Sharjah’s energy sector is undergoing a period of dynamic change as the emirate develops its existing resources, and transitions towards clean and renewable energy sources. In pursuing its goals along with those of the wider UAE, Sharjah is well positioned to leverage its strategic location as a gateway to the Northern Emirates, making it a key centre for power transmission, gas pipelines and gas storage.
At the same time, the emirate continues to play a leading role in the UAE’s drive to reach net-zero carbon emissions, which the country plans to achieve by 2050. Sharjah is emphasising carbon capture and storage (CCS), solar and other sources of renewable energy, waste-to-energy initiatives and environmental protections. The emirate has also launched a sustainable finance framework to ensure that green bonds and sukuk (Islamic bonds) finance its renewable energy projects. The emirate is developing a green economy through initiatives such as Sharjah Sustainable City and schemes to ensure food security. Meanwhile, the emirate’s long-standing role in education, training and research is being maximised to accelerate the energy transition.
Structure & Oversight
As one of the UAE’s seven emirates, Sharjah is subject to federal laws and programmes, with the federal-level Ministry of Energy and Infrastructure (MoEI) acting as the central supervisory authority for the country’s energy sector. The MoEI also develops and implements the UAE’s strategic programmes. In this regard, there are a series of annual plans and long-term objectives, such as the UAE Energy Strategy 2050. Launched in 2017 and updated in July 2023, the framework is the first unified plan for the country as a whole, aiming to create 50,000 new jobs, save Dh100bn ($27.2bn), generate as much as Dh200bn ($54.4bn) in investment and increase the share of clean energy sources in the country’s total power generation to 32% by 2030. It also upgrades the 2050 target from reducing greenhouse gas emissions by 70% to net zero, as well as intends to triple the country’s renewable energy capacity by 2030.
In addition, the strategy pays particular attention to energy and water efficiency. Both are highly integrated in the UAE, as most water for domestic and industrial use is the product of desalination plants that are powered by domestic energy sources. Indeed, as there are no natural bodies of surface water in the UAE, the country is projected to be one of the most highly water-stressed in the world by 2040, according to the World Resources Institute. The UAE’s energy strategy recognises this power-water nexus and sets interconnected targets of reducing energy consumption by 40% in energy-intensive sectors, and water consumption by 51% in the building and agriculture sectors by 2050.
Green Targets
Some 50% of construction waste is set to be recycled by 2050, and the UAE aims to improve its air quality by 95% by the same year. A projected reduction of 166m tonnes of CO emissions is also set under the national strategy, which estimates that improving water and energy efficiency will save the country Dh226bn ($61.5bn) by 2050.
The UAE also targets the development of significant hydrogen production facilities. The goals for 2031 are a hydrogen research and development (R&D) centre, two hydrogen oases and 1.4m tonnes per annum (tpa) in the country, with these numbers rising to five oases and 15m tpa by 2050. These efforts dovetail with the UAE’s Nationally Determined Contributions (NDCs), the country’s pledges made under the 2015 Paris Agreement. The UAE’s June 2023 update on its second NDC – “accelerating action towards a green, inclusive and resilient economy” – set a target of reducing greenhouse gas emissions by 19% by 2030 relative to 2019, with the update reporting that the UAE believed that its emissions had peaked between 2019 and 2022.
In 2023 the UAE hosted and acted as president of the COP28 UN Conference on Climate Change in November and December of that year. The government also declared 2023 the Year of Sustainability.
Oil & Gas
Oil and gas has a long history in Sharjah. The first test well in the emirate was drilled in 1940, although the first commercial quantities of oil did not begin export until 1974. Gas was discovered offshore in 1980, with gas and light oil first pumped from the Sajaa field to onshore processing facilities at Hamriyah in 1982. In 1984 the emirate established the Sharjah Liquefied Petroleum Gas Company (SHALCO), which made its first export shipment in 1986. That year also saw gas supplied by pipeline to neighbouring Dubai for the first time.
While each emirate is expected to coordinate its energy transition policies with the national strategy and the MoEI, oil and gas resources are left to the administration of the individual emirates, which retain all rights to the hydrocarbons located on their territories, according to the UAE’s constitution. Oil resources in the emirate fall under the remit of Sharjah’s Petroleum Council, which assumed the responsibilities of the previous Department of Petroleum and Minerals in October 1999. The council is responsible for devising policies, regulating and monitoring sector activity, and supervising the activities of companies granted concessions in Sharjah. In October 2010 Sharjah National Oil Corporation (SNOC) was established, and in February 2014 SHALCO was merged with SNOC. The entity is owned by the emirate and falls under the umbrella of the Petroleum Council, although with financial and administrative independence. SNOC is also the emirate’s primary gas supplier.
