Dubai Electricity & Water Authority (Dewa) is planning to develop a coal-fired power plant at Hassyan, the site that was allocated for the emirate’s first gas-fired independent power project (IPP).

Dubai has a long-term strategy to diversify its energy mix and clean coal is to account for 12 per cent of total generation by 2030. Dewa commissioned a study to evaluate the use of clean coal to generate electricity in the emirate in May 2011.

“The [coal] study is ongoing, we have completed phase one,” says Waleed Salman, Dewa’s executive vice-president of strategy and business development. “We have selected the site and technology. [The coal-fired power plant] will be in Dubai at the Hassyan site. It will be from 1,800MW to 3,000MW in size and is to be carried out in phases. We studied various sites, but this was the best one.”

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 economic [considerations] will determine how we start it,” says Salman, when asked whether the scheme will be an IPP like the previous Hassyan power project. It is too soon to say when tendering for the project will commence.

There is room to build further projects at the Hassyan site. “The site is big enough for 9,000MW and even extended further,” says Salman.  “When we first identified that site, we looked at the technology five years back. Today, technology is more compact and is designed in a different way. So you could fit even more on that site.”

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.

Dewa deferred its plans to build a gas-fired IPP at Hassyan in April (MEED 19:4:12). In spite of this, Dewa is still yet to return bid bonds to the bidding groups.

Dewa shortlisted the two lowest bids to build the 1,500MW IPP in March before the project was deferred. A group comprising Japan’s Marubeni, the UAE’s Taqa and South Korea’s SK submitted the lowest bid in December 2011. The group submitted a price of AED0.19057 ($0.052) a kWh. Germany’s Siemens Power Ventures and Qatar Electricity & Water Company submitted the second most competitive bid at AED0.19134 a kWh and was the other group to be shortlisted.