Gulf states face blackouts says report
Dubai, October 7, 2008
The Gulf region is likely to see more power shortages and blackouts as regional utilities struggle to deal with fast-rising power demand, Moody's Investor Service said.
Rapid growth of economies and populations fuelled by record oil revenues is straining the power grids of the world's top oil exporting region, it said.
State-run utilities will struggle to procure both the fuel and the generation equipment needed to meet power demand growth, Moody's said.
"Exceptional growth trends are likely to challenge local utilities... Power shortages and temporary blackouts have already been seen in certain countries with particularly tight supply margins (Kuwait, Saudi Arabia), and these are likely to increase," Moody's said in a report.
Tight fuel supplies were the biggest risk to long-term growth in the region, Moody's said.
Despite sitting on some of the world's largest gas reserves, Gulf countries have been slow to develop them for domestic consumption and now face a shortfall of supplies for industry and power generation.
Around $50 billion was needed to boost power supply by 60,000 megawatts in the Gulf Cooperation Council (GCC) through 2015, Moody's said, citing figures from the London-based Middle East Economic Digest.
Plans for a regional Gulf electricity grid will help to ease the shortages, Moody's said, although that grid was not expected to be completed until 2012.
Rapid growth and concerns about fuel supplies were making the option of nuclear power increasingly attractive in the region, Moody's said. - Reuters