Extending the network: New strategies in the utilities sector in response to growing demand

For most of the last decade the government focus has been on building new plants to catch up with skyrocketing demand for power. Now the focus is switching to connecting up the disparate residential and industrial consumers to the national grid. In the water sector, the aim is to build up storage capacity from 1.24m to 2.37m cu metres so as to reduce extraction from the country’s natural aquifers.

At the same time, the government is starting to look much more closely at the country’s 11% annual rate of electricity consumption growth. Indeed, Bahrain is taking active steps reduce electricity consumption through the future introduction of smart meters and energy-saving schemes for new buildings, industrial plants and refineries. A new master plan delving into the detail of forecast power, water and fuel consumption should help the Kingdom form a strategy to reduce and manage demand over the coming decades.

TRANSMISSION UPGRADE: The country is already connected to the GCC grid, along with Kuwait, Qatar and Saudi Arabia. But in 2011 the Electricity & Water Authority (EWA) commissioned 22 substations as part of its 220-KV and 66-KV Transmission Development Project 2007-11. The BD320m ($845m) project is the largest in the Kingdom’s history. Overall the scope covers the construction of 11 new 220-KV substations and associated 220-KV cabling connections, as well as building at least 29 new 66-KV substations and associated 66-KV cabling.

In addition there is the BD230m ($607m) 400-KV Transmission Development Project 2009-13, which is aimed at relieving the existing networks and improving the transmission of power from generation plants. It will also make the network compatible with the 400-KV GCC grid and ensure a smoother flow of power at times of peak demand over the summer months.

Construction tenders are due to be launched in June 2013 for new substations, with work expected to be completed by the end of 2014. UK-based Mott Macdonald is the master planner for the 2009-13 project.

Finally, there is the BD50m ($132m) 11-KV Distribution System Development Project 2007-17, aimed specifically at upgrading the lower-voltage networks to residential, industrial and commercial consumers. This 10-year master plan is aimed at modernising and reinforcing the existing 11-KV network. The technical consultant is currently determining the exact number of substations that will be required and their locations, according to EWA.

Given the large number of new substations that will be built over the next five years, a national control centre to manage the network is needed. Currently, European firms such as Germany’s Schneider Electric and Swiss-based ABB have expressed interest in designing and operating a new $30m control and oversight centre for the transmission systems.

STORING WATER: In the water sector, the focus is on boosting storage capacity and improving distribution networks across the country. The BD243m ($641m) Water Transmission Development Programme 2009-12 is currently being implemented.

“We want to end extraction from the freshwater Dammam aquifer by switching to the storage of greater quantities of desalination water from all the independent water and power projects [IWPPs] in the Kingdom,” Sheikh Nawaf bin Ebrahim Al Khalifa, the chief executive of EWA, told OBG. Due to overuse of the Kingdom’s only freshwater aquifer by agricultural and commercial consumers, the government has stopped extraction to allow the aquifer to naturally replenish itself. There is also a plan, under study by EWA, which looks at re-injecting treated water into the natural aquifer.

Mott Macdonald is also the consultant for the water transmission project that aims to boost overall storage capacity, adding 75%. The scope of this project also includes the construction of new pumping and distribution stations and the installation of new pipes along a 155-km transmission network.

LONG-TERM PLANS: However, the most significant project will be the appointment of a consultant for a wide-ranging master plan that will analyse the country’s future energy and water needs from 2012 through 2030. EWA expects to appoint a consultant by early May 2012. The consultant will measure the requirements for power generation, transmission and distribution and water storage for the next 20 years, and will visit every government agency in Bahrain to gather data to generate demand forecasts and help to inform a future national strategy.

TOWARDS ENERGY EFFICIENCY: The National Oil & Gas Authority, EWA and the Ministry of Finance in coordination with other government departments are looking more closely at a range of energy-efficiency projects. These schemes are set to play a greater role in the near future as the Kingdom changes focus from concentrating on power generation towards reducing its current levels of consumption.

The World Bank is currently advising the Ministry of Finance and EWA on a master plan that will review building codes and materials used in construction to find ways of improving energy efficiency. The study, which is due to be completed within six months, is also looking at electricity use across government departments as well as the better management of air conditioning and district cooling systems.

Moreover, global accountancy firm KPMG is conducting a study on smart meters for EWA aimed at managing consumption during peak periods of usage. EWA is planning to pilot metering systems in around 20,000 residential homes using UK energy-saving regulations as a guide for domestic regulations.

GOING GREEN: Moreover, greater use of renewable energy in power generation projects is expected in the near future. A National Committee for Renewable Energy was established in 2010 with representatives from EWA, NOGA, Aluminium Bahrain, the Ministry of Industry and Commerce and the University of Bahrain.

Interesting examples of the most recent projects include a plan by Bahrain Petroleum Company ( BAPCO) under the direction of NOGA to build a 20-MW solar pilot project in the town of Awali that will concentrate on installing photovoltaic (PV) panels on the roofs of houses or light poles in areas of the town. A request for proposals was prepared by BAPCO, and US firm Petro Solar is expected to start construction work within the next two years.

Another pilot project under way is led by Germany’s Fichtner, which is advising EWA and looking into a combined 5-MW solar and wind plant. The study will primarily look at the offshore wind potential in the Gulf of Bahrain between the Kingdom’s coastline and the coastline of Saudi Arabia.

Wind speed on this section of the coast is estimated at 4 metres per second, which would be sufficient for investment in an offshore wind farm. This stretch of coastline is not very deep, making it easier and more cost-effective to build wind turbines. Power contractors like Germany’s Siemens have expressed interest in a range of upcoming transmission and distribution, energy saving and renewable projects.

“We are very interested in the upcoming tenders for the turnkey project for the 400-KV transmission project,” Michael Kellner, the CEO of Siemens Bahrain, told OBG. “We would be very interested in any concrete future plans for the installation of smart grids and PV manufacturing, solar collector installation or polysillicon plants in the Kingdom as well. We further see industrial energy-saving projects such as waste heat recovery for industries like the aluminium smelter as a potential area where we can offer our expertise.” Siemens started operations in October 2011 at its new manufacturing and service facility in the Bahrain International Investment Park.

REFINERY IMPROVEMENTS: BAPCO has initiated a number of projects that are aimed at improving power efficiency at the country’s refinery at Sitra. France’s Technip is completing the installation of new turbines at the refinery under the $108.3m steam turbo generator project, with work due to be completed by the third quarter of 2012.

NOGA has also signed a memorandum of understanding with UAE-based Masdar aimed at implementing clean development mechanism projects in the Kingdom, particularly under the refinery master plan. Other environmental projects at the refinery include the $120m wastewater treatment plant, which is due to be completed in 2012, and a $25m, 250,000-cumetre-a-day sewage treatment plant that is expected to begin operations during the course of 2012.

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