GDPE0770ICR UAE Power Market Outlook to 2025, Update …reference code gdpe0770icr | publication...

REFERENCE CODE GDPE0770ICR | PUBLICATION DATE APRIL 2015

UAE POWER MARKET OUTLOOK TO 2025, UPDATE 2015 – MARKET TRENDS, REGULATIONS, AND

COMPETITIVE LANDSCAPE

UAE Power Market Outlook to 2025, Update 2015 – Market Trends, Regulations, and Competitive Landscape 2 © GlobalData. This report is a licensed product and is not to be copied, reproduced, shared or resold in any form.

UAE POWER MARKET OUTLOOK TO 2025, UPDATE 2015 – MARKET TRENDS, REGULATIONS, AND COMPETITIVE LANDSCAPE

Executive Summary

UAE’s Power Sector Outlook

The UAE has one of the most impressive

economies in the Middle East. Largely due to the

economic performance of the constituent states of

Dubai and Sharjah, its Gross Domestic Product

(GDP) increased at a Compound Annual Growth

Rate (CAGR) of XX% from $XX billion in 2000 to

$XX billion in 2014. Electricity consumption

followed suit, growing at a CAGR of XX% during

the same period. Although the region is not highly

industrialized, the rapid growth of the services

industry and vast investment in real estate have

ensured the growth of electricity consumption.

Power Market, UAE, Gross Domestic Product ($bn) and Annual Power Consumption (TWh), 2000–2014

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Ann

ual p

ower

con

sum

ptio

n (T

Wh)

GD

P ($

bn)

GDP (constant prices) Annual power consumption Source: GlobalData; IMF, 2014 TWh: Terawatt hour

Annual power consumption increased from XX

TWh in 2000 to XX TWh in 2014 at a CAGR of

XX% due to growth in both the economy and the

size of the population. Annual electricity generation

increased during the same period from XX TWh in

2000 to XX TWh in 2014 at a CAGR of XX%.

Renewable generation in the UAE is still in its

nascent stages, and so the additional electricity

generation came almost entirely from thermal

sources.

Power Market, UAE, Annual Power Consumption and Generation (TWh), 2000–2014

2000 2007 2014

Ann

ual p

ower

con

sum

ptio

n an

d ge

nera

tion

(TW

h)

Annual power consumption Annual power generation

Source: GlobalData, Power Database [Accessed on March 20, 2015]

In 2014, thermal sources accounted for XX% of

UAE’s total installed capacity, with gas-based

capacity contributing XX% and oil-based thermal

capacity contributing only XX%. The remaining

XX% came from renewable sources, including

solar Photovoltaic (PV), Concentrated Solar Power

(CSP) and onshore wind.


Table of Contents


1 Table of Contents

1 Table of Contents ....................................................................................................................... 4

1.1 List of Tables ...................................................................................................................... 8

1.2 List of Figures ..................................................................................................................... 9

2 Introduction ............................................................................................................................... 10

2.1 GlobalData Report Guidance ............................................................................................ 11

3 UAE, Power Market, Snapshot ................................................................................................. 12

3.1 UAE, Power Market, Macro-economic Factors .................................................................. 12

3.2 UAE, Power Market, Supply Security ................................................................................ 14

3.3 UAE, Power Market, Opportunities .................................................................................... 15

3.4 UAE, Power Market, Challenges ....................................................................................... 15

4 UAE, Power Market, Market Analysis ....................................................................................... 17

4.1 UAE, Power Market, Supply Structure .............................................................................. 17

4.2 UAE, Power Market, Key Market Players .......................................................................... 18

4.3 UAE, Power Market, Financial Deals ................................................................................ 19

4.3.1 Deal Volume and Value Analysis, 2004–March 2015 .................................................... 19

4.3.2 Deals by Type, 2014 ..................................................................................................... 20

4.4 UAE, Power Market, Demand Structure ............................................................................ 20

4.4.1 Electricity Consumption by Sector, 2014 ....................................................................... 23

5 UAE, Power Market, Regulatory Scenario ................................................................................ 24

5.1 UAE, Power Market, Key Electricity Policies ..................................................................... 24

5.2 UAE, Power Market, Nuclear Energy Policy ...................................................................... 24


Table of Contents


5.3 UAE, Power Market, Renewable Energy Policies .............................................................. 26

6 UAE, Power Market, Capacity and Generation Overview .......................................................... 28

6.1 UAE, Power Market, Cumulative Installed Capacity by Fuel Type, 2014 ........................... 28

6.2 UAE, Power Market, Cumulative Installed Capacity and Annual Power Generation, 2000–

2025 .................................................................................................................................. 29

