The Abu Dhabi, United Arab Emirates’ capital, is undergoing an ambitious growth plan that is destined to make the UAE one of the regional powerhouses within the gulf area. The growth and development, however, has resulted in a number of challenges that pose a threat to the actual growth plans of the economy.
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A capacity shortfall in electricity consumption was anticipated in the year 2012. Residents of the city consume the largest amount of electricity, with their domestic consumption alone reaching 39%. The commercial sector records a percentage consumption of 29, while the government and schools, together with the agricultural sector, consume 21% and 11% respectively.
Efforts are currently ongoing to see to it that a sustainable energy program is implemented to offer a long-term solution to the problem. The Abu Dhabi Future Energy Company, for instance, seeks to initiate technological developments, particularly in the areas of solar energy, wind power, as well as hydrogen power generation.
The UAE has also focused its attention on Nuclear energy as a viable long-term solution to its energy challenges. This paper seeks to carry out a comprehensive analysis of the Abu Dhabi energy needs situation, including making comparison with other international cities, the Carbon Footprint of the city, as well as drawing conclusions on the best energy alternatives.
Electricity Consumption in Abu Dhabi Emirate
Electricity consumption has increased in Abu Dhabi to more than 36.5 TWh at present. In the year 2008, for instance, consumption stood at 36.5 Twh compared to 19.1 Twh recorded in 2000. This increase in consumption is because of the rapidly growing population, together with the increased average consumption, and the expansion of inter-Emirate export market involving Dubai and the Abu Dhabi (Abu Dhabi Environment Agency 2010, p. 106).
The production and consumption of electricity in Abu Dhabi often registers annual increases, with the year 2011 recording 10.8% growth compared to the previous year. The actual consumption in 2011 reached 43,251 GW/h, corresponding to an electric consumption per capita of 20.4 (Statistics Centre 2012a p. 78).
The Abu Dhabi region leads to the consumption of total power generated in the Abu Dhabi Emirate. In 2010, for instance, Abu Dhabi consumed 24,850,010 MWH of the total 39,173,140 MWH consumed that year. In comparison, AL Ain consumed 9,081,380 MWH while Al Gharbia consumed 5,241,750 MWH.
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In 2011, the total amount of electricity consumed was equivalent to 43,250,919 MWH, with Abu Dhabi consuming 26,897,768 MWH. The Al Ain and Al Gharbia regions consumed 7,011,402 MWH and 9,341,749 MWH, respectively (Statistics Centre 2012a, p. 79).
The total electricity consumption of the Abu Dhabi Emirates is outstandingly the highest in the whole world. The period between the years 2000 and 2008 saw the annual consumption per capita registering between 14 and 15 MWh.
The United States of America registered 13.6 MWh during the same period, while Qatar recorded 14.1 MWh. The Organisation for Economic Cooperation and Development (OECD) recorded a comparatively low average figure 7.6 MWh, which is about half the consumption of the Abu Dhabi (Abu Dhabi Environment Agency 2010, p. 106).
In terms of property and residential status, Abu Dhabi’s nationals residing in villas consumed the highest amount of power, at between 93 MWh and 97 MWh. Those are living in shabiyat consumed between 69 and 80 MWh. On the other hand, non-citizens living in villas consumed between 32.1 and 97 MWh while those in flats recorded between 7.2 and 12.4 MWh in consumption.
According to the Abu Dhabi Environment Agency (2010, p. 107), these figures were collected during power surveys conducted between the years 2005 and 2007. In the US, statistics for the year 1997 indicate that up to 90% of the households consumed 13,600 kWh per year compared to the consumption by flats alone in the Abu Dhabi Emirate, which ranged between 7,250 and 12,350 kWh annually. In Singapore, flats consumed between 3,000 and 6,900 kWh annually during the same period (Regulation and Supervision Bureau n.d., p. 2).
Energy Tariff: Electricity and Fuel
The electricity sector in Abu Dhabi runs a single-buyer model where all generators retail their production to ADWEC. In turn, the company sells the power obtained from the various generators to the companies charged with the distribution function.
Transmission to the distributing networks from the production plants is undertaken by TRANSCO (Regulation and Supervision Bureau 2009, p. 2). The main distribution companies now include AADC and ADDC, both of which sell the supplied electricity to the buyers or end customers.
The Regulation and Supervision Bureau, better known as the Bureau, undertakes the economic, as well as technical regulation of the energy sector in Abu Dhabi. The licensing of other companies in the industry is exclusively in the domain of the Bureau.
There are different distribution networks, which carry varying voltage levels depending on the type and consumption capacity of the end consumer.
All domestic consumers, for instance, are connected to low-voltage networks. However, some consumers require non-standard connections, mainly because of their demand levels, as well as individual supply requirements.
