A Q&A guide to electricity regulation in the United Arab Emirates. . The Abu Dhabi Water and Electricity Authority (ADWEA) is the single buyer. (Adwea) into the emirate’s newly established department of energy as The Regulation & Supervision Bureau (RSB), which oversees water. 3. Abu Dhabi Water and Electricity Authority (ADWEA). 4. Regulation and Supervision Bureau (RSB). 5. Town Planning Department (TPD). 6.
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Electricity regulation in the United Arab Emirates: It covers the regulatory structure; foreign ownership; import of electricity; authorisation and operating requirements; trading between generators and suppliers; rates and conditions of sale and proposals for reform. For a full list of content visit www. What is the role of the electricity market in your jurisdiction?
Overview The energy sector plays an important role in shaping the UAE’s internal and external strategies and policies. Since the discovery of oil and gas more than half a century ago, the UAE has become a central player in the global hydrocarbon energy market, providing a reliable and stable supply of energy.
Recently, the UAE was labelled as the fastest growing electricity market globally. The UAE’s latest solar photovoltaic project attracted worldwide attention for its low production costs, which will be the lowest price in the world to date. This initiative was backed due to UAE’s stable political and financial system. This revenue continues to contribute to the UAE’s rapid economic aadwea social development, which started in the s regu,ation continued at a speed and to an extent that has impressed the international community.
The report is based on major energy projects undertaken in the UAE, which are essentially focusing on energy diversification and government policy.
The UAE has planned to increase its mix of energy sources including natural gas, solar power and nuclear power.
Consequently, Abu Dhabi increased its power generation capacity by Dubai unveiled plans for a 1, megawatts solar energy park to diversify its energy mix and reduce dependency on oil and gas. The solar power project will be implemented by the Supreme Council of Energy in Dubai, and managed and operated by the Dubai Electricity and Water authority.
ENEC has signed contracts for obtaining uranium, converting it and enriching the fuel for use in its plant’s nuclear reactors. What is the regulatory framework for the electricity sector? Regulatory framework The UAE power and water sectors are heavily influenced by the structure of the government and the significant powers afforded to the individual emirates under the UAE Constitution of UAE Constitution.
The powers of the federal and emirate governments are set out in the UAE Constitution. The federal government has exclusive and executive jurisdiction over electricity services ArticleUAE Constitution. However, in practice, the emirates formulate and implement their own electricity policies, and operate independently of each other.
Although the Ministry of Energy is the federal entity overseeing the electricity sector, a legislative gap remains. For example, there is no federal law that regulates the collaborative energy policies of the country.
Under the UAE Constitution, individual emirates have complete autonomy in the management and regulation of energy and resources. Additionally, there is no federal law governing renewable energies, and the UAE has yet to enact specific legislation to regulate this relatively new market.
In Abu Dhabi, the main legislation governing the electricity sector is the Law No. In Dubai, the primary laws regulating the electricity sector are the:. Member organisations of the DSCE include the:. The DEWA and the Sharjah Electricity and Water Authority are responsible for the generation, transportation and distribution of water and electricity within Dubai and Sharjah, respectively. The UAE Constitution allows the governments of each emirate to have a separate ministerial office for the regulation of health, safety and environmental matters.
This policy aims to achieve excellence in the management and protection of the environment, health and safety, through partnership between all governments and the private sector, in order to ensure that activities within Abu Dhabi are undertaken in a responsible, safe and sustainable manner. Similarly, in Dubai, the Dubai Municipality oversees safety, environment and health regulations.
Any business that does not comply with these regulations are subject to fines or other penalties. See box, The regulatory authorities. Electricity companies Main companies. What are the main companies involved in electricity generation, transmission, distribution and supply? The main entities responsible for the generation, transmission and distribution of electricity in the UAE are the:. Three water and power authorities owned by each of the individual emirates of Dubai, Abu Dhabi and Sharjah see below.
These state-owned entities are the exclusive purchasers and distributors of electricity in their respective areas of operations. While the private sector can participate in the generation of electricity, electricity transmission and distribution is exclusively carried out by state-owned entities. The Abu Dhabi Water and Electricity Authority ADWEA is the single buyer of all water and electricity from production plants that connect to the sector’s transmission grid, using long-term power and water purchase agreements.
The BST is the wholesale power and water tariff for the sector, and must be approved by the Regulation and Supervision Bureau each year before publication. The Dubai Electricity and Water Authority DEWA is the sole purchaser of electricity in Dubai, and presently owns all the generation, transmission and distribution capacity of the emirate. The DEWA operates a network of overhead lines that are connected to a distribution system of lower voltage substations and distribution lines.
The FEWA is governed by a board of directors whose members hold office for a term of three years. A number of these projects have been developed or are currently under development in these emirates. Acts as a single point of sale for all power generated in the northern emirates. Owns and operates all the electricity transmission and distribution networks within the northern emirates.
