Abu Dhabi's plan to tap new sources of electricity and water


There is a rapid transformation taking place in Abu Dhabi’s power and water sector. A major shift in the energy mix is under way, with a transition away from fossil fuels and an expanded use of renewables and nuclear power. At the same time, the emirate continues to be a leading supplier of electricity and water to other emirates of the UAE, while technological advances and developments in demand management are shaping sector trends. Changes also mean challenges, however, with utilities providers having to adapt to new patterns of supply, while also having to meet increasingly urgent demands for sustainability and higher environmental standards.

Water Sources

As is the case in other emirates, Abu Dhabi lacks natural, permanent surface water. The UAE has traditionally accessed water via deep wells and irrigation systems known as falaj. With rapid economic development in recent years, however, these resources have come under pressure and Abu Dhabi is now largely dependent on desalination plants for its water supply.

These plants require power, with thermal desalination systems using waste steam from power generation units. This has led to the physical integration of power and water utilities, a trend also reflected in the sector’s regulatory and organisational structures, which combine generation, transmission and distribution of both electricity and water.

Structure & Oversight

Water and power utilities are overseen by several bodies at both the federal and emirate level. At the federal level is the Ministry of Energy and Industry (MoEI). Headed by Suhail Mohamed Faraj Al Mazrouei, the MoEI develops strategic plans for the sector. The ministry has a wide range of responsibilities, having absorbed the responsibility of the Ministry of Petroleum and Mineral Wealth, and the Ministry of Electricity and Water after a reshuffle in 2004. At the emirate level, strategic planning, sector regulation and licensing are the responsibility of the Department of Energy (DoE), headed by Awaidha Murshed Al Marar, who is also a member of the Abu Dhabi Executive Council. DoE was established in 2018, absorbing the Abu Dhabi Water and Electricity Authority, and the Regulation and Supervision Bureau.

DoE has regulatory oversight of the emirate’s water, wastewater and electricity segments, monitoring compliance with legal, technical and economic requirements. It also controls prices in certain areas of the market – including transmission, procurement ,distribution and supply – with a view to encouraging efficiency and improved service delivery. End-user tariffs are dependent on the type of user, whether residential, industrial, commercial or government.

The Abu Dhabi Power Corporation (ADP ower) was established in 2018. ADP ower, a joint-stock company wholly owned by the Abu Dhabi Development Holding Company, is the owner of the emirate’s power and water operating companies: the Abu Dhabi Transmission and Despatch Company (TRANSCO), Abu Dhabi Distribution Company (ADDC) and Al Ain Distribution Company (AADC). TRANSCO operates and manages the transmission system as a whole, while AADC is the sole licensed distributor and supplier in the Eastern Region of the emirate centred on Al Ain. ADDC plays the same role as AADC for the city of Abu Dhabi and the Al Dhafra Region. ADP ower is also the majority shareholder in the emirate’s independent water and power producers (IWPPs), which in turn sell output to a sole power purchaser and seller – the Emirates Water and Electricity Company (EWEC). The main role of EWEC is to guarantee the supply of water and electricity to consumers through demand forecast and generation-expansion planning; long-term power and water purchase agreements (PWPAs) with producers; fuel supply agreements with suppliers; and bulk supply tariff agreements with distributors – though this requires DoE consent. EWEC sells its electricity and water to TRANSCO via a bulk supply tariff, with TRANSCO then transmitting the product on to ADDC and AADC for distribution to households and businesses across the emirate.

At the post-consumer end is the Abu Dhabi Sewerage Services Company, which is responsible for the collection, treatment and disposal of residential, commercial and industrial wastewater. It recycles water and bio-solids for irrigating everything from farms to roadside landscapes through a series of independent sewerage treatment plants. Wastewater is also regulated by DoE.

Vision & Strategy

All utilities regulators operate within the overarching framework of the Abu Dhabi Economic Vision 2030 – the emirate’s long-term development plan – and UAE Energy Strategy 2050. The former contains commitments to sustainability and increasing the share of renewables in the energy mix, while the latter sets a target of reducing the UAE’s power-generation carbon footprint by 70% between 2017 and 2050. The national strategy also aims to diversify the energy mix to 6% nuclear, 12% clean coal, 38% gas and 44% renewable energy.

