MENA to save up to USD1bn a year with smart grids
The Middle East and North Africa (MENA) region is in the early stages of its smart grid development but stands to realise strong benefits, including minimum savings of USD300 million to USD1 billion per year for Gulf countries.
This is according to a new report by Northeast Group, LLC.
The report says smart grid is an opportunity for MENA countries to incorporate their vast solar and renewable resources, manage growing demand, reduce carbon emissions and cut down on electricity system losses.
It projects that the smart metering market will reach 16.1 million units by 2022 with cumulative capital expenditure of USD3.9 billion. The majority of near-term activity will be in the Gulf region, where Saudi Arabia and the United Arab Emirates are currently leading the way. By 2022, 86% of homes and businesses in the Gulf countries will have smart meters. Other MENA countries outside the Gulf will develop at a slower pace - due largely to political risk - but represent larger market sizes and also stand to realize strong benefits from smart grid technologies.
The report notes that governments of several MENA countries are experimenting with a number of policies to help curb domestic consumption of fossil fuels, including feed-in tariffs for renewables, conservation outreach campaigns, and electricity pricing mechanisms that more closely reflect the costs of electric service (regional electricity prices are currently among the lowest in the world). Several high profile transmission interconnection initiatives are also helping these countries to use their systems more efficiently.
"Smart grid regulatory frameworks are in the early stages of development but progress is being made," Northeast Group added.
"Governments are realising they must incentivise energy conservation and are beginning to invest in the technologies necessary to make their grids smarter," the report says.