Energy shortfalls of upto 35% to hit the UAE by 2012

According to the report, water and power shortages of approximately 35% are expected in Kuwait, Qatar and Saudi Arabia by 2010, while the UAE and Bahrain will face similar problems by 2012 and 2013 respectively. This figure was reached after taking into account the current power capacity across the region and adding the projected 24% which is under construction.

'Energy consumption is on the increase not only in the region but across the world,' said Ashruf Kamel, Vice President of Corporate Development at Septech Emirates. 'Infact, global net electricity consumption is expected to increase by a whopping 42% by 2015 and an additional 1600GW of power generating capacity is required to meet mounting demand.'

With the growing population and mega scale industrial and real estate developments, demand for power is estimated to rise considerably. Estimated investments in the private sector over the next decade are expected in excess of US$75 billion.

Kamel added:

'At present, there is a huge concern across MENASA governments on how to combat the shortfalls projected in both water and power. Financial institutions, private equity houses, investment banks and government investment authorities are now addressing the current and forecasted growth in the economy and how this increase will affect basic utilities like water, power and transportation.'

According to Septech Emirates analysis, in mid-2007, the total capacity for electricity production in the UAE was estimated at 19,220 MW (Megawatts) compared to 9600 MW in 2001. And, according to industry estimates, this capacity is set to increase to 26,000 MW by 2010.

At present, Abu Dhabi Water and Electricity Authority (ADWEA) accounts for 53 per cent of the total capacity produced; Dubai Electricity and Water Authority (DEWA) account for 29%; Sharjah Electricity and Water Authority (SEWA) for 11 per cent, while the Federal Electricity and Water Authority (FEWA) account for 7%.

According to Septech Emirates, the UAE has witnessed three years of unprecedented economic and population growth and as a result the UAE's 'utilities, road and transport' authorities have been struggling to ensure demand does not outpace supply.

Main drivers for growth in the power and utilities sector are attributed to the growing population in the Middle East and North Africa (MENA), which comprises more than 20 countries and over 310 million people. Other drivers include the MENA labour force, which is estimated to increase to 85 million by 2010, the enormity of construction projects and urban infrastructure currently underway to sustain the level of population and jobs in the region.

'The summer of 2007 proved to be a historical milestone when the UAE came close to a full scale energy crisis,' added Kamel. 'Over the past 15 months, Septech has been developing and implementing 'sustainable water and power' systems to combat such situations and not only will these systems prove to be an industry leading offering but are also in line with the prerequisites of the UAE rulers and sustainable awareness committees.'

Since 1997, initiated by ADWEA, a wave of re-structuring and privatisation has swept through the UAE water and electricity sector in a concerted effort to increase capacity and improve efficiency. As part of this strategy, Independent Water and Power Production Plants (IWPPs) have been introduced on a build, own and operate (BOO) basis through joint venture arrangements. IWPPs sell water and electricity from their production plant to a single buyer from the sector.

According to industry experts, the UAE has the capacity to produce an estimated 1,000 megawatts of electricity every year using wind energy, if utilised properly.

In addition, the UAE has recently set up a wind power plant on Sir Baniyas Island, which is the first ever wind power project in the entire Arabian Peninsula. The wind power plant is also the first in the world which is designed to sustain the most severe climatic conditions including high temperatures and humidity. 'Septech has also installed a pre-engineered water and wastewater system on this Island, which has proved very successful,' added Kamel.

Abu Dhabi Future Energy Company (ADFEC) is also planning to launch several projects in the near future and develop a new economic sector dedicated to alternative and sustainable energy. The recently launched $250m Masdar Company to develop a new economic sector dedicated to sustainable and renewable energy is also part of the government's efforts to conserve the environment and is part of Abu Dhabi's drive to cut dependence on hydrocarbon power generation.