UAE to invest $8bn in power

The UAE is expected to pump more than $8 billion (Dh29.36 billion) in electricity generation over the next eight years with capacity expanding by over 53 terrawatt hours by end-2021, Business Monitor International said recently.

“Expansion is the name of the game in the UAE’s electricity market. With more than $8 billion expected to be invested in the period up to 2020, covering thermal, renewable, coal and nuclear generating capabilities, the market will remain highly attractive to international developers; however, the tight time frames for some ambitious new projects, intended to hike output by more than 50 per cent, will present logistical challenges,” BMI said in a press release.

Total power generation in the UAE for 2012 is forecast at 90.48 terrawatt hours (TWh), representing a year-on-year rise of nearly four per cent. With plenty of new generating capacity coming online in Abu Dhabi in the next few years, BMI envisages an uptick in annual production, lifting overall capacity to more than 123TWh by 2017. With nuclear added into the mix, power generation is set to reach 144.2TWh by end-2021.

BMI anticipates that natural gas-fired generation will grow by a more modest 3.6 per cent between2012 and 2021. Nuclear is expected to account for 13.6 per cent of the total energy mix by the end of this period. Alongside nuclear, the UAE is also persevering with fossil-fuel based additions, with plans for coal-fired power stations in Dubai; however, the report did not factor coal into the wider energy mix.

It also sees solar and renewables making up a more significant contribution to the overall energy mix. The first, 13MW phase of the planned 1,000MW Mohammed bin Rashid al-Maktoum Solar Park, is due to be completed in2013. Under the Dubai Integrated Energy Strategy 2030, the aim is to reduce energy consumption by 30 per cent through the implementation of enhanced energy-efficient initiatives like the solar PV park. By 2030, Dubai aims to generate at least 5 per cent of its energy from renewables, 12 per cent from clean coal and 12 per cent from nuclear power – an ambitious target. Dubai Electricity and Water Authority (Dewa) expects that distributed rooftop solar power sources would make a practical contribution to Dubai’s power needs, at around 20%, or around 2,500 megawatts(MW), by 2030.

With the nuclear ball rolling, BMI expects more contract awards through 2013. Emirates Nuclear Electricity Corporation (ENEC) was awarded its construction licence for two of four planned nuclear units in the west of Abu Dhabi in mid-July 2012. The Federal Authority for Nuclear Regulation (FANR) granted the licence in mid-July 2012 and gave the green light for the building of two advanced pressurised water reactors (APRs), with each having a 1,400MWcapacity. In Q312, it signed deals with six companies to supply uranium over a 15-year period. These companies were ConverDyn of the US, Canada’s UraniumOne, Urenco of the UK with Rio Tinto, Russian’s Tenex and France’s Areva. These companies will provide enriched uranium to Kepco Nuclear Fuels, which will then make the fuel assemblies for the four planned units.

BMI forecasts a sharp increase in annual power demand over the 2012-2021 period, with an anticipated average annual increase in consumption of 5.6 per cent. Consumption of 81.0TWh will rise to 133.5TWh by 2021, under our forecast scenario. Much of this growth will be underpinned by a rising population, which we see increasing from 8.1mn in 2012 to 9.3mn by end-2021.

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