Under UAE Energy Strategy 2050, around Dh600bn ($163.3bn) will be invested in energy by the government through the implementation period, with the programme expected to result in savings of Dh700bn ($190.5bn). At the same time, the strategy sets a 40% target for increased consumption efficiency for individuals and corporations. The strategy will be rolled out in three phases, with the first concentrated on efficient energy consumption, along with source diversification and security; the second on new solutions that integrate energy and transport; and the third on research and development, as well as innovation in sustainable energy delivery.


In 2019 Abu Dhabi produced 73,305 GWh of electricity, a 0.7% increase on the previous year, according to Statistics Centre - Abu Dhabi (SCAD). Over the same year, total demand for electricity stood at 62,682 GWh, with the emirate’s generation capacity standing at 13.7 GW. Commercial operations were the biggest user of electricity in 2019, consuming 39.4% of the total. This was followed by industry, which accounted for 24.7% marking significant rise on previous years, with the share of total consumption standing at 12.3% in the previous year. The next-largest segments were domestic consumers, at 24.2%, agriculture (5.8%), government (5.7%) and other users (0.1%). In line with previous years, the Abu Dhabi region of the emirate accounted for 59.9% of demand, followed by Al Dhafra (22.4%) and Al Ain (17.8%). In a significant development for Abu Dhabi, in 2019 the emirate produced 2164 GWh of electricity from renewable sources, nearly nine times the amount generated in 2018.

EWEC’s portfolio stretches beyond Abu Dhabi, with the company managing 18 water and power plants, two of which are in Fujairah: the 882-MW Fujairah F1 and the 2114-MW Fujairah F2 facilities. A 2400-MW combined-cycle gas turbine plant, Fujairah F3, is in the pipeline, and EWEC was considering six proposals as of late 2019. A power purchase agreement for the plant was signed by Japan’s Marubeni in February 2020. Among the other water and power installations in the emirate’s portfolio is the 5. 6-GW Barakah Nuclear Energy Plant, a four-reactor facility due to see its first unit come on-line in late 2020 following the issuance of an operating licence in February (see analysis). The 1177-MW Noor Abu Dhabi solar photovoltaic (PV) plant is also an EWEC facility, as is the 100-MW Shams Solar project in Al Dhafra. A 2-GW solar PV plant in Al Dhafra that was in the planning stages as of early 2020 is also under EWEC’s umbrella (see analysis).

EWEC’s other Abu Dhabi plants provide both electricity and water, and are grouped by region. In Al Dhafra – which, while largely desert, has a coastline opposite major offshore oil and gas fields that require substantial power – the Mirfa International Power & Water Company runs a 1.6-GW plant, along with a desalination facility producing 52.5m imperial gallons per day (MIGD) of water. The Al Dhafra Region is also home to the Al Shuweihat Power and Water Complex, which has two power and water plants, in addition to an electricity plant. Each facility has a generation capacity of 1.6 GW of power and 100 MIGD of water. Al Dhafra is home to the 108-MW Madinat Zayed power plant, which is operated by Al Mirfa Power Company (AMPC). The IWPP runs the Remote Areas Company, which supplies 3.6 MW of generation capacity and 5.5 MIGD to areas including Delma, Murawah Island, Al Garneen and Ramhan.

In addition, AMPC runs the 256-MW Al Ain Power Plant. The city of Abu Dhabi is supplied partly by the Umm Al Nar Power and Water Company, which has a large complex at Sas Al Nakhel with a capacity of 2.3 GW of power and 145 MIGD of water. The capital region is also home to the Taweelah A1, A2 and B plants. The B plant, owned by the Taweelah Asia Power Company, is one of the largest co-generation plants in the world, with a capacity of 2.2 GW of electricity and 162 MIGD of water. Taweelah A1 – owned by the Gulf Total Tractebel Power Company – has a capacity of 1.7 GW and 84 MIGD. Taweelah A2 – owned by the Emirates CMS Power Company – has respective capacities of 760 MW and 52.5 MIGD. The Taweelah plants receive natural gas from the Abu Dhabi-owned Dolphin Energy project, in which gas is pumped to Abu Dhabi via a 350-km pipeline from the North Field onwards to Oman.

