The Middle East requires capital investment of around US$30bn to US$40bn to meet its 2035 renewable energy targets with wind likely to be the segment growing faster than the others in the region, according to president and chief executive of GE's renewable energy business.
"Today there is a lot of money chasing wind projects because the technology is not risky, the wind [segment] is growing, there is a lot of money that is looking for investment and there is no reason why the Middle East couldn't receive a part of it," Jerome Pecresse said in an interview with The National in Abu Dhabi.
The Middle East’s oil producers have set ambitious targets to add solar and wind capacities to their power mix in order to free up more crude for export.
Saudi Arabia, the world's largest oil exporter, will tender around 3.25 Gigawatts of solar projects and around 800MW of wind this year, as it looks to produce 9.5GW of power through renewable sources by 2023. The UAE, the second-biggest Arabian Gulf economy which currently derives around 98 per cent of its energy needs from gas, has set a target to meet 44 per cent of its energy needs from renewables, 38 per cent from gas, 12 per cent from fossil fuels and the remainder from nuclear sources.
A recent report by Siemens has suggested that the Middle East would likely deploy around 100GW by 2035 from 16.7GW in 2016, which translates into big business opportunities for contractors and developers eyeing the regional markets.
Renewables form a smaller unit within GE, adding revenues of around $10bn to the business last year.
Wind, hydro and solar businesses are "growing and meaningful" segments, said Mr Pecresse for the conglomerate, which has made a string of acquisitions in this sector over the last couple of years.
In 2016, GE acquired France's Alstom for $14bn, combining the electric grid and renewables businesses of the two firms. It also completed the acquisition of Denmark-based LM Wind Power, which manufactures parts for the wind industry.
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These additions would likely give GE's renewables business a reasonable footing as it chases new projects in the nascent wind and solar sectors in the Middle East, even as GE as a group suffered a $10bn loss in the last quarter following a probe by US federal regulators.
The company has currently deployed around 2GW of renewables turbine capacity in the Middle Eastern markets, which for GE also includes Pakistan, said Mr Pecresse.
“We’re growing. Last year we booked a project in Pakistan, a project in Oman that we’re executing, we have turbines operating in Morocco, Turkey and across the region,” he added.
Investments in production facilities will further help GE to solidify its position in the region's renewables market, enabling it to service future projects. The firm currently has a manufacturing facility in Turkey to produce long wind blades.
“We’re also investing in production capacity…because we see momentum for onshore wind, also for hydro,” said Mr Pecresse.
GE, which last December signed an agreement to develop a conventional 120MW sub-station with the Egyptian Electricity Transmission Company is eyeing opportunities in the ongoing round of renewables in the North African state and is working with developers bidding for the Saudi renewables rounds.
“We’re working on the contracts, in many cases. [The] Saudi auction is an opportunity for us. We’re talking-to various customers that are going to bid,” said Mr Pecresse.