6.2.1 Cumulative Installed Thermal Capacity and Annual Thermal Power Generation, 2000–

2025 ............................................................................................................................. 32

6.2.2 Cumulative Installed Nuclear Capacity and Annual Nuclear Power Generation, 2000–

2025 ............................................................................................................................. 36

6.2.3 Cumulative Installed Renewable Capacity and Annual Renewable Power Generation,

2000–2025 ................................................................................................................... 39

7 UAE, Power Market, Transmission and Distribution Overview .................................................. 42

7.1 UAE, Power Market, Transmission Overview .................................................................... 42

7.1.1 Upcoming Projects ........................................................................................................ 44

7.2 UAE, Power Market, Distribution Overview ....................................................................... 44

7.3 UAE, Power Market, Grid Interconnection ......................................................................... 45

7.3.1 Electricity Import and Export Trends, 2000–2013 .......................................................... 46

7.4 UAE, Power Market, Electricity Trading............................................................................. 46

8 The UAE, Power Market, Competitive Landscape: Snapshot of Leading Power Generating

Companies ............................................................................................................................... 47

8.1 Key Company in the UAE Power Market: Abu Dhabi Water & Electricity Authority ............ 47

8.1.1 Company Overview ....................................................................................................... 47

8.1.2 Business Description ..................................................................................................... 47

8.1.3 SWOT Overview ........................................................................................................... 48


Table of Contents


8.2 Key Company in the UAE Power Market: Dubai Electricity and Water Authority ............... 51



8.2.3 SWOT Overview ........................................................................................................... 52

8.3 Key Company in the UAE Power Market: Sharjah Electricity & Water Authority ................ 56



8.3.3 SWOT Overview ........................................................................................................... 57

8.4 Key Company in the UAE Power Market: Federal Electricity & Water Authority ................ 60



8.4.3 SWOT Overview ........................................................................................................... 61

9 Appendix................................................................................................................................... 64

9.1 Market Definitions ............................................................................................................. 64

9.1.1 Power ............................................................................................................................ 64

9.1.2 Installed Capacity .......................................................................................................... 64

9.1.3 Electricity Generation .................................................................................................... 64

9.1.4 Electricity Consumption ................................................................................................. 64

9.1.5 Thermal Power Plant ..................................................................................................... 64

9.1.6 Hydropower Plant .......................................................................................................... 64

9.1.7 Nuclear Power............................................................................................................... 64

9.1.8 Renewable Energy Resources ...................................................................................... 65

9.2 Abbreviations .................................................................................................................... 66


Table of Contents


9.3 Bibliography ...................................................................................................................... 67

9.4 GlobalData’s Methodology ................................................................................................ 67

9.4.1 Coverage ...................................................................................................................... 68

9.4.2 Secondary Research and Analysis ................................................................................ 68

9.4.3 Primary Research and Analysis..................................................................................... 69

9.5 Disclaimer ......................................................................................................................... 69


Table of Contents


1.1 List of Tables

Table 1: Power Market, UAE, Gross Domestic Product ($bn), Population (million) and Annual Power

Consumption (TWh), 2000–2019 ................................................................................................. 14

Table 2: Power Market, UAE, Market Share of Power Generation Companies (%), 2014 ........................... 18

Table 3: Power Market, UAE, Deal Value ($bn) and Number of Deals, 2004–March 2015 ......................... 20

Table 4: Power Market, UAE, Annual Power Consumption (TWh), 2000–2025 .......................................... 22

Table 5: Power Market, UAE, Electricity Consumption by Sector (%), 2014 ............................................... 23

Table 6: Power Market, UAE, Cumulative Installed Capacity by Fuel Type (%), 2014 ................................ 28

Table 7: Power Market, UAE, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh),

2000–2025 .................................................................................................................................. 31

Table 8: Power Market, UAE, Leading Thermal Power Plants, 2015 .......................................................... 33

Table 9: Power Market, UAE, Cumulative Installed Thermal Power Capacity (GW) and Annual Thermal

Power Generation (TWh), 2000–2025 ......................................................................................... 35

Table 10: Power Market, UAE, Upcoming Nuclear Power Units, 2015–2020 ............................................... 36

Table 11: Power Market, UAE, Cumulative Installed Nuclear Power Capacity (GW) and Annual Nuclear


