With widespread coverage of potable water, waste-water and electricity networks, Abu Dhabi maintains utility services that are on a par, if not better than, many countries in Europe and North America. At the same time, the emirate’s government has been committed for many years to boosting power and water infrastructure further still, with 2017 seeing some of the world’s most advanced projects in these spheres. Utilities development is also being carried out within the framework of the Abu Dhabi Economic Vision 2030, which includes clear environmental and sustainability goals. While many of Abu Dhabi’s power and water projects and facilities are famed for their size, future expansion is based on quality and innovation, giving the emirate a place at the forefront of technological and scientific development in the utilities field.
Several different bodies are responsible for the power and water sector in Abu Dhabi, as well as for the two sectors in the UAE overall. As the largest emirate in terms of land area and home to the UAE’s second and fourth-largest cities, Abu Dhabi and Al Ain, respectively, the UAE’s policies often have a greater impact in the emirate than elsewhere.
However, the UAE’s federal structure also gives the emirate’s own institutions considerable authority. In terms of UAE-wide institutions, the Ministry of Environment and Water was established in 2006, out of the previous Federal Authority for the Environment. The ministry’s role was then expanded a decade later and renamed the Ministry of Climate Change and Environment to reflect its new powers and focus. The development of plans and strategies for water resources falls within the new body’s remit, with these set on a federal basis, but with clear implications for each emirate.
Meanwhile, the Ministry of Energy (MoE) oversees the UAE’s oil and gas sector, as well as the electricity and water segments. In the UAE as a whole, water and power are closely linked, as most potable water is generated by desalination plants that are attached to electrical power plants. The MoE also has its own departments tackling clean energy and climate change.
Distribution & Transmission
Within the emirate of Abu Dhabi, the Supreme Petroleum Council oversees petroleum policy and activities. The main electricity authority is the Abu Dhabi Water and Electricity Authority (ADWEA). In terms of electricity generation and water production, ADWEA works through a series of public-private partnership agreements, with nine independent water and power producers (IWPPs) and two independent wastewater treatment companies. The IWPPs and ADWEA’s own production plants sell their output to the Abu Dhabi Water and Electricity Company (ADWEC) under a series of power and water purchase agreements. ADWEC is the single buyer and a wholly-owned subsidiary of ADWEA. Also the sole seller, ADWEC supplies power and water to distribution companies in the emirate of Abu Dhabi and charges a series of bulk supply tariffs that differ by season and time of day or week. The operation and management of the transmission system is the responsibility of the Abu Dhabi Transmission and Despatch Company (TRANSCO), a wholly owned subsidiary of ADWEA.
ADWEC sells its power and water to two principal distribution companies, both of which are wholly-owned ADWEA subsidiaries: Al Ain Distribution Company (AADC) and Abu Dhabi Distribution Company (ADDC). AADC is the sole and licensed distributor and supplier of water and electricity in the Eastern Region of the emirate, which is centred on the city of Al Ain and surrounding rural areas. ADDC is the sole and licensed entity that supplies and distributes power and water to the main urban area of Abu Dhabi City as well as the Al Dhafra Region of the emirate. ADWEC sells power and water to the northern emirates through Sharjah Electricity and Water Authority and the Federal Water and Electricity Authority. Moreover, the UAE transmission system is linked to the GCC network, creating an opportunity to export to and import from GCC countries.
A number of other agencies play a key role in the sector for the emirate. For example, the Regulation and Supervision Bureau (RSB) regulates the emirate’s water, wastewater and electricity sectors, to ensure compliance with economic, legal and technical requirements. Moreover, the RSB has two additional units under its remit, namely, Powerwise and Waterwise, that aim to boost public awareness of water and electricity conservation. RSB also has a price control function in areas of the system that are naturally monopolistic, such as transmission, procurement, and distribution and supply.
In this segment, RSB follows a multi-year price control mechanism, where RSB establishes revenue caps for the transmission and distribution companies over a number of years based on efficient levels of cost, and providing incentives for companies to reduce costs and improve both performance and customer service. When it comes to final tariffs for the customer, cost-reflective tariffs are applied to some customers. In cases where customers have tariffs that stand below cost-reflective levels, the government makes up the revenue shortfall to the sector. This allows the sector to maintain services on a commercial basis.
