**GCC region**: Utility companies across the Gulf Cooperation Council could reduce operational costs by 15-30%, saving up to $22 billion through strategic reforms and tech adoption. This is crucial amid rising electricity demand and national energy transition goals, with smart grid innovation and workforce upskilling key to success.
A new report by Strategy& Middle East, part of the PwC network, reveals that utility companies across the Gulf Cooperation Council (GCC) region have the potential to reduce operational costs by between 15 and 30 per cent over the next decade, potentially generating savings worth up to $22 billion. These efficiencies could be realised through a combination of short-term tactical measures and long-term strategic reforms in utility operations.
The analysis comes amid growing demands on GCC utilities to support national energy transition goals and emissions reduction targets. Electricity demand is rapidly increasing; for example, Saudi Arabia expects consumption to rise by 58 per cent from 330 terawatt hours (TWh) in 2024 to over 520 TWh by 2030. The Kingdom’s energy transition is projected to cost around $235 billion by 2030. Other GCC countries, including the UAE, have embedded regulatory mandates aimed at improving energy efficiency and capping costs. In Abu Dhabi, for instance, utilities must achieve an annual efficiency improvement of 0.5 per cent through 2026.
Utility companies in the region are under significant pressure to adopt advanced technologies such as smart grids, integrate renewable energy at scale, and implement broad digital transformation initiatives, all while maintaining service quality and reliability. Anthony Yammine, Partner at Strategy& Middle East, commented to Arabian Business: “As energy systems evolve and electricity demand surges, GCC utilities must redefine performance to optimise costs. Through a set of targeted actions, the sector can unlock up to $22bn in operational savings over the next decade. This can be achieved without sacrificing service quality, and embracing smarter, more agile ways of operating aligned with national transformation goals.”
The report identifies several misconceptions that impede cost optimisation within the utilities sector. These include the beliefs that operating costs are fixed and not influenced by output or change initiatives; that reallocating resources would degrade service quality and network performance; and that unique regional conditions such as climate or network design prevent the adoption of cost-saving practices used elsewhere. Disproving these assumptions is essential to advancing transformation efforts.
On a global scale, best practices demonstrate that cost efficiency can complement utility regulation frameworks, combining financial sustainability with operational effectiveness. Models such as revenue caps, performance-based regulation, and benchmarking tariffs against top performers in the market encourage utilities to reduce costs while maintaining service standards and profitability. Evidence from European utilities shows operational expenditure (OpEx) reductions of 16-17 per cent since 2005, accompanied by a 33 per cent decrease in service interruptions.
To achieve these savings, GCC utilities are urged to eliminate inefficiencies and redirect resources towards strategic investments in infrastructure upgrades, greater digitisation, and workforce reskilling. The report underscores the benefits of broader deployment of automation, AI-based grid management, predictive maintenance, and digital customer services as ways to reduce operational costs.
Nine key areas for operational optimisation have been identified, with significant savings potential: risk-based maintenance could yield up to 20 per cent savings, procurement excellence 10 per cent, and optimising support services 15 per cent. Aditya Harneja, Principal at Strategy& Middle East, said: “Utilities in the GCC have a clear opportunity to optimise operations by reengineering workflows, adopting proven practices from more mature markets, and integrate cutting-edge technologies that boost productivity. A strategic allocation of resources from legacy operations to smart grid technologies, alongside a focus on cybersecurity and workforce upskilling, can help the sector support growth priorities, close critical gaps and build long-term resilience.”
In the short term, quick wins through tactical reforms can result in meaningful savings without complex stakeholder involvement. One regional GCC utility reported achieving 8-15 per cent savings in operational expenditures within three years by adjusting capitalisation policies, fleet sizes, and overtime protocols. These initial successes can pave the way for longer-term organisational restructuring, process improvements, and digital transformations, which could contribute an additional 7-15 per cent in operational expenditure savings.
The report emphasises that optimising operational spending is both a necessity and an opportunity amid the evolving energy landscape. Vlad Gheorghe, Principal at Strategy& Middle East, told Arabian Business: “Optimising operational spending requires a structured approach that balances quick wins with longer-term transformation. Tactical actions can create immediate impact and build momentum, while strong leadership and program design are key to driving sustained performance and long-term value.”
Overall, the report highlights that the ability of GCC utilities to implement these strategies will play a critical role in their capacity to meet increasing demands and contribute effectively to national economic and sustainability ambitions.
Source: Noah Wire Services
- https://www.tradearabia.com/touch/article/CONS/432793 – Supports the $22 billion operational cost savings potential for GCC utilities through reforms, as cited in the Strategy& Middle East report.
- https://www.strategyand.pwc.com/m1/en/reports/2020/electricity-pricing-reform.html – Corroborates the need for electricity pricing reforms to achieve economic viability and industrial growth in GCC countries.
- https://www.strategyand.pwc.com/m1/en/reports/2018/the-outlook-for-renewable-energy-in-the-gcc.html – Aligns with the emphasis on integrating renewables and setting standards to meet energy transition goals in the GCC.
- https://www.strategyand.pwc.com/m1/en/press-releases/2020/electricity-price-reforms-and-industrialisation.html – Validates that structured electricity pricing reforms can support economic viability and industrial growth in the GCC.
- https://www.strategyand.pwc.com/m1/en/reports/2020/electricity-pricing-reform/electricity-pricing-reform.pdf – Detailed justification for tariff reforms to equitably distribute operational costs and maintain industrial competitiveness, aligning with the report’s claims.
- https://www.strategyand.pwc.com/m1/en/reports/2018/the-outlook-for-renewable-energy-in-the-gcc.html – Reiterates the importance of renewable energy integration and regulatory frameworks for achieving GCC sustainability targets.
- https://www.arabianbusiness.com/industries/energy/how-gcc-utility-firms-can-create-22bn-in-savings – Please view link – unable to able to access data
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
9
Notes:
The narrative references projections for 2024 to 2030, including Saudi Arabia’s electricity demand increasing from 330 TWh in 2024, indicating very current data. The report discussed is recent from Strategy& Middle East, part of PwC, with no indications of recycling or outdated information. The focus on near-future developments and ongoing regulatory targets supports high freshness.
Quotes check
Score:
8
Notes:
Quotes from Strategy& Middle East partners Anthony Yammine, Aditya Harneja, and Vlad Gheorghe appear original and specific to this report and interview with Arabian Business. No earlier or alternative sources for these exact quotes were found, suggesting these are original and directly obtained from the report authors.
Source reliability
Score:
8
Notes:
The narrative originates from Arabian Business, a notable regional business publication known for covering Middle East economic sectors. The key report is from Strategy& Middle East, a PwC network member, which is a globally reputable consultancy. This combination provides a strong basis for credible and reliable information.
Plausability check
Score:
9
Notes:
The claims align with known regional energy trends, including rising electricity demand in the GCC, substantial investment in energy transition, and the adoption of smart grids and digital technologies. The savings percentages and operational optimization strategies correspond with global utility sector practices and recent transformations, making the narrative plausible.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is based on a recent, detailed report by a reputable consultancy and is published by a credible regional business publication. The data and projections are timely and match current GCC energy sector trends. Direct quotes are original and traceable to the involved experts. The operational cost savings and technology adoption claims are credible given the global utility sector context. Overall, the content is fresh, reliable, plausible, and well-founded.
