Economic Update

Published 24 Aug 2017

Given its arid climate and limited groundwater reserves, Abu Dhabi is in the process of ramping up efforts around both water conservation and wastewater treatment.

The emirate is already something of a regional leader in this field, having adopted comprehensive water and electricity tariff reform, first in 2015 and again in early 2017, and a series of local government policies are continuing to make progress in this regard.

Water reuse, in particular, stands to benefit from the completion of Abu Dhabi’s Strategic Tunnel Enhancement Programme (STEP) later this year.

STEP, a large, gravity-driven wastewater network tunnel, is a cornerstone of Plan Abu Dhabi 2030 – a blueprint for accommodating the emirate’s rising population, which is expected to reach some 3m by 2030.

Demand-side management to address consumption patterns

Water security is essential to the long-term sustainability of the emirate, given rapid population growth and above-average per capita consumption rates. And while the emirate has one of the world’s largest per capita incomes, it also has relatively low annual rainfall, at 87.4 mm in 2015, according to Statistics Centre – Abu Dhabi.

With groundwater reserves being depleted some 20 times faster than the natural production rate, according to the Environment Agency – Abu Dhabi (EAD), the emirate has traditionally had to rely heavily on energy-intensive desalination for drinking water.

After years of pricing that did not adequately reflect costs, a 2015 measure removed subsidies for both government and expatriate consumers above certain thresholds, and introduced water tariffs for UAE nationals for the first time.

From a consumption standpoint, rationalisation has largely been a success. Initial studies undertaken by both Al Ain Distribution Company and Abu Dhabi Distribution Company have shown promising results. According to Sheikh Abdulla Al Hamed, chairman of the Regulation and Supervision Bureau, residential customers reduced their electricity and water consumption by 4-5% and 20-25%, respectively, in 2015.

“While non-residential electricity consumption exhibited little reduction, non-residential water consumption fell by around 7-8%,” Al Hamed told OBG. “Overall, tariff reforms reduced electricity and water consumption for all customers, by 1-2% and 14-21%, respectively.”

Further reforms came into effect on January 1, 2017, and saw bills for UAE nationals increase by between 23% and 38%, and those for expats rise by between 28% and 32%.

In addition to tariffs, the Abu Dhabi Water and Electricity Authority rolled out a new demand-side management programme, Tarsheed (or “Rationalisation”), in early 2017. Through a series of initiatives, the programme is aiming to encourage more efficient use of resources by consumers and reduce water and electricity consumption by 20% by 2030.

Treated wastewater presents alternative to costly desalination

Water usage is largely dependent on groundwater reserves, which make up 62.6% of consumption in the emirate, with the rest coming from desalination (32.6%) and treated wastewater (4.8%), according to the EAD’s “Abu Dhabi State of Environment Report 2016”.

However, of the emirate’s total wastewater treatment capacity, only 60% was being used as recently as 2014, with much of it directed towards industry and agriculture, as well as forestry and municipal landscaping. The remaining 40% is typically discharged as runoff into the sea, suggesting there may be scope for further local usage.

Such moves led the Abu Dhabi government to begin work on the Dh5.6bn ($1.5bn) STEP project in 2008, which, at 41 km, will be one of the world’s longest gravity-driven sewerage tunnels upon its completion this year.

Aided by another 43 km of supply tunnels and a main pumping station at Al Wathba area, STEP will increase the emirate’s wastewater capacity from 650,000 to 1.7m cu meters per day.

 “The flow capability of STEP is three times current volumes, making it built for the future,” Alan Thomson, managing director of Abu Dhabi Sewerage Services Company, the government-owned company responsible for all sewerage services in the emirate, told OBG, noting that the main tunnel is designed with a lifespan of some 100 years. “But STEP could reach its full hydraulic capacity as early as 2040, depending on population growth.”

STEP will play an important role in the government’s target of 100% wastewater reuse in the near term by simplifying collection processes, including the removal of 35 pumping stations, which will also save money and energy.

Additionally, two new major projects are under way to expand the distribution network for treated wastewater, something seen as vital as the uses of recycled water expand into areas like district cooling and crop agriculture.

“We see great potential to channel more recycled water to the city and other areas, and distribution companies can play a role here,” Thomson added.