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Thu 8 Sep 2011 11:10 AM

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GCC set to become world's highest electricity consumers

Residents will have to reduce domestic demand amid rise in industrial activity, Deloitte says

GCC set to become world's highest electricity consumers
GCC electricity consumption is expected to increase 2.5 percent annually until 2035
GCC set to become world's highest electricity consumers
GCC set to become world's highest electricity consumers
Electricity pylon

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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Kaz 8 years ago

Until buildings are properly regulated to be more energy efficent - it's going to be hard to cut domestic use. IE I live in a new apartment. I have 2 seperate emersion heaters for the kitchen and the bathroom with no timer device etc. Air con should have timer. For all the talk of greener cleaner energy efficent - the basic principles of energy efficency are not installed into housing projects.

rene 8 years ago

So good we have so much solar and wind energy in the Middle East... By the way... Counterparts in USA ??? If I look on the world map, the Middle East is not exactly in the same climate zone as the USA...

Energy Efficient 8 years ago

Comes down to two things, lack of sustainable building design in the UAE and a lavish consumerist attitude in the region.

The first step should be forcing Malls to turn their AC temperatures up, more often than not Malls are freezing in Dubai and you need a jumper inside, even in the summer, this is an insane waste of energy across the Emirates, just think of how much energy could be saved if they bothered to keep the Malls at a more reasonable comfortable temperature.

Secondly the UAE needs to start implementing regulations around building design, internal fittings, energy efficient appliances etc. It amazes me that in such a young country, for building, Dubai have not taken the initiative in sustainable building design, instead buildings are a product of the boom times where build fast for profit over-road any thoughts of sustainability. This isn't something that can be resolved just on an individual level, changes need to come from industry leaders to really make a difference.

David 8 years ago

There are solutions available to reduce energy spend without it being painful. My own company can reduce monthly bills by up to 20% with a 2 year payback period. Perhaps more importantly, our actual 'savings' are independently guaranteed by one of the largest insurance companies in the world. Furthermore, we also provide full project financing. All this means that you simply cannot lose. However, we're not going to see major contracts until such time as the government legislate the requirement. People here just don't care about their wild energy use

eco FutureLab 8 years ago

Reduce subsidies, install statutory regulations for use of solar energy, energy efficient appliances, Sustainable building design and construction....FIT =First Insulate Thoroughly

Ali 8 years ago

I think you are exagerrating; some malls are overcooled, but most of them maintain a reasonable 21-23 C inside, which is not "jumper weather" for most people.
Some places like Festival City turn their ACs down during non peak times and its not pleasant to walk about in 30C in a closed environment.
Malls here and elsewhere are designed to have people as much time as possible inside as in summer theres not much else to do. Making them less pleasant will result in their business going down..

Telcoguy 8 years ago

You are certainly right, but could not be more wrong :)
-Energy efficient buildings cost more money to build. Economies come with TCO only and very few people here are thinking long term enough to justify the additional upfront cost.
-Consumer attitudes are hard to change too as the liberal (some may say cavalier) use of energy is perceived as a birthright, or even a status symbol.
-Subsidies are a hot potato too, I would imagine you understand why. Even replacing them with more efficient cash handouts seems to be totally out of scope.

So, we are, surprisingly, back to the same issues we always discuss here, real estate, people's attitudes, efficient use of capital, and short vs long term residents. I refer you to past threads.

raj 8 years ago

The goverments need to put meters with timers to every household to give cheaper price for using electricity at night times when the load on electricity is less, so that all the washing machines and iron and lot of others stuff are made to work at night . If there is no incentives or benefits , why will anybody care . It will make a big difference .

This is just 1 example , there can be many such ideas and example .