Making it count: Energy conservation is an increasingly high priority

With peak demand for electricity expected to more than double between 2011 and 2020, Abu Dhabi is taking steps to encourage a reduction in consumption. This would not only lessen the government’s burden when it comes to subsidising electricity prices, it could also obviate, or at least reduce, the need to invest in new power generation capacity. To meet its goal of reducing energy demand, the emirate has implemented a number of different conservation efforts, including educating consumers about energy consumption and introducing building codes to make structures more energy-efficient. At the centre of any discussion about the consumption of electricity is pricing. At present, residential customers who are Emiratis pay Dh0.05 ($0.014) per KWh, while the price for non-nationals is Dh0.15 ($0.04) per KWh. Similarly, industrial, commercial and government users are also charged Dh0.15 ($0.04) per kWh. These rates are flat and do not change according to the time of day the electricity is consumed.

EDUCATION: While price is usually one of the most important factors in driving demand, Abu Dhabi is in the midst of trying to modify consumer behaviour without changing its tariff structure. In March 2012 the Regulation and Supervision Bureau (RSB), the independent regulatory authority overseeing the sector and the distribution company, rolled out a newly designed utility bill for water and electricity. In addition to providing information regarding usage, the new bill will also indicate the amount of government subsidy that has been paid for the amount of water and electricity consumed. For example, for electricity, it might show a nominal bill of Dh2000 ($544), a subsidy of Dh1400 ($381), and a final charge of Dh600 ($163).

Residential customers will also be able to see “ideal” and “above-ideal” consumption ranges for different property types. For example, the ideal amount of electricity usage for a flat is up to 20 units per day, while the daily figure for water is 700 litres. For villas, the amounts are higher, at 200 units and 5000 litres per day. The new bills reflect this ideal and above-ideal information as green and red blocks, respectively. According to Nicholas Carter, the director-general of RSB, about 80% of the bills in April 2012 fell within the ideal range (green block), but he cautioned that this figure would change in summer months as air conditioning usage rises. However, there is an expectation that residential customers will modify their behaviour when presented with additional information, regardless of the fact that prices have not changed, Carter added.

PEAK DEMAND: New bills are not the only way in which to inform people of how much electricity or water they are using; another programme from RSB, this time through its Powerwise office, will also help customers better understand their power consumption, particularly with respect to the time of day, with a goal of reducing usage during peak hours, which usually occur in the late afternoon. The challenge for Abu Dhabi – as for any entity working to ensure that electricity is available – is that power generation capacity must be sufficient to handle the peak demand, even if non-peak demand is much lower. With peak demand steadily rising in recent years, this has required investing in more and larger facilities that are unused at certain times, ultimately raising the cost of delivering power to customers.

As of mid-2012 the new Powerwise programme was still in its early stages, with RSB in the process of recruiting 400 volunteers to participate in a 16-month trial. Specifically, this testing period will be used to assess whether or not people will adjust their usage when informed about changing electricity prices over the course of the day. As the trial has been designed, nationals will be charged Dh0.10 ($0.03) per KWh for peak usage (2-8pm), while non-nationals will be charged Dh0.30 ($0.08) per KWh during this same period. At off-peak times, these prices will fall to Dh0.03 ($0.01) and Dh0.10 ($0.03), respectively. A monitor will be installed in the houses of all participants, which will make it easier for users to see and optimise their energy use.

The goal is to encourage people to put off certain electricity-intensive activities – like running the washing and dishwasher machines – until off-peak times. Another time-specific option is to set air conditioning units a few degrees warmer during the afternoon. More generally, RSB has also recommend a number of other ways to reduce electricity usage, including using the economy setting on appliances such as dishwashers and turning off computers and televisions when not in use. The regulator has also suggested cleaning air conditioning filters monthly to help the unit run more efficiently.

STAYING COOL: Keeping air conditioners running efficiently could provide significant savings, given that cooling accounts for over 50% of electricity consumption in peak summer months. RSB is not alone in its efforts to reduce energy demand from air conditioners, with the Abu Dhabi Water and Electricity Authority (ADWEA) also supporting this goal.

In 2010 a pilot programme was completed which showed that energy consumption by air conditioners could be reduced by up to 27% with a proactive maintenance routine. ADWEA is also involved with a multi-agency project team that was set up in June 2011 and has identified potential energy saving strategies, including better maintenance of air conditioning systems. While ADWEA would not have direct responsibility for air conditioning maintenance, it is nonetheless playing a role in evaluating this as an option among several strategies. Some challenges remain when it comes to air conditioning, however. Many residential units are inhabited by renters, not owners, with the former less likely to perform maintenance on air conditioners. Moreover, as is the issue with all the efforts to modify consumer behaviour, without changing electricity prices, it is difficult to encourage people to service their air conditioners on a regular basis. The situation in commercial buildings is different, where the volume of usage means that facility managers and owners have an incentive to keep air conditioners well maintained, even if the price per KWh is low.

BUILDINGS: While well-maintained air conditioners could help reduce demand for electricity, an alternative would be to improve the efficiency of buildings so that less energy would be required to keep them at comfortable temperatures. The government of Abu Dhabi has been focusing on the issue of environmentally friendly and energy-efficient construction, with the Urban Planning Council having launched the Estidama (Arabic for “sustainability”) programme in 2010. This sustainability initiative grew out of the Urban Planning Council’s Plan Abu Dhabi 2030 and presents a series of guidelines for sustainable development. “Government initiatives such as Estidama will help increase efficiency and slow the growth of electricity demand in the long run,” Syed Basar Shueb, the CEO of PAL Group told OBG. “This conservation of energy will help the utilities sector meet the local requirements.”

One component of Estidama is the Pearl Ratings System, which deals with the built environment and ranks developments according to various environmental, economic, social and cultural indicators, with particular emphasis placed on optimal energy and water consumption. There are five levels, with one pearl the lowest and five pearls the highest rating. Since June 2010, all master-planned communities have been required to achieve a minimum rating of one pearl, and any project being built for the government must meet the two-pearl standard.

The implementation of Estidama has resulted in somewhat higher construction costs, although, it is also expected reduce energy bills for those who live and work in newer buildings. At present, tenants may not be aware enough of the programme to seek out higher-rated dwellings or commercial spaces, but if Abu Dhabi were to raise electricity prices to more accurately reflect the cost of production, this could be a more meaningful factor in the future.