Electricity and Water
The services offered by the federal Ministry of Electricity and Water have grown very substantially over the years and now match those offered in developed countries. Electricity has reached every dwelling in the UAE. However, demand has also spiralled in the intervening years, so much so that maximum demand in Abu Dhabi emirate was 2,686 MW in 1998. Water supplies have also been under pressure to meet the needs of 75,000 consumers. Current consumption levels stand at approximately 250–300 million imperial gallons per day (migd), with Dubai accounting for up to 107 migd during peak periods and up to 100 migd in winter. An independent federal authority is being established under the chairmanship of the Minister of Electricity and Water to manage the electricity and water sector as well as supervise projects and planning in the future. A draft federal law to this effect was approved by the federal Cabinet in June 1999. The authority is due to be in operation by the end of 1999. In order to cope with the demands of more than 124,000 energy consumers the Ministry is linking all its generating plants in a single grid. The first and second phases of the grid linked areas of the east coast, Fujairah, Qidfa, Khor Fakkan and Dibba, and the west coast, Ajman, Umm al-Qaiwain and Ras al-Khaimah, to the Central Zone. The Ministry has also signed a Dh 75 million contract for the third phase of the project which covers the linking of Dhaid power generation station in the Central Zone with the main station in Fujairah in the Eastern Zone. The new grid will facilitate the distribution of power to the stations according to the needs of each area, at the same time meeting the growing demand of electricity in the Northern Emirates. On completion of the grid the UAE will be linked to the AGCC grid throughout the Arabian peninsula. In addition the Ministry finalized a Dh 220 million contract on 6 August 1999 for the installation of 200 megawatt gas turbines in Qidfa in Fujairah and Nakheel in Ras al-Khaimah, all of which will increase output to the Northern Emirates, stabilizing power supply and meeting the increasing demand for power in the area. The final phase of the project is scheduled to be completed by the end of the year 2000. New Privatization in Abu Dhabi At present desalination plants in Abu Dhabi emirate are currently operating near their design capacities of 218 migd and the capital’s power requirements are expected to reach 4,500 MW by the year 2010. To meet current needs and plan for the future Abu Dhabi Government has embarked on a comprehensive programme to privatize its water and electricity sector which is expected to be completed within the next 10 years. The ambitious privatization plan is well under way with the formation of 11 companies under the Abu Dhabi Water and Electricity Authority (ADWEA), thereby bringing to an end the old Water and Electricity Department (WED). The 11 companies will operate on a commercial basis, each with its own budget and objectives, under the leadership of Sheikh Dhiyab bin Zayed Al Nahyan, ADWEA chairman. The Government will retain control of the 11 companies for some time, but the plan is to ultimately permit foreign investors to buy stakes in the generating and distributing companies. Four of the 11 companies will be involved in power generation: the Al Mirfa Power Company, Umm al-Nar Power Company, Bainounah Power Company and Al Taweelah Power Company. The two new distribution companies are the Abu Dhabi Distribution Company and Al Ain Distribution Company. Other new firms are the Abu Dhabi Company for Servicing Remote Areas, Abu Dhabi Transmission and Dispatch Company (Transco) , Abu Dhabi Water and Electricity Corporation, Al Wathba Central Services and Emirates CMS Power Company. Transco will be responsible for scheduling and dispatching, maintaining the integrity of the transmission networks (water and electricity) and administering the settlement system. All the companies will be subsidiaries of ADWEA and will be supervised by the Regulation and Supervision Bureau for Water and Electricity which will grant or withdraw licenses for operating companies, establish quality standards and develop the tariff structure. The immediate aim is to trim the 14,000 staff in the Water and Electricity Department and develop new re venue sources through investment in infrastructure. Long-term objectives are to promote the efficient use of resources, to send cost reflective price signals to consumers and provide clear incentives for producers to manage costs. Privatization of electricity projects will eliminate government subsidies: currently electricity consumption is heavily subsidized by up to 75 per cent of the cost for nationals and up to 50 per cent for non-nationals and business. Privatization will also reduce public expenditure on the provision, maintenance and expansion of power projects, which will free financial resources for other development expenditure. |
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