Currently, no consumer within the Emirate of Abu Dhabi is allowed to connect with generation stations directly, a practice that is also referred to as by-pass sale (Regulation and Supervision Bureau 2009, p. 3).
The tariff structure is such that the distribution companies receive all the accumulated costs of the sector. The costs incurred by the generation companies in achieving power output are charged by ADWEC. It uses a Bulk Supply Tariff (BST), which comprises of both a demand charge and system marginal price, abbreviated as SMP.
TRANSCO, on the other hand, levies its charges on the transmission of electricity using a kind of charging system that is known as Transmission Use of System (TUoS) (Regulation and Supervision Bureau 2009, p. 3). On their part, the distribution companies incur two main kinds of costs, the sales or supply costs and the Distribution Use of System costs, also abbreviated as DUoS.
Power companies rely on consumer tariffs to pay their costs. Moreover, governments can issue subsidies to companies to help recover the costs. However, all charges being levied by the sector are subject to approval by the regulating body, the Bureau. The independent regulator impresses upon the players to focus on efficiency to control cost levels and improve services, as well. A summary of the tariff components includes the following:
|Bulk supply tariff||BST||Charges levied by ADWEC incurred mainly as generation costs by the distribution companies.|
|Transmission use of the system||to||Charges levied by TRANSCO for activities undertaken within the transmission network.|
|Distribution use of the system||DUoS||Charges levied by the distribution company for distribution network activities.|
|Cost from serving the customer||Sale||Charges levied by the distribution company for such services as billing and meter reading.|
|Government subsidy||GS||These are direct payments made by the government to the distribution companies. They allow the government to make decisions about the tariffs.|
Source: Regulation and Supervision Bureau 2009
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The BST comprises of two main workings, the demand charge, and the SMP. Variations in charges due to demand depend on whether it is peak time or not, whereas the SMP fee changes all the time. The BST, as a demand charge, pertains to every unit of the demand level or connected load during three different system peaks (Regulation and Supervision Bureau 2009, p. 3).
This is a reflection of the fact that generation is established mainly for purposes of meeting peak demand. With the Abu Dhabi economy continuously registering growth, it implies that the peak levels are also on a continuous growth path (Regulation and Supervision Bureau 2009, p. 4).
The SMPs are an indicator that electricity in the Abu Dhabi Emirates is expensive during such times when the demand is also high. This often happens during summer, and daily between 12 p.m. and 12 a.m. Consumers paying the SMP have a very strong reason to shift demand to the times when SMP is relatively cheaper, from the high SMP times. The following is the formula for coming up with standard tariffs:
‘BST + TUoS + DUoS + Sale – GS = standard tariff’
The ‘standard tariff’ is the same all the time, implying that it does not keep fluctuating. It comprises the subsidy that the Abu Dhabi government pays to the industry players. This subsidy, however, is varied across the numerous customer groups. Thus, the determination of the standard tariffs follows the variation that is witnessed as indicated in the table below:
|Customer group||Tariff (fils. kWh)|
|UAE-national domestic (remote areas)||3|
|UAE-national domestic (other areas)||5|
Source: Regulation and Supervision Bureau 2009
The non-standard tariffs apply to the special supply terms that customers with large consumption, usually those with more than 1 MW, enjoy. ‘Time-of-day metering’ is one of the strategies that can help companies in coming up with accurate bills.
The government does not subsidize the non-standard tariffs like is the case with standard tariffs. Instead, customers are expected to meet the entire economic cost. Even though this plan does not enjoy any kind of subsidies, some customers find it to be economical, particularly basing on their consumption rates and levels (Regulation and Supervision Bureau 2009, p. 4).
Customers whose connections include the high-voltage distribution network have a leeway to through which they can avoid a share of the DUoS charges. Others who connect with the system of transmission avoid all charges related to DUoS.
Through personal management, both categories of consumers are able to reduce BST-related costs considerably. The Bureau is tasked with the mandate of approving all non-standard tariffs. The calculations for the non-standard tariffs are achieved thus;
‘BST + TUoS + DUoS + Sale = Bespoke tariff’
‘BST + TUoS + Sale = Bespoke tariff’
In setting the non-standard tariffs, costs that need to be recovered are reflected accurately based on the yearlong figures. The non-standard tariff’s main aim is to recover a customer’s incurred costs that reflect on the consumption (Regulation and Supervision Bureau 2009, p. 4). The effects of actions are met by the consumer, which results in either reducing or raising contributions towards the sector costs.
The annual cost expected is then calculated from the total consumption that is anticipated by a consumer as far as his load-profile is concerned. The “TUoS, BST demand charge, and where possible the DUoS,” are an indicator of the peak time demand for customers.
