G Sathiamoorthy highlights the water and power technology trends in the GCC.
black & Veatch has been serving communities in the Middle East since the 1920s, undertaking projects that enhance the quality of life - power generation to support economic development, and water and sanitation to improve health. Our current focus is on the Gulf Co-operation Council (GCC) states.While it is important to recognise that the GCC is not a homogenous market; common trends do exist in the types of technology sought for projects.
The Gulf States´ infrastructure investment is set to maintain an upward trajectory as seen in the last two decades. Figures vary but according to a leading expert in the field, Ventures Onsite, infrastructure project awards across the GCC states exceeded US$ 86 billion in 2014 alone, an increase of 77.8 per cent over 2013.
Saudi Arabia - the largest GCC state - provides a good indicator of the region´s investment trends. According to the MEED, the kingdom had US$ 127 billion worth of non-hydrocarbons projects at the design and main contractor bid phase as of January 2015. In terms of B&V´s core markets, Saudi Arabia has upcoming power and water projects worth more than US$ 16 billion.
Projects to be active
While the fall in oil prices is likely to lead to a slowdown in some of this investment, it is unlikely that projects will be cancelled. This is because critical resources such as water and power is what the GCC states cannot do without. Gulf states are reliant on desalinated water. Saudi Arabia is estimated to require almost a billion gallons a day of additional capacity to meet current demand and reserve margin needs by 2020. In contrast to many western countries, much of the Gulf´s infrastructure expenditure is on new-build projects, rather than the improvement of ageing legacy assets. This translates into greater potential for the use of sophisticated state-of-the-art technology.
Another powerful influence on the region´s choice of technology is the growing need for resource efficiency. Qatar´s per capita water consumption is more than 12 times higher than the country´s available renewable water resources, and its per capita electricity consumption is more than five times the world average.
Such patterns of power and water consumption, repeated across the Gulf states, are being played out against a shared backdrop of limited water resources. This is one of the world´s most arid regions. And, there is a shared need to meet communities´ demands for power while not impeding the generation of revenues through oil and gas exports.
Power generation technology
Across the GCC, these pressures are driving interest in more efficient power generation technology. This means greater need for a combined cycle but also a demand for the most efficient types of combustion turbines. Technical knowledge, which is allied to procurement expertise, is vital to meet this need. For example, Saudi Arabia´s average thermal efficiency in generation is around 30-35 per cent. Converting the Kingdom´s single-cycle plants into combined-cycle ones would push up thermal efficiency to 40-45 per cent.
The interdependency of energy and water also comes into play here. Combined cycle plants generate nearly 66 per cent more energy per unit of water used compared to traditional gas-fired plants. So, by understanding the technology and the nexus of water and energy, you begin to see a virtuous circle with more efficient generation coupled with a reduction in demand for water - vital for such an arid region.
Wastewater treatment technology
There is a growing realisation that wastewater treatment technology can contribute significantly to meet the GCC´s water challenges. The right technology choices turn wastewater treatment works into resource recovery plants. Utilities want partners with the technological understanding of, and experience in, wastewater recycling and unlocking wastewater streams´ potential as sources of renewable energy. By viewing water and wastewater holistically, rather than as separate entities, business cases can be made to create resources that can also fund the growing infrastructure needs.
Although an interest in water reuse technology is growing, levels are currently low. For example, Abu Dhabi plans to recycle 100 per cent of its wastewater for irrigation by 2018. Reuse currently represents around 7 per cent of the emirate´s overall supply. As an example of reuse´s potential, we supported the NEWaterprogramme in Singapore, which can currently meet around 30 per cent of the country´s needs. Water recycling technology means that virtually any population centre that creates a significant wastewater stream has the potential to create a renewable water source.
Domestic wastewater streams are also excellent sources of renewable energy. Biogas produced during wastewater treatment can be processed to fuel combined heat and power (CHP) engines. At a time when the GCC states are starting to revaluate their energy consumption, this may represent an attractive proposition.
Renewable energy technology
Other forms of renewable energy technology are becoming an increasingly important element of energy projects. Driven by the desire to diversify its fuel portfolio away from fossil fuel reserves, Kahramaa recently announced an intention to generate at least 2 per cent of Qatar´s electricity from renewable sources, including solar. Although solar is seeing the greatest investment currently, wind is another technology likely to find favour in the Gulf states.
Delivering successful renewable projects, however, requires more than just an understanding of the generation technology. Efficient project delivery requires companies with expertise in integrating renewable power seamlessly into the distribution network, as well as the ability to design, procure and construct the renewable generation asset.
Asset creation, however, is only half the story. To deliver the levels of customer service and environmental performance end-users and governments seek, the GCC states´ infrastructure asset base needs to be managed effectively. We see this as another strategic growth area.
PAS 55 is recognised around the world as the benchmark for asset management quality. Use of specification in the GCC is growing; Abu Dhabi Distribution Company announced last year the appointment of Black & Veatch to help it achieve PAS 55 certification.
In a significant advance in the discipline of asset management, the International Organisation for Standardisation - commonly called the ISO - last year published ISO 5500X, the world´s first international suite of standards for asset management. We anticipate a growing demand for services, which deliver effective asset management regimes. With this, utilities can ensure that their technology investments deliver the performance desired in the long-term.
About the author:
G Sathiamoorthy is the Managing Director of Black & Veatch.