The selection of Saudi Arabias Acwa Power to develop the first major coal-fired power plant in the GCC shows that Dubai is determined to deliver on its energy diversification promise.
There was much scepticism in the regional and international power market when the Dubai Electricity & Water Authority(Dewa) announced in 2013 that it was going to press ahead with its first independent power project (IPP) as a coal-fired facility.
The reasons for the scepticism were twofold. In April 2012, Dubai cancelled its first proposed IPP at the Hassyan site, just when it was on the verge of selecting a preferred bidder. Developers and bankers then became wary of Dubais ability to succeed with the IPP model, which has been widely used throughout the GCC over the past two decades.
Doubts over Dubais ability to utilise the IPP model was further compounded when it announced that it was going to move forward with its first major public-private partnership scheme as a coal-fired power plant, the first in the GCC. With no domestic coal reserves, and no coal receiving facilities, not to mention the environmental implications of using coal in the age of renewable power, many predicted the scheme was destined to fail.
However, Dewa ignored the doubters and by selecting the preferred bidder for the coal project the emirate has further bolstered its position as one of the regions most diverse and exciting alternative power markets. The award of the contract to Acwa Power earlier this year to develop a 200MW solar IPP, followed by the trebling of its renewable energy target to 15 per cent by 2030, shows that the emirate remains committed to diversifying its energy supply, regardless of the oil price.