Recent changes to the tariff structure have brought prices more in line with costs. Another agency concerned with utilities, as well as wider issues, is the Environment Agency - Abu Dhabi. This government body looks at energy and water environmental policy, as well as air quality, conservation and other environmental issues as part of the wider goal of ensuring that Abu Dhabi’s growth takes place in a sustainable way.
The most recent figures available from ADWEC show that of the nine IWPPs currently in Abu Dhabi, the Arabian Power Company (APC) held the largest share of electricity generating capacity in the emirate at 2430 MW out of a total of 15,546 MW. The fourth IWPP set up in the emirate, APC is a special purpose vehicle established by ADWEA, International Power, the Tokyo Electric Power Company and Mitsui & Co. The IWPP runs the natural gas-fired Umm Al Nar (UAN) Power and Desalination Plant at Sas Al Nakhl, which is located approximately 20 km from Abu Dhabi. The project contains the UAN East and West plants, and the new UAN B plant, all of which have multi-stage flash distillers, in addition to gas turbines. APC has the capacity to produce around 143m imperial gallons per day (MIGD) of desalinated water. The next largest IWPP is the Taweelah Asia Power Company (TAPCO), which has 2220 MW of capacity at its Taweelah facility, located approximately 80 km to the north of Abu Dhabi City.
TAPCO has the largest capacity for desalinated water production in the emirate, with 162 MIGD of desalinated water. In terms of electricity generating capacity, the third-largest IWPP is the Fujairah Asia Power Company (FAPCO), with 2114 MW of capacity and 132 MIGD of water, located in Fujairah around 280 km north-east of the city of Abu Dhabi. The fourth-largest producer in terms of generating capacity is the Gulf Total Tractebel Power Company (GTTPC), which has a capacity of approximately 1671 MW and 84 MIGD of water at the A1 Taweelah site; GTTPC is an ADWEA, Marubeni and Engie vehicle.
Other key players include: the Shuwaihat CMS International Power Company, with 1615 MW and 101 MIGD, the Ruwais Power Company, with a 1627 MW and 101 MIGD capacity at the Shuweihat S2 plant;; Emirates CMS Power Company, with the Taweelah A2 plant and 760 MW and 51 MIGD of capacity; and the Emirates SembCorp Water and Power Company, with the Fujairah F1 plant and its new extension, which has 861 MW and 131 MIGD of capacity. Al Mirfa is currently undergoing a major rehabilitation and expansion project, which is due for completion in June 2017 and will see another 1600 MW and 52.25 MIGD come on-line.
Several of these IWPPs also come under the umbrella of the energy company TAQA, which is majority-owned by the Abu Dhabi government. Listed on the Abu Dhabi Securities Exchange and present in six countries, it has 54% stakes in Taweelah A1, A2 and B; Shuweihat S1 and S2; the UAN project; and Fujairah 1 and 2. In addition, Emirates Aluminium – now part of Emirates Global Aluminium (EGA) – operates a 3100 MW, gas-fired power station at its Taweelah facility, with this power used at the adjacent smelter – the world’s largest single-site primary aluminium producer, with a capacity of 1.3m tonnes per annum. If necessary, limited power from this facility can be supplied to the grid, and vice versa. In 2015 some 3 GWh of power was transferred from the grid to EGA.
Since 2013 the grid has also received input from the Shams 1 solar power station. Shams 1 is a 100-MW concentrated solar power plant located in the Al Dhafra Region of the emirate. Shams 1 was designed and developed by Shams Power Company, a joint venture between Abu Dhabi’s renewable energy and clean technology company Masdar (60%), Total (20%) and Abengoa Solar (20%). The plant was a pioneering project at the time, as it was the first such venture in the Middle East to involve private financing.
The feedstock for Abu Dhabi’s other natural gas-fired, plants, including those located in Fujairah, currently comes from domestic sources or the Dolphin Gas Project. This has obvious drawbacks, as the gas could be sold abroad, raising revenue, and importing gas represents a drain on the exchequer. As a result, the emirate’s plan is to radically alter its energy mix in the years ahead. Nuclear is set to play a major part, along with renewables (see analysis).
