The energy sector
The UAE aims to achieve a sustainable infrastructure for generating power through renewable energy.
The demand for electricity and water continues to grow at a fast pace due to a rise in population, an expanding economy and climatic considerations. According to Business Monitor International, a sharp increase in annual power demand throughout the country is expected over the period 2012-21, with an anticipated average annual increase in consumption of 5.6 per cent.
According to The UAE State of Energy Report 2015 (PDF), the share of power generation from gas will drop from 98 per cent in 2012 to less than 76 per cent in 2021 as clean energy would enter the mix and energy efficiency would intensify.
The energy sector plays an important role in shaping the UAE's internal and external policies. Since the discovery of oil and gas more than half a century ago, the UAE became a central player in global hydrocarbon energy market.
The UAE is the fifth largest oil producer in OPEC, with an oil output of 2.79 million barrels per day (bpd) in 2013. In the same year, the production of natural gas amounted to around 54.60 billion cubic metres. The production capacity of oil is set to rise to 3.5 million bpd by 2017.
However, thanks to the wise leadership, the UAE has decided to diversify its energy mix in order to sustain its progress and at the same time minimise the environmental impact that may arise from burning fuel.
Therefore, it was decided that the traditional sources of energy, being oil and gas should not be the main drivers of the economic process.
In addition, the UAE is developing local expertise in these important technologies and fostering international cooperation and resource conservation. Through this diversified long-term strategy, the UAE is building the knowledge and human capital required to create sustainable solutions for energy resources.
While oil and gas have historically been the dominant fuels powering the UAE's economy, the UAE's energy sector is undergoing a transformation targeting the diversification of the UAE's energy mix.
The UAE generates most of its electricity (110 billion kilowatt-hours in 2013) using natural gas-fired generation. It is planning to integrate the natural gas distribution networks of all the emirates; this should help alleviate some of the peak-demand shortfalls experienced in the past.
In 2012, the total installed capacity of electricity generation was 27.2 gigawatts (GW). To meet the rising demand in a sustainable manner, the UAE is focusing on coming up with a balanced energy mix.
The UAE efforts in the field of energy aims to ensure access to affordable, reliable and modern energy services, increase substantially the share of renewable energy in the global energy mix and double the global rate of improvement in energy efficiency.
Clean energy-mix in the UAE
The UAE Energy Strategy 2050 targets an energy mix that combines renewable, nuclear and clean energy sources to meet the UAE’s economic requirements and environmental goals as follows:
- 44 per cent clean energy
- 38 per cent gas
- 12 per cent clean coal
- 6 per cent nuclear.
The UAE government aims to invest AED 600 billion by 2050 to meet the growing energy demand and ensure a sustainable growth for the country’s economy.
The UAE government envisions to use nuclear power as the main source for generating non-hydrocarbon based electricity. The UAE instituted a comprehensive civil nuclear energy programme under the direct supervision of the International Atomic Energy Agency.
In 2008, the UAE published its policy on the peaceful use of nuclear energy. The policy is built on the most exacting standards of safety, transparency and security, making the UAE, a role model for nuclear energy development worldwide.
To meet the ambitious milestones set by the UAE's nuclear energy policy, the Emirates Nuclear Energy Corporation (ENEC) was established in 2009.
The construction of the first nuclear power plants started in 2013. Four new South Korean-designed nuclear reactors are due to become operational by 2020, each with generating capacity of 1,400 megawatts. The reactors will be able to provide an estimated 25 per cent of the country's electricity demand by 2020, replacing primarily the natural gas-generated electricity that makes up the bulk of power generation at present.
Since 2012, the UAE has reached agreements with at least three countries (Argentina, Japan and Russia) on cooperation in the nuclear power sector. In addition, the UAE signed a nuclear cooperation agreement with the United States in 2009 and it is a signatory to the Treaty on the Non-proliferation of Nuclear Weapons.
The additional renewable energy power generation in the country comes primarily from solar power, as it has a great role to play when it competes with steady sources of electricity supply.
It is currently viewed as the most attractive renewable technology for the UAE as the country is blessed with abundant sunshine. Costs have also decreased substantially in recent years.
