UAE POWER 2013 - Global Business Reports Industry Explorations EXPERT OPINION
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UAE POWER 2013 - Global Business Reports Industry Explorations EXPERT OPINION Dear readers, One thing we have learned during our time Many within the Gulf state would attribute here is that very little is beyond the ambition these advancements to the visionary leader- of the UAE. The world’s largest indoor ski ship of the UAE. Again, in many respects they slope situated in a desert city is perhaps the would be accurate. Sheikh Zayed Bin Sultan Al most striking, if slightly trivial, testament to Nayhan set this “nothing is impossible” phi- that. In addition, the country is home to the losophy in action, ruling the UAE from 1966 tallest building in the world, the largest shop- till his death in 2004. His son now embodies ping mall in the world, the finest hotel in the that ambition, pursuing development in every world, not one but two world leading airlines direction. and the most spectacular man-made islands There are also downsides to this philosophy. ever constructed. All this and more in a coun- The race towards development in the power try of less than 8 million people: a country sector has resulted in rampant inefficiency. As just 42 years old. the UAE power sector opens this new chapter, Many would point to the UAE’s oil riches as efficiency has been highlighted as fundamen- the foundation of the nation’s achievements, tal to progression: it is the power plant they do and in many respects this would be accurate. not need to build. Yet it must also be noted that, despite modest Whether for nuclear, solar, efficiency or hy- hydrocarbon resources, the emirate of Dubai drocarbons, players across the global power has built a wondrous city in the desert: a glob- industry are targeting the Emirates. The UAE al financial centre and a popular tourist resort. acts as a hub for commerce in the Arabian Hydrocarbons now make up less than 6% of Gulf and as a pioneer for new technologies, GDP in the emirate. innovative regulation and best practice across The “nothing is impossible” philosophy that the region. has characterised the UAE’s economic growth This report is a patchwork of opinions from continues in the country’s power sector. Heav- experts working in this exciting sector, com- ily dependant on hydrocarbons for power, the bined with quantitative data and our own on- nation is embarking on a journey to diversify the-ground research. We would like to extend its electricity generation. our sincere gratitude to all those who shared The first nuclear power station in the Middle their insights and expertise with us. East will be completed in Abu Dhabi’s western region by 2020. Now home to the Interna- tional Renewable Energy Association (IRENA), Abu Dhabi has built one of the worlds larg- est solar power plants: the 100 MW Shams One (Shams Two and Three are in the works). Meanwhile, Dubai has begun construction of the 1000 MW Mohamed Bin Rashid Al Mak- Katya Koryakovtseva & toum Solar Park. Ramzy Bamieh Industry Explorations Global Business Reports // UAE POWER 2013 3 CONTENTS Industry Interviews The director of clean energy at Masdar 43. Interview with NEM Middle East talks about the UAE’s increasing focus on Overview JACCO JANSEN, EXECUTIVE VICE PRESIDENT AND renewable energy, with the International Beyond Oil and Gas MANAGING DIRECTOR Renewable Energy Agency providing 44. Conventional Energy an outside perspective. The Emirates MAKING USE OF THE UAE’S RESOURCES 8. A Tale of Two Cities 45. Interview with Pöyry INTRODUCTION AND OVERVIEW Nuclear Energy Corporation tell of their G.B.D. VARA PRASAD, OPERATIONS MANAGER, ambitions. 10. Interview with the Deloitte & Touche DUBAI KENNETH MCKELLAR, MIDDLE EAST ENERGY & 46. Interview with Wärtsilä RESOURCES LEADER SEPPO HAUTAJOKI, MANAGING DIRECTOR AND VICE 11. Interview with Ernst & Young PRESIDENT SERVICES & LARS-ÅKE KJELL, REGIONAL 24, 25, 30 MOBIN KHAN, PARTNER AND MENA POWER & DIRECTOR OF POWER PLANTS UTILITIES MARKET LEADER 48. From the GBRoundup 12. Interview with the PwC THE EMERGENCE OF A GREEN SUKUK PAUL NAVRATIL, MIDDLE EAST ENERGY, UTILITIES & 49. Expert Opinion From the MINING LEADER FROM RICHARD MENEZES, MANAGING DIRECTOR, GBRoundup 14. Interview with the Golden Sands UTICO Management Consultancy GBR’s own researchers provide their ROBERT M. BRYNIAK, CEO insights into the market, with a discussion 15. Shifting Sands of the UAE’s shifting power generation THE CHANGING MAKE UP OF THE EMIRATI POWER makeup and an explanation of Islamic SECTOR 18. Interview with the Regulation and finance as it relates of the energy sector. Complementing Supervision Bureau NICK CARTER, DIRECTOR GENERAL Production 19. From the GBRoundup Transmission and Efficiency CHALLENGING DIVERSIFICATION in the United Arab Emirates 19,18 52. Grids in the Desert TRANSMISSION SYSTEMS IN THE UAE Cleaner, Greener, 56. Interview with Gulf Jyoti International Diversification PRADIP K. DAS, GENERAL MANAGER The Emirati power sector is increasingly Smarter and 57. Interview