The GCC’s path to a diversified energy future

Nicholas Newman looks at how GCC states are facing up to the challenge of combining energy diversity with security

Like the rest of the world, the Gulf Cooperation Council (GCC) countries are experiencing an energy transition. This region, a leading crude oil and gas producer, is changing the way 
it exploits this resource while taking an increasing interest in other energy sources. This interest includes investment in wind, solar and nuclear power generation, in order to meet rapidly increasing demand from growing populations and economic development.

This feature looks at the ongoing developments of the region’s states as they aim to apply science and artificial intelligence (AI) to upstream oil activities; diversify power generation away from oil to nuclear, solar and wind; and encourage a shift away from petrol combustion engines to electric cars, and from heavy fuel oil and diesel to liquid natural gas in shipping.

Fossil fuels

In the oil and gas sector, investment in research and development is geared towards increasing exploration success, as well as improving the efficiency and effectiveness of upstream operations. Saudi Aramco has invested heavily in AI to process and analyse large unstructured datasets generated by seismic studies, and uses deep-learning processes to determine rock types and geological features for better well placement and field development. The potential of AI to increase efficiency of upstream operations is also being trialled. AI can be used to analyse well and drilling rig performance, troubleshoot under-performing fields, prescribe corrective actions, and deploy and guide robots to carry out maintenance tasks.

The national oil companies are also moving down the hydrocarbon chain. Saudi Aramco is expanding its refineries at Jubail, while the UAE’s ADNOC is creating a refinery complex at Ruwais. Both these facilities are designed to produce high-demand products such as jet fuel, heating oil and feedstocks for the region’s petrochemical industries.

Natural gas is often used to create steam to inject into oil wells, a process that improves oil recovery from mature fields and depleted wells. Oil-rich but gas-poor, Oman is hoping that solar power could replace gas in the recovery of oil and power generation. Shell is currently testing solar steam generators, produced by GlassPoint Solar, to recover oil from depleted fields. The use of solar steam generators can reduce an oilfield’s natural gas consumption by up to 80%.

US$25bn - The Barakah nuclear energy plant in the UAE – a US$25bn joint public and private venture – is expected to be online in late 2019

Power generation

The rapid growth in demand for electricity and water, combined with the need to conserve oil and gas export revenues, have increased interest in nuclear and renewable power. For example, the Barakah nuclear energy plant in the UAE – a US$25bn joint public and private venture – is expected to be online in late 2019. Saudi Arabia also aims to build 16 nuclear reactors in order to produce 17GW, or 15% of its power needs, by 2040 – at an estimated cost of US$80bn.

However, it is renewable energy that is set to grow six-fold by 2020. Oman has several solar projects on the go, including rooftop solar panels, and Bahrain, the smallest GCC country, is aiming for renewables to contribute 5% of its electricity by 2020. Qatar, the world’s biggest exporter of liquid natural gas, aims to have 1.8GW of solar power generation by 2020, rising to 10GW by 2030. Kuwait, facing a tripling of domestic energy demand by 2030, expects 15% of its electricity to come from solar and wind. Even Saudi Arabia, the world’s largest oil exporter, aims to build 3.45GW of solar and wind plants by 2020, and expects to have 9.5GW of renewables contributing 10% of its generating capacity by 2023.

The UAE, meanwhile, aims for leadership in renewable energy, and wants to become a global hub by mid-century. The signing ceremony for the fourth phase of Dubai’s solar park in September launched the world’s largest single-site 700MW concentrated solar power project. The second phase for the 200MW was completed in March, and the first 13MW facility was launched in January 2012.

It is worth noting that desert dust storms are a key obstacle to solar panel efficiency in this hot and arid region. If dust is left in place for more than a day, it adheres to the panels, causing a daily baseline yield loss of 0.4% to 0.8% and energy yield losses of 60% during and after sandstorms. NOMADD’s robot-on-rails, which automatically brushes the sand from solar panels, is still in the development stage.

The Gulf states have cooperated to construct a power interconnector linking their individual electricity markets, thus achieving greater energy security, economies of scale and the ability to trade power across the region. Now there are plans to expand the network to neighbouring countries.


Modes of transport on both land and sea are also undergoing change. Onshore, there is growing interest to move away from diesel and oil combustion engines and towards a cleaner energy alternative, namely electric cars. Ford, Nissan and Tesla electric cars and charging stations can be seen across the region, including in Saudi Arabia, the UAE and Kuwait, and the Saudi Sovereign Wealth Fund is investing US$1bn in an electric carmaker to compete with Tesla and other manufacturers. The UAE is to replace government cars with eco-friendly imported cars and has introduced attractive incentives for the public to follow suite, further burnishing its green credentials. Dubai, for instance, aims to have 32,000 electric cars by 2020, rising to 42,000 by 2030 – 10% of its vehicle fleet.

To comply with the International Maritime Organisation’s global 0.5% sulphur fuel standards, coming into operation in January 2020, the region’s ship owners are looking to use of cleaner liquefied natural gas in place of heavy fuel oil and diesel for their fleets and container ship offshore support vessels. Total is developing new bunkering services for ships at the Omani port of Sohar.

In sum, the GCC region is actively taking part in the energy transition from fossil fuels to cleaner gas, nuclear and renewable energy, as well as the application of AI to its crown jewel sector – oil and gas.