OBG talks to Faris Obaid Al Dhaheri, Director-General, Abu Dhabi Water & Electricity Authority (ADWEA)

Interview: Faris Obaid Al Dhaheri,

What are growth trends like and why? How is infrastructure being developed to support the growth of heavy industry and domestic demand?

FARIS OBAID AL DHAHERI: Electricity demand in Abu Dhabi is expected to grow at an average annual rate above 10% through 2015, and water demand at an average annual rate above 6%. In the case of electricity, growth in demand comes from a range of industrial and business sectors. In addition to our commitment to supporting growth within the emirate, ADWEA continues to support demand from the other emirates of the UAE. Past trends have shown that peak electricity demand has risen by as much as 9.4% a year for the last five years. This is a result of many different factors, including new developments and population growth. To meet this demand we diligently manage, review and revise our feedstock requirements and capacity to ensure consistency and security of supply. Besides maintaining production, ADWEA also invests in several other key areas necessary to deliver electricity and water to its customers, such as transmission and distribution.

Will there be opportunities for independent power and water producers to help meet this new demand? If so, to what extent?

AL DHAHERI: One challenge ADWEA faces is staying ahead of a dynamic market so as to ensure that power and water are produced in a competitive manner and overall costs are reduced. To improve cost-efficiency, ADWEA has used a variety of approaches, including privatisation to attract foreign investment and expertise. In doing so, ADWEA has not only been able to meet increases in demand, but has also improved efficiency across its production facilities. We continually monitor and adapt our model to fit existing market conditions. One example of this is Shuwaihat S3, a new 1600-MW independent power plant expected to open commercially in 2014 and the first project to consist of power only. This change in the infrastructure of supply reflects an adjustment in the demand profile.

How can incentive schemes or other price-control methods be improved to encourage conservation and reduce demand?

AL DHAHERI: Tariffs are one example of measures that can be used to promote energy conservation and reduce demand. For example, during the hot summer months demand stays relatively flat throughout the day, and typically peaks at less than 20% above its lowest point. One of the reasons for this is that most summertime demand is driven by cooling systems, the need for which stays consistently high throughout the day.

While raising tariffs could potentially encourage consumers to use less electricity and water, many other measures could improve overall energy efficiency. One example is limiting the sale of energy-inefficient appliances. This process has already begun in Abu Dhabi and the wider UAE through measures introduced by the Abu Dhabi Quality Conformity Council (ADQCC) and the Emirates Authority for Standardisation and Metrology (EASM), such as setting minimum efficiency standards for air-conditioning systems. ADQCC and EASM are now expanding the scope of these measures to encompass domestic appliances and lighting.

Also continuing to improve are the energy-efficiency standards of buildings across the UAE. The Estidama programme, implemented in 2009 by the Abu Dhabi Urban Planning Council, enforces a set of sustainability benchmarks called the Pearl Rating System for all new government-constructed buildings. This programme has contributed to a significant reduction in the average energy consumption per square metre compared to similar buildings. Another initiative now being considered is to require a checklist of targeted maintenance for chiller systems and the decommissioning of excess cooling capacity, which could potentially deliver considerable energy savings. While residents of the emirate of Abu Dhabi are fortunate to enjoy comparatively inexpensive electricity and water, the government is committed to continually devising and supporting initiatives that will boost efficiency of use.