The UAE and its largest emirate, Abu Dhabi, have embarked on a far-reaching energy transition process that has been accelerated by the start of commercial operations at the Barakah Nuclear Energy Plant in Al Dhafra, Abu Dhabi, in 2021. These efforts are underpinned by UAE Energy Strategy 2050, which targets an energy mix that combines renewable, nuclear and clean energy sources to meet the country’s long-term economic needs and environmental goals.

The strategy seeks to achieve a balance comprising 44% clean energy, 38% natural gas, 12% clean coal and 6% nuclear as the country works to incorporate sustainability in its policies. Under the Net Zero by 2050 strategic initiative, introduced in 2021, the UAE is aiming to catalyse Dh600bn ($163.3bn) in investment in clean and renewable energy solutions over the next three decades – with Abu Dhabi expected to play a leading role in building out that capacity.


Both federal- and emirate-level laws and regulations govern Abu Dhabi’s energy regime, which has evolved in step with efforts to diversify the economy away from oil and gas. At the federal level, the main entities are the Ministry of Energy and Infrastructure (MoEI) and Etihad Water & Electricity. While the former focuses mainly on the Northern Emirates, it plays a role in laying nationwide priorities. For example, it – then the Ministry of Energy and Industry – set the ambitious targets of UAE Energy Strategy 2050.

Abu Dhabi’s Department of Energy (DoE), established in 2018, is responsible for the planning and direction of the local energy sector, with a focus on sustainable, long-term growth in line with UAE Energy Strategy 2050. DoE also licenses companies and organisations operating in the sector, and monitors their compliance with quality and sustainability standards.

The department is pursuing a wide-ranging Demand Side Management and Energy Rationalisation Strategy that seeks to reduce electricity consumption by 22% and water consumption by 32% by 2030 from a 2013 baseline. The strategy uses common-sense approaches, including an emphasis on industry consolidation, to improve energy and water use efficiency. For example, in January 2023 DoE unveiled a policy to guide water usage among district cooling providers to promote the least-cost use of recycled, sea- or desalinated water.

In April 2023 the department hosted a workshop for government employees showcasing best practices in reducing energy consumption in buildings and facilities, and introduced participants to energy service companies. A programme to retrofit the approximately 3000 government-owned buildings in Abu Dhabi with energy-efficiency equipment was also under way as of mid-2023, and an energy-efficiency ambassador has been placed in each government department.


Like other entities in the GCC, Abu Dhabi operates its water and power supply and treatment system via public-private partnerships with foreign companies, known as independent water and power producers and independent power producers (IPPs). ADQ, the emirate’s strategic investment vehicle, is positioned to enable Abu Dhabi’s economic diversification under the Abu Dhabi Economic Vision 2030. ADQ manages a vast and diverse portfolio of investment, and has a key role to play in diversifying the emirate’s economy through its capital allocation.

ADQ has invested in all four of the emirate’s major utilities: Emirates Water and Electricity Company (EWEC), Abu Dhabi National Energy Company (TAQA), Emirates Nuclear Energy Corporation (ENEC), and Abu Dhabi Waste Management Company (Tadweer), and Abu Dhabi Sustainable Water Solutions (SWS).

ENEC owns and operates the Barakah Nuclear Energy Plant, where as of February 2023 the third unit out of four planned was operational. The new unit added a further 1400 MW of power capacity, with the total production capacity of the first three units reaching 4200 MW of baseload power. Battery energy storage systems with 300-MW capacity are required to maintain system operability following the delivery of full nuclear capacity with the upcoming activation of the fourth Barakah unit. ENEC said the initial three units provided more than 80% of Abu Dhabi’s clean electricity consumption as of December 2022, and when complete, the four-unit plant is expected to meet up to 25% of the UAE’s total electricity demand.

This is a significant accomplishment given that the UAE only launched its Peaceful Nuclear Energy Programme in 2008, and established the Federal Authority for Nuclear Regulation (FANR) as watchdog the following year. FANR’s role is to ensure the UAE’s nuclear energy sector meets national regulations and international standards, and to issue nuclear facility licences.

