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UAE power sector shapes up ahead of Cop28

3 April 2023

This package on the UAE's power sector also includes:

> Ewec rules out solar in desalination projects

> Dewa receives K station bid

> Dewa briefs 1.8GW solar bidders

> Italian firms pursue energy transition roles

> Majid al-Futtaim signs 36MW clean energy agreement

> Abu Dhabi eyes power and water contracts extension

There will be no shortage of milestones once November’s Cop28 turns the spotlight onto the UAE’s power generation sector.

Already, Abu Dhabi-based Emirates Water & Electricity Company (Ewec) has announced that, on 10 February at 2.26 pm, it met 80 per cent of total power demand using renewable and clean energy from its solar and nuclear power plants – supplying roughly 6.2GW of its total 7.7GW system power demand.

Before this, Bruce Smith, Ewec’s executive director for strategy and planning, told MEED that the company was working towards implementing control systems to enable clean and renewable energy to meet up to 100 per cent of power demand “under specific parameters or conditions”.

As things stand, Ewec is set to become the first offtaker in the region to build a utility-scale battery energy storage system (BESS), a key tool to address the intermittency of solar energy production. The company sought advisers for the development of its first two BESS facilities earlier this year.

The two projects will have a minimum capacity of 300MW plus one-hour of reserve-optimised BESS. The facilities are expected to come on-stream by 2026.

From being nearly wholly dependent on thermal power generation as recently as four years ago, these developments offer compelling evidence of the UAE’s commitment to its energy diversification strategy

Higher peak demand not only requires additional thermal and solar generation capacity, but also batteries to enhance system reliability, Ewec noted in a presentation in March.

Based on its latest statement of future capacity requirements, Ewec foresees a 30 per cent peak demand increase from 16.7GW in 2022 to 21.6GW by 2029.

This year’s commissioning of a new power plant in Sharjah – the 1,800MW Hamriyah independent power producer (IPP) – is expected to reduce Ewec’s electricity exports. However, this will be offset by the addition of offshore demand starting in 2026 from Abu Dhabi National Oil Company (Adnoc).

In spite of rising demand warranting expansion in installed generation capacity – and with substantial contracted thermal capacity approaching expiry – Ewec forecasts halving its total carbon dioxide (CO2) emissions from 43 million tonnes a year (t/y) in 2019 to 22 million t/y by 2035.

Ewec needs to install 7.3GW of solar capacity by 2029 and 16GW by 2036, which implies procuring roughly 1GW to 1.5GW of new capacity annually during the period.

By the end of 2023, Ewec’s solar fleet will comprise the 935MW Noor Abu Dhabi project in Sweihan and the 1.5GW Al-Dhafra solar photovoltaic (PV) plant, which is nearing completion.

The procurement process is under way for the emirate’s third utility-scale solar PV IPP, also with a capacity of 1.5GW, in Al-Ajban.

Tendering for a fourth solar PV project, likely to be located in A-Ain, is also expected to begin in the third or fourth quarter of 2023.

This ambitious programme, including an aspiration to enable Ewec’s solar fleets to produce dispatchable loads similar to conventional power plants, makes the BESS projects of paramount importance.

Dubai green story

Dubai’s long-term capacity procurement plan is less clear, although state utility Dubai Electricity & Water Authority (Dewa)  has reported a 5.5 per cent increase in demand in the emirate in 2022, to reach 53,180 gigawatt-hours (GWh).

This is half of the 10 per cent growth in 2021, which marked the emirate’s resurgence from the Covid-19 pandemic. 

As of early 2023, over 2GW of clean energy from the Mohammed bin Rashid solar park accounted for 14 per cent of Dewa’s electricity production capacity, which stood at 14.5GW.

Based on the initial plan of 5GW of capacity once the solar park is complete, and with some 1GW still under construction, Dewa is expected to procure at least 2GW more.

The 1.8GW sixth phase of the solar park, which is currently being tendered, accounts for most of the outstanding capacity.

Unlike Abu Dhabi, which plans to expand its thermal generation capacity in light of the demand increase and expansion of intermittent renewable energy, Dubai has already ruled out gas as a feedstock for future greenfield generation capacity.

“We have a relatively new and modern fleet [of thermal power generation plants] that would be operational for another 20 to 30 years,” Saeed Mohammed al-Tayer, Dewa CEO and managing director, said in a forum in Dubai in 2020.

The Dubai Economic Agenda 2033 (D33), which aims to double the size of Dubai’s economy over the next decade and consolidate its position among the top three global cities, is expected to drive power and water demand within the emirate, without compromising its carbon abatement strategy and emissions reduction targets.

Diversification

The UAE already has the GCC’s most diversified electricity production installed capacity, with fleets deriving electricity from solar PV, thermal and nuclear power plants. The region’s first hydroelectric power plant in Hatta in Dubai will further expand the country’s power sources.

The completion of the 1.5GW Al-Dhafra solar IPP in Abu Dhabi and roughly 1GW from the fourth and fifth phases of the MBR solar park in Dubai will drive solar’s share from 8 per cent at the start of the year to 12 per cent by the end 2023. This will cause the overall share of thermal power generation to retreat by three percentage points to 79 per cent, in spite of the completion of the remaining units at Hassyan in Dubai, the Hamriyah IPP in Sharjah and the Fujairah F3 facility.

The three reactors at the Barakah nuclear power plant in Abu Dhabi also contribute an estimated 4.2GW of installed capacity, or roughly 9 per cent of Abu Dhabi, Dubai and Sharjah’s combined overall capacity, and 18 per cent in Abu Dhabi alone.

From being nearly wholly dependent on thermal power generation as recently as four years ago, these developments offer compelling evidence of the UAE’s commitment to its energy diversification strategy.

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Jennifer Aguinaldo

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