New Energy market report from Business Monitor International: "United Arab Emirates Power Report Q2 2014"
Boston, MA -- (SBWIRE) -- 05/01/2014 -- This quarter we maintain our bullish forecasts for the UAE power sector. UAE authorities at both federal and emirate levels continue to prioritise generating capacity expansion programmes focusing on expanding the country electricity mix to include a wider range of fuel sources, spanning to traditional steam and gas turbines to carbon-light technologies, such as renewables and nuclear. Yet we remain sceptical about the ability of the country to meet its targets with the anticipated speed.
Key Trends And Developments
- Although the UAE is not without its challenges, it is seen as one of the more stable Gulf states over the long term, with a small, wealthy population; no history of terrorism; and no sectarian tensions to speak of. Additionally, BMI's Country Risk analysts remain bullish on the economic outlook for the UAE as a wealth of data point to continued growth. With consumer and business sentiment looking positive, the outlook for household consumption and fixed investment is particularly bright over the coming quarters, effectively supporting plans for hikes in generating capacity. With more than US$8bn to be invested in the period up to 2020, the market is expected to remain highly attractive to regional and international developers.
- Several major players are vying for contracts in the well-established thermal segment, as well as in renewables and nuclear. Natural gas-fired generation will continue to fire the lion's share of generation (71.92% in 2023), as the country perseveres with fossil-fuel-based capacity additions with a view to taking advantage of its abundant and cheap domestic resources.
- Yet, new technologies are being developed in the country. For instance, state-owned Dubai Electricity and Water Authority (DEWA)'s decision to launch a tender for the construction of a new 1,200 megawatt (MW) coal-fired power plant in Q313 underlines the UAE's ambitious capacity expansion plans, and we believe one of the most notable elements of the project is that it could potentially be the biggest clean coal-fired power plant in the Gulf if completed
- Similarly, the country's nuclear aspirations continue to take shape. The UAE plans to build four nuclear power plants with a combined capacity of 5.6GW by 2020. Emirates Nuclear Energy Corporation (ENEC) officially commenced the construction of the UAE's first nuclear energy plant in 2012 and the construction of the second nuclear reactor at the new Barakah power plant was announced in May 2013. The US$20bn facility, which is located in Al Gharbia, will have a total of four nuclear reactors. The first is scheduled for completion in 2017, with the remaining three to be installed by 2020.
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