OBG talks to Nicholas Carter, Director-General, Regulation and Supervision Bureau

Interview: Nicholas Carter

What changes do you expect to see in water and electricity production and management in order to meet demand in the future?

NICHOLAS CARTER: A diversified portfolio is crucial to any power sector, and by 2020 there will be a broader feedstock mix for electricity generation. First, there will be a diversification of gas sources. Currently, most gas used for generation is from Dolphin Energy, but in the future we will also have more gas coming from GASCO through the Shah gas field development project, as well as from imports. Renewable energies and nuclear power will also play an increasingly important role, and could satisfy 20-25% of peak demand needs.

There could also be increased demand for industrial load. Developing industrial and commercial loads – which have a 90-95% load factor – in addition to nuclear power, creates good synergy. Residential demand will decrease as a percentage of overall demand.

We are working towards a significant curtailment of water misuse as well, by promoting the idea of recycling all wastewater, which is nearly the situation now. There is also a drive to increase the amount of water returning to the sewers, with a current goal for 60% of the water produced in the emirate to be returned back to the sewers. Most drinking water not going to the sewer will be used for irrigation. In the future, beautification will only be expanded where there is sufficient recycled water available. Finally, as the emirate builds more apartment units, there will be a much greater percentage of water returning to the sewers – nearly 90-95% as opposed to only 20-25% in the villas.

What measures are being taken to enhance the efficiency of the utilities sector?

CARTER: The water and electricity law is structured to promote competition and remove inefficiency. Foreign entities are crucial in achieving major efficiency gains, and there is still progress to be made in the sector. We promote efficiency through the setting of price controls. Local operators can choose how they spend their revenues, and if these companies spend inefficiently by increasing operational expenses, they reduce their profits. This pressures the company to lower operating costs. How they deal with cost management, provided they do not reduce services to customers, is a matter for each company’s management.

To what extent do you feel behaviour modification can help manage consumer demand?

CARTER: This is a difficult issue to identify. What we do know is that there is a better chance of changing consumer behaviour if customers are informed about the consequences of their actions. The introduction of our new billing system is part of a larger programme designed to inform consumers about the value of utilities compared with the prices they are being charged.

What is being done to strengthen the electricity grid both within Abu Dhabi and with its neighbours?

CARTER: We anticipate there will be more integration with the rest of the emirates in the coming years, as opposed to a greater expansion in GCC-wide connectivity. At the moment, the country has a series of transmission clusters, and these will be strengthened in the future in order to gain efficiencies in terms of spinning reserves, system integrity and security. It is much better to have a national grid with a 40-50 GW capacity rather than a series of isolated systems. A more robust network is necessary, especially as nuclear power becomes part of the country’s blend of energy sources.

How will this grid impact the ability for nuclear power to be introduced as part of the energy mix?

CARTER: The transmission network for the nuclear facilities will use much higher voltages to move power away from the Baraka site, as there are no significant loads in that area and the generated electricity will need to be moved to the load centres. As a result, there will be some changes to the transmission network as a consequence of future nuclear development.