With strong demand for upstream oil and gas projects, power generation, and desalination, key markets in the UAE, Saudi Arabia, Qatar and Kuwait are driving growth for the multi-billion dollar turbo Machinery & pumps industry, despite setbacks in other regions due to the worldwide slowdown.

The aggressive pursuit of energy conservation through the introduction of high efficiency devices on the demand side, as well as power generation from renewable energy sources, will become key pillars in combating global warming going forward. Cooling and heating demand to support our everyday lives and industrial activities is the greatest source of energy consumption. Pumps /Heat pumps should play an extremely important role in meeting cooling and heating demand as they are capable of substantially reducing carbon dioxide (CO2) emissions.

Heat pumps are extensively used for a wide variety of purposes, including freezing, refrigeration, air conditioning, and water heating. A variety of impressive technological innovations have been achieved in heat humps in recent years, thereby making it possible to dramatically improve the efficiency and performance of heat pump equipment. Combustion-based devices were predominantly used for hot water heating and hot water supply for residential use, as well as for heating, drying, and steam generation for industrial use, but with the technological innovations, heat pumps have come to be more extensively used both for residential and industrial applications.

Aerothermal, geothermal and hydrothermal energy, which are used by heat pumps, are defined as renewable energy sources like solar energy in the EU Renewable Energy Directive, as well as Sophisticated Methods of Energy Supply Structures and the Basic Energy . The increasingly wider use of renewable energy sources by heat pumps can further contribute to a substantial reduction in CO2 emissions.

At the same time, when attempting to substantially reduce the CO2 emissions associated with energy consumption by using high-efficiency heat pumps, it is also necessary to reduce the effects of global warming due to the greenhouse gas emissions from the refrigerant used in heat humps. It is essential to not only promote the widespread use of heat pumps but also enforce stricter controls over refrigerant emissions and step up the development of low global warming potential (GWP) refrigerant devices.

Middle Eastern and North African oil producing countries will invest $525 billion
Middle Eastern and North African oil producing countries will invest $525 billion on energy projects from next year to 2016, according to an inter-governmental Arab energy lender.

Nations such as Saudi Arabia, the UAE, Iran and Algeria have increased spending on energy projects for the next five years as current high oil prices are allowing them to resume projects that were delayed because of to the financial crisis, the Arab Petroleum Investments Corp said.

Saudi Arabia will top the list with committed investments of $141 billion, followed by the UAE that is planning to invest $76 billion in that period, according to Apicorp

Countries in the region can finance the projects on their own as long as the basket of OPEC crudes stays at more than $90 a barrel, it said.

Saudi oil Saudi energy demand to double by 2028

Currently, more than 3m barrels of the 8.3m barrels produced a day are consumed by domestic market

Saudi Aramco has forecast that the kingdom's daily energy demand will reach an equivalent of 8.3 million barrels by 2028, more than double the 3.4 million barrels equivalent in 2009.

Currently, of the 8.3 million barrels daily in oil production, more than three million barrels are consumed by the domestic market mainly to fuel national industries.

In the meantime, the National Industrial Clusters Development Programme (NICDP) is promoting solar energy, value chain products to support solar power plants, which are envisioned to be established across the kingdom as a component of the country's resolve to harness renewable energy to meet increasing electricity demand.

Saudi Arabia's industrial clusters programme in solar energy products is introducing the polysilicon and photovoltaic technologies, said Azzam Shalabi, president of the National Industrial Clusters Development Programme.

Integration

"The programme is currently developing three projects in the silicon route which would bring in 12 KTA of solar grade polysilicon and semiconductor grade polysilicon," Shalabi said during his presentation on the progress of the industrial clusters plan of the kingdom.

He said in a press release the polysilicon projects will integrate other projects, such as the production of ingot, wafer and cells, ensuring the production of modules upon the development of the local market.

A number of local firms are now conducting feasibility studies on the production of solar photovoltaic thin films for local and export markets.

The solar energy project encourages also the conversion of the kingdom's high quality silica sand for the production of solar grade glass for exports.

Curbing dependence

Saudi Arabia has now resolved to harness solar power and renewable energy to meet its increasing electricity demand and, thereby, in the process, curb its dependence on crude oil.

According to the Electricity and Co-Generation Regulatory Authority (ACWA), an initial investment of more than $100 billion (Dh367.3 billion) will be needed to expand electricity power generating capacity and transmission grid, build renewable energy plants, and set up nuclear power installations.

A third of the $100 billion is expected to fund the building of solar power plants and other renewable energy resources.