A new reverse-osmosis (RO) desalination plant – which, once complete, will be the largest of its kind in the world – is being planned for the Taweelah complex. Other plants in Abu Dhabi use either multi-stage flash or multi-effect distillation methods; only 15% of the emirate’s desalinated water was derived from RO in 2019. However, RO is a relatively new technology in terms of commercial applications on a larger scale. The Dh3.2bn ($871m) plant will begin operations in 2022. ADP ower and Mubadala Investment Company share a 60% interest, with the remaining 40% held by Saudi Arabia’s ACWA Power. Once operational, the facility will supply 909,000 cu metres of water per day, 44% more than the world’s current largest RO plant. RO has the advantage of both radically reducing the plant’s carbon footprint and allowing facilities to be independent of power production. RO plants can be located close to consumers, whereas those attached to power plants are often located near hydrocarbons reserves.


In addition to increasing desalination capacity, efforts are under way to ensure more sustainable water management. In June 2019 DoE launched its recycled water policy, which provides a framework for the development of purchase and supply contacts for recycled water, and obligates all entities operating in the segment to increase efficiency. As is the case with the power grid, Abu Dhabi’s water transmission is managed by TRANSCO. The bulk water and electricity transmission system also runs to the Northern Emirates via the Emirates National Grid. TRANSCO has the additional task of ensuring supply to high-volume customers such as Emirates Global Aluminium, and the offshore and onshore facilities of Abu Dhabi National Oil Company.

Electricity Transmission

On the electricity side, TRANSCO has 400-KV, 220-KV and 132-KV transmission networks developed according to a series of seven-year plans. The utility provider’s “2019 Electricity Seven-Year Planning Statement”, published in June of that year, forecast peak electricity demand for Abu Dhabi, including exports to the Northern Emirates, would reach 20.1 GW by 2026, up from 15.1 GW in 2018. This would be a smaller rise in annual usage than seen in the 2000-17 period, when demand grew by an average of 9.2%. Looking to the future, the average growth in annual demand is expected to be 3.6% through to 2026. TRANSCO estimates that its transmission capacity will reach 24.1 GW by 2026 once several new plants are brought on-line, and after several others – namely Umm Al Nar, Al Ain Power Station and Madinat Zayed – are retired. The older plants will see their PWPAs expire in 2020, while Taweelah A2’s PWPA expires in 2021.

However, it is expected that Taweelah’s agreement will be extended. TRANSCO is rolling out a major network reinforcement plan as new generation sites come on-line. The 400-KV works take into account the imminent arrival of the Barakah Nuclear Energy Plant and the Noor Abu Dhabi solar PV plant. As such, state planners in the emirate will need to consider the implications of intermittent solar and always-on nuclear generation capacity for the grid.

“The integration of the new nuclear energy plant and the expansion of solar PV energy will create the need for changes to how the system is operated,” Stephen Haw, partner at Abu Dhabi-based consulting firm Baringa, told OBG. “It will also generate greater potential – over the short and longer term – for trading electricity within the UAE and across the GCC.”

Regional Power Trade

Gas-fired generation is relatively easily controlled, ramped up or down according to demand. The arrival of nuclear and solar PV energy will change this, as the technologies will produce periodic surpluses that could then be traded with other emirates and countries in the region. The fact that others in the GCC are pursuing solar and renewable energy programmes – and in the case of Saudi Arabia, nuclear energy – creates potential for enhanced intra-GCC power trade.

Higher levels of power trade will require an expansion of the regional transmission system. The GCC Interconnection Authority (GCCIA), a joint-stock company owned by the six members of the GCC, is looking to encourage this expansion and facilitate greater regional trade. In 2018, 1236 MW was traded between GCC members, according to the GCCIA, up 41% from 2017. The GCC Electricity Market System was inaugurated in 2018 to enable such trading. The GCCIA is also looking at expanding interconnections further afield to the Horn of Africa, the northern Middle East, Europe and Central Asia.

