By Heba Hashem

Governments across the Middle East and North Africa (MENA) are gearing up for massive solar power programmes. Saudi Arabia plans to install 25GW of CSP by 2032, Jordan is aiming for 600MW of solar power by 2020, and Morocco 2 GW by 2020. In the UAE, Abu Dhabi is targeting a renewable capacity of 1.5 GW by 2020, and Dubai 1 GW by 2030.

As one would expect, these announcements have attracted many global CSP players, yet there’s plenty of room for local small and medium enterprises (SMEs) across the various stages of CSP project development.

“While a significant amount can be locally supplied – and in the case of CSP, local content can be very significant – much of the scope for SMEs will be in the area of fabrication, erection and onsite construction, and limited scope for steel work,” Paddy Padmanathan, ACWA president and CEO, tells CSP Today.

Where in the supply chain?

When it comes to the manufacture and assembly of solar field collector steel structures, a significant amount of steelwork of varying kinds, and different levels of precision and specification are used in a CSP plant.

Although much of this will be best provided by larger fabrication shops, Padmanathan notes that there is space for a limited amount of steel fabrication by SMEs.

“There is definitely a scope for well-organised SMEs to contract work to the assembly task on site, which is a considerable amount of activity onsite in a warehouse-type environment – prior to the prefabricated frames being taken out to the field itself by lifting vehicles and erection,”.

In the manufacturing, site erection, installation and testing of a relevant number of water storage reservoirs and tanks for molten salts, there is also an opportunity for SMEs in the task of site erection.

As for the supply of piping and cables, the scope of work will be limited to field erection activity. Similarly, in site preparatory works such as earth moving; foundation work such as piling; and all ancillary civil works, SMEs will likely contribute through field activity.

Finally, in the mechanical and electrical erection, and assembly of turbine, heat exchangers, transformers, and pumps, as well as piping and cables installation, “there is some scope in fabricating heat exchangers and quite a bit of scope in erection”, as Padmanathan highlights.

Subcontracting on the agenda

According to Reda El Chaar, managing director of Dubai-based Access Advisory and a Chartered Alternative Investment Analyst, drawing from the international precedents, the biggest value for SMEs is acting as early-stage developers and originators of projects and as subcontractors to the O&M companies in the field of facility management.

“On the operations side, there will be a need for skills like cleaning panels and mirrors, and SMEs can contribute to that as subcontractors”, El Chaar points out.

With international EPC contractors and developers such as ACWA Power, Abengoa Solar, Acciona, Al Terrya, Babcock, Bechtel, Tractebel Engineering, WorleyParsons, and Total already active in the region, and with the amount of work that goes into building a CSP plant, subcontracting will definitely on the agenda.

It is worth noting that in the construction of the 100 MW Shams 1 in Abu Dhabi (, 66 local businesses contributed with direct contracts to different phases of the $600 million project.

“I am very proud of the fact that 66 local companies participated in this project. More than half of them did not even exist before Shams 1. They may be small enterprises today but they will grow with time. All these companies gained experience and knowledge from working with Shams 1 from an early stage”, Dr. Sultan Ahmed Al Jaber, CEO of Masdar, said during the launch of Shams 1.

Adapting expertise

SMEs who are already involved with the oil and gas or the renewable energy sector have an existing advantage, as they could adapt their expertise to serve the CSP sector.

“In terms of manufacturing, a medium-sized player can have a very comfortable business for example in metallic structures, civil engineering, electrical installations, or operations and maintenance. It’s a more a question of each company taking a hard look at their skills and capabilities and choosing which step of the value chain to play at,” explains Grant Greatrex, senior partner at Mac Group and head of the company's renewable energy advisory division.

According to him, a medium-sized firm can build up its own in-house expertise for CSP-specific components or services if it’s already involved in metallic structures, civil construction, or public works – although it would need to adapt its manufacturing processes. “Providing metallic structures for the solar power sector would not be a huge leap in terms of skills.”

One of the clearest illustrations of diversification into renewable energies, as Greatrex notes, comes from the automotive components industry. “You have several examples worldwide of companies that moved to metallic structures, other renewable energy equipment, and even the construction of wind towers from automotive components manufacturing. Huge amount of metal works goes into CSP - just look at the storage tanks”.

An interesting key study is that of the Iberian companies that diversified from building pressurized tanks for the oil and gas industry into making storage tanks for CSP. Because they had the skills of building large tanks for the oil and gas industry, it was only a question of acquiring the right engineering and design skills. Glass manufacturers as well can move into mirror manufacturing for either parabolic trough or heliostats.

Other ways for SMEs to get involved in the CSP supply chain is by recruiting the engineering and manufacturing expertise or licensing technologies and designs.

“I remember with the development of CSP in Spain, there were several medium-sized companies that licensed the design of their troughs, tracking and support structures and they built and installed them. It’s a question of being a first mover, seeing the opportunity, and making sure you tie up with the right type of partners internationally,” notes Greatrex.

El Chaar agrees: “If you look at engineering, there are already many SMEs that can contribute to design verification, because localization of designs is required”.

SMEs will undoubtedly play a significant role in the MENA’s CSP sector, given the value of and preference for local content usage and the substantial amount of work involved in building a CSP plant. How much can they contribute will depend on their own ability to adapt their products and services to serve the CSP market.

To comment on this article write to the author, Heba Hashem.

Find out more about the prospects for SMEs in the MENA’s CSP sector at the MENASOL conference, which takes place on May 6-7 in Dubai, and where experts from Masdar, AREVA Solar, ACWA Power, SolarReserve, Shams Power Company, BrightSource Energy, Skyfuel, Abengoa, and Tractebel Engineering GDF Suez will be sharing commercial and technical knowledge on the regional CSP market.