It’s no exaggeration to comment that the energy sector has served as the main engine and has powered the rapid rise of GCC economies in the last few years. Holding almost 30 percent of the world’s proven unpolished oil reserves, and approximately a fifth of overall gas reserves, the GCC countries have fuelled robust economic progression by developing and exporting fossil fuels.
But with industrialization and an exponential increase in population, the demand for energy has also grown dramatically in the region. During the 2000s, regional energy consumption grew at an average of 5 percent per year, faster than India, China, and Brazil, rendering to the International Renewable Energy Agency (IRENA). Domestic consumption increased to about 28 percent of production in 2014, equated with 17 percent in 2000.
Meanwhile, macro-economic features have also had an effect on the balance of the oil market and prices. The downfall of oil prices in mid-2014 contracted the region’s oil proceeds, and with continuing unpredictability in the market due to slowing global demand in the middle of geopolitical uncertainty, a pressing need emerged for energy diversification. Driven by the necessity for greater energy security, GCC economies have established strategies for a broader energy mix, with nuclear, coal, and renewable choices such as solar and wind.
“When it comes to diversification, there is no ‘one size fits all,'” illuminates Dr. Sacha Parneix, a chief commercial officer of GE Steam Power. “Every country requires to find its energy mix, which may be subject to on a number of factors.”