with CESI looking to alternative means of energy FLORIS SCHULZE, MANAGING DIRECTOR, MIDDLE Nuclear EAST production. Nuclear energy, solar power, 58. Interview with Emerson Process clean coal and conventional sources are The UAE Power Sector Enters Management all being added to the UAE’s matrix in its an Era of Diversification COR CORBEEK, GENERAL MANAGER – MIDDLE EAST effort to diversify. AND AFRICA 59. Commitments to the Environment 22. Changing Focus PROMOTING EFFICIENCY IN A POWER-HUNGRY A BREAKDOWN OF ELECTRICITY GENERATION IN MARKET THE UAE 62. Interview with KSB 24. Interview with Masdar TONJES CEROVSKY, SENIOR VICE PRESIDENT SALES BADER AL LAMKI, DIRECTOR OF CLEAN ENERGY – REGION MEA 25. Interview with the International 63. Interview with SCHOTT 28, 32, 41, 44 Renewable Energy Agency KIOMARS DABBAGH, MANAGING DIRECTOR, FRANK WOUTERS, DEPUTY DIRECTOR-GENERAL MIDDLE EAST 26. Interview with GE 64. Interview with Schneider Electric Quantitative MOHAMMED MOHAISEN, GENERAL MANAGER GOKTUG GUR, COUNTRY PRESIDENT, UAE & OMAN – THERMAL PRODUCTS & POWER GENERATION Data SERVICES SALES 27. Interview with AREVA Statistics and quantitative data on all REMI COULON, CHIEF COMMERCIAL OFFICER elements of the United Arab Emirate’s 28. The Nuclear Age economy and power industry, presented BIG INVESTMENTS AND LONG-TERM PLANNING in easily accessible formats and 30. Interview with Emirates Nuclear Energy Appendix emphasizing trends and including Corporation Into the Future maps of electricity consumption and MOHAMMED AL HAMMADI, CEO transmission systems across the seven 31. Interview with Hatch 68. Final Thoughts ROY DABBOUS, REGIONAL MANAGER - HATCH emirates. 70. Index & Company Guide 32. Harnessing the Sun 72. Data Overview 9, 13, 23, SOLAR POWER IN A DESERT ENVIRONMENT 74. Credits 35. Interview with the Emirates Solar Industry 29, 54, 55, 61 Association VAHID FOTUHI, PRESIDENT 36. Interview with First Solar Final CHRISTOPHER BURGHARDT, VICE PRESIDENT DEVELOPMENT EAME, & MATT MERFECT, EPC Thoughts COUNTRY MANAGER Thoughts on the future potential of the 38. Interview with CSEM-UAE UAE power industry, the challenges it DR. HAMID KAYAL, CEO faces, the path it must take to overcome 39. Expert Opinion FROM DR. MICHAEL KRÄMER, SENIOR ASSOCIATE, these, and the opportunities present, TAYLOR-WESSING from leading businessmen and industry 39. Interview with Shams Power Company This research has been conducted by YOUSIF AL ALI, GENERAL MANAGER Katya Koryakovtseva, Ramzy Bamieh, figures. Alice Pascoletti and Diego Carillo. 41. Clean Coal Edited by Barnaby Fletcher | Designed by Gonazalo Da Cunha POLISHING THE DIRTY CARBON A Global Business Reports Publication 42. Interview with Utico For more information, contact [email protected], follow us on Twitter @GBReports or check out our blog at RICHARD MENEZES, MANAGING DIRECTOR gbroundup.wordpress.com. 68 Global Business Reports // UAE POWER 2013 5 Beyond Oil and Gas: An Introduction to the United Arab Emirates and its Power Sector “It is a combination of regulation and policy that makes the UAE very specif- ic. Innovation and efficiency improvements are being promoted in a big way; the country wants the best processes and performance indicators. Clearly, Abu Dhabi’s structure and regulatory capabilities are most advanced; Dubai has a regulator on paper but is still in the early stages of development. Abu Dhabi has a more unbundled framework; this is not an end in itself but independent reg- ulation, accountability and performance improvement can lead to it. For some services, the northern emirates have been core business for DNV, but they are still highly dependent on Abu Dhabi for energy. As they mature, the first step will be to enhance knowledge through internal training.” - Mohamed Atif, MANAGING DIRECTOR OF DNV KEMA MIDDLE EAST WAIT CITY KUWAIT Global Business Reports ARTICLE Industry Explorations FACTSHEET United Arab Emirates at a Glance Source: CIA World Factbook A Tale of N O Population: 5,314,317 (July 2012 est) I T Capital: Abu Dhabi A C IRAN Chief of State: President Khalifa bin Zayid O L Al-Nuhayyan Two Cities Head of Government: Prime Minister Muhammad bin Rashid Al-Maktum GDP: $361.9 billion (2012 est) A brief introduction to the economy of the UAE Growth Rate: 4% (2012 est) BAHRAIN GDP per Capita: $49,000 (2012 est) Economic Sector Breakdown: Al Manamah agriculture: 0.8%, industry: 56.1%, services: Persian Gulf OMAN 43.1% (2012 est) Exports: $300.6 billion (2012): crude oil, natural gas, reexports, dried fish, dates Doha Imports: $220.3 billion (2012): machinery PAKISTAN and transport equipment, chemicals, food The United Arab Emirates (UAE) is made up est GDP per capita in the world. This will be there was, including a petition to the gov- Dubai QATAR Major Trade Partners: India, Japan, China, of seven emirates, yet two dominate the de- supported by the favourable conditions for ernment sent by roughly 100 Emirati activ- Iran mographic, economic and geopolitical land- foreign direct investment (FDI) in the UAE: ists and intellectuals, helped to spur a $1.6 scape.