Boosting power in Dubai

Jodie Humphries

Dubai has set the wheels in motion to develop a strategy to diversify power generation sources and improve efficiency. The government of Dubai want to ensure that by 2030, there is an adequate energy supply. The plans of boosting power in Dubai are just a small part of major plans to boost power in the Persian Gulf.

The emirate's Supreme Energy Council held a two-day workshop with advisers McKinsey to devise plans that would include using "clean" coal, nuclear power and renewable-energy, according to an e-mailed statement.

Dubai, which is the second-biggest of the seven sheikdoms in the UAE, produces less than four percent of the nation's oil. The emirate is seeking to guarantee power supply and reduce emissions that contribute to global warming, according to comments made by Saeed Mohammad Al-Tayer, the Council's vice chairman.

The UAE holds about seven percent of the world's crude reserves, with most of the country's oil and natural gas deposits located in Abu Dhabi.

Oil and natural gas production made up about 5.5 percent of Dubai's US$62 billion economy in 2007, according to data from the UAE Economy Ministry.

Persian Gulf states are boosting power supply to meet rising demand from growing populations and as they seek investment to spur economic growth. The UAE is beginning an atomic-energy programme to diversify supply and compensate for limited amounts of the natural gas needed to fire power plants.

Clean energy projects - boosting power in Dubai

The Dubai International Financial Centre (DIFC) could become the centre for an estimated US$200 billion of investments into GCC clean energy projects this decade, but only if regional governments remove subsidies for fossil fuels.

A shortage of natural gas, rocketing energy consumption and ample sunshine have created the right conditions for renewables but GCC governments continue to set prices for electricity, gas and oil-based fuels far below market rates.

The rates make renewable energy less economically viable in the region than almost anywhere else in the world.

"Instead of helping renewable energy grow, we're subsidising carbon-based technology and consumption," said Dr. Nasser Saidi, the chief economist of the DIFC.

By 2020, GCC countries will invest in between 14 and 20 major clean energy projects - including solar panel arrays, geothermal energy and nuclear power plants - worth US$200 billion, said Karim Nassif, an associate director for infrastructure finance at the ratings agency Standard & Poor's.

Energy planning - boosting power in Dubai

Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum, last year established an energy planning council and an oil affairs department to manage production, sale and export of crude and regulate licensing of related products.

Government-run utility Dubai Electricity & Water Authority is seeking international investors to build a 1,500-megawatt power plant and water desalination facility. DEWA, headed by Al- Tayer, plans to build in six phases a new generation facility located at Hassyan on the border with Abu Dhabi that would generate a total of 9,000 megawatts when completed.

The utility, which slowed projects because of lower growth rates, still plans to raise generation capacity by about a third over the next two years to 9,800 megawatts. The company is also building a 2,085-megawatts combined- cycle gas turbine plant at an industrial area along the coast.

Nuclear and coal-fired power plants - boosting power in Dubai

Coal and nuclear technology are two options being weighed by the Dubai Government as it strives to diversify energy resources to meet future demand.

The private sector will be allowed to invest in power projects in future as part of the Energy Strategy 2030.

"We are looking for public-private partnerships and already we are experiencing this in the Hessian project. However, the private sector's participation will not go above 40 percent," Saeed Mohammad Al Tayer, vice-chairman of the Supreme Council of Energy, and managing director and chief executive of the Dubai Electricity and Water Authority (Dewa), said.

The Dubai Government's newly created Supreme Council of Energy has hired global advisory group McKinsey & Company to help develop an Energy Strategy 2030 that will help the emirate explore alternative energy resources to power its utilities sector and meet future demand.

Strong economic growth has driven up power demand across the GCC where governments have been pondering the use of nuclear and alternative energies to maintain growth. The UAE earlier awarded a contract to a Korean consortium to build four nuclear power plants.

The council is studying the development of short, medium and long-term strategic plans for the energy sector in Dubai. "It is a study at this stage which will be completed in August. The power demand in Dubai is increasing," Al Tayer said.

"However, the coal-fired and nuclear energy options are followed by the most advanced industrial countries, the US, China, Korea, which we hope to adopt as well. This could be the best option to diversify energy sources in the Emirates including alternative and nuclear energy and create ongoing sources of sustainable energy to meet the requirement of future development."

Current energy demand in Dubai is very high, and expected to rise significantly by 2030. "Power demand in Dubai has reached the peak in June. It is 5.6 percent higher than the previous level and expected to grow further," he said.

Exponential growth in energy demand and the need to secure fuel sources had made the government look at diversification of energy sources to meet future demand, he said.

"We discussed the development of a strategy related to the preservation of the environment and reducing carbon emissions, sustainable energy applications in various areas as well as the usage of renewable energy resources," he said, but could not give an estimated investment outlay for the energy strategy plan.

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