Tehran has used its lack of power-generating capacity to justify its pursuit of nuclear power, which has led to increasing tensions with the West, particularly the US.

Plans to install an interconnection between Dubai and Iran have progressed, with the submission of four bids for the feasibility study to Dubai Electricity & Water Authority (Dewa) in late October.

The bidders are understood to include Germany’s Fichtner and the UK’s Mott MacDonald.

Dewa is expected to award the contract in a month and the study is due to be completed by mid-2008.

Dewa signed a memorandum of understanding with Iranian state power generation and transmission company Tavanir earlier this year for the sale of electricity (MEED 4:5:07). The 180-kilometre-long interconnection will use high-voltage direct current to supply Dubai with power from the Iranian national grid.

One of the issues the study will address is whether Iran has enough excess power to export. ‘There are no reliable demand figures,’ says one UAE-based industry source. ‘It is expanding its generation capacity, so it could have enough to export 1,500-2,000 MW in 4-5 years.’

The results of the study will also decide the voltage of the interconnection.

Iran has an installed generation capacity of approximately 39,000 MW, while Dubai has 5,000 MW. The emirate is struggling to meet domestic demand, which rose by 16.5 per cent in 2006. In addition to the planned transmission scheme with Iran, Dewa is planning to boost capacity through a series of projects at Hassyan (MEED 26:10:07).

Abu Dhabi Water & Electricity Authority has been supplying Dubai with up to 700 MW of electricity, through the UAE national grid.