*The Gulf Arab states’ utility-scale energy storage market is expected to reach 1.5-2.5GW by 2027, compared to 0.1GW of capacity installed by 2021. This will constitute a growth of at least 15-fold by 2027 despite limited policy support, and persistent market and financial challenges. Contact online >>
*The Gulf Arab states’ utility-scale energy storage market is expected to reach 1.5-2.5GW by 2027, compared to 0.1GW of capacity installed by 2021. This will constitute a growth of at least 15-fold by 2027 despite limited policy support, and persistent market and financial challenges.
*In the region, batteries are currently the largest source of energy storage system (ESS) and are dominated by the United Arab Emirates. These technologies will contribute significantly to planned capacity expansion, mostly through a large single-site application in Saudi Arabia. Additionally, pumped hydro storage is expected to provide half of storage expansion through announced projects in Saudi Arabia and the UAE.
*Storing large quantities of electricity in various ESS can address the variability of these renewable energy technologies and manage the need to curtail or quickly ramp up power generation sources. This is also an attractive option considering the chronic investment deferrals for network upgrades which target transmission and distribution operations.
*In the region, batteries are currently the largest source of energy storage system (ESS) and are dominated by the United Arab Emirates. These technologies will contribute significantly to planned capacity expansion, mostly through a large single-site application in Saudi Arabia. Additionally, pumped hydro storage is expected to provide half of storage expansion through announced projects in Saudi Arabia and the UAE.
*Storing large quantities of electricity in various ESS can address the variability of these renewable energy technologies and manage the need to curtail or quickly ramp up power generation sources. This is also an attractive option considering the chronic investment deferrals for network upgrades which target transmission and distribution operations.
Increasing deployment of large-scale grid-integrated Energy Storage Systems (EES) in Gulf Arab states is being driven by the implementation of renewable energy systems. More and more, variable renewable energies are being integrated into the grid as upgrades to transmission and distribution networks are being deferred. As a result, demand for ESS is likely to grow.
Planned to expand at least 15-fold within the next four years, the announced large-scale storage systems in Gulf Arab states are together expected to exceed 1.5GW of capacity by 2027, with 7.5GWh of cumulative stored energy deployed through several notable projects in Saudi Arabia and the United Arab Emirates (UAE). Separately, a 1GW dam in Wadi Baysh, Saudi Arabia faces an uncertain fate. If the project proceeds, then the region''s combined storage capacity will reach 2.5GW by 2027, with a stored energy capacity of 13.5GWh.
This represents additions of 1.4-2.4GW of capacity, which is expected to be online by 2027, up from 0.1GW in 2021. This will increase stored energy from 1.8GWh to 11.7GWh. For comparison, the European energy storage market reached 3GW/4GWh by the end of 2021 according to Bloomberg NEF, whilst on a global scale, a record 10GW/22GWh was installed in 2021.
The ESS market has had a slow start in the Gulf, but renewable energy and, by extension, storage indicators - such as electricity demand, committed renewables targets, and grid status - highlight potential for fast growth. Historically, Gulf Arab states'' rapid increase in power consumption prompted a race to boost power generation capacity. Consequently, the annual growth rate of installed generation capacity in Gulf Arab states averages 7%-10%, compared to a global rate of 6%. Oil producers are now adding renewable energy to their sources of power generation, thereby freeing up oil for exports – and increasing revenues as a result.
To achieve the goal of freeing up oil for export and mitigate the impact of climate change, Gulf Arab states have pledged ambitious 2030 renewable energy targets ranging from 15% of power generation in Kuwait to 50% in Saudi Arabia. Although renewable energy has yet to make a dent in the Gulf Arab power mix, these states have the opportunity to leapfrog renewable energy project development. Fast-tracking renewables in the Gulf is enabled by a strong renewable energy resource base, favorable financing terms and lower project development risks compared to many developed and developing countries.
Storing large quantities of electricity in various ESS can address the variability of renewable energy technologies and manage the need to curtail or quickly ramp up power generation. This is also an attractive option considering the chronic investment deferrals for network upgrades which target transmission and distribution operations. In addition, different ESS applications provide a variety of benefits such as grid services, including frequency regulation and energy arbitrage, among other ancillary services.
Energy storage systems vary in technologies, applications, and characteristics. Indeed, energy storage technologies fall within one of the following categories: mechanical - such as pumped hydro storage; electrochemical - as in batteries; thermal - such as molten salt; chemical - like hydrogen; and electrical supercapacitors. Despite this variety, technology market trends in the Gulf are largely in line with global trends, focusing on pumped hydro storage and battery applications.
