casting industry. The forging industry which includes various types of forging methods (open die forgings) is in demand for the mechanical parts required for the installation of renewable power and energy resources. Also, the technologies of power systems engineering and promotion of techniques like abrasive blasting, gravity batteries, and mechanical seals are in great demand in the market.
The analysis breaks down the investments by sector and finds that Saudi Arabia, Morocco, Algeria, and the UAE are at the top of the list of countries stepping up attempts to achieve their national renewable power and energy targets. Morocco has the greatest share of renewable energy projects planned among all countries in terms of global energy industry investments. UAE’s energy transition, according to the research, has progressed significantly in moving away from carbon emission power and energy sources and ensuring low carbon emission sources.
According to the research, the Russia-Ukraine crisis had divergent effects on the region’s power and energy environment, with net-energy exporters driving the increase in project investment thanks to a windfall of oil and gas income brought on by the war’s oil prices jump. The rising oil prices, which had risen 67% in 2021, soared to well about $140 per barrel in March before reversing some of their gains. Higher oil prices and lower inflation are expected to bring in up to $1.4 trillion in new revenue to Gulf countries over the next four to five years, according to research released last month by the International Monetary Fund. Even the largest oil producing countries in the world are facing this situation.
Global geopolitical uncertainty and macro challenges, on the other hand, are not expected to slow investment development in the power and energy industry in the MENA region, including oil, gas, power and energy, and petrochemicals in the Middle East and North Africa (MENA) during the next five years. Also, the power and energy industry is facing cyberattacks in the field, for which many countries are giving importance to cybersecurity.
Committed projects account for roughly 45 percent of its total investments in the GCC, which is 50% more than the MENA average of 30 %. The relative fragility of net-energy importers in North Africa and the Mediterranean to geopolitical threats arising from the war, compounded by the economic constraints of inflation and debt loads. The offshore wind energy investments are expected to reach high in the future years. With the installation of floating wind turbine, hydraulic turbine, wind turbine, and solar panels, there is a great upcoming for the water, wind and solar energy.
The rise of the power and energy industry in MENA OPEC mentions the United Arab Emirates as the third largest producer of oil, but it aims to be carbon neutral by 2050, by providing energy that is cleaner and renewable in nature. The investment made to achieve this goal is a net worth of AED 600 Billion ($163.5 Billion). Abu Dhabi, an Emirate of UAE who is bringing a significant contribution to the country’s oil production, is currently constructing the world’s biggest solar plant named Al Daffa, having a capacity of over 2 gig watts as well as Dubai, another Emirate of Dubai is developing the world’s largest solar energy park and the execution of these plans have already begun.