Gerald Strickland, Director, Middle East Lighting Association delivering a presentation at the Middle East Smart Lighting and Energy Summit 2016 edition
Energy consumption in the Middle East is among the highest in the world and still increasing, leading to higher carbon emissions per capita than the world average. In the region, lighting accounts for 22 per cent of energy use compared to a global figure of 19 per cent, so the opportunity to increase lighting efficiency is huge.
Despite relatively low oil prices and challenging market conditions, the Middle East market is upbeat for LED technology and systems as it is expected to remain buoyant as private investments continue and government investment stabilizes. Members of the Middle East Lighting Association (MELA) believe that part of the answer to addressing this challenge is to be found increasingly in supporting Governments in the region in their efforts to restrict demand for least-efficient lighting products and systems and to promote “ledification” and supply of intelligent lighting solutions that will allow cities, businesses and individuals to both personalize their lighting solutions and save energy and funds at the same time.
In 2015-2016 across the region MELA members have seen a huge increase in interest for intelligent lighting solutions from office building owners, hotels and governments alike. This is a welcome change, and it shows that customers of our member companies now largely understand the impact of lighting on their energy footprint and the possibilities offered by other building management benefits delivered by intelligent lighting solutions.
The speed of change from conventional lighting components to energy efficient LED has been faster than predicted as most countries in the region quickly adopt new lighting technologies for high profile projects. Controls are the next disruptive technology and itis in addition to LEDs that controls appear to be making a big difference. Currently, however, it appears government bodies and municipalities across the region do not have the necessary liquidity and this has a knock-on effect on the value chain, leading to project delays or cancellations. For public and private companies, there are also big opportunities but the sticking point also appears to be the initial capital cost. Fortunately, this situation had stimulated discussions about financing, and one can start to see the emergence of performance contract management in the region, a relatively new trend and service.
In general, MELA sees a long term trend of strong demand for lighting and controls as governments increase their spending on infrastructure such as roads, schools, homes and hospitals. Added to this, the growth in overall population in many countries in the region and positive demand for more intelligent lighting solutions can be seen in the long term.
Lighting market outlooks
According to reports by International Expo Consults “the LED market will witness a compounded annual growth rate (CAGR) of 13 per cent from 2015 through 2022 in the Middle East and Africa region (MEA).” In the same study, the lighting industry in the MEA region was valued at $2.35 billion in 2015. This growth is set to be augmented by other countries in the GCC region that also aim to adopt LED lighting in many industrial, commercial and retail sectors as an efficient and cost saving alternative.
According to a recent study by Transparency Market Research, a global market intelligence firm, the Saudi Arabia electrical market was worth US$4.5bn in 2014 and is anticipated to reach a value of US$10.8bn by the end of 2023 expanding at a CAGR of 10.4% from 2015 to 2023. The lighting control systems segment is projected to grow at a fast pace, exhibiting a significant 14.30% CAGR between 2015 and 2023, thanks to the rapid urbanization in this region. According to the report, the LED lighting technology segment in Saudi Arabia is anticipated to register a 23.60% CAGR between 2015 and 2023 due to the growing demand for efficient lighting systems in this region.
This level of ambition and intent demonstrated by regulators in the region fits well with MELA’s principle objective to represent the interests of the leading lighting product manufacturers, in their support to legislators across the Middle East region in drafting and implementing policy (standards and regulations) for lighting related products and services.
Harmonizing Performance Standards
From a regional lighting-related policy perspective in 2016, regulators in the GCC appear to be in a phase of consolidation of regulatory initiatives targeting the lighting sector. Indeed information revealed so far this year in discussions with various standards authorities in Gulf Cooperation Council members is that the GSO is attempting to harmonise lighting performance standards across the region. Lighting regulations adopted in ‘first mover countries’ such as the United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA) are often forwarded to GSO for scrutiny and eventual adoption. The UAE’s pending Restriction of Hazardous Substances regulation is a potential candidate for this harmonization process.
In line with other countries around the globe, national initiatives in the region aim to prohibit inefficient and low-quality light sources, control gear and luminaires from entering the GCC markets and to set new criteria for manufacturers and marketers of lighting products. This is particularly the case in the KSA, where the registration period for products within the scope of the new residential lighting regulation has recently come to an end signalling the formal entry into force of Regulation 2870 and the start of the market surveillance/compliance effort managed by the Saudi Arabian Standards Organization (SASO) in conjunction with regional customs authorities.
In the UAE discussions are underway regarding the update of the existing residential lighting regulation – Cabinet Decision Number 34. Indeed, Governments across the region are giving more attention to standards development and for MELA the priority is to offer the right expertise at the right time to support Governments in their efforts to get those standards right.
It appears that UAE is set to lead the LED marketplace in the Middle East due to the growth in the country’s large commercial establishments, entertainment sector and also investments in infrastructure development.
– by Gerald Strickland, Director, Middle East Lighting Association