SNOC is key to the sector, serving as Sharjah’s executive arm. The company is a highly integrated company, as its activities range from exploration and production, processing and refining, to the storage and transport of hydrocarbons. The company also runs Sajaa, which consists of four gas fields; a gas processing complex 35 km from Sharjah City with a capacity of 700m standard cu feet per day; a liquefied petroleum gas (LPG) blending plant; LPG and condensate storage and export terminals; underground gas storage; and pipelines and flow lines.
In January 2019 Sheikh Sultan bin Muhammad Al Qasimi, the ruler of Sharjah, signed an agreement granting Italian energy company Eni a 30-year licence to explore three onshore concessions. This agreement led to the January 2020 discovery of the onshore Mahani gas and condensate field in Area B, in which Eni and SNOC hold equal shares, but is operated by the latter. Production from the Mahani-1 well began in January 2021. Production at the field is expected to peak in 2025 before gradually falling over the next two decades, with Mahani-1 expected to reach its economic limit in 2045.
Downstream
Hamriyah Free Zone is expanding in the downstream segment. In June 2023 India’s Infinite Energy signed a deal with the Hamriyah Free Zone Authority to double its investment in the zone and establish a multifunctional oil refinery there. The refinery is projected to have a daily production capacity of 10,000 barrels and an annual capacity of up to 3.6m barrels. In addition to overseeing pipeline gas supply contracts with ADNOC, SNOC has become a key part of the natural gas network in the neighbouring emirate of Ras Al Khaimah. In October 2023 SNOC signed a gas storage service agreement with Ras Al Khaimah Gas, under which the latter will use SNOC’s storage facilities to manage fluctuations in supply and demand to mitigate any potential shortages in Ras Al Khaimah.
SNOC is undertaking a series of long-term development plans, the most recent of which being a 10-year strategic vision launched in 2022. This plan places the reduction of greenhouse gas emissions, portfolio diversification and sustainable development at the forefront of the entity’s efforts. SNOC has set its own target of achieving net zero by 2032. As part of this initiative, in July 2023 SNOC and Japanese trading company Sumitomo’s Middle East subsidiary agreed to conduct a feasibility study on Sharjah’s CCS value chain. The results of this initiative are expected to assess the possibility of a future small-to-large scale CCS project in Sharjah close to major CO resources, such as power plants and other high-emission facilities.
Electricity
As with oil and gas, oversight over the operation and development of Sharjah’s power and water sectors is the responsibility of the emirate. The Sharjah Electricity, Water and Gas Authority (SEWA) is the primary entity in this regard, bearing responsibility for the generation, transmission and distribution of power and water in the emirate. SEWA, along with three other entities – Abu Dhabi’s Department of Energy, the Dubai Electricity and Water Authority, and Etihad Water and Electricity, which is responsible for the Northern Emirates – provide power coverage for the country as part of the UAE’s National Grid project. This initiative aims to bring the four authorities together in an interconnected system, leading to savings, stronger capacity and the commercial transfer of electricity between the participating entities.
SEWA operates seven power stations in the emirate: five in Sharjah City, and one each in Khorfakkan and Kalba. According to the authority’s most recent statistics from 2021, total installed capacity was more than 2.5 GW for the capital district, 152 MW for Khorfakkan and 116 MW for Kalba. Gas turbines and steam turbines accounted for most capacity, although there were diesel units at Wasit, Hamriyah, Seir BuNeir, Abu Mussa and Khorfakkan.
The 2021 figures showed that SEWA had a total installed capacity of more than 2.8 GW and an available capacity of nearly 2 GW from 54 different units spread throughout its power plants. The maximum load was nearly 2.5 GW, with 2.3 GW in Sharjah City, 110 MW in Khorfakkan and 108 MW in Kalba. In 2021 Sharjah imported more than 6.6bn kWh of electricity from the National Grid, accounting for more than half of the emirate’s electrical power generated and up from 5.7bn kWh the previous year.
One major development in the expansion of the emirate’s energy capacity is the natural gas-fired Al Layyah combined cycle power plant. The facility, the expansion of which was completed in November 2023, represents a major energy efficiency upgrade for Sharjah, delivering more than 1 GW, or 20% of electricity needs. Meanwhile, Hamriyah has become home to Sharjah’s first independent power plant. In May 2019 investment arm Sharjah Asset Management, US-based GE Energy Financial Services, and Japan’s Sumitomo and Shikoku Electric Power created Sharjah Hamriyah Independent Power to build and operate the plant for 25 years. All three blocks of the high-efficiency plant came on-line in October 2023, generating 1.8 GW in total and accounting for around 40% of Sharjah City’s required electricity.
The Kalba gas power plant serves Sharjah’s east coast and its industrial area with a capacity of 116 MW, while the plant located in the port city of Khorfakkan is a fuel oil and natural gas plant with a capacity of 150 MW. A modernisation plan for the Khorfakkan plant, and its transmission and distribution network has been undertaken in recent years, with new generators installed in 2022.
