Gulf power systems must reward flexibility alongside new plant builds

what happened

Gulf power systems are entering a new stage as solar output and electricity demand grow. According to Taimoor Zaman, managing partner and chief executive of VpowerU, new generation remains necessary, but the value of fast-responding resources such as storage, flexible plants and controllable load is rising. Writing for Reuters, he argues that markets built on long-term contracts and flat, subsidised tariffs cannot see or pay for that flexibility.

Saudi Arabia reached roughly 19 GW of installed solar and wind capacity by August 2026 and signed its first 2 GW of standalone battery storage this year, against a 48 GWh target for 2030. Abu Dhabi plans solar output above 35 GW and storage up to 15 GW by 2035, while Qatar's Dukhan plant is set to lift its solar fleet to about 4 GW by 2030. Kuwait, with peak demand near 17.5 GW, has leaned on imports, rolling outages and orders for industrial sites to halt operations.

The article also points to demand-side tools: district cooling with thermal storage, desalination shifted into daylight hours, interruptible industrial loads, and aggregated large consumers paid to cut usage. Interconnectors such as the 3 GW Saudi–Egypt link could also help balance the grid, provided market rules allow flexibility to be traded across borders.

why it matters

For energy markets, the key takeaway is that gas plants will need to earn revenue for how quickly they respond rather than how much power they produce. Storage, grid links and flexible demand are becoming an investment theme in their own right. The piece is an expert opinion, so its proposed reforms remain recommendations rather than regulatory decisions.

market impact

Gulf power sector: demand for storage and flexible capacity grows, while gas peakers face new payment rules

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