In terms of transmission, the most recent statistics from TRANSCO for 2014 show a system with some 6644 km of overhead and 903,011 km of underground transmission lines, with 143 substations. The company also despatched some 264m gallons of water that year, via 3540 km of water pipelines. A backbone of 400-KV circuits feed the emirate and connect it to the GCC Interconnection Grid, while 220-KV and 132-KV circuits make up the rest of the network.
In 2015 total generating capacity for the emirate stood at 15,546 MW, with peak load totalling 13,691 MW, including exports to other emirates, according to ADWEC.
Peak usage occurs during the summer months, with domestic demand for air conditioning and other cooling systems at its height. This is also when water demand peaks, with 2015 seeing peak water supply at 852 MIGD, while total net capacity stood at 916 MIGD, according to ADWEC. In 2014, for example, net peak power demand was 12,093 MW and peak water 821 MIGD, representing growth of 13.2% and 3.8% in 2015, respectively. Clearly, with such expansion, the emirate requires a major programme of water and power generation capacity expansion. ADWEC estimates that total power demand, which includes Abu Dhabi’s system and the Northern Emirates’ supply, will reach around 16,096 MW by 2020 and 19,630 MW by 2030. Abu Dhabi’s authorities are already putting in place measures to address this.
The emirate’s first nuclear reactor, located at the Barakah plant, was completed in 2017 and is expected to begin operations in 2018, delivering some 1400 MW of additional generating capacity. A further three more reactors are being constructed simultaneously at the plant and will be completed in the coming years, resulting in a total capacity of 5600 MW (see analysis). At the same time, a major expansion in renewable energy is under way. Under the MoE’s new strategy released in January 2017, the UAE will see 44% of its energy needs come from renewable sources and 6% from nuclear by 2050.
The independent Sweihan solar photovoltaic (PV) power project is set to be the first of a number of solar PV plants in the emirate. ADWEA and ADWEC put out a request for bids for the Sweihan solar plant in autumn 2016, and six bids were submitted by pre-qualified bidders. In March 2017 the two firms received a record low bid of $0.0242 per KWh from a consortium of China’s Jinko Solar Holding Company and Japan’s Marubeni Corporation for a capacity of 881 MW. This reflects plummeting costs in the solar PV business, which fell by nearly 70% in the five years leading up to 2016. The plant should start generating in 2019.
The emirate is also pressing ahead with its ambitious Abu Dhabi Future Energy Company – Masdar – project. The scheme involves the establishment of a new city, powered by renewable energy, with a 10-MW solar PV plant already installed, alongside a solar rooftop programme. Masdar also includes some of the latest research facilities for alternative power, such as the Masdar Solar Hub, a state-of-the-art testing ground for PV and solar thermal technologies run in conjunction with the former Masdar Institute, which now falls under Khalifa University, researching renewable energy.
This shift away from gas-fired, combined water and power plants to nuclear and solar does have pros and cons for Abu Dhabi’s water utilities. In particular, it implies a separation of water and power production facilities, creating an opening for stand-alone desalination plants. “This will give more flexibility in the despatch of water, as facilities can be built further down the line, unattached to gas plants,” Nick Carter, Baringa Partners Middle East director, told OBG. Reverse osmosis (RO) technology is now widely favoured for this method, rather than the thermal-based techniques used at existing combined plants. The emirate’s main RO facilities are currently in Fujairah, where the F1 plant (SembCorp) has a 37. 5-MIGD RO capacity unit and the new F1 Expansion project added 30 MIGD of RO in 2015. FAPCO’s F2 Plant has also 30 MIGD of RO capacity. RO is set to expand further, possibly in more innovative ways.
Local media reported in late 2016 that the Masdar Institute has been researching a variety of clean energy-based RO techniques, including using solar PV to power the process. Another approach in the future may be forward osmosis, a technique still largely at the developmental stage, which may have particular utility in dealing with highly saline groundwater.
