Dubai to raise awareness on real cost of energy

Dubai plans to educate its residents on the real cost of water and electricity and is in the stage of studying all options with regard to subsidies, tariffs and development of own nuclear plant.

“For the time being we are looking into options and ways to raising the awareness of the users,” Nejib Zaafrani, secretary general and chief executive officer of Dubai Supreme Council of Energy.

In Abu Dhabi, consumers will be made aware of how much the government subsidises their consumption beginning January this year, a step that many speculate is a prelude to a tariff increase already under consideration by the Abu Dhabi Executive Council.

 In terms of the possibility of removing subsidies or increasing tariff, Zaafrani said policies are still on the drawing board. “I cannot talk about strategies when it is still in the making. You just have to be patient.”

In August last year, Vice President and Prime Minister of UAE and Ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum, in his capacity as the ruler of Dubai, issued a decree forming the Supreme Council of Energy. He established the Energy Higher council to address demand while the Department of Petroleum Affairs address supply.

A year after the creation of the energy body, the emirate announced plans a long-term strategy to focus on peaceful nuclear energy and clean coal to meet the emirate's future power demand.

Earlier this month, Saeed Al Tayer, vice chairman of the Supreme Energy Council, said Dubai may meet 20 per cent of energy needs from nuclear energy and another 20 per cent from clean coal with an aim to diversify power-generation sources and improve efficiency to ensure an adequate energy supply through 2030.

Waleed Ali Ahmed Salman, a member of Dubai's Supreme Council of Energy, said they may either  work together with Abu Dhabi  or pursue a project of its own.

Asked whether Dubai has started talking to Abu Dhabi with regard to nuclear plans, Zaafrani said: “Abu Dhabi is part of the UAE and Dubai part of the UAE…You will realise what is best for you when you look at the options. On a country level, you should look at all options and assess whether you work together or you do your own, and then explore. When you started thinking of working together, then you have to evaluate the value because it has to be a win-win situation.”

Another source of additional supply is Dubai's newly discovered oilfield, which could begin production next year. The oilfield is expected to help boost Dubai's electric output to 10,000 megawatts in 2012, from the current 7,500 megawatts, according to official estimates.

The new field, located east of the Rashid oilfield and which was called al-Jalila after a daughter of Dubai ruler Sheikh Mohammed, is expected to "increase the production of crude in Dubai significantly."

A field that size would give Dubai additional revenues of around $750,000 per day, or some $270 million per year, Reuters reported. Industry experts however noted that not all of this would be additional production or revenue, as Dubai is battling declining production from its mature oilfields. Output stands at around 50,000 to 70,000 barrels per day, down from a peak over 400,000 bpd in 1991.

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