Table 12: Power Market, UAE, Cumulative Installed Renewable Power Capacity and Annual Renewable

Power Generation, 2000–2025 .................................................................................................... 41

Table 13: Power Market, UAE, Transmission Line Length (Ckm), 2000–2020 ............................................. 43

Table 14: Power Market, UAE, Upcoming Transmission Line Projects, 2015–2020 ..................................... 44

Table 15: Power Market, UAE, Distribution Line Length (Ckm), 2000–2020 ................................................. 45

Table 16: Power Market, UAE, Abu Dhabi Water and Electricity Authority, SWOT Profile, 2014 .................. 49

Table 17: Power Market, UAE, Dubai Electricity and Water Authority, SWOT Profile, 2014.......................... 52

Table 18: Power Market, UAE, Sharjah Electricity & Water Authority, SWOT Profile, 2014 .......................... 57

Table 19: Power Market, UAE, Federal Electricity & Water Authority, SWOT Profile, 2014 .......................... 61

Table 20: Abbreviations .............................................................................................................................. 66


Table of Contents


1.2 List of Figures

Figure 1: Power Market, UAE, Gross Domestic Product ($bn), Population (million), and Annual Power

Consumption (TWh), 2000–2019 ................................................................................................. 13

Figure 2: Power Market, UAE, Market Share of Power Generation Companies (%), 2014 ........................... 18

Figure 3: Power Market, UAE, Deal Value ($bn) and Number of Deals, 2004–March 2015 ......................... 19

Figure 4: Power Market, UAE, Annual Power Consumption (TWh), 2000–2025 .......................................... 21

Figure 5: Power Market, UAE, Electricity Consumption by Sector (%), 2014 ............................................... 23

Figure 6: Power Market, UAE, Cumulative Installed Capacity by Fuel Type (%), 2014 ................................ 28

Figure 7: Power Market, UAE, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh),

2000–2025 .................................................................................................................................. 30

Figure 8: Power Market, UAE, Cumulative Installed Thermal Power Capacity (GW) and Annual Thermal


Figure 9: Power Market, UAE, Cumulative Installed Nuclear Power Capacity (GW) and Annual Nuclear


Figure 10: Power Market, UAE, Cumulative Installed Renewable Power Capacity (GW) and Annual

Renewable Power Generation (TWh), 2000–2025 ....................................................................... 40



Introduction

2 Introduction

The UAE, a federation of seven emirates in the Arabian Peninsula: Abu Dhabi, Ajman, Dubai,

Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Quwain, is one of the biggest exporters of oil in

the world and plays a major role in the Organization of the Petroleum Exporting Countries (OPEC).

It is currently on a high growth trajectory due to substantial oil and gas reserves and is one of the

most prosperous countries in the Middle East.

The UAE has an open economy with a high per-capita income and a sizable annual trade surplus.

Predominantly an oil-dependent nation, it is trying to diversify its power mix by putting greater

emphasis on the development of renewable and nuclear energy. The UAE has undergone robust

industrialization over the past few years, making practical and effective use of its substantial natural

resources. Private sector participation is increasing significantly, and government agencies are

creating better job opportunities. The UAE’s Free Trade Zones, which offer XX% foreign ownership

and zero taxes, are also providing a major boost to economic development.

In April 2004, the UAE signed a Trade and Investment Framework Agreement with Washington

and in November 2004 entered negotiations with the US for a Free Trade Agreement (FTA).

However, there has been no advancement in the FTA, mainly due to concerns over the UAE’s

labor laws and human rights record.

The UAE’s Gross Domestic Product (GDP) amounted to $XX billion in 2014, with a growth rate of

XX% over 2013 (IMF, 2014). The main driver of the economy is revenue from its oil sector, which

helped the economy to grow greatly between 2000 and 2008 until the financial crisis in 2009. This

global crisis, which resulted in tight international credit and deflated asset prices, resulted in a

negative estimated GDP growth rate of XX% in 2009.

The industrial sector accounted for an estimated share of XX% of overall GDP in 2013, with the

services sector accounting for XX%. The agricultural sector accounted for a minimal share of less

than XX% (CIA, 2014).

Rapid growth in the economy and in the size of the population has allowed electricity consumption

to grow phenomenally. Total power consumption in 2000 was XX Terawatt hours (TWh), which

increased to XX TWh in 2014 at a Compound Annual Growth Rate (CAGR) of XX%.