The UAE was ranked third in the world in the production of concentrated solar power (CSP) in 2013. In 2014, roughly 140 MW of solar power was being generated in the UAE.
The government estimated that savings between USD 1 billion and 3.7 billion could be achieved by hitting its renewables' target and now believes that the savings could be even greater with the changed outlook for fossil fuels and renewable energy prices.
A number of solar energy facilities have been planned in the UAE, with some of them already operating. These include:
Shams 1 in Abu Dhabi
Shams 1 is the world's largest CSP plant. It was launched by H. H. Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE in March 2013.
The USD 600 million, 2.5 square kilometre plant has the capacity to feed 100 MW of electricity into the national grid, enough to power 20,000 homes and divert 175,000 tonnes of CO2 per year from the atmosphere.
The plant is located in Western Abu Dhabi and considered the largest concentrated solar power (CSP) plant and the first utility-scale commercial solar project in the Middle East and one of the largest in the world.
The plant features several key innovations, including purpose-built booster heaters that use natural gas to increase the resulting steam from 380 degrees Celsius to 540 degrees Celsius, enhancing the steam turbine's efficiency and expanding energy production.
The CSP plant also uses a dry cooling system to condense the exhaust steam flow, significantly decreasing the amount of water the plant uses compared to a similar facility.
Shams 1 is a joint venture between Abu Dhabi's clean energy company Masdar (60 per cent), Total (20 per cent) and Abengoa (20 per cent).
It was recognised for its contribution to local communities at the 2016 MENASOL Conference and Exhibition in Dubai.
This award reflects the key role that Shams 1 is playing in the UAE's quest to increase the share of renewables in the energy mix, and the positive difference it is making to the quality of life of local communities.
Concentrated Solar Power (CSP) project
As part of Dubai Clean Energy Strategy to generate 75 per cent of Dubai's power from clean energy by 2050, Dubai will build the largest Concentrated Solar Power (CSP) project on a single site in the world, which is expected to begin power generation within the next five years.
The project will surpass the existing world's largest CSP tower in Morocco that has a power generating capacity of 150MW.
The new CSP project, will deliver inexpensive power at less than 8 US cents per kilowatt-hour as it is generated from the site to be located at the existing Mohammad Bin Rashid Al Maktoum Solar Park.
Circular rings of solar mirrors called heliostats will direct sunlight into a central collection tower where the sun’s rays would power a steam turbine to generate concentrated solar power.
The solar project and solar park when completed are expected to slash carbon emissions in Dubai by more than 6.5 million tonnes of harmful CO2, helping Dubai and the UAE meet their commitment to the Paris Agreement to keep global warming temperature increases below 2 degrees Celsius this century.
The benefit of using concentrated solar power is that it can be stored for 8 to 12 hours after generation, which can help power the emirate through the night. The first phase of the new CSP project should be operational by 2021.
Mohammed bin Rashid Al Maktoum Solar Park
The emirate of Dubai announced in January 2012 that a 1 GW Mohammed bin Rashid Al Maktoum Solar Park would be built in phases and completed by 2030 in Seih Al Dahal, around 50 km south of Dubai city, to meet its renewable energy supply target.
The Mohammed bin Rashid Al Maktoum Solar Park is the largest single-site solar park in the world, based on the IPP model. It will generate 1,000 MW by 2020 and 5,000 MW by 2030. The first phase of this project began operations in 2013 with a capacity of 13 MW. The second phase began operations in April 2017 with a capacity of 200 MW. The third phase will begin operations in 2020 with a capacity of 1,000 MW, while the fourth phase of the project will begin operations by the last quarter of 2020 with a capacity of 5,000 MW. The project will have the world’s tallest solar tower, measuring 260 metres.
This project was launched under the Dubai Clean Energy Strategy 2050 to increase the share of clean energy in Dubai’s total power output to 7 percent by 2020, 25 percent by 2030 and 75 percent by 2050.
This plant can be responsible for the reduction of approximately 15,000 tons of carbon dioxide annually. The park is expected to eventually cover 40 square kilometres. A 200 MW plant, part of the same complex, is currently under construction. The park will produce 5,000 MW by 2030.
