GCC’s distributed energy market estimated to reach a revenue of $602 million by the end of 2021

Recent analysis of the distributed energy market, which encompasses distributed solar photovoltaic (PV), distributed wind power, hybrid systems, diesel gensets, and gas gensets, in the Gulf Cooperation Council (GCC) countries shows that it is estimated to garner a revenue of $602 million by the end of 2021, registering strong double-digit growth at a CAGR of 25.4 percent over 2020.

Distributed Energy Rejuvenating the Power Sector in the GCC through Innovation and Efficiency, 2021 is the latest addition to Frost & Sullivan’s Energy & Environment research and analyses available through the Frost & Sullivan Leadership Council, which helps organizations identify a continuous flow of growth opportunities to succeed in an unpredictable future.

The analysis reflects the gathering momentum in the GCC with declining technology costs, resource availability, and favourable policies. This encourages customers to self-generate electricity through distributed renewable sources and sell excess electricity back to the grid, transforming customers into prosumers (an individual who consumes as well as produces goods or services).

The UAE and Saudi Arabia will lead the market for this sector with Oman set to emerge as the fastest-growing market in the region.

Neeraj Sanjay Mense, Energy & Environment Industry Analyst at Frost & Sullivan, pointed out, “As utility-scale and distributed renewable resources become a crucial aspect of the region’s decarbonization mandates, utilities will invest in grid modernization solutions, digital platforms, software solutions, and systems associated with asset performance, modelling, and predictive analysis.”

Additionally, Mense added, distributed solar PV will drive the market for distributed energy resources (DER) as an increasingly wider customer base is expected to adopt rooftop solutions, buoyed by the regulatory mechanisms supporting such installations.

The rise in prosumerism will present tremendous growth opportunities to the stakeholders across the ecosystem. OEMs should tap into this opportunity of technological evolution and acquire companies or make partnerships to release new products to meet the evolving needs. Project developers and installers should move up the value chain to offer complex energy solutions, such as solar storage or microgrid solutions based on DER aggregation, load management optimization, digital services, and aftermarket services. This will translate into diversification of revenue streams.

System integrators should leverage the end-user need for energy security, diversification, and cost optimization to provide packaged solar and battery storage solutions. Commercial and industrial companies should focus on hybrid systems with battery storage to improve system reliability and ensure optimal consumption of available renewable resources.

Utilities should actively pursue DER and storage, sharing their costs with customers, so they can deploy assets that help manage peak demand and provide an additional revenue stream. They should also adopt new business models and forge new partnerships to diversify service offerings in an evolving electricity landscape. Energy service companies (ESCOs) should focus on raising customer awareness about the types of contracts available for DER projects and acquiring distributed generation solutions either independently or through partnerships with installers.