The pricing is done in terms of AED per kW. For every unit consumed by a buyer, the ‘SMP charge’ keeps track of that unit. The charge is not constant as it varies within the year and depends on whether it is AM or PM (Regulation and Supervision Bureau 2009, p. 4).
International comparison of Energy consumption
The residential consumption of electricity for the city of Abu Dhabi currently stands at 41,000 kWh every year (Regulation and Supervision Bureau, n.d. p. 2). The reason for this is because quite a substantial number of residents in the city reside in villas.
During summer, villas consume a lot of electricity. Generally, the UAE is a desert country with very high temperatures throughout the year. These temperatures rise even further during summer, forcing residents to rely on air conditioners for the regulation of temperature. AC machines consume relatively more power than other electronic equipment.
In entire South America, the total consumption for electricity mainly because of using air conditioners in the year 1997 was 13,600 kWh. Although this figure is bigger than the Abu Dhabi Emirates of between 7,250 kWh and 12,350 kWh during the same period of time, it is worth pointing out that Abu Dhabi alone is relatively small in terms of both physical size and population, compared to the whole of South America. It is also worth noting that up to 90% of households in South America are fitted with AC machines (Regulation and Supervision Bureau, n.d. p.2).
In comparison to Singapore, a total of between 3,000 and 6,900 kWh were consumed in the same period. However, the statistics from Singapore only represent flats, with only 53% of them having AC machines fitted. With these figures highlighting the consumption differences, which exist among the different countries, in comparison to Abu Dhabi, the annual bills, on the other hand, indicate distinct overlaps.
Resident ex-pats in Abu Dhabi living in flats pay an average annual bill of between 1,100 AED and 1,850. Those living in villas, on the other hand, pay between 4,800 AED and 14,650 AED. UAE nationals living in villas pay an annual figure ranging from between 4,650 AED and 4,850 AED while the others living in shabiyat pay an annual bill of between 3,450 AED and 4,000 AED (Regulation and Supervision Bureau n.d., p.2).
In South America alone, residents living in all kinds of properties pay an average annual electricity bill equivalent to 5,000 AED. These figures are comparatively high, especially given that the electricity consumption levels of South America are by far much lower than what Abu Dhabi records annually.
In Singapore, residents living in flats pay an equivalent of between 1,364 AED and 3,131 AED. Like in this case of South America, these figures are comparatively higher than those of Abu Dhabi. In these statistics, which only represents flats, only 53% of the houses have AC machines fitted (Regulation and Supervision Bureau n.d., p. 2).
Energy and City Sustainability
The carbon footprint of electricity Abu Dhabi
Carbon dioxide emissions related to power production and consumption indicates that there has been an annual increase of 6 million tonnes every year since 1990. By the year 2004, the emissions reached a maximum level of 17.9 million tonnes, decreasing a bit in the subsequent year registering 17.6 million tonnes.
Basing on the population figures released in 2005, this amounts to 11.9 tonnes of the carbon dioxide gas per capita released due to the public power generation (Abu Dhabi Environment Agency 2010, p. 104).
However, there has been some marked decrease in as far as the per capita CO2 emissions are concerned since 2006. For instance, in 2010, the per capita emissions of the carbon dioxide gas reached 13.77 tons. The total carbon dioxide emissions during the same year from the production of both water and electricity recorded a total of 27.1 million tons (Statistics Centre 2012b, p. 15).
Production of the desalinated water has increased by 31 percentage points during the five-year period between 2005 and 2010. During the year 2010 alone, 834.5 MCM of water was desalinated for use in the production of electricity.
This figure, however, reduced by 1.3% compared to the amount produced in 2009. The total amount of desalinated water in Abu Dhabi reached the 962.8 MCM mark in the year 2010 alone (Abu Dhabi Environment Agency 2011, p. 12).
Abu Dhabi faces a major scarcity of freshwater. The large amounts required mainly in electricity production, which relies on gas-fired power plants, water is drawn from the Gulf but desalinated before being used in the process (Abu Dhabi Environment Agency 2011, para 5).
Consumption of the desalinated water was to the tune of 873 MCM in 2010, translating to an average daily consumption of 2.39 MCM, as well as a 1.2 cubic meters as the per capita average on a daily basis. The Abu Dhabi region consumed the greatest share of this water, registering about 61% of the total consumption.
The Al Ain region recorded a 26% consumption rate, while the Western region consumed the least amount, equivalent to only 13% of the total consumption. The domestic sector was the highest consumer amongst the sectors, with its consumption representing 68% of the total Emirates consumption. This translates to 596 MCM for the entire year or 1.63 MCM on average daily consumption.
Other sectors had little consumption percentages, with the government registering 17% while the commercial sector is posting only 9% (Statistics Centre 2012b, p. 12). In general, the UAE’s environmental footprint is the highest per person throughout the world, a statistic that caused the government to initiate plans aimed at lowering it (Abu Dhabi Environment Agency 2011, para 8).
