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TMCNet:  Smart Move [Utilities Middle East (United Arab Emirates)]

[July 09, 2014]

Smart Move [Utilities Middle East (United Arab Emirates)]

(Utilities Middle East (United Arab Emirates) Via Acquire Media NewsEdge) Smart grid technology may have taken a while to make its mark in the Middle East but that could all be about to change. The next two years could prove to be a bonanza for companies engaged in the sector, as countries in the region make their move after a period of quiet assessment.

The global market for smart grid technology is growing rapidly and is expected to reach $125bn in 2017, according to a recent Frost & Sullivan report. But while 75% of Europe should be smart grid-enabled by the following year, adoption in the GCC has so far been "sluggish".

Now, countries in this region must face up to the power grid challenges brought about by massive economic growth and industrial diversification. Regional integration of transmission grids and, especially, the expected rise of renewable energy will also be key drivers behind the widespread adoption of smart grid technology in the Middle East, experts say.

In the next five years, the GCC is expected to invest close to $73bn to boost power generation capacity by 36 GW and improve power transmission and distribution infrastructure. A significant portion of this sum is anticipated to be funnelled into smart grid solutions, Frost & Sullivan says.

A growing need The term smart grids describes the technology used to provide a two-way flow of energy and real-time information between power generation, grid operators and consumers. They have the ability to enhance power transmission and distribution networks through information technology.

As the Middle East continues down the path of rapid economic development and diversification, the pressure on its power and water infrastructure becomes ever greater and more complex. This is not least because the region is one of the most energy intensive in the world, due to the near year-round need for airconditioning and the power demands of the water desalination process.

The primary driver behind the need for smart grid technology is the exponential growth in electricity demand and ability to manage the variability of that demand.

"The capabilities of today's major networks and power-generation facilities are designed to cope with maximum levels of consumption rather than actual demand at any given time," says Rodolphe de Beaufort, Smart Grid Marketing Director at French energy powerhouse Alstom.

"Through intelligent, predictive management of consumption levels, smart grids can adjust infrastructure performance in line with average consumption patterns as well as peaks, which can reduce investment costs by as much as 20%." Rising demand is putting ever more financial strain on the governments that subsidise the cost of power and water, bringing the need for energy efficiency sharply into focus, and utilities can use the data provided by smart grids to deliver that efficiency and reduce costs.

"In many of these countries the distribution grids are growing exponentially so right now they are focused on automating and getting transparency into their distribution grids," explains Sitaram Chodimella, Head of Smart Grid Division, Middle East at Siemens.

"This helps to implement technologies that can reduce per capita consumption which is one of the highest in the world, so there is a lot of focus on utilities reducing consumption." Smart grids enable utilities to reduce peak power demand, Chodimella says. "They are building generation capacity for peak demand. If we are able to reduce per capita consumption during the summer by increasing energy efficiency across buildings and networks, they can reduce peak demand and this helps them to reduce the capex needed for new power generation." As GCC economies develop, they are becoming increasingly interconnected, providing a further challenge for utilities. While connecting the networks of different countries in the region allows them the benefit of sharing excess power capacity, it also means that managing the network to prevent power blackouts becomes even more important, Chodimella says.

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[[page-break]] The challenge of renewables In addition, there is a growing tide of interest in the development of renewable energy projects to meet at least part of the region's future energy needs. As the cost of renewable power generation falls, the rate of its deployment in the GCC is likely to increase.

The integration of wind and solar power into the energy mix is leading to the proliferation of distributed production sites, a factor compounded by the intermittent nature of power generation from these sources, Alstom's de Beaufort explains.

"The growing share of renewables in the energy mix is another cause of instability. Smart-grid solutions can anticipate this intermittency to balance supply in real time and in transparent fashion by combining electricity produced from renewable sources with power from thermal plants, backed by resources made available through load-shedding strategies," he adds.

"The region needs to develop forecasting, energy storage via batteries and on-line stability solutions to use the high potential from clean solar and wind energies." Philip Dingle, Power Utilities and Networks Segment Manager, Eaton's Electrical Sector, says: "Smart grid promotion and investment is inextricably linked to renewable power generation and in this area the investment is coming.

"In Western Europe pilot projects which have been in the planning stage for the last four or five years are now being adopted. There is the opportunity for the GCC to learn from these projects and bring forward their own in a shorter time frame having learned from the projects taking place elsewhere." The first steps The fact that smart grids have yet to gain much traction in the Middle East doesn't necessarily mean that countries here have been standing still. Indeed there is plenty going on behind the scenes, with a number of pilot projects being undertaken throughout the region which are expected to reach a conclusion in the near future.

"There are plenty of smart grid activities across all the utilities in the region," says Chodimella. "As a first step they want to do the piloting to see that this is the right technology to apply before doing a mass roll out across their larger networks.

"They are doing the right thing by not rushing into it, by evaluating the benefits and then implementing them," he adds "They have to decide, based on their existing infrastructure what is needed out of the technologies that are available today. And of course this helps them to formulate the regulatory framework that is needed to implement these technologies." He adds: "We foresee that in the next one or two years the pilots will be completed by most of the GCC countries and then we will see large scale deployment of metering, of distinct demand side management systems and distribution management systems." It is no surprise to hear that, within the GCC, the larger economies of the UAE and Saudi Arabia are leading the way in the development of smart grid technology, but other countries are not far behind.

"I would say that UAE and Saudi are doing much more in terms of pilots, probably because of the size of the countries but every other country is also evaluating their requirements from a smart grid perspective," Chodimella says.

"We [Siemens] have one pilot in Qatar which is now installed and handed over to the customer. They have a one-year evaluation period and after that they will do the large scale roll out. And in Saudi and Oman they are building small scale pilots and they will also take about a year before rollouts." Alstom has already deployed and promotes various projects in the Middle-East including a fully integrated grid management solution in Kuwait; wide area monitoring systems (WAMS) and stability solutions for a GCCIA interconnection project; and integrated distribution management systems (IDMS) in Bahrain and Saudi Arabia.

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[[page-break]] The next steps The implementation of smart metering is one of the first steps on the way to developing an integrated smart grid approach, but there is plenty more to do.

"Smart metering is one of the basic components of the infrastructure needs of the smart grid," says Chodimella. "They provide information from the demand side, but once that's done you have to integrate the smart metering into the grid control platforms and then use this to evolve the management information systems that utilities need to take their decisions." He adds: "This is the entire value chain across the smart grid technologies. It starts with the basic step of installing smart meters but utilities have to undertake the next steps of distribution automation and then also integrate this into the transmission grid. This is how smart grids should evolve." De Beaufort believes local governments could be doing more to promote the development of smart grids in the region. "They are taking actions, however, the low cost of energy in the region is an obstacle to the consumer's awareness. Governments still have a key role to play." Philip Dingle of Eaton, emphasises the potential benefit to GCC countries of learning from other parts of the world where valuable experienced has already been gained. "There is a great deal of knowledge which has been gathered and promoted and discussed in other regions in the world regarding the electrical industry and smart grids," he says.

"The GCC can make the best of this 'tribal' knowledge and promote it through more conferences and education. There still needs to be a wider understanding of the issues and agreement among the stakeholders, be it government, business or regulators about the role they will be required to play." (c) 2014 ITP Business Publishing Ltd. All Rights Reserved. Provided by SyndiGate Media Inc. (

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