Introduction

The Federal Electricity and Water Authority (FEWA), Abu Dhabi Water and Electricity Authority

(ADWEA), Dubai Electricity and Water Authority (DEWA), and Sharjah Electricity and Water

Authority (SEWA), all of which operate under the Ministry of Energy, are responsible for the overall

generation, transmission and distribution of energy in their respective emirates. The Regulation and

Supervision Bureau (RSB) is an independent regulatory authority responsible for all activities

related to the power sector in Abu Dhabi.

2.1 GlobalData Report Guidance

The executive summary captures the key growth trends in the UAE’s power market.

Chapter three provides a snapshot of the key parameters that impact the UAE’s power sector,

as well as key points about the power market.

Chapter four provides an analysis of the UAE’s power market.

Chapter five details the regulatory scenario of the power market and the inward foreign

investment scenario in the UAE.

Chapter six provides information on the UAE’s cumulative installed capacity and annual

generation trends by individual generation source.

Chapter seven describes the power transmission and distribution infrastructure in the UAE and

provides information on interconnectors with neighboring countries. The section also covers

electricity imports and exports and upcoming grid-related projects.

Note: All 2014 market numbers provided in the report are estimates, except where actual data

were available.



UAE, Power Market, Market Analysis

4.4.1 Electricity Consumption by Sector, 2014

The residential sector is the largest consumer of electricity in the UAE. Its share in the total

electricity consumption is increasing, bolstered by the realty boom in Dubai and the rising affluence

of its citizens. The residential sector accounted for an estimated XX% of total electricity

consumption in 2014, followed immediately by the commercial sector, which accounted for an

estimated XX% and the industrial sector with XX%. Other sectors, including government offices

and other public utilities, are estimated to have accounted for the remaining XX%.

Figure 5: Power Market, UAE, Electricity Consumption by Sector (%), 2014

Residential

Commercial

Industrial

Other

Source: GlobalData

Table 5: Power Market, UAE, Electricity Consumption by Sector (%), 2014 Sector Share

Residential

Commercial

Industrial

Others

Source: GlobalData



UAE, Power Market, Capacity and Generation Overview

6.2 UAE, Power Market, Cumulative Installed Capacity and Annual Power Generation, 2000–2025

In 2000, the UAE’s cumulative installed capacity stood at XX GW, which increased to XX GW by

2014 at a CAGR of XX%. Thermal sources, including gas and oil, accounted for more than XX% of

capacity in 2014.

Installed capacity is expected to increase at a CAGR of XX% in the 2015–2025 forecast period.

Thermal fuel sources will remain the highest contributors in 2025, despite their relative share in the

total power mix being expected to decline to XX% by then.

Renewable energy sources are expected to witness the highest CAGR growth, at XX%, during the

forecast period. A shift in government focus towards renewable sources due to growing

environmental concerns has resulted in the scale-up of solar and wind projects.

Nuclear energy projects are expected to contribute to the total energy mix in the near future, and

the first XX GW nuclear power plant will come online by 2017. By 2020, XX GW of nuclear power

plants will be set up in the UAE. The government is expected to provide further impetus to the

development of nuclear energy projects in the future.

Total electricity generation in the UAE increased from XX TWh in 2000 to XX TWh in 2014,

recording a CAGR of XX%. With expected high demand due to robust industrialization and high

residential electricity demand, power generation is expected to increase during the forecast period

at a CAGR of XX% to XX TWh by 2025. Thermal fuel sources are expected to dominate the power

generation mix with XX% (126 TWh) in 2025. Nuclear energy is expected to account for XX% of

total generation in the UAE by 2025. The renewable energy sector is expected to register a sharp

increase at a CAGR of XX% during the forecast period, reaching an estimated generation of XX

TWh by 2025.




Figure 7: Power Market, UAE, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh), 2000–2025

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Ann

ual p

ower

gen

erat

ion

(TW

h)

Cum

ulat

ive

inst

alle

d ca

paci

ty (G

W)

Cumulative installed capacity Annual power generation





Table 7: Power Market, UAE, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh), 2000–2025

Year Cumulative installed capacity Annual power generation

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025



Appendix


9 Appendix

9.1 Market Definitions

9.1.1 Power

Power refers to the rate of production, transfer or energy use, usually related to electricity. It is

measured in Watts (W) and often expressed in kilowatts (kW) or Megawatts (MW). It is also known

as real power or active power.

9.1.2 Installed Capacity

Installed capacity refers to either the generator’s nameplate capacity