Advisers submit bids for Dubai coal-fired power plant

10 January 2011

Consultant will conduct feasibility study and advise on power plant tender

Dubai Electricity & Water Authority (Dewa) has received nine bids from consultants for a coal study and power plant tender in an effort to diversify its energy mix.

Dewa invited bids in November 2010. Bids were submitted by the US’ McKinsey & Company, Germany’s Lahmeyer, the UK’s Mott MacDonald, Germany’s Fichtner and the US’ Parsons Brinkerhoff along with four others.

The study will be divided in two phases. In the first phase, the consultant will conduct a preliminary analysis on the type of technology, the type of coal and sourcing strategy, which best suit Dewa’s requirements. This is to include logistics and infrastructure requirements, as well as environmental impacts of building the emirate’s first coal-based power plant.

The second phase will cover the development of the conceptual design for the first coal-fired power plant for Dewa, along with the requests for proposals, and the assessment and development of new regulatory elements for clean coal-based power plants.

The project may be developed on an engineering, procurement and construction (EPC) basis or as an independent power project (IPP). According to a source at Dewa, the utility is “looking for investment if there is appetite. I believe there is [appetite and the contract type] will be decided over several months once we see the consultant’s reports. We are leaving that option open for the time being.”

The plant may use super critical pulverised coal (SCPC) or integrated gasification combined cycle (IGCC) technology. First power from the project is expected in 2015 or 2016.

The issue of feedstock for power generation has become a growing problem in Dubai. Dewa receives all of its natural gas supplies from the fellow state-owned entity Dusup. In recent years Dusup has experienced a shortage in supply. As a result, the price of gas has increased sharply.

Further, the lack of new gas supplies has meant that Dubai has turned to more expensive fuel oil to power its plants. Electricity consumers have been affected by the increased cost of power production with severe rate hikes.

According to the Dewa source, “We really have no choice. It is a long way before nuclear power will be available and renewables are not really playing a role in baseload operations. Gas price fluctuations may cause some insensitivity in supply in the future. So we really have to look into our fuel sources.”

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