Repeated setbacks to the award of the Mirfa independent water and power project (IWPP) have raised concerns over Abu Dhabi’s ability to meet future power requirements. If demand grows as predicted, the emirate could face an electricity shortage in 2016.

Like elsewhere in the region, Abu Dhabi continues to record sharp annual increases in demand for power, with peak consumption in the emirate set to rise by 14 per cent in 2014, according to Abu Dhabi Water & Electricity Company’s (Adwec’s) winter 2012/13 electricity and water demand forecast.

The population-driven demand growth in Abu Dhabi is being compounded by the completion of major industrial projects and an increase in exports of electricity to the northern emirates of the UAE.

Potential shortfall

With construction work under way on Abu Dhabi’s first nuclear power scheme, there is a significant amount of capacity due to come online in the next decade. However, with the Mirfa IWPP, the only major new project planned in the intervening period, running behind schedule, Abu Dhabi will need to accelerate its development or begin contingency planning for a potential shortfall in electricity supply.

For the five years up to 2008, Abu Dhabi recorded steady annual electricity demand growth of 6 per cent. However, since then, consumption growth has often surpassed 10 per cent a year. It rose 9 per cent in 2011 as peak demand hit 9,749MW.

This sharp growth continued into 2012, with peak consumption rising by 11 per cent to reach 10,618MW. In 2013, peak usage was expected to have grown by about 12 per cent to 11,556MW. One major reason for the spike in consumption since 2010 is Abu Dhabi’s pledge to supply power to its poorer neighbours. “Abu Dhabi is committed to [supplying the northern emirates with electricity],” says a local industry source. “The president pledged to help the emirates with power exports a few years ago.”

The delay with Mirfa does raise concerns about whether there will be enough capacity [in the emirate]

Source at a major power firm active in the region

In March 2011, UAE President Sheikh Khalifa bin Zayed al-Nahyan ordered Abu Dhabi Water & Electricity Authority (Adwea) to supply the northern emirates with electricity to help meet projected demand. As a result, power exports from Abu Dhabi to its neighbours jumped by 36 per cent that year to reach 1,198MW. Peak imports to the Federal Electricity & Water Authority (Fewa) system are expected to have reached about 2,500MW in 2013. Adwea also sends a significant amount of power to Sharjah Electricity & Water Authority (Sewa), with exports estimated to have risen from 184MW in 2007 to 707MW in 2011.

While exports are expected to continue to rise, most of the additional power demand by 2020 – 3,990MW – will come from population-related increases. This includes major developments at Yas Island, Saadiyat Island and Raha Beach.

Adnoc requirements

Planned Abu Dhabi National Oil Company (Adnoc) projects will also require significant supplies of electricity in the next couple of years. Adwec forecasts that 1,195MW of capacity will be required for the state oil firm’s major new schemes.

Adnoc’s Ruwais refinery project is expected to be commissioned in late 2014 and its Shah Gas Development is due for commissioning in 2015. Each of these will require 300MW of power, which will put further pressure on the emirate’s grid.

“[The requirement of] 600MW for these schemes is a lot of capacity to come online in the same year,” says a local consultant in the power sector. “Add to this population-related growth and increasing exports, and this becomes a lot of extra demand for Adwea.”

Adwec predicts peak demand from Adwea could reach 16,009MW by 2016. This could cause a problem for Abu Dhabi. With the authority having an installed generating capacity of 13,842MW in 2012 and only 1,647MW of new capacity from the under-construction Shuweihat 3 independent power project scheduled for commissioning in 2014, there could be a demand/supply deficit in as little as two years’ time.

This potential problem is compounded by the delay to the Mirfa IWPP, which was originally planned for commissioning in 2015. Abu Dhabi’s Executive Council approved the project in March 2012, as a result of the forecast increase in power consumption.

Adwea launched the tender for the scheme in June 2012 and received bids from six consortiums for the plant, which is planned to have a generation capacity of 1,600MW and a 52.5 million-gallon-a-day desalination component.

MEED reported in June 2013 that a consortium led by the UK/French GDF Suez Energy International was the frontrunner to win the contract to develop the IWPP, but the project has slipped behind schedule despite Adwea’s plans to have signed all the project agreements by early September last year.

Mirfa delays

According to sources close to the scheme, Adwea has remained in negotiations with the GDF Suez consortium, but the project has stalled since the Executive Council decided to seek further updates on the requirements of power from the Mirfa IWPP in mid-September. While there has been no official or internal decision to delay the project, the scheme has fallen behind schedule due to the ongoing discussions, and the initial target for the IWPP’s first power to come online in 2015 is no longer possible.

“The delay with Mirfa does raise concerns about whether there will be enough capacity [in the emirate],” says a source at a major power company active in the region. “The problem could be greater if the nuclear deadlines are missed.”

The first 1,400MW reactor at the 5,600MW Baraka nuclear project is planned to come online in 2017, with the remaining reactors due to start up in 2018, 2019 and 2020. While energy from the scheme would greatly ease the strain on the UAE’s power sector, if the commissioning deadlines are missed, the likelihood of an electricity shortage will be all the greater.

Emirates Nuclear Energy Corporation (Enec), the company behind the Baraka scheme, has insisted that work is on schedule and that the targeted completion dates will be met. Enec provided the latest update on the project in early February, when it announced it had received approval for additional civil construction works on reactors 3 and 4, and that construction on reactors 1 and 2 was 35 per cent complete.

Baraka deadlines

However, some sources in the region’s power industry are sceptical about the deadlines being met due to the technical and legal complexities of nuclear projects. “No nuclear project in the world has ever been completed on time, so for the UAE’s first one, I doubt it will set a new precedent,” says a regional source at a major power firm.

Should the deadlines on the nuclear programme be missed, bringing the Mirfa project, or another conventional power scheme online in its place will become increasingly crucial.

If demand does outstrip supply, Adwea could potentially import up to 1,000MW from the GCC interconnection and also up to 1,000MW from neighbouring Dubai. Beyond that, the authority may be forced to resort to using expensive temporary power generators.

With Abu Dhabi’s economy beginning to accelerate once again and progress being made on vital infrastructure and energy schemes, it is important that the emirate ensures its power market keeps up with the pace of development.

Key fact

Peak power demand in Abu Dhabi is set to rise by 14 per cent in 2014

Source: Abu Dhabi Water & Electricity Company