Korea Electric Power Corporation (KEPCO) was selected to implement the Barakah plant, using its 60-year APR1400 reactor technology. Moving forwards, Abu Dhabi is keen to wind down reliance on foreign providers of nuclear services, and ENEC has launched a two-year diploma in nuclear technology programme to help train a new generation of industry engineers.

EWEC is the sole buyer and seller of water and electricity in Abu Dhabi, and holds a mandate to maintain supply of both to all of the emirate’s consumers. The company was formed in November 2018, succeeding the Abu Dhabi Water and Electricity Company.

TAQA, which is listed on the Abu Dhabi Securities Exchange, has operations across 11 countries and provides more than 1m UAE customers with power and water. In 2020 TAQA continued a process of asset consolidation by buying a majority stake in Abu Dhabi Power Corporation’s power and water generation, transmission and distribution assets. These included the Abu Dhabi Transmission and Despatch Company (TRANSCO), Abu Dhabi Distribution Company (ADDC) and Al Ain Distribution Company (AADC).

EWEC sells its electricity and water on to TRANSCO via a bulk supply tariff, and TRANSCO then sells to ADDC and AADC, from where utilities are sold to households and businesses. In an example of how this structure operates, in July 2023 DoE concluded a multi-year review of local regulatory controls in the electricity and water utility segments. It set permitted revenue for TAQA’s distribution units at Dh50bn ($13.6bn), excluding pass-through costs, for the 2023-26 period.

Energy Shift

EWEC is working towards DoE’s Clean Energy Strategic Target 2035 for Electricity Production in Abu Dhabi, issued in July 2022 to provide certainty for investors, and to encourage technology development and innovation to generate energy from clean sources. The strategy elevates the target for clean energy – including nuclear – set by the UAE Energy Strategy 2050 from 50% to 60%, and a 75% reduction in carbon emissions per MWh produced by the electricity sector.

Abu Dhabi faces some challenges in balancing supply and demand when making the transition from a conventional thermal power plants-based electricity system to one that is dominated by renewable energy solutions and nuclear plants. On the supply side, the strategy favours technologies including solar photovoltaic (PV); carbon capture, utilisation and storage; battery energy storage solutions; and low-carbon hydrogen. On the demand side, smart energy solutions, including distributed generation and smart micro-grids, are being considered over an approximate 15-year time frame.

The strategy also features a land availability map that will help improve the planning process for new solar power plants and capacity requirements for energy storage, which build on an existing 108 MW of distributed sodium sulphur batteries with six hours of energy storage capacity, leading to a more flexible natural gas system. “Gas system upgrades and storage facilities are needed to provide flexibility for the higher penetration of clean energy and support the intermittency of renewable solar PV through dispatchable, high-efficiency gas plants,” the strategy notes. A new hydrogen strategy to make Abu Dhabi a globally competitive player in the cleaner fuel has also been promised.

Water Policy

The UAE Water Security Strategy 2036 is the principal guiding policy for the country’s water utility development under the MoEI. It aims to reduce national demand for water resources by 21%, increase the water productivity index to $110 per cu metre, lower the water scarcity index by three degrees, bolster treated water reuse to 95% and increase national water storage capacity by up to two days.

As a coastal desert, 90% of Abu Dhabi’s groundwater supply is saline, requiring widespread use of desalination plants. In 2021 Abu Dhabi approved a 10-year water resources management plan to tackle water scarcity. Solutions included greater use of reverse osmosis (RO) in desalination, employing solar energy technologies to prevent dam water from evaporating, and producing energy and developing technologies to strengthen water harvesting. “The transition towards sustainable water solutions is a collective effort,” Ahmed Al Shamsi, CEO of SWS, told OBG. “Awareness and education play a vital role in achieving widespread adoption. The aim is to improve people’s understanding of the different uses and benefits of recycled water, starting from school.”

