Expanding and modernizing electricity networks is becoming more crucial to the future of the Middle East region, according to Siemens’ Infrastructure Transition Monitor report.
The report, a survey under the theme Enabling Transformation: How a New Generation of Infrastructure Assets is Reshaping the Middle East, was conducted on 400 executives and through in-depth interviews with regional infrastructure leaders and experts across the UAE, Saudi Arabia, Egypt, Qatar, and Oman.
The report mentioned three areas for grids to enable infrastructure transition: increasing the grid’s capacity and flexibility while maintaining its reliability, grid operators and power consumers also need to enhance partnerships in cross-border interconnections and regional power trading.
Power-grid limitations are the most likely factor to slow down the transition to clean energy, with 62 percent of Middle East survey respondents saying electrification is being held back by inadequate grid infrastructure.
The power grid is becoming one of the Middle East’s most important pillars for industrial growth, energy security, and decarbonization. Upgrading the grid can be done through integrating economic expansion, electric vehicle (EV) adoption, data centers, and industrial electrification, which will require a new operating model for power systems and long-term strategic investments, according to the report.
The Egyptian-Saudi linkage project, connected by around 1,350 km of overhead transmission lines, including submarine cables in the Red Sea, aims to improve the efficiency of Egypt’s energy system and find practical solutions to its current energy crisis.
Egypt has been working to ensure electricity supply amid rising consumption and regional volatility, and prepare for an expected six to seven percent increase in electricity use this summer. It also has a target of achieving a 45 percent share of renewable energy in its energy mix by 2028, under the National Climate Strategy 2050.
Furthermore, the future of power grids in the region relies on creating a more digital, flexible, and coordinated electricity system to support clean-energy goals, industrial expansion, and a fast-growing digital economy, according to Siemens.
The report mentioned that 70 percent of the Middle East executives surveyed said that if energy producers and consumers increased data sharing, it would improve energy-system efficiency, this is compared to 57 percent globally.
The same 70 percent say their organization is planning on using energy assets to profit from demand-side flexibility mechanisms, which allow consumers to adjust their electricity usage in real time, due to price changes, grid needs, or incentives, instead of only increasing energy supplies, compared with 63 percent globally.
Moreover, leaders across the Middle East see digitalization, AI, smart buildings, flexible energy systems, and modernized grids as enablers of progress.
Collaborating for impact and infrastructure
As smart cities gain popularity, data centres are also contributing to a growing digital economy, while industries and energy systems are upgraded to achieve a lower-carbon future.
Pressures to achieve this persist through extreme heat levels and water scarcity, which place a demand on cooling and resource management, while rising energy demand is pushing for new ways to implement grid resilience, power supply, and efficiency.
This is alongside geopolitical instability and security risks, which. Are forcing operators to rethink how critical infrastructure is designed and protected against the pressures.
“The infrastructure transition is the transformation of the structures and systems that keep our world functioning, particularly across energy, industry, and the built environment,” CEO of Smart Infrastructure in Siemens Middle East, Hakan Ozdemir, said.
Respondents in the region are also looking to smart-building technologies to support infrastructure transition goals due to their strong return on investment, transparency, operational efficiency, lower energy costs, and safety and security.
Data centers can also reduce the infrastructure pressures for decarbonization, artificial intelligence (AI)-driven data analysis and prediction, and autonomous systems will have the biggest positive impact on decarbonization over the next three years. Almost 62 percent believe AI will transform how their organization operates.
While 69 percent of Middle East respondents say that their organization needs smarter technologies to enable rapid data integration, compared to 64 percent globally.
Meanwhile, Egypt has been building data centres and is planning to establish more to expedite digital transformation and establish a data infrastructure that supports government operations, private-sector engagement, and cloud computing capabilities, as well as generate around $42.7 billion in AI-related investments.
Pace of progress
Business and government leaders across the Middle East described the pace of their infrastructure transition to meet the demands of economic diversification, population growth, and decarbonization as “effective” and “following a clear vision” amid energy transition in other parts of the world slowing down, the report claims.
On the other hand, Middle East respondents are more cautious than their global counterparts. When asked about expectations of pace on goals such as ensuring resiliency in energy supply, regional participants recorded 42 percent, compared to 53 percent with global participants.
Electricity demand in the Middle East and North Africa (MENA) region has tripled since 2000 and is expected to rise by another 50 percent by 2035, with 40 percent of that is projected to come from cooling and desalination alone, according to Siemens, citing International Energy Agency figures.
As a result of this, the region aims to diversify and decarbonize its energy production to accommodate building capacity for rapid urban and industrial growth, extreme heat, larger populations, and a complicated industrial base.
Around 62 percent of Middle East respondents reported that they consider increasing spending across a range of priority infrastructure transition areas, such as digitalization and decarbonization. This is compared to 55 percent of the global counterparts.
The biggest planned increases are in investments for digital technologies (62 percent), expediting decarbonization efforts (61 percent), investments in renewable energy supply or adoption (60 percent), and energy efficiency and electrification (60 percent).
Energy transition, decarbonization, and collaboration
The data says 65 percent of survey-responding executives in the region say businesses and governments should collaborate more closely on energy-system policy, to allow for the creation of more models of energy management. This is compared to 59 percent outside the region.
As a result, the region continues working on its vision to decarbonize fossil fuels and build renewable energy systems and value chains.
This is despite decarbonization falling down the priority list in many parts of the world to 58 percent, compared to 70 percent for Middle East respondents who have set decarbonization targets for scopes 1 and 2 in place for direct and indirect emissions from owned or controlled sources.
Decarbonization of core operations takes top priority out of 14 for the Middle East over the next three years, compared to 7th place for global organizations. This is followed by improving efficiency in facilities and buildings as the second priority for the region, and on-site renewable energy production, energy storage, recycling, and reusing waste and materials.
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