Dubai Electricity & Water Authority (Dewa) has decided to move forward with its first independent power project (IPP) as a clean coal-fired power generation plant, which will be the Gulf’s first coal-fired private power scheme.

Dewa has invited companies to submit bids by 8 October for the advisory services contract on the IPP, which will have a total generation capacity of 1,200MW. The project will be carried out in two 600MW phases, with the first phase to be completed by 2020 and the second by 2021.

The IPP will form a key part of Dubai’s long-term plans to diversify its energy mix, as set out in the Dubai Integrated Energy Strategy 2030, which aims for clean coal to account for 12 per cent of total power generation. Dewa first commissioned a study to evaluate the use of clean coal to generate electricity in the emirate in May 2011.

“We have to diversify,” Nasser Lootah, executive vice-president of power and water generation at Dewa, told MEED. “We cannot depend on one source of fuel from an energy security point of view. Most countries are balanced; this minimises the risk if there is a fluctuation in price.”

The IPP is planned to be located at Hassyan, which was also the proposed site for the gas-fired IPP. Dewa received bids for the $1.3bn gas-fired facility in December 2011, but announced it was putting the scheme on hold in April 2012, just as the preferred bidder was due to be announced.

The utility provider said it was delaying the project due to its success in boosting power production in existing plants by improving efficiency, which eliminated the need for a new plant. Dewa did not provide a timeframe for how long it would defer the development of the gas facility. Sources in the UAE’s power sector have pointed to the high price of bids and reservations regarding the security of gas supplies as further factors behind the decision to shelve the scheme.

Dewa regards coal as a viable and cost-effective alternative that will reduce dependency on gas feedstock supplies and help meet the emirate’s future power requirements.

“The key point is that it is clean coal,” says Robert Bryniak, owner of the UAE’s Golden Sands Management Consulting. “The efficiency of clean coal is a little higher and the low cost of coal should [make it] fairly competitive.”

Dubai is also planning to utilise nuclear and renewable energy schemes to meet power capacity requirements, which will contribute 12 per cent and 5 per cent respectively to its electricity grid by 2030. However, in the short term, they will be unable to meet rising demand.

“Dubai is pushing ahead with renewables, but renewables can’t reach the capacity [the emirate] requires in the short-to-medium term,” says Bryniak. “Renewables can reach 200-300MW, but not the thousands of megawatts required. Coal can provide this.”

Construction work on Dubai’s first significant solar power scheme is under way, with the project scheduled to reach completion in October. The US’ First Solar, in partnership with Athens-based Consolidated Contractors Company, is building the 10MW photovoltaic solar plant at the Mohammed bin Rashid al-Maktoum Solar Park, located southeast of Dubai city. Dewa will manage and operate the overall development of the park.

According to Dewa, the solar park will require a total investment of about AED12.6bn ($3.5bn), although the scheme is likely to cost more. While the first phase will be procured by the government, subsequent projects could be financed by the private sector.

In 2012, Dubai had a total installed power capacity of 9,464MW. It is estimated that the emirate will require an installed capacity of 14,840MW by 2020.