This plan was followed by a policy introduced in February 2023 to better manage groundwater by decreasing extraction by up to 650m cu metres by 2030. Though water scarcity in Abu Dhabi is among the highest in the world, it also has one of the highest per capita water consumption rates. Groundwater constituted 60% of total water resources consumed in the emirate as of February 2023 and is mainly used to irrigate crops. Depletion has caused a decline in the volume and quality of groundwater in many areas. According to the Environment Agency – Abu Dhabi, as of February 2021, 79% of groundwater is highly saline, 18% is medium brackish and 3% is considered freshwater.

Size & Performance

The UAE electricity market is forecast to grow at a compound annual growth rate of 3% over the 2022-35 period, according to UK analytics firm GlobalData. In July 2023 DoE approved $4.4bn of new utility infrastructure spending through to 2027.

TAQA holds a 54% interest in eight power generation and water desalination facilities nationwide, accounts for more than 90% of Abu Dhabi’s power and water needs, and supplies water to Fujairah, Sharjah and Umm Al Quwain. Its power plants generate 1.4 GW from renewable sources. In 2022 TAQA registered Dh50bn ($13.6bn) in annual revenue, up 10.3% from 2021, earning profit of Dh8bn ($2.2bn), which itself was up 28%. In 2022 gross operating power generation and capacity was 24.2 GW across TAQA’s operations, including 5 GW under construction, and 7.3 GW from Masdar. UAE-wide desalination capacity was 1060m imperial gallons per day, including 200m imperial gallons per day under construction. In terms of transmission and distribution, TAQA maintains 90,000 km of power networks and 21,000 km of water pipelines, with transmission asset availability of 99.3% for electricity and 97.78% for water.

In EWEC’s “Statistical Report 2022”, it reported maintaining a total firm (dispatchable) electricity generation capacity of 21,800 MW, with non-firm capacity of 2580 MW. Clean energy generation accounted for 24% of total assets. Total electricity generated across its IPP portfolio was 94,500 GWh in 2022. Over the year, 5170 GWh of electricity was exported to the Sharjah Electricity, Water and Gas Authority, with 17,100 GWh dispatched to Etihad Water & Electricity. EWEC’s water capacity totalled 4.4m cu metres in 2022, while production reached 1.2bn cu metres. Annual water exports reached 106m cu metres to the two UAE utilities firms.

EWEC exports power to the GCC grid under a 2006 interconnection agreement, exporting 109 GWh to GCC members in 2022. In addition to exports, the utilities firm provided 346 GWh to Emirates Global Aluminium (EGA), the UAE’s largest industrial company outside the oil and gas space. In March 2023 EWEC announced that, for the first time, 80% of total power supplied was delivered from renewable and clean energy sources. According to the firm, around 6.2 GW of electricity was generated from such sources out of the total 7.7 GW supplied by its solar and nuclear power plants.


The emirate’s utilities have embarked on a consolidation programme similar to the one seen in the electricity sector. In December 2022 TAQA acquired a 43% controlling stake in the renewables business of Abu Dhabi Future Energy Company, commonly known as Masdar, with Abu Dhabi’s sovereign wealth fund Mubadala retaining a 33% interest, and ADNOC – the emirate’s oil major – owning the remaining 24%. ADNOC also holds a 43% controlling stake in Masdar’s new green hydrogen joint venture, while Mubadala retains a 33% interest and TAQA owns a 24% stake. The intention is for TAQA to allow Masdar to expand its renewables portfolio independently. “We will be focusing more on high-efficient, gas-fired power plants; efficient seawater RO desalination; and growing our transmission and distribution business,” Jasim Husain Thabet, group CEO and managing director of TAQA, told local media in May 2023. Masdar, operational since 2006, is working to consolidate the emirate’s green hydrogen and renewables efforts.

