Following attempts by many large coal-consuming countries to substitute the burning of coal with natural gas, global consumption of coal has begun to fall after a long period in which it steadily increased. Gas production has been rising in order to cater for this trend; but in a number of cases there is insufficient supply to meet the increase in demand. Countries that had once planned to cover the growth in demand for electricity with gas fired power stations are having to rethink their strategy. Somewhat surprisingly, some of these countries are in regions noted for their large reserves of gas. Some of the strongest growth in coal consumption over the next five years could occur in parts of the Middle East and North Africa.

Middle East

No Middle East and North Africa (MENA) country has significant coal reserves and so it has historically played a limited role in the MENA energy system with the exceptions of Morocco and Israel. In Israel, the black stuff currently accounts for 48% of power generation but this is expected to fall as the country increases its reliance on domestically produced natural gas. Morocco relies on lignite for approximately 32% of power generation capacity.

Sub-critical coal-fired power generation represents approximately 80% of global coal-fired capacity and is characterised as low efficiency (approximately 25–37%) and highly polluting. Hence, coal-fired power generation in its most widely adopted form is one of the least favoured choices for new power capacity when resource efficiency and environmental matters are factored. However, prices fell approximately 80% between 2008 and 2015, thus reviving interest in coal for power generation particularly where policy frameworks are not in place to price in the health and environmental externalities of coal-fired power generation.

Coal benchmark price drop
Coal benchmark price drop

Gulf Coal Plans

One of the most active developers of new coal-fired electricity generation is Dubai, where a 4.8 GW generating complex is now under construction, which will become the Persian Gulf’s first coal-fired station when the first phase begins in 2020 with the commissioning of the inaugural 600 MW generating plant. Each of the following three years will see the addition of a further 600 MW unit, and after that four additional units of similar size will be added in stages.

Dubai has positioned its generation as “clean coal” that uses super-critical boilers and steam generators (37–45% plant efficiency) as well as flue gas desulfurization to comply with stringent emissions standards. Although Dubai has secured its capacity at a very low PPA of US $0.045 per kWh over 25 years, such pricing is not likely to be possible in MENA countries where financing is more expensive.

The complex is being built at Hassyan as an independent power producer (IPP). The project is being developed jointly by the Saudi-owned firm, ACWA Power and China’s Harbin Electric in partnership with the state-owned Dubai Electricity and Water Authority (DEWA). Another UAE state utility, the Federal Electricity and Water Authority (FEWA) plans a 600 MW IPP in Ras al-Khaimah and a further 1.8 GW IPP elsewhere in the northern emirates.

Coal power plants in the Middle East
Coal power plants in the Middle East

The Hassyan plant was planned originally as a gas-fired station, which is the normal fuel for Dubai’s power stations; but it was switched to a coal one as it became clear that sourcing the gas would be difficult and expensive. Dubai has little gas production of its own and has to import liquefied natural gas (LNG). In 2016, Abu Dhabi also began to import LNG and there are plans for other emirates to obtain gas in this way. Elsewhere in the Gulf region, Kuwait imports LNG and Bahrain is to do so from 2019 in order to fuel its power stations, all of which makes it difficult for Dubai to find gas for itself.

The use of coal for power generation in Saudi Arabia has been modeled and was found to be economically viable in the Kingdom’s overall future energy mix if coal prices remain near current levels out to 2030 and sufficient increases in competing gas and oil prices occur. To date, however, Saudi Arabia has made no commitments to coal.

Growth in Egypt too

Dubai and the northern emirates are not alone in the Middle East in opting for coal rather than gas. Egypt has announced plans for about 14 GW of coal-fired capacity. Egypt has gone from being a net exporter of gas to a net importer and as a result has been using large amounts of heavy fuel oil and diesel to generate electricity. At present there is about 17 GW of gas-fired capacity planned or under construction for the period 2017-2020. The proposed units are for the period after that, though an additional 10 GW of coal-fired power generation have apparently been postponed pending a review of the country’s plans for 4.8 GW of nuclear power generation.

Elsewhere in North Africa, Morocco is proposing to add to its existing 2.5 GW of coal-fired capacity with two further stations with capacity totalling 1.7 GW. The Middle East and North African region’s principal user of coal in power generation, Israel, on the other hand, is planning to switch to natural gas from its present and future offshore gasfields.


The energy landscape of the Middle East and North African region has undergone a significant transformation in recent years as a result of intersecting technological, economic and political trends, both regional and international. The evolving dynamics of international energy markets, increased diversification of energy sources, global concerns for climate change, and regional conflict are among the leading factors impacting the evolution of MENA energy policy

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