New Market Study Published: United Arab Emirates Power Report Q4 2012

Boston, MA -- (SBWire) -- 02/07/2013 --BMI View: Confronted by a major, sustained demand spike, the UAE authorities at both federal and emirate levels will continue to prioritise electricity expansion schemes, whether traditional steam- and gas-powered, or through new methodologies such as coal, renewables and nuclear. A key facet of the country's market looking forward will be a much wider range of fuel sources, though there must be questions over whether the full complement will be able to come online with the anticipated speed. Nonethless, the government and its parastatal utilities, such as the Abu Dhabi Water & Electricity Authority, are doing most things right and we expect it to keep pace with rising demand.

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Expansion is the name of the game in the UAE's electricity market. With more than US$8bn expected to be invested in the period up to 2020, covering thermal, renewable, coal and nuclear generating capabilities, the market will remain highly attractive to international developers; however, the tight timeframes for some ambitious new projects, intended to hike output by more than 50%, will present logistical challenges.

Key trends and developments in the UAE electricity market:

- Total power generation in the UAE for 2012 is forecast at 90.48 terrawatt hours (TWh), representing a year-on-year (y-o-y) rise of nearly 4%. With plenty of new generating capacity coming online in Abu Dhabi in the next few years, BMI envisages an uptick in annual production, lifting overall capacity to more than 123TWh by 2017. With nuclear added into the mix, power generation is set to reach 144.2TWh by end-2021.
- BMI anticipates that natural gas-fired generation will grow by a more modest 3.6% between 2012 and 2021. Nuclear is expected to account for 13.6% of the total energy mix by the end of this period. Alongside nuclear, the UAE is also persevering with fossil-fuel based additions, with plans for coal-fired power stations in Dubai; however, we are not yet factoring coal into the wider energy mix.
- BMI sees solar and renewables making up a more significant contribution to the overall energy mix, and Dubai is now following in Abu Dhabi's footsteps. The first, 13MW phase of the planned 1,000MW Mohammed bin Rashid al-Maktoum Solar Park, is due to be completed in 2013. Under the Dubai Integrated Energy Strategy 2030, the aim is to reduce energy consumption by 30% through the implementation of enhanced energy-efficient initiatives like the solar PV park. By 2030, Dubai aims to generate at least 5% of its energy from renewables, 12% from clean coal and 12% from nuclear power - an ambitious target.Dubai Electricity and Water Authority (DEWA) expects that distributed rooftop solar power sources would make a practical contribution to Dubai's power needs, at around 20%, or around 2,500 megawatts (MW), by 2030.

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