Meanwhile, another substantial new initiative in water management is the construction of the strategic water storage scheme with underground water storage in a natural aquifer facility in the emirate, at Liwa, some 200 km inland from Abu Dhabi City. Completed in 2015, after a decade of studies, this facility will store 5.5bn imperial gallons of desalinated water that can be used to meet any future water emergency. The nature of the aquifer is such that water can be stored at the site for a long period of time while water quality is maintained and continuously monitored.
Paying The Cost
For many years, electricity and water were sold at tariffs that did not reflect cost. This naturally resulted in a high consumption rate and inefficient use of both water and power. Consequently, electricity and water tariffs were reformed, first on January 1, 2015. This saw tariffs updated for the vast majority of customers in the emirate.
Amongst the notable changes was the removal of subsidy for government customers. Before the changes, their tariffs were 15 fils/KWh for electricity and 2.20 Dh/m3 for water. Currently, these tariffs stand at 29.4 fils/KWh and 10.41 Dh/m3 respectively and are updated on an annual basis to remain in line with the sector efficient costs. Similarly, the subsidy was removed on tariffs for expat consumption above an ideal average; their thresholds are daily averages of 700 litres and 20 KWh for flats, and 5000 litres and 200 KWh for villas. These expat tariffs are also updated annually and currently stand at 30.5 fils/KWh for electricity and 10.41 Dh/m3 for water.
A further significant change saw water tariffs for UAE nationals introduced for the first time, with tariffs of 1.70 Dh/m3 for the first block of consumption, below an ideal average, and 1.89 Dh/m3 for additional consumption. For UAE nationals, the thresholds are currently set at 700 litres and 30 KWh for flats, and 7000 litres and 400 KWh for villas.
Following updates to cost-reflective tariffs levels for government and expat customers at the start of 2016, further wider-ranging tariff reforms took effect on January 1, 2017. For UAE nationals, water and electricity tariffs increased between 23% and 38% and expats experienced increases of 28-32% on their initial water and electricity tariffs. The subsidy reductions go hand in hand with efforts by Powerwise and Waterwise, as well as a range of other agencies, to reinforce more efficient and sustainable power and water consumption patterns across the residential, commercial and industrial sectors. This demand-side management strategy is also having an impact, according to the RSB. “We have non-governmental organisations, governmental bodies and private sector companies all boosting recognition of the value of water and power,” says Jamal Shadid, director of water services at the RSB.
The RSB has been working with companies since 2014 to develop and implement a demand-side incentive scheme, encouraging businesses to develop energy saving strategies. The RSB has also developed regulations to encourage rooftop solar PV installations, producing best-practice based technical codes for connections and a new regulation on selling surplus to the grid as a credit. The latter regulation is due for implementation in 2017.
The RSB has also undertaken a study using smart metering with in-home display units which ran for two years and demonstrated a fall in electricity consumption of 16.8% at peak hours in households where smart meters were installed. Other studies conducted by the bureau using remote-controlled chiller devices in commercial buildings also produced promising results of reducing peak demand of chillers.
Moreover, the RSB and the Abu Dhabi Quality and Conformity Council – the emirate’s consumer protection agency – are working closely to ensure that the solar PV systems installed in the emirate meet the highest quality standards, as Abu Dhabi can be a harsh environment for panels. One central concern is that companies and individuals undertaking installation work will need to be properly qualified and trained.
In the future, Abu Dhabi will also likely see a major rise in the numbers of electric vehicles, with this advancement eventually being built into the emirate’s power plans. In January 2017 RSB issued the technical regulations for electric vehicle charging stations and installation guidance for electric vehicle charging stations. These initiatives are the natural consequence of the bureau’s three core objectives: ensuring the safety, efficiency and security of supply.
These are dynamic and important times for the utilities sector in Abu Dhabi. New technologies in renewable and nuclear energy are transforming the sector, while the emirate’s investment in knowledge and innovation has created a whole range of cutting-edge projects. The former Masdar Institute, for example, is looking at solar powered desalination.
Meanwhile, with the economy and the population continuing to grow, demand for water and power services only continues to increase. Programmes that can manage this demand and encourage energy and water conservation and reuse are also being given top governmental priority. It may be that in the future, the UAE will be known not only as one of the world’s leading producers of hydrocarbons, but also a leading player for both alternatives and water technologies.
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