Other technologies, particularly thermal storage molten salt, will make a significant contribution to ESS capacity through the addition of 700MW of concentrated solar power when the fourth phase of the UAE''s Mohammed Bin Rashid Al Maktoum Solar Park becomes operational towards the end of 2023.
Gulf Arab states have neither adopted regulations governing ESS nor have they outlined energy storage targets. Their ambitious renewable energy targets have not accounted for policies or targets for ESS, although some solar photovoltaic projects do include energy storage systems. In contrast, energy storage targets are common in the United States and China, where the ESS market is most developed. Ten American states have adopted storage targets to date, while China is targeting 100GW of storage capacity by 2030.
Project financing and market structure complicate the situation further. For an energy storage project to be economically viable, storage capacity payments alone do not suffice. By stacking revenue - adding payments for various grid services provided by ESS on top of capacity payments - the ESS industry has grown. Market-driven projects capitalizing on lucrative ESS grid services such as frequency regulation and energy arbitrage have been the main drivers of developed storage markets. Yet such grid services are neither identified by utilities or grid operators nor recognized as having a monetary value in Gulf Arab states. Therefore, revenue stacking cannot take place, threatening ESS project funding.
The structure of the Gulf''s power market presents an additional challenge. Dominated by state-owned electricity utilities, with a single buyer model and subsidized electricity tariffs, ESS in the Arab Gulf will have no choice but to rely on government spending for the foreseeable future. As the Arab Gulf is an emerging market, ESS projects will also likely require more equity spending compared to other power projects, according to analysis from regional development bank Apicorp. Sustainable progress in deploying ESS in the Gulf will eventually require a power market and tariff restructure, increased private sector engagement, and stacked grid services - all of which are more easily planned than implemented.
Bid selection and award criteria also need to be remodeled to promote ESS. Auction-based contracts are typically awarded based on least-cost, technically compliant criteria. To date, this has driven record-low prices for electricity produced from variable renewable energy in Gulf Arab states. However, new evaluation and award criteria for auctions should be adopted to reflect the value of ESS stacked services and its associated technologies, applications, and specifications.
Despite facing challenges along the way, innovative procurement can help the Gulf grow its energy storage market while it develops support mechanisms for its ESS expansion.
*Jessica Obeid is Head of Energy Transition, SRMG Think
Emirates Water and Electricity Co. (EWEC) has started accepting expressions of interest for a 400 MW battery energy storage system (BESS). The chosen developer will enter into a long-term agreement with the Abu Dhabi-based utility as the sole procurer.
Image: Andy Bay, Pixabay
EWEC is requesting expressions of interest for the development of an independent greenfield 400 MW BESS.
The project will involve the development, financing, construction, operation, maintenance and ownership of the BESS and associated infrastructure. The chosen developer will enter into a long-term agreement with EWEC as the sole procurer.
EWEC said the BESS will provide operating reserves and ancillary services such as frequency response and voltage regulation, while improving system operability and enhancing overall network stability.
The project aligns with the company''s strategic vision to sustainably diversify its energy portfolio, which includes increasing its total PV generation capacity to 7.5 GW by 2030.
Othman Al Ali, the CEO of EWEC, said BESS offers "unmatched advantages," including increased flexibility, scalability, cost-effectiveness, and improved efficiency. He added that the utility "continues to see BESS as a critical investment to manage system operability when large amounts of renewables are synchronised to the power system.”
EWEC is inviting developers and developer consortiums to submit expressions of interest for the project before March 22, after which it will issue a request for qualifications (RFQ) to interested parties. The RFQ will provide additional details about the project, the pre-qualification criteria, and the bidding process.
About United arab emirates energy storage applications
As the photovoltaic (PV) industry continues to evolve, advancements in United arab emirates energy storage applications have become critical to optimizing the utilization of renewable energy sources. From innovative battery technologies to intelligent energy management systems, these solutions are transforming the way we store and distribute solar-generated electricity.
When you're looking for the latest and most efficient United arab emirates energy storage applications for your PV project, our website offers a comprehensive selection of cutting-edge products designed to meet your specific requirements. Whether you're a renewable energy developer, utility company, or commercial enterprise looking to reduce your carbon footprint, we have the solutions to help you harness the full potential of solar energy.
By interacting with our online customer service, you'll gain a deep understanding of the various United arab emirates energy storage applications featured in our extensive catalog, such as high-efficiency storage batteries and intelligent energy management systems, and how they work together to provide a stable and reliable power supply for your PV projects.