The clean coal project
The first phase of the clean coal project should begin operating in 2020. Dubai's Integrated Energy Strategy 2030 calls for 12 per cent of generating capacity from clean coal, 12 per cent from nuclear, 5 per cent from solar facilities and 71 per cent from natural gas by 2030.
Masdar initiative was launched in 2006 as a wholly owned subsidiary of Mubadala Development Company which belongs to the Government of Abu Dhabi.
Guided by Abu Dhabi Economic Vision 2030 (PDF), Masdar aims to become a developer of clean technology and future energy solutions in terms of design, innovation research laboratory and implementation.
Masdar operates through four interconnected business units and a research division that complements their work. The business units are:
Masdar has two global ventures: the Masdar Clean Tech Fund and DB Masdar Clean Tech Fund. The funds are focused on building portfolios in some of the world's most promising and pioneering companies in clean technology and renewable energy.
With a focus on mature technologies in solar and wind power, Masdar clean energy has invested over USD 1.7 billion of equity across projects with a total value over USD 6.4 billion.
Masdar Special Projects focuses on small and medium-sized applications in often challenging conditions and geographies. It has delivered 14 projects in 5 countries and has 13 ongoing projects across 9 different countries.
Other clean energy projects
- Energy performance contracting (ESCO companies) for retrofitting more than 30,000 buildings across Dubai
- Feeding the generated excess electricity to the power grid in Dubai is expected to boost the installation of rooftop PVs
The region's first wind turbine was installed on Sir Bani Yas Island. The wind turbine, which stands 65 metres high and has three rotor blades each with a 52-metre wingspan, has a production capacity of 850 kilowatts per hour. Masdar and Abu Dhabi's Tourism Development and Investment Company (TDIC) aim to develop an onshore wind farm on this island with a capacity of up to 30 MW.
Waste-to-energy is the process of generating energy in the form of electricity or heat from the primary treatment of waste.
Masdar, Abu Dhabi's renewable energy company, had signed a strategic partnership agreement with Bee'ah to develop the UAE's waste-to-energy (WtE) sector. This partnership will help contribute to the UAE Government's Vision 2021 which targets, among other goals, diverting waste from landfills by 75 per cent by 2021.
In Abu Dhabi
A 100 MW facility, one of the world's largest, is under development in Abu Dhabi by Abu Dhabi National Energy Company PJSC (Taqa), in coordination with the Center of Waste Management (Tadweer).
The plant was scheduled to be up and running by 2017, generating enough power for 20,000 households in Abu Dhabi as well as cutting greenhouse gases. It is expected to reduce CO2 emissions by more than one million ton per year.
The project will be set near the Mussafah Sea Port, and it will be one of the biggest waste-to-energy facilities in the world, stretching across an area of 100,000 square metres.
By the second quarter of 2020, Dubai will have the largest plant in the Middle East to convert waste-to-energy. The plant will be located in Al Warsan 2 and will be built at a cost of AED 2 billion.
The project is in line with Dubai Municipality's vision to make Dubai the most sustainable and smart city by 2021, which will in turn achieve National Agenda's objectives for a 75 per cent reduction in the number of landfills by 2021.
This will provide more land plots that are currently being used to store waste, in addition to protecting the environment from methane emitted by landfills.
The plant will begin its operations by the second quarter of 2020, and that it will be able to process 2,000 metric tonnes every day during the first phase of operations, producing 60 megawatts of energy.
Dubai Municipality, in co-ordination with the Dubai Supreme Council of Energy and Dubai Electricity and Water Authority, conducts studies to achieve the strategy of Dubai for Clean Energy, to produce 7 per cent of Dubai's total energy from clean energy sources by 2020.
The emirate of Sharjah set up a municipal waste management company Bee'ah (the Arabic word for environment) in 2007 in the form of a public-private partnership. In October 2011, Sharjah announced an ambitious plan for 100 per cent landfill diversion by 2015.
To attain this goal, Bee'ah developed a state-of-the-art waste management centre to process and recycle waste. In 2012, the company introduced two-stream waste collection and a new tipping fee structure to incentivise waste reduction and to closely regulate landfill contents. Improved blue and green coloured odour-proof bins have been deployed across the emirate.
