MIDDLE EAST Trends and Developments Contributed by: Brendan Hundt, Dan Feldman, Sam Anastasiou and Saiesh Kamath, King & Spalding LLP
eration, transmission and distribution networks to improve resilience and continuity of supply in the face of external threats. Events of the last few months have altered how gov- ernments and corporates approach energy planning. Traditional assumptions of stable geopolitical con- ditions and efficient, just-in-time delivery are being replaced by a more defensive posture, with greater focus on redundancy, flexibility and long-term resil- ience. This shift is influencing investment patterns across the region, and is expected to do so for several years to come, but is leading to a sustained pipeline of opportunities across the sector as existing infra- structure is strengthened and new infrastructure is added to the network to provide added resilience and redundancy. Going forward The rapid growth of solar (with an ambitious pipeline, backed by fundamentals) and the advent of solar- plus-battery are exciting developments in the renew- able energy landscape of the GCC. A few things to keep an eye out for include: • growth in captive power project development, as data centre operators and other large industrial consumers seek dedicated power supply arrange- ments outside the traditional single-buyer model; • potential regulatory reforms that would permit the use of “wheeling” structures (the transmission of electricity from a generator to a specific consumer over the public grid), which are currently prohib- ited in most regional jurisdictions but which could unlock new power procurement models if liberal- ised;
• tenders and pricing of solar projects in the UAE and KSA to identify if the downward trajectory of prices will settle or continue and to assess the speed at which the project pipeline materialises; • development of the round-the-clock project, which could set a new precedent for solar-plus-battery projects and herald a rapid scale-up of this tech- nology in the GCC region; • interest and investments in data centres in the GCC to indicate the potential strain on the power sector in the near future and the upgrades to the power grid which would be necessary; • potential role of natural gas as a backstop and the consideration given to the risk of stranded assets if the anticipated growth of data centres does not materialise; and • any opportunities arising from supply chain-proof- ing initiatives which GCC countries may start for energy security. For clients looking to undertake power projects in the GCC, particularly in the UAE and Saudi Arabia, solar PV plus BESS assets are making clean power cheaper and helping to overcome intermittency issues at the same time that data centres are creating an insatiable, growing demand for large base loads of energy. This is creating clear incentives to expedite large-scale solar PV plus BESS projects, and to upgrade or expand transmission infrastructure. Many countries in the Middle East, and particularly in the GCC, are seeking to create investor-friendly environments (including in terms of access to clean power), while also furthering their own clean-energy ambitions, which will continue to create opportunities to capitalise on the ongoing wave of energy and technology investments.
239 CHAMBERS.COM
Powered by FlippingBook