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UAE power sector hits record $8.9bn in contracts

8 October 2025

 

The UAE’s power market has recorded its highest annual total for contract awards on record, with $8.9bn confirmed across 26 projects so far in 2025.

The total surpasses all previous years, including the pre-pandemic peaks of 2017 and 2018, when contract awards were valued at $7.4bn and $7.3bn, respectively. 

It is the first time since then that investment in power generation and transmission has returned to record levels, though the makeup of projects presents a more complex picture.

Landmark project

The largest contract award, and the only independent power producer (IPP) project contract this year, is the $6bn solar plant and 19GWh battery energy storage system (bess) in Abu Dhabi. 

A consortium of India’s Larsen & Toubro and Power China won the main contract for the project, which will be the world’s largest round-the-clock combined solar and storage facility when completed.

Developed by Abu Dhabi Future Energy Company (Masdar) in partnership with Emirates Water & Electricity Company (Ewec), this single IPP accounts for 67% of total contract value in 2025, reflecting how the UAE’s investment cycle has shifted from conventional engineering, procurement and construction (EPC) projects to large, capital-intensive public-private partnerships at the utility scale.

In 2017, the only IPP made up about 15% of total power awards. A year later, the Hamriyah combined-cycle plant accounted for 21%. Across both years, 92 EPC contracts were issued for power projects.

By contrast, in 2025, just 21 EPC contracts have been awarded, reflecting a narrower but higher-value market. While total spending has reached new highs, the number and diversity of projects have declined, signalling consolidation around large developer-led schemes.

One other investment in the power sector exceeded $1bn this year. The Al-Dhafra open-cycle gas turbine (OCGT) plant is being financed by Abu Dhabi National Energy Company (Taqa). Taqa will operate the 1,000MW facility under a 24-year power-purchase agreement with Ewec, signed in April. A joint venture of South Korea’s Samsung C&T and local firm Trojan General Contracting secured the EPC contract.

Pipeline projects

At present, projects under bid evaluation total around $8.4bn, representing those expected to be awarded in the near term. Of this, $2.6bn is linked to solar photovoltaic (PV) schemes, $4.5bn to new gas-fired plants, and $1.1bn to substations and control centres. Five IPPs account for over 90% of the total value under evaluation.

The largest is a 2,500MW gas-fired IPP planned within Abu Dhabi’s Al-Taweelah complex, for which three consortiums have submitted bids. The project is expected to be awarded in the fourth quarter of 2025, with the successful developer to hold a 40% equity stake.

Further upstream, about $14.3bn-worth of power projects are currently out to tender. Oil- and gas-based plants comprise the largest share at $7.8bn, followed by $4.9bn in solar and $1.2bn in transmission works. The figures highlight how conventional power remains essential, even as renewables dominate long-term policy goals.

Grid investments

Beyond generation, Taqa Transmission has awarded $760m across nine grid projects, complemented by $550m in network and efficiency contracts through Taqa Energy Services. Emerge, the Masdar-EDF joint venture, added $226m in distributed solar projects, while Etihad Water & Electricity (Etihad WE) and Sharjah Electricity & Water Authority (Sewa) implemented smaller regional connection schemes valued below $50m each.

These ownership patterns confirm the continuing concentration of activity around Abu Dhabi-linked entities, with Ewec, Masdar and Taqa driving most large-scale procurement. Dubai Electricity & Water Authority (Dewa) remains active through grid and solar expansion, while smaller northern utilities focus on targeted distribution upgrades aligned with regional demand.

Transmission and distribution upgrades have become central to maintaining grid stability and integrating intermittent renewables. Ewec and Taqa are expanding 400kV and 132kV networks across Abu Dhabi and the Northern Emirates, while Dewa continues to reinforce its cable and substation systems in Dubai. These works are vital precursors to the next phase of large-scale solar and battery storage integration.

Solar growth

Renewables remain a key pillar, even as the pace of new awards moderates. Upcoming solar IPPs, including Ewec’s Al-Zarraf and Al-Khazna projects, will expand its capacity in clean energy to more than 6GW once operational. Contracts for both are expected to be awarded by the end of the year. 

In Dubai, Dewa is focused on completing new phases of the Mohammed Bin Rashid Al-Maktoum Solar Park and piloting grid-scale storage initiatives. The utility is preparing to tender the main contract to develop the seventh phase to prequalified firms. This phase will include a 1,600MW solar PV plant and a 1,000MW bess, providing up to six hours of storage. 

In terms of sector composition, solar power leads the way in 2025, representing $6.6bn of total contract awards, propelled by the $6bn Abu Dhabi solar and storage IPP.

Oil- and gas-fired plants contributed $1.1bn, while transmission and cable works added $449m. The remaining share came from substation and control-centre developments. Waste-to-energy and wind remain limited, with less than $200m in combined tender activity this year.

Market concentration

Compared with previous cycles, ownership structures have stayed broadly consistent but become more concentrated. In 2022 and 2023, Dewa accounted for a higher number of smaller-scale projects, averaging about 15% of total annual contract value. In 2025, that share fell to about 10%, though with larger average contract sizes, reflecting a more strategic investment focus. Ewec’s total investment value, meanwhile, has more than doubled since 2024.

Taken together, the figures present a mixed picture for 2025. The UAE’s power sector is attracting record levels of investment, but that capital is flowing into a handful of large IPPs rather than a broad portfolio of EPC schemes. The shift illustrates both the success of the public-private partnership model and the consolidation of opportunities into fewer, more complex projects, a sign of maturity, but also of growing selectivity in the market.

MEED's November 2025 special report on the UAE also includes:

> GOVERNMENT: Public spending ties the UAE closer together
> ECONOMY: UAE growth expansion beats expectations
> CONSTRUCTION: UAE construction faces delivery pressures
> TRANSPORT: $70bn infrastructure schemes underpin UAE economic expansion

 

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Mark Dowdall

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