Faced with rising demand from a growing population for both power and water, authorities in the UAE need to act fast to avoid disastrous shortfalls that could have profound economic consequences. 

The problem is particularly acute in Abu Dhabi’s power sector. Electricity consumption growth in the emirate has often exceeded 10 per cent a year since 2008. In 2013, peak usage grew by about 12 per cent to some 11,500MW, in part due to Abu Dhabi’s commitment to supply power to its poorer neighbours.

Peak consumption in the emirate is likely to rise 14 per cent in 2014, according to Abu Dhabi Water & Electricity Company (Adwec), as increased demand from an expanding population is augmented by that from large industrial projects and rising electricity exports to the northern emirates of the UAE.

Nuclear power

By 2020, Abu Dhabi is expected to need about 21GW of capacity. Some of the expansion to get to that figure will come from the construction of a nuclear power station being built by a consortium led by Korea Electric Power Corporation (Kepco) at Baraka, on the coast, about 50 kilometres from Ruwais. The plant’s four APR-1400 reactors will have a total capacity of 5.6GW and will cost $20bn to build and another $20bn to operate over their lifetimes.

But setbacks for another key project threaten the emirate’s ability to boost capacity at the required rate before the nuclear plant comes online, raising the possibility of shortages by about 2016 if demand increases as forecast. The emirate is dependent on the speedy completion of the Mirfa independent water and power project (IWPP) in the next few years to meet this short-term supply crunch. Adwec has forecast that Abu Dhabi’s peak demand could reach about 16,000MW by 2016, while generating capacity in 2012 stood at only 13,842MW.

Shuweihat 3

The just-completed Shuweihat 3 combined-cycle plant will go some way towards bridging that gap, contributing 1,647MW of new capacity. Located 260km west of Abu Dhabi, Shuweihat 3 was handed over by Siemens and Daewoo Engineering & Construction to its owners in September 2014. The Shuweihat Asia Power Company (Sapco) – a consortium of Japan’s Sumitomo Corporation, Kepco and Abu Dhabi Water & Electricity Authority (Adwea) – will now bring the plant into commercial operation through an operating company, Shuweihat Asia O&M Company.

Mirfa would add 1,600MW more capacity, plus increased desalination, but its development has suffered delays. The project does now seem to be progressing. In October 2014, Adwea and the UK/France GDF Suez Energy International, which is building the plant, announced the signing of a $1.5bn financing agreement for the IWPP, which is scheduled to produce its first commercial power output in 2016 and ramp up supply further in 2017.

If that timetable is adhered to, Abu Dhabi may avoid its supply crunch, but further delays could require the emirate to turn to short-term power imports from Dubai and elsewhere.

Dubai’s strategy

Eager to avoid a power shortfall of the type that could afflict its neighbour, the authorities in Dubai are diversifying generating options by investing in clean coal and renewables, while making efforts to attract private sector involvement.  

Dubai’s peak demand growth has fluctuated in recent years, hitting 9.6 per cent in 2010, 0.7 per cent in 2011, 6.9 per cent in 2012 and 3.3 per cent in 2013. At present, the emirate’s installed capacity of 9,656MW can cope comfortably with peak demand, which reached a maximum of 6,857MW in 2013. Power consumption growth slowed following the end of Dubai’s construction boom and during the 2009 economic downturn. But with electricity usage expected to grow by 4.5-5 per cent a year until 2020, there is little room for complacency.

Energy mix

Dubai Electricity & Water Authority (Dewa) has targeted a cut in gas-fired generation to 71 per cent of its total energy mix by 2030, while increasing the share of clean coal and nuclear energy to 12 per cent each. Solar is slated to provide 5 per cent of total energy.

As part of this push, Dewa has lined up 1,900MW of power generation projects, according to tender documents issued in 2014. One of them is a 600MW capacity expansion of the existing 2,030MW M station plant at Jebel Ali.

Hassyan IPP

More significant for the future structure of Dubai’s power sector could be the 1,200MW Hassyan coal-fired independent power project (IPP), which would be the country’s first major IPP. The first 600MW unit is scheduled to come onstream in 2020, with the other due to launch the following year.

While the project is intended to mark a shift towards power sector liberalisation, doubts still remain over the emirate’s commitment to wider participation. These were heightened by the announcement that state-owned Dubal Holding was one of the prequalifiers for the Hassyan project in an open public tender. Dewa recently extended the bid submission date for the Hassyan IPP by two months, until 26 January 2015. Eight consortiums have been invited to bid for the project, selected from 17 prequalification entries.

High consumption

Expanding populations and scarce local resources mean that the water sector is every bit as big an issue for the emirates as power. Per capita, the UAE uses an average of 500-550 litres of water a day, some two-thirds more than the international average, and the highest level in the world according to the UAE’s Federal Water & Electricity Authority (Fewa), which is largely responsible for the sector in the northern emirates. This consumption rate has prompted a drive across the emirates to boost desalination, recycle wastewater and bring in measures intended to reduce water consumption.

At present, just over half of the water used in the UAE comes from groundwater, with almost a third coming from desalination plants. This latter figure will need to increase markedly if the emirates are to meet growing demand.

In Abu Dhabi, peak demand for potable water is expected to more than double over the next decade-and-a-half, rising from 431 million imperial gallons a day (MIGD) in 2012 to as much as 1,300 MIGD by 2030, according to Adwea. This expansion means that, while maximum water supply capacity – put at 916 MIGD in 2012 by Adwea – is adequate, more needs to be built. 

Desalination schemes

A series of upcoming desalination projects are intended to fill the gap. The Mirfa IWPP is planned to come onstream around 2016, and will be able to process 52.5 MIGD of seawater into potable water via reverse osmosis. The use of this technique is becoming more commonplace in the UAE, as the plants can be run using electricity, which enables them to be located close to centres of demand – and, potentially, to use renewable energy. At present, much of the UAE’s desalinated water is produced using multi-stage flash technology, which depends on thermal power and so must be attached to thermal generating capacity.

A major priority in developing new desalination capacity is to reduce the power needed to run it and to find greener energy sources. Currently, almost a third of Abu Dhabi’s carbon emissions come from burning fossil fuels to operate desalination plants.  

Masdar initiative

To that end, Masdar, the Abu Dhabi-based clean energy company, has established a pilot project to develop desalination powered by renewable energy. The scheme involves Spain’s Abengoa, France’s Degremont and Sidem, and US firm Trevi Systems.

Abu Dhabi has also unveiled plans to reuse all of its waste water by 2018, compared with the current reusage level of 60 per cent of the 284 million cubic metres of treated sewage produced in the emirate. The other 40 per cent is pumped into the sea. To help achieve this, infrastructure connecting wastewater treatment plants and centres of water demand is being improved.

Dubai capacity

Dubai’s water consumption profile has followed a slightly different path to that of Abu Dhabi. As with the power sector, the economic slowdown has left the emirate with ample capacity to meet water demand for now. Dubai’s desalination capacity totalled 470 MIGD in 2013, according to Dewa. Almost all of this comes from desalination plants – more than 98 per cent – which comes at a heavy cost for an emirate without the energy resources of Abu Dhabi.

Dewa has embarked on a major push to reduce water wastage – water unaccounted for in Dubai’s system dropped from 42 per cent in 1988 to just under 11 per cent in 2012, says the authority – and is looking at ways to diversify power sources for production.