Water Security
SEWA operates 10 desalinated water plants, several of which are integrated with power production. The 2021 SEWA figures show the Al Layyah plant as the largest by installed capacity, coming in at 59m gallons per day (gpd), followed by the Hamriyah plant, with 20m gpd. The Rahmaniya plant added 5.5m gpd, while plants at Khorfakkan and Kalba added 5m gpd and 7.2m gpd to total capacity, respectively. Sharjah also had access to desalinated water from the Emirates Water and Electricity Company, with a capacity of 17.5m gpd, and 25m gpd from private water utility UTICO in the Al Hamra Industrial Zone in Ras Al Khaimah. There are smaller desalination plants at Tahel, Mohathab, Nazwa, Seir BuNeir and Abu Mussa.
As with electricity, there have been some notable developments in water in recent years. The Hamriyah seawater reverse osmosis plant, a facility in the Hamriyah Free Zone that became operational in June 2014, is projected to reach an eventual capacity of 120m gpd via reverse osmosis and another 48m gpd via multiple effect distillation. In April 2023 SEWA announced a request for proposal to pre-qualified bidders for a new, independent water plant in Hamriyah with a capacity of 90m gpd, with commissioning expected in the third quarter of 2026.
Renewables
A significant development has been Sharjah’s progress in the waste-to-energy (W2E) segment. In 2017 the emirate’s public-private waste company BEEAH Group and Abu Dhabi clean energy company Masdar came together to establish the Emirates W2E Company, with its inaugural project being a $200m plant in Sharjah that was commissioned in May 2022. The Sharjah Waste to Energy plant has a capacity of 300,000 tonnes of landfill waste per year, from which it is capable of generating up to 30 MW of electricity, which is enough to power up to 28,000 homes. The plant is the first of its kind in the Middle East, aligning with a number of Sharjah’s policy priorities, ranging from environmental protection, to net zero and recycling. At full capacity, the plant is expected to reduce CO emissions by 450,000 tonnes annually.
Sharjah has also been pursuing a major expansion of its solar photovoltaic (PV) capacity. The UAE is particularly well endowed with solar potential, with 350 sunny days per year and 10 hours of sunlight per day. Depending on the location and time of year, that works out to 6.5 kWh of solar energy per square metre per day, or 4-6 kWh of direct solar irradiation per square metre per day throughout the country.
Recent years have seen a gradual build-up in solar installations in Sharjah, from 50 such facilities with a total capacity of 20 MW in 2016, to 200 facilities with a total capacity of 100 MW as of 2020, accounting for 3% of electricity demand on the SEWA grid. In October 2023 SNOC signed an agreement with Emerge, a joint venture (JV) between Masdar and France’s EDF Group, to build Sharjah’s largest solar PV plant. The facility, which is set to be built under a build-own-operate-transfer agreement and have a capacity of 60 MW, is expected to be operational by the end of 2024. Located at SNOC’s Sajaa Gas Complex, the plant will supply the Sharjah-based company with its own needs and dispatch any surplus to SEWA’s grid during the day, with SEWA supplying the facility with power at night.
The project is particularly valuable for Sharjah’s efforts to meet its climate and green energy goals, and switching to renewable energy sources is expected to significantly reduce emissions and help SNOC move closer towards reaching its 2032 decarbonisation and net-zero targets.
Sustainability
Another notable initiative is Sharjah Sustainable City. Illustrating how the energy transition can make consumers into producers, the 1250-villa, 7.2m-sq foot development is set to generate much of its own power from rooftop solar panels, as well as treat its wastewater for reuse. Working in collaboration with SEWA, the city’s developer is a JV between Dubai-based real estate company Diamond Developers, and the Sharjah Investment and Development Authority. Phase one of the project was completed in 2022, with 280 of the expected 1250 villas built during that period. The remainder are set to be completed over three more phases.
Wind has also been highlighted in the UAE’s overall plans for the energy transition as a potential source of energy, with further wind farms projected to be launched following Masdar’s initiation of a four-site, 103.5-MW project in October 2023. According to Masdar, the wind farm is anticipated to power more than 23,000 homes and generate an amount of clean energy that is equivalent to removing 26,000 cars from the country’s roads. Sharjah made significant progress with wind power between 2016 and 2020, increasing installed capacity from 10 MW spread across five installations in 2016 to 30 MW across 15 installations in 2020, increasing its contribution to grid demand from 0.2% to 1%.
The emirate is a centre for education, training and R&D in the renewable energy segment, with the University of Sharjah, American University of Sharjah, and Sharjah Research Technology and Innovation Park conducting projects in the field. Many smaller renewable energy companies are also based in the emirate, which has productive manufacturing and industry sectors. Among these entities are energy storage solutions provider Soleil Power, solar equipment supplier ELSY Industrial Systems and solar solutions company Kaltech Energy.