In addition, Sharjah is constructing a Waste-to-Energy (WtE) plant in in Sajja area that will eventually convert 400,000 tonnes of waste per year into 80 megawatts (MW) of electricity.
The project will convert 99 per cent of organic waste into energy. After using some of the generated power for the plant's own needs, the electricity will be exported to Sharjah.
In Ras Al Khaimah
A 2 MW facility is operational in Ras Al Khaimah.
Need for energy efficiency
There are many reasons behind the increasing interest in achieving energy efficiency and rationalisation. Some of them are:
- climate change and the desire to reduce emissions
- the tendency to shift towards a green economy capable of creating new job opportunities
- the desire to achieve global economic competitiveness and to provide more sustainable products and services
- the increased demand for conventional energy sources and their rising prices
- the negative effects of using fossil fuels to produce electricity.
Some of the factors that lead to the prevention of energy efficiency among consumers are:
- lack of motivation of owners and tenants to spend money on the property to develop its energy efficiency
- low consumption cost.
The above equation requires careful revision of the consumption tariff from time to time, or to apply the slab tariff system. The slab tariff encourages consumers to stay within the scope of the least costly slab rather than increasing consumption to avoid the more expensive slabs.
In order to promote efficient consumption of electricity and water, an additional fuel fee is added to consumers' monthly electricity and water bill. This fee depends on the rate of increase or decrease of the actual fuel cost supplied to DEWA's generation plants.
Efficiency standards and specifications require an increase in capital expenditure to cover the sums required to purchase applications or introduce improvements that help to reduce consumption.
Sourced from DEWA website.
Tips to reduce utility bills
Users need to adopt certain devices and best practices in order to reduce bills and conserve energy. For more information check:
Energy efficiency, conservation
At the federal level
In July 2014, Ministry of Energy and Industry established a new department for energy conservation and energy efficiency. One of the goals of this department is to establish a database of energy consumption by different sectors across the UAE, which allows comparisons between performance of establishments within a sector.
Emirates Authority for Standardization and Metrology (ESMA) promotes the use of efficient electrical equipment. In 2012, it launched an efficiency-labelling scheme for window and split-unit air-conditioning systems, eliminating highly inefficient units from the market. Since July 2014, ESMA has also banned the import of inefficient incandescent light bulbs. The scheme is expected to cut energy use by 500MW per year.
At the local level
In Abu Dhabi, the Regulation and Supervision Bureau works actively with residents to reduce electricity and water consumption and demand.
In Dubai, H. H. Sheikh Mohammed bin Rashid Al Maktoum, issued a resolution to implement green building specifications and standards (PDF) in new buildings. In 2014, the building code became mandatory for all new buildings in the emirate.
Sharjah Electricity and Water Authority (SEWA) created a unit called Conservation Department with a target to conserve electricity, water and gas.
In Ajman, Green Building committee in Ajman Municipality and Planning Department was formed to support energy conservation efforts.
In 2010, the UAE Cabinet approved the Green Building and Sustainable Building standards to be applied across the country. Application of these standards started at government buildings early 2011. The project is expected to save AED 10 billion by 2030 and reduce around 30 per cent of carbon emissions.
Emirates Energy Star (EES) is a joint venture between Etisalat and Pacific Controls to reduce the GHG emissions of the UAE and the fuel bills of its companies, by retrofitting existing buildings with energy saving controls systems and achieving savings of 10-35 per cent.
The programme is working successfully with all types of legacy systems, ranging from buildings with or without building management system (BMS), facilities with chilled water systems and those with package units. It is tailored to suit individual building owner's financial requirements.
EES' rating system
Emirates Energy Star assigns stars on the basis of percentage of energy saving. Refer to the chart below for stars:
- 10 per cent energy saving (1 star)
- 15 per cent energy saving (2 stars)
- 20 per cent energy saving (3 stars)
- 25 per cent energy saving (4 stars)
- 30 per cent energy saving (5 stars)
Estidama, which is the Arabic word for sustainability, is an initiative developed and promoted by Abu Dhabi Urban Planning Council (UPC). Through Estidama, Abu Dhabi is progressing the principles and imperatives for sustainable development, while recognising the unique cultural, climatic and economic development needs of the region.