The Saudi Electricity Company's current generation capacity is about 45,000 megawatts, which is projected to increase to 75,000 megawatts by 2018 and to more than 120,000 megawatts by 2030.

Swinging into profit

The Saudi Arabian Mining Co (Maa'den) said on Tuesday it had moved to a net profit in the third quarter of the year compared to the same period in 2010 due to higher world gold prices and an increase in sales.

Net profits climbed to 27.4 million riyals (Dh26.8 million) compared to a net loss of 200,000 riyals in the corresponding three-month period in 2010, Ma'aden said in a statement on the Saudi stock exchange website.

The state-run firm, which was set up in 1997, has been expanding its operations to also include phosphate and bauxite mining.

Gold prices have been climbing sharply over the past year, and closed up $35 per ounce, or at $1,669.60 an ounce in New York on Monday.

The average gold price was $1,703 an ounce in the third quarter compared to $1,227 an ounce in the year-earlier period. Gold traded at $1,671 an ounce at 9.34am in Riyadh.

Ma'aden, whose main focus is gold mining, is expanding by adding three new business lines.

These include aluminum and phosphate to tap into the rising demand for chemicals used in agriculture and the lightweight metals used to make beverage cans and aircraft.

A joint venture between Ma'aden and New York-based Alcoa Inc started construction at an alumina refinery in Ras Al Khair

Projects worth $277b currently underway to help meet demand

Dubai: Utility demand in the GCC is expected to grow 7 per cent to 8 per cent every year, with Gulf countries expected to spend $45 billion (Dh165.26 billion) before 2015 in order to add 32,000 megawatts of capacity, a report released by the Kuwait Financial Centre (Markaz) says.

It states that there are 361 power projects underway in the GCC at a total value of $277 billion, with 70 per cent of them in Saudi Arabia and the UAE. Saudi Arabia has the highest number at 161, followed by the UAE with 70.

The GCC countries have been trying to increase their power generation capacity for some years, the report points out, in an effort to meet rising demand from growing populations and economies.

Power consumption across the GCC has grown at an annual rate of about 9 per cent since 2002, and Saudi Arabia and the UAE account for 75 per cent of total GCC consumption.

One-third of the projects - with a value of $92 billion - are in the execution phase, and these are mainly in Saudi Arabia.

But while power projects are an increasing focus of the GCC countries, the global financial crisis has resulted in 11 per cent of projects in the region being cancelled - with a value of $31 billion - and put another 3 per cent on hold.

Over half of the cancelled projects, 15, are in Saudi Arabia - with a value of $17 billion - while $5.4 billion worth of UAE projects have been shelved.

That said, analysts remain upbeat about an increasing number of projects in the UAE.

"The GCC is expected to invest around $73 billion in power generation, transmission and distribution projects in the next five years, adding nearly 36 gigawatts of generation capacity in the same period," said Abhay Bhargava, industry manager at Frost and Sullivan's energy and power systems practice, Middle East and North Africa.

Major driver

He said that while in the UAE the decline of the construction sector has indeed impacted on previous forecasts of the increase in power-related investments, the emerging industrial sector is expected to reverse the decline and be a major driver for increased investments in power generation.

"Saudi Arabia is expected to lead the way, with more than 47 per cent of the total investments, and the UAE following significantly behind with just 13.7 per cent of the envisaged investment," he said.

Bhargava remarked that this increased investment reflects the aggressive diversification and industrialisation plans of the GCC economies that are being put into motion.

Meanwhile, the Markaz report pointed out how the GCC countries are gradually opening up to private sector participation in power projects, a model that has been used successfully in the region in the past.

With the announced split of the Saudi Electricity Company (SEC) into standalone generation, transmission and distribution companies, Bhargava expects to see a strategic shift in the way the power sector operates.

"In the long term, this is expected to pave the way for a GCC-wide privatisation of both generation and some sections of transmission and distribution," Bhargava said.

The Markaz report also showed how the GCC is interested in renewable energy as an alternative source of power, and Bhargava agreed that solar power is certainly gaining traction, with an increasing number of pilot projects being undertaken in the GCC.

"Nearly 105 megawatts of solar projects were tendered in 2010 in the GCC region.

"We estimate that an additional $4.5-$5 billion investment will be made by the GCC in the next five years for solar related power generation," he said.

Capacity doubles

The major power projects completed across the GCC during the past decade have now commenced operations - installed capacity has doubled from nearly 46,600 MW in 2002 to almost 98,000 MW in 2009: a CAGR of 10 per cent.

Currently, the GCC operates with a reserve margin of about 19 per cent with an excess reserve mainly in Qatar and Abu Dhabi (43 per cent and 30 per cent, respectively).