GCC set to become world's highest electricity consumers

Residents will have to reduce domestic demand amid rise in industrial activity, Deloitte says
GCC electricity consumption is expected to increase 2.5 percent annually until 2035
By Claire Ferris-Lay
Thu 08 Sep 2011 11:10 AM

GCC electricity consumption is expected to increase 2.5 percent annually until 2035 with Gulf residents set to become the world’s highest consumers of electricity per capita, a new report has said.

Residents in the Gulf consume 47 percent of the total electricity with just 10.5 percent directed towards industry needs compared to a global average of 37.7 percent, Deloitte said in its white paper on energy and resources in the Middle East.

Consumers will have to reduce domestic demand amid an increase in industrial activity, warned Deloitte.

“Residents of GCC countries use more electricity domestically than their counterparts in the United States,” Kenneth McKellar, partner and energy and resources leader at Deloitte, Middle East, said in a statement.

“GCC countries have embarked on economic diversification plans, with industrialisation as a key component of the long term strategies which they are pursuing,” he added.

“Based on the existing electricity consumption patterns of other industrialised and industrializing countries, the success of this strategy may, alongside other measures, require a rebalancing in electricity consumption from residential to industrial sectors in the long term.”

The GCC states, controllers of nearly 45 percent of the world’s oil and 25 percent of the global gas wealth, are spending billions of dollars on industrial projects in a bid to diversify their economies away from oil.

Oil producers plan to spend nearly $25bn on new aluminum projects and expansion of their existing smelters in the next 12 years, the secretary general of the GCC’s aluminum council said in January.

“The aluminum sector has largely developed to become one of the main pillars of economic activity in the region and contribute actively to economic diversification programmes,” said Mahmoud Al Dailami.

“Investments in the aluminum sector in the GCC are expected to climb to nearly $55bn in 2022 from around $30bn at present…the investments will cover new projects and expansion of existing smelters,” he added.

Dubai in August said it would not raise water and electricity tariffs in the next few years despite rising demand for electricity in the emirate.

 “There will be no increase in the tariff of electricity and water consumption during the few coming years in Dubai,” Nejib Al Zaafrani, secretary general and chief executive of Dubai's Supreme Council of Energy (SCE) said in a statement.

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