Green Economy
The energy transition is projected to have a significant impact on Sharjah. Emissions reductions and net-zero targets for a country in which non-oil and gas activities account for more than 70% of GDP bring significant focus to other sectors, such as construction, transport, manufacturing, real estate and finance. Agriculture is also an area in which Sharjah is moving ahead with green technologies. Food security is a priority for the emirate, along with energy security, with the two often interlinked. Sharjah Sustainable City, for example, includes hydroponic and aquaponic techniques in its goal of providing fresh food throughout the year to residents. The project also aims to use 100% of wastewater to irrigate green spaces.
The Sharjah Department of Agriculture and Livestock (SDAL), which was established in March 2022, coordinates the emirate’s food security, as well as efforts to ensure the efficiency of irrigation and water consumption. One of its first major projects was the Mleiha wheat farm, which aims to play a significant role in the emirate’s domestic food production. As Sharjah imports 330,000 tonnes of wheat per year, the emirate’s government is keen to reduce that dependency, as well as move towards self-sufficiency in grains. Mleiha intends to make a major contribution to that objective via a multi-phase rollout. In phase one, which launched in November 2022, 400 hectares were planted; phase two, which was officially announced in September 2023, is expected to cover 1500 hectares. For the second phase, the SDAL is working with Elite Agro, which is part of the Abu Dhabi-based Emirates Advance Investment Group. The farm will utilise artificial intelligence for its irrigation system, enabling smart monitoring and responses to variations in weather and soil. In addition, in October 2023 the SDAL started the second stage of the Wheat Seeds Distribution Project, which aims to enhance the emirate’s food security and self-sufficiency by distributing seeds to local farmers. The SDAL is also undertaking various projects to encourage private and public sector participation in dairy and the production of other animal products.
Efforts to grow the green economy have also focused on financing. Sharjah’s Sovereign Sustainable Financing Framework established structures for the issuance of green bonds and sukuk, and the provision of financing for green economy projects in line with international standards. The framework published in February 2023 enabled the issuing of a $1bn green bond by the emirate that same month.
Sharjah has played an active role in reducing emissions in the construction, industry and transport sectors. As part of the emirate’s efforts to make construction projects more environmentally friendly, green buildings are set to occupy a central role in Sharjah Sustainable City and a wide variety of projects located around the emirate, such as Sharjah Healthcare City, which relies on solar PV as its primary energy source, while smart sensors regulate air conditioning and lighting.
Entrepreneurs
In the industry sector, Sharjah has been supporting “sustainopreneurship” – new businesses and start-ups that are focused on sustainability. Examples include companies that work in upcycling food waste, use machine learning platforms to understand temperature changes and develop methods for converting petroleum vehicles to electric vehicles (EVs). The adoption of EVs is being supported at the federal and emirate level, as demand for EVs in the country is projected to grow at a compound annual growth rate of 30% from 2022 to 2028. The MoEI has ambitions to roll out a countrywide network of fast charging stations for EVs, with ADNOC Distribution and the Abu Dhabi National Energy Company targeting a total of 70,000 charging points in place by 2030. By 2050 the aim is for 50% of the UAE’s car fleet to be EVs, along with 70% of buses. This poses a challenge for infrastructure and grid development across the UAE. In the emirate, the Sharjah Roads and Transport Authority (SRTA) has begun a green transition, with a taxi fleet of more than 750 EVs deployed. In July 2023 the SRTA announced the launch of 10 electric taxis and two electric buses. In addition, Sharjah Sustainable City is planning to install 80 EV charging stations.
SEWA has also been implementing an initiative to supply free electricity and water-saving devices to homes in the emirate. In November 2023 SEWA approved an investment of Dh20m ($5.4m) to install 30,000 water-saving and 80,000 electricity-conserving tools in around 6000 homes. The authority has also been promoting energy efficiency and conservation through educational programmes conducted online, as well as at schools and universities.
Outlook
The next few years are likely to be crucial in the energy transition, as COP28 highlighted many of the challenges that the global energy sector faces and the progress still to be made. For Sharjah, a framework of policies and strategies is in place for the emirate to play its part in addressing these challenges. From emissions reduction to CCS, Sharjah is making efforts to achieve the emirate’s and the UAE’s targets, and provide a healthier, more sustainable environment for its residents. The years ahead will see the expansion of projects such as Sharjah Sustainable City, along with strategies to boost energy and food security, in addition to new and more efficient systems and technologies in energy generation, transmission and distribution.
The transport, construction and industry sectors have experienced increased pressure to integrate more energy-efficient methods into their practices and projects, while the EV rollout is set to accelerate dramatically in the years up to 2030. At the same time, Sharjah is expected to continue to remain at the centre of the energy transition due to its institutions of higher learning, as research and innovation are key components in the global green transition.
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