Transmission grids are the backbone of any utility supply chain such as gas, electricity and water. They form the strategic link between the production of power and water and the provision of these vital resources to consumers via local distribution networks. TRANSCO operates a load despatch centre in the capital and is responsible for ensuring that producers have sufficient “real-time” generation and water capacity available to meet continuously varying customer demands.
To date, a number of independent water and power producers IWPPs have been established under a “build-own-operate” model, in accordance with joint venture arrangements between the ADWEA and various power companies. The major IWPPs include the:. Al Mirfa Power Company. Fujeriah Asia Power Company. The FEWA is responsible for electricity transmission in the northern emirates. Distribution is the link between a transmission company and final users customers.
The two following companies are currently responsible retulation the distribution and supply of power and water in Abu Dhabi:. The FEWA is responsible for the distribution of electricity in the northern emirates.
Electricity regulation in the United Arab Emirates: overview | Practical Law
The FEWA is responsible for the supply of electricity in the northern emirates. Unbundling requirements In the UAE, services relating to electricity generation, transmission, distribution and supply are controlled by state-owned entities, which enjoy a monopoly in their respective areas reguation operation. Are there any restrictions concerning the foreign ownership of electricity companies or assets?
All energy companies established in the UAE must be majority owned by nationals. The electricity laws do not specifically impose any restrictions on foreign ownership.
However, as most companies are either wholly or majority owned by the Federal Government or the individual emirates Governments, foreign participation is generally not possible. In Abu Dhabi, a programme of privatisation of the electricity sector is implemented through independent water and power producers see Question 3, Transmission: To what extent is electricity imported?
The UAE does not currently import electricity.
Two billion cubic feet regluation day of gas from Qatar through the Dolphin pipeline, the largest cross-border gas pipeline in the region. Electricity generation and renewable energy Sources of electricity generation. What are the main sources of electricity generation? Natural gas is one of the main sources of electricity generation in the UAE.
Abu Dhabi’s utility folded into new energy department – spokesman
Contrary to popular belief, the source of energy that fuels UAE’s rapid economic development stems from natural gas rather than oil. All the responsible authorities in each emirate continue to use natural gas as the main source of electricity generation, but are looking for new underground storage options to ensure supply during peak summer demands. Additionally, Dubai is studying plans to start using: Clean coal and solar power by A key feature of the UAE electricity market is its interconnection with water production, which for the most part occurs at combined-cycle, cogeneration thermal plants.
Water cogeneration has an impact on the efficiency of power plants for electricity generation. This is especially true regulatoin the winter due to the reduced demand for electricity while water demand remains the same, causing a drop in the power-to-water ratio to a much lower level than that required for the optimal efficiency of power plants’ operations.
Nuclear fission See Question 9. Renewable energy Solar power is currently viewed as the most attractive renewable technology for the UAE, as:. The country has abundant sunshine.
United Arab Emirates – The Energy Regulation and Markets Review – Edition 5 – The Law Reviews
Solar technology is mature, with project implementation and further technology developments bringing down costs to such an extent that solar power can compete with fossil fuels. The governance model in Dubai and the creation of a UAE federal energy policy taskforce are key steps towards the use of renewable energy in the UAE. Are there any government policies, targets or incentives in place to encourage the regulatkon of renewable or low carbon energy?
There is currently no federal energy policy. Under the UAE Constitution, individual emirates have autonomy in the management and regulation of energy and resources.
To date, there are only a few federal energy regulations, for example, regulations of the Emirates Authority for Standardization and Metrology regarding the phase-out of incandescent light bulbs and inefficient air conditioning units.
The pricing of gasoline is also regulated and determined at the federal level. However, there is growing recognition regulatlon the need for co-ordination, consistency and co-investment among the emirates. The UAE Ministry of Energy is leading the country’s first effort to develop a national strategy, which is expected to cover issues such as:.
Deployment of different supply technologies. Abu Dhabi and Dubai are arguably the most advanced emirates in that field, and have introduced independent regulators aewea is, the Regulatory and Supervisory Bureau in Dubai and the Regulation and Supervision Bureau in Abu Dhabi for their power and water markets. Dubai notably established the Dubai Supreme Council of Energy DSCE inwhich is the most centralised and formalised energy decision-making body in the country.
It unites Dubai’s largest energy producers and consumers to collectively determine policy and investment across all energy sectors. Abu Dhabi is considering a similar model, regluation the Abu Dhabi Energy Authority regulatiom under development.
To date, only the Abu Dhabi hydrocarbon sector has a unified governance structure under the Supreme Petroleum Council, which was established in The UAE will account for the largest share of renewable energy projects in the region in the next regualtion years.
While there has been no public announcement to this effect, the regulaiton anticipates that governments will look to finance their renewable energy plans through feed-in tariffs.