Interview: Saeed Mohammed Al Tayer
What new electricity infrastructure investments are being put in place to manage the surge in demand due to upcoming mega-projects?
SAEED MOHAMMED AL TAYER: DEWA has allocated over Dh2.6bn ($708m) to support electricity, water and renewable energy infrastructure projects, built to the highest international standards. Our most recent electricity infrastructure investment was the selection of the preferred bidder for the first phase of the 1200-MW Hassyan clean coal power plant. This ambitious project supports the Dubai Plan 2021, which focuses on delivering sustainable environmental policies.
In addition to this, we have started accepting expressions of interest for the third phase of the Mohammed bin Rashid Al Maktoum Solar Park, which will have a capacity of 800 MW. This new capacity target was made possible by DEWA after it received the lowest bid ever recorded for solar power in a tender won by Saudi Arabia’s ACWA Power and Spain’s TSK. The 13-MW first phase became operational in October 2013, while the 200-MW second phase is estimated to be in operation by 2017.
The solar park project is one of the largest strategic independent power producer single-site projects in renewable energy worldwide, with an anticipated production capacity of 1000 MW by 2020 and 3000 MW by 2030. Allocating 100 MW to power Expo 2020 Dubai, the pioneering solar park also supports the Dubai Plan 2021, which seeks to consolidate Dubai’s position as a smart, integrated and connected city with cutting-edge infrastructure that supports both social and economic development.
DEWA has also awarded the expansion works contract for its M Station, the largest power generation and water desalination plant in the UAE. The project’s new expansion plan involves installing new power generation units expected to produce 700 MW of electricity, thus raising the total production capacity to 2760 MW upon completion of the project in 2018.
How might the Dubai Integrated Energy Strategy create new business opportunities for joint ventures and international partnerships?
AL TAYER: In 2011, the Dubai Supreme Council of Energy formulated the Dubai Integrated Energy Strategy 2030 to diversify the energy mix so that 15% of energy supply comes from solar power by 2030. The launch of the Mohammed bin Rashid Al Maktoum Solar Park is the first milestone in achieving this vision. However, this has now been superseded by the Dubai Clean Energy Strategy 2050, which was announced by Sheikh Mohammed bin Rashid Al Maktoum, vice president and prime minister of the UAE and ruler of Dubai, to raise the target for solar energy to 25% and add a new target for 75% of Dubai’s total power output to come from clean energy by 2050.
That we are investing in this source of energy suggests that we would need to explore joint ventures and international partnerships with providers. Similarly, the other percentages of energy represented in the mix should be addressed by collaborating with international public and private sector providers.
Is solar generation set to be permanently priced out of the energy generation market? Or do lower oil prices present an opportunity for renewables?
AL TAYER: Now is the ideal time to accelerate the shift to renewable energy, by capitalising on the cost-effectiveness of prices. Studies show that there are many reasons why low oil prices mean it’s time to shift to renewable energy. Oil prices are both unpredictable and volatile, which is economically costly. The true cost of fossil fuels, like oil, is much higher than the current market price, and renewable energy prices are falling fast, a trend that will continue. We have long-term plans that suggest more reliance on renewable energy, regardless of oil prices. Our leadership developed these plans, and we are moving forward with them to secure Dubai’s sustainable future.
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