Dubai to develop Hassyan for power only

19 December 2010

Dewa drops water desalination component of project and raises water rates in the emirate

Dubai Electricity & Water Authority (Dewa) has decided to carry out its first independent project as a power-only facility. The independent water and power project (IWPP) planned for a site at Hassyan will now be developed as an independent power project (IPP).

According to a source at Dewa, the decision to adjust the project plan was taken following a revised water demand forecast. While power continues to increase at a steady rate, the Dewa representative stated that meeting water needs in coming years will be less difficult.

Dubai desalination capacity (Million gallons a day)
YearInstalled desalination capacity Peak desalination demand
Source: Dewa

“By 2014-15 we will still have enough water capacity. We are not expecting to bring on any new capacity before 2018/2019”, says the Dewa representative.

The decision coincides with an announcement by Dewa that it will be raising water tariffs to end users by 50 per cent. As one of the few states to have implemented a slab tariff to curb water consumption, Dubai has shown a commitment to demand-side management for several years. According to the Dewa representative, “I believe people will be more careful with water.”

The project will be constructed on a build-own-operate (BOO) basis. When complete, it will generate 1,500MW. Construction tenders are scheduled to be issued in the first quarter of 2011 and the project is expected to be commissioned in 2014. Dewa will buy all of the power produced by the project.

Dewa has said that it will take a shareholding in the IPP and continues to include the option to list the project company in an initial public offering (IPO). A UK consortium comprising bank HSBC, engineering firm Mott MacDonald and law firm Clifford Chance was selected in June to advise on the project.

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