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Dubai to double coal power plans, sees no power cuts

Capacity of coal-fired plant to rise to 3,000 MW; DEWA sees no shortage of power, desalinated water; Sees power demand growth of by 5 percent

June 22, 2011 3:31 by

Dubai Electricity and Water Authority (DEWA) has doubled the size of its planned coal-fired power plant, DEWA’s chief executive said on Wednesday, dismissing summer power shortage fears over the next few years.
Rising demand for electricity in Dubai, where soaring summer temperatures drive up air conditioning use, has forced the energy-hungry emirate to buy more natural gas on an increasingly tight global market to feed its power stations.
DEWA had planned to build a 1,500 megawatt (MW) coal-fired power plant to reduce Dubai’s heavy reliance on a steady supply of imported gas. But it now plans to double the size of the coal plant to help keep the business and trade hub of the United Arab Emirates cool as demand soars.
“I can assure you there will be no power shortage for the next five years,” DEWA CEO Saeed Mohammed al-Tayer told reporters.
“Dubai has enough power and enough desalinated water for the next five years,” he said, adding the emirate would have nearly 10,000 MW of power production capacity by the end of 2011.
Another DEWA executive who declined to be named said a feasibility study to determine the cost, technology and ownership structure of the 3,000-MW coal plant would take 3-4 months.
Dubai is home to nearly 2 million people and used around 33,000 gigawatt hours (GWh) of electricity in 2010. Tayer expects demand to surge again in 2011.
“I expect 5 percent of growth but then it could be 7 percent,” he said. “The peak demand (growth) last year we thought would be 6 percent and then it came 9.6 percent.”
Demand for electricity peaked at 6,161 MW in summer 2010, up from 5,622 MW in 2009, according to the figures from DEWA’s website.
The government of Dubai owns DEWA, while the Dubai Supreme Council of Energy is responsible for ensuring energy supplies in the emirate where increasing demand for cooling and fresh water are major drivers for rapidly rising electricity use.
The UAE, which has seven percent of the world’s known oil reserves, is one of the highest per capita consumers of water and electricity in the world.
The world’s third biggest oil exporter depends on groundwater and desalination plants for sea water. Its fresh water reserves are expected to dry up over the next few decades, increasing reliance on energy intensive seawater treatment.
Power demand in the oil-rich Gulf region is rising rapidly as economies and populations boom, forcing governments to diversify their energy mix to secure supplies.
UAE plans to meet much of its expected surge in demand by building a large nuclear power plant, which should also cut oil burning in power plants to increase valuable crude exports.
Gas prices fell sharply from 2008-2010 as demand in Europe and North America fell and output from lead exporter Qatar surged, cutting costs for net importers like Dubai.
But prices have risen markedly in 2011 on increased demand from leading importer Japan after the closure of many of its nuclear plants and rising demand from new consuming countries.
The International Energy Agency (IEA) said last week it expects global demand and prices for gas to rise sharply over the next five years as enthusiasm for nuclear power wanes in the wake of Japan’s Fukushima disaster.

By Humeyra Pamuk

(Reporting by Humeyra Pamuk, Editing by Daniel Fineren)

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