RAK may allow private players in power sector

Ras Al Kaimah is studying the option of allowing private investors to enter the power generation sector.

The emirate, which is rated ‘A/A’ by Fitch and Standards & Poor’s rating agencies, is also looking at intensifying its gas exploration programmes.

“Ras Al Kaimah has small gas but we are looking for more gas to grow our energy reserves,” Sheikh Faisal bin Saqr Al Qasimi, Chairman, RAK Finance Department, said. “For every cubic feet of gas that we burn, we must find some to replace it.”

Currently, RAK has two hydrocarbons companies, RAK Petroleum and RAK Gas, which are pushing forward with investments to boost output and capacity while looking overseas for new opportunities.

RAK Gas has acquired shares in a number of blocks in Africa, two each in Tanzania and Somalia, and one each in Madagascar, the Seychelles and Kenya.

The aim of these investments – all but one a minority stake – is to diversify the firm’s holdings while promoting supply security for customers.

The emirate has reserves of 400 million barrels of oil and condensate, according to the federal government, a small but not insignificant proportion of the UAE’s estimated 100bn barrels.

The oil sector is dominated by RAK Petroleum, which also has substantial upstream gas interests. Founded in 2005, it is owned by a range of public enterprises and individuals in the UAE and Saudi Arabia, and is based in RAK FTZ.

Because Ras Al Kaimah is an industrial hub, one persistent issue in the industrial sector has been the lack of an adequate supply of energy.

Yet despite the limited hydrocarbon resources, the emirate has no problem in power, says Khater Massaad, CEO, RAK Investment Authority (Rakia). He said Ras Al Kaimah is looking at accepting private players in the power sector.

“Now, the power is sufficient for us. But we hope that other investors would come to Ras Al Kaimah to put their own power plants. His Highness Sheikh Saud bin Saqr Al Qasimi is very keen to open the door for power operators,” he said.

“It is a free place. Anybody is free to put up a power plant here,” Massaad added.

“For industrial zones of Rakia, we have two power plants - a 45MW and 85MW plants – which are operating today. We have excess capacity for our industrial zones. We are selling it at a Fewa price and it is sustainable.”

He said overall, the Federal Electricity and Water Authority has been able to sustain their power requirements.“ Fewa is giving electricity and we are happy with that,” he added. “For the industrial zones, His Highness is working very hard with the federal authorities to have electricity for the emirate and he’s been successful.”

Meanwhile, the UAE as a whole is moving towards boosting supply and energy cooperation through a number of initiatives, including the newly formed Emirates Nuclear Energy Corporation (Enec).

Enec told Oxford Business Group that it was in the advanced stages of assessing several potential sites across the country.

Actual construction is expected to start in 2012, and the nuclear power plants could begin producing electricity in 2017. In addition to boosting power supply, the plants will provide a fillip for the emirate’s cement producers, which have seen a fall in demand for cement since the crisis hit.

Cement makes up 15 per cent of high-density concrete used in construction of nuclear power plants.

The emirate has been home to one of the world’s most innovative renewable energy schemes.

The joint Swiss Centre for Electronics and Microtechnology (CSEM) and UAE project is experimenting with “solar islands”, which use extra flat concentrators (EFCs), mirrors that focus the light of the sun and produce highly pressurised vapour for power generation.

Floating the EFC panels allows them to be shifted to follow the sun’s path more easily, while avoiding the high wind resistance (and therefore station downtime) caused by vertical panelling.

CSEM claims that solar islands produce power at a fifth of the cost per KWh of rival systems, due to the simple cell technology, the lack of precision mechanics for rotating the panels, and their relative space-efficiency, which allows up to 95 per cent of the surface area to be active.

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