More recently, in May 2023 Abu Dhabi Sewerage Services Company, responsible for all wastewater collection, treatment and reuse in the emirate, was rebranded as SWS. The following month TAQA announced that the company would acquire SWS for around Dh1.7bn ($462.7m), adding about Dh16bn ($4.4bn) in asset value and creating a vertically integrated player with a 12,000-km network of sewer pipelines, as well as a sewage treatment capacity of approximately 1.3bn cu metres per day from 37 wholly owned plants. The consolidated entity holds 60% ownership of two companies that operate four sewage plants under a build, own, operate and transfer (BOOT) model.

Shift to Renewables

In July 2022 EWEC and SWS issued a request for proposals for a greenfield wasteto-energy IPP, drawing interest from more than 100 companies. In line with the UAE’s net-zero ambitions, the proposed facility would use 900,000 tonnes of waste to power up to 52,500 households per year, while reducing CO equivalent emissions by up to 1.1m tonnes.

Masdar, along with French energy major TotalEnergies, operates the 100-MW Shams 1 concentrated solar plant, which was the largest renewable energy project in the Middle East when launched in 2013. However, Energy generation by type, 2017-22 Source: Emirates Water and Electricity Company 0 20 40 60 80 100 Concentraing solar-thermal power Solar Photovoltaic Nuclear Fossil fuels 2022 2021 2020 2019 2018 2017 another Masdar-led IPP project, the 2-GW Al Dhafra solar PV facility near Abu Dhabi, is set to be the largest, and its last PV module was installed in April 2023. TAQA and Masdar own 60% of Al Dhafra, with France’s EDF Renewables and China’s Jinko Power holding the rest.


Masdar operates several smaller solar PV plants: a 500-KW facility on Marawah Island, a 750-KW solar farm on Al Jarnain Island, the 100-KW Um Al Zomul plant, an off-grid facility in the desert, the 200-KW Sea Palace on-grid PV plant and the 10-MW Masdar City plant. Masdar also runs the Abu Dhabi solar rooftop programme, featuring PV installations on 11 government buildings with a peak capacity of 2.3 MW.

Also involved in the solar space is EWEC through the Sweihan PV power project, a 1.17-GW IPP called Noor Abu Dhabi that is operated by a consortium comprising Japanese business conglomerate Marubeni, Chinese PV manufacturer JinkoSolar Holding and TAQA. The facility, which began operations in 2019, issued a $700m green bond in January 2022 to refinance its debt – the first of its kind linked to a solar project in the region – extending the power purchase agreement with EWEC by five years to a total of 30 in the process. In November 2022 EGA purchased clean energy certificates for 1.1m MWh of electricity supplied by EWEC from Noor Abu Dhabi, supporting the sustainable production of 80,000 tonnes of aluminium at its CelestiAL plant. In 2022 the Sweihan PV power project generated 2010 GWh of electricity. Projects such as this build on previous efforts at sustainability. For example, in December 2021 TAQA announced that it would work with ADNOC to spend $3.6bn to decarbonise the latter’s offshore energy production. The investment will necessitate a new high-voltage, direct current subsea transmission system, implemented by a special-purpose vehicle that involves KEPCO, Japan’s Kyushu Electric Power and EDF Renewables. The development is set to reduce the CO footprint of ADNOC’s offshore operations by more than 30%, replacing existing offshore gas turbine generators with more sustainable power sources available onshore.


Abu Dhabi is prioritising upgrading its utilities infrastructure in a manner that emphasises sustainability, opening up space for partners specialising in related areas. In recent years there have been opportunities for public-private cooperation and private investment in segments such as smart grids, renewable power, battery storage systems, RO desalination, general water infrastructure and energy efficiency techniques such as retrofitting buildings, emphasising the breadth of opportunities. There is also space for nuclear and conventional thermal power partners, as the emirate works to accommodate a fast-growing population and rising demand for both water and electricity.

The consolidation of the sector by a handful of major stakeholders makes partnership agreements easier to navigate and should streamline project implementation, even as the BOOT model allows foreign players and conglomerates to compete for plant operation contracts.