Estidama introduced the Pearl Building Rating System (PBRS) in 2010 to rate energy efficiency in buildings. The PBRS encourages:
- minimisation of waste
- reduction in consumption of water and energy
- use of local material.
It aims to improve supply chains for sustainable and recycled materials and products.
Wetex sustainability exhibition
Wetex is a global platform organised by DEWA in Dubai. It brings national and international companies closer to the latest technology and resource management solutions. The exhibition presents all latest developments in the water, energy, technology and environment sectors.
Demand side management policies
Dubai Supreme Council of Energy (DSCE) set a governance framework to streamline existing energy practices across the DSCE entities to optimise synergy and energy efficiency. The council identified policies and regulations to steer demand side management in the emirate in three areas: power, water and transportation fuel.
Efforts in this regard include:
- implementing demand abatement and energy efficiency measures
- evaluating energy consumption
- developing intensity mapping for the emirate
- introducing abatement technologies for water
- power and transportation fuel.
Sharjah, the City of Conservation
SEWA started efforts towards creating one of the best model cities of power conservation with an ambitious strategy and creative initiatives for energy conservation. In 2015, Sharjah had been declared as the City of Conservation to achieve sustainable development in the emirate. The initiative focuses on the implementation of energy efficiency, with a target of 30 per cent reduction in the consumption of power and water in the emirate of Sharjah.
Hosting IRENA's regional office
Abu Dhabi hosts International Renewable Energy Agency (IRENA) since 2009, which is the first inter-governmental organisation to have its headquarters in the Middle East.
IRENA is an inter-governmental organisation that supports countries in their transition to a sustainable energy future and serves as the principal platform for international cooperation, a centre of excellence, and a repository of policy, technology, resource and financial knowledge on renewable energy.
IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy, including bio-energy, geothermal, hydropower, ocean, solar and wind energy, in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth and prosperity. Abu Dhabi Government has set a target that by 2020 at least 7 per cent of power generation should be from renewable energy.
Launching Dubai Integrated Energy Strategy 2030
The Government of Dubai established Dubai Supreme Council of Energy (DSCE) in 2009, which oversees all aspects of energy in the emirate and developed the Dubai Integrated Energy Strategy 2030 to drive energy decarbonisation and ensure efficient use of energy.
In January 2015, Dubai announced a revision of its targets for the share of renewable energy in the total energy mix to 7 per cent by 2020 and 15 per cent by 2030.
Dubai Clean Energy Strategy 2050
Read about Dubai Clean Energy Strategy 2050.
Deregulation of fuel prices
Subsidies on fuel encourage higher consumption and lower conservation. Therefore, linking the price of petrol to the price of oil will help rationalise fuel consumption and encourage the use of public transport in the long run, as well as incentivise the use of alternative fuels.
Ministry of Energy and Industry had announced that fuel prices across the UAE would be deregulated from August 2015, adopting a new policy linked to global prices. Ministry of Energy and Industry and Ministry of Finance would act as the government's representatives in a committee set up to review fuel prices in the UAE every month.
On the 28th of each month, the ministry announces the prices via its websites, its social media accounts and national media. In addition, distribution companies declare the new prices once they are announced each month.
The decision corresponds to the UAE's efforts to ensure sustainable development while preserving the environment, achieve a balance between economic and social development and to provide high quality of life for future generations.
In case of any violations, a complaint can be submitted to Ministry of Energy and Industry via a dedicated phone number (056-5467942) and an email id (email@example.com).
Price structure of energy
The price structure varies depending on the utility. Part of the price reflects the cost of supply of natural gas to the respective emirate. For more information about prices in each emirate, check with the respective entity.
Energy Trilemma Index
The Energy Trilemma Index ranks countries in terms of their potential ability to provide sustainable energy through the three dimensions:
- Energy security
- Energy equity
- Environmental sustainability
In 2017, the overall rank of the UAE in this index was 40 and the balance score was AAD.
The UAE scored 21 in energy security, 14 in energy equity and 116 in environmental sustainability.
Read more about the UAE's performance in Energy Trilemma Index.
Updated on 21 Mar 2019