Renewable Energy for Abu Dhabi
The use of fossil fuels for purposes of generating power has resulted in serious environmental issues for Abu Dhabi. Additionally, there is a limit in terms of the country’s natural gas reserve available to sustain expanded power generation. In this regard, therefore, the country may be unable to supply adequate electricity using conventional gas-run plants.
The government of the UAE, however, has initiated plans targeting the growth of energy sources that are also renewable. These programs include the development of wind, nuclear, and solar power, which has all been included in the Masdar Initiative (Abu Dhabi Environment Agency 2011, para 6).
Masdar, Abu Dhabi Future Energy Company
The $15 billion renewable energy program has focused on a number of projects, which it aims at fulfilling both in the short and long-term period. A Concentrating Solar Power Plant (CSP) set to produce 100 MW includes some of Masdar’s plans.
The plant, Shams 1, is constructed in Madinat Zayed under build, own, operate, BOO, basis (Oxford Business Group 2009, p. 186). Another solar power project, the 10 MW-capacity solar parks in Masdar city, already supplies to the national electrical grid. Masdar City receives 17,500 megawatt-hours every year from the project (Abu Dhabi Environment Agency 2011, para 6).
A wind turbine has been built at the Sir Bani Yas Ireland, lying on Abu Dhabi’s western coast. This is the largest wind turbine in the whole of the Middle East region and is 65 meters high. Its wingspan measures 52 meters, with its production capacity measuring 850 KW every hour (Schulte-Peevers 2010, p. 39).
Facilities within the island depend on electricity produced by the turbine, although additional supply is also tapped from the national grid (Abu Dhabi Environment Agency 2011, para 7).
Nuclear Energy in Abu Dhabi
The UAE has established a policy of nuclear energy under the Emirates Nuclear Energy Corporation, abbreviated as ENEC. It works in accordance with the International Atomic Energy Agency (IAEA) issued guidelines as it looks at implementing a peaceful program for the UAE (para 4). As part of its ongoing plan to implement nuclear power energy, the UAE signed the Treaty on Non-Proliferation of Nuclear Weapons as early as 1995 before ratifying the safeguards stipulated within the IAEA Agreement later in 2003 (Abu Dhabi Environment Agency 2011, para 8). The UAE has further signed bilateral agreements with other member countries who are also the Non-Proliferation Treaty signatories, including France, the USA, South Korea, as well as the UK (Abu Dhabi Environment Agency 2011, para 9).
The Abu Dhabi Emirates is the world-leading household energy consumption. The country has constantly recorded growth in its energy needs and consumption each year, a fact that is attributable to its economic growth and expansion. Currently, much of the power generated is gas-fuelled, which makes it very expensive for the country.
Additionally, the fossil fuel reserves of the country are diminishing each day with the increased consumption rates, while the environmental effects are also adverse. Because gas-fuelled generators require a lot of water for cooling purposes, Abu Dhabi’s water footprint of electricity is very high.
Water is drawn directly from the Gulf and desalinated prior to the cooling consumption purposes. Abu Dhabi’s household power consumption is at least times the average of the consumption by other countries in the world, including those by the US, Singapore, and the OECD as a whole.
The Abu Dhabi Emirates, however, has initiated plans to develop renewable and sustainable energy for the country, even as consumption and demand rise. The Abu Dhabi Future Energy Company in Masdar has been charged with the responsibility of steering this campaign. Among the alternative energy sources that the initiative has come up with include wind-powered energy and solar power.
However, the scale of demand in the mid and long term period cannot be sufficiently met by these alternative power sources. Thus, the UAE government has finalized plans to introduce safe nuclear energy power, which will sufficiently serve the ever-growing energy demands. Plans to have the program implemented are at an advanced stage as the UAE has already met all the requirements as stipulated by the international nuclear energy bodies.
List of References
“Electricity tariffs for large-users in the Emirate of Abu Dhabi,” 2009, Regulation and Supervision Bureau, [online], pp 1-5.
“Report: Consumption-Water & Electricity,” Regulation and Supervision Bureau, [online], pp 1-2.
Abu Dhabi Environment Agency 2010, ‘Population, economy, and development,’ Sector Paper, pp. 102-107
Abu Dhabi Environment Agency 2011, State of the environment: Electricity.
Oxford Business Group 2009, The Report: Abu Dhabi 2009, Oxford Press, Oxford
Schulte-Peevers, 2010, Dubai 6, Lonely Planet, New York, NY
Statistics Centre 2012a, Statistical Yearbook of Abu Dhabi 2012, Statistics Centre, Abu Dhabi
Statistics Centre 2012b, Energy and Environment Statistics 2011, Statistics Centre, Abu Dhabi