Frost & Sullivan have released a new report stating that the Gulf Corporation Council (GCC) region is rumoured to be investing nearly $73 billion in Transmission & Distribution (T&D) and power generation projects in the next 5 years which will add 36 GW of generation capacity. So far, the GCC has been slow to show interest in implementing smart grids. Frost & Sullivan noted “The advent of Smart Grids has been the most radical phenomenon to impact the Power industry globally; this is expected to continue to be the most prominent changing force for the industry over the next decade at least.”
GCC countries need to diversify their infrastructure and expand and modernize the T&D network, to keep up with the ongoing urbanization in the region, the result of this is shown in their commitment to invest in Power Generation and T&D.
There are not currently any smart grids in development in the GCC, but several countries in the region are either in the pilot or planning stages. This process is set to accelerate over the next 5 years or so.
The most significant challenge for the adoption of smart grids, according to Frost & Sullivan’s report, will be to overcome traditional business models used by GCC utilities which could lost the revenue due to decreasing energy consumption in light of the stringent moderation of tariff structures by the governments and regulators.
Frost & Sullivan Energy and Power Systems Industry Manager, Abhay Bhargava, notes: “Smart Grids might not be the exact solution for all utilities. However, each utility needs to gain absolute clarity on the performance optimization required in its case and seek a solution that fits with its needs. Benchmarking is a great way to do so.”
The report also suggests that investment in renewables could help to develop Smart Grids in the region, together with raising consumer awareness about energy efficiency and deploying beyond-the-meter technology.