Water Network

In 2020 TRANSCO had a network of 49 water-pumping stations, 119 storage reservoirs with a total capacity of 664m imperial gallons and 3705 km of pipelines under its remit. Total water transmission capacity is 3640 MIGD, with peak demand at around 859m imperial gallons. According to SCAD, in 2019 around 235bn imperial gallons of desalinated water was available in Abu Dhabi, with 189.7bn imperial gallons produced locally and 45.3bn imperial gallons imported from Fujairah. That same year, desalinated water capacity stood at 647 MIGD, up from 645 MIGD in 2016 but down from 697 MIGD in 2018. In 2019, 45.1% of the desalinated water supply was used by domestic consumers, 21.7% by agriculture, 18.5% by commercial customers, 11.8% by government, 2.6% by industry and the remaining 0.3% by other users, according to SCAD.


ADDC and AADC charge different tariffs for water and electricity for UAE nationals and expatriates, for high-use and low-use consumers, and according to the type of residential property. As of May 2020 government entities pay Dh10.41 ($2.83) per cu metre of water and around Dh0.29 ($0.08) per KWh for electricity, according to the most recently published breakdown of business rates and tariffs by ADDC. The rate for commercial enterprises is Dh7.84 ($2.13) per cu metre of water and Dh0.20 ($0.05) per KWh for electricity. The rate for agricultural businesses is Dh3.13 ($0.85) per cu metre of water and around Dh0.05 ($0.01) per KWh for electricity. The water tariff for industrial enterprises stands at Dh7.84 ($2.13) per cu metre, while electricity tariffs vary based on usage, time and season. The rate for electricity use that is less than or equal to 1 MW is around Dh0.29 ($0.08) per KWh, while that in excess of this level stands at Dh0.27 ($0.07) and around Dh0.37 ($0.10) during peak times, namely between 10.00am and 10.00pm from June 1 until September 30. These rates also apply to Abu Dhabi National Oil Company and its subsidiaries. However, in June 2019 the government of Abu Dhabi introduced an incentive scheme that allows industrial companies to apply for an energy bill discount of up to 40%. The initiative – which forms part of the Ghadan 21 development strategy – offers discounts based on the contribution of industrial companies to the economy, productivity increases, and the efficient use of power and resources. In terms of consumers, UAE nationals typically pay Dh2.09 ($0.57) per cu metre of water if they live in an apartment and consume fewer than 0.7 cu metres per day, or if they live in a villa and consume fewer than 7 cu metres per day. If those levels are exceeded, the rate rises to Dh2.60 ($0.71) per cu metre. Meanwhile, the rate for expatriates is Dh7.84 ($2.13) per cu metre of water for apartments, with the upper limit for villas at 5 cu metres per day. If those limits are exceeded, the rate rises to Dh10.41 ($2.83) per cu metre. For electricity, the tariffs are similarly differentiated, with Emiratis paying Dh6.75 ($1.84) per KWh and expatriates Dh26.80 ($7.29) per KWh.


In September 2019 DoE launched the Abu Dhabi Demand-Side Management and Energy Rationalisation Strategy (DSM) 2030, with the goal of reducing water consumption by 32% and electricity consumption by 22% by 2030. The strategy has nine core programmes: retrofitting existing buildings; demand response; efficient water use and reuse; new building codes; street lighting rules; district cooling; new standards and labels; energy storage; and rebates and awareness campaigns. In order to support the campaign DoE introduced a number of financial incentives to encourage consumers to upgrade to more efficient cooling systems. Around 70% of peak electricity demand comes from cooling systems in the UAE. As such, rationalising and optimising the country’s cooling systems would have a significant impact on electricity consumption. Sector players are also keen to highlight the positive effects the plan is likely to have on living standards. “DoE’s DSM Strategy 2030 is not just about saving money, it is also about having a positive health and social impact,” Mohammed bin Jarsh, the undersecretary of DoE, told OBG. “The strategy will focus on a range of different aspects, including water conservation, efficient irrigation systems and reliable electricity transmission. This, in turn, has a tangible impact on the quality of life of our citizens.”


Major solar PV facilities along with the initial unit of the first commercial nuclear energy plant in the Arab world are expected to come on-line in Abu Dhabi in 2020. As both the nuclear and solar segments add capacity in the years ahead, profound changes in the nature of electricity supply will require adaptive grid management and the development of a more flexible, integrated system. Meanwhile, the introduction of RO technology to the local market means that a decoupling of water and power will begin to occur, changing the sector’s traditional generation, transmission and distribution networks.

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The Report: Abu Dhabi 2020

Utilities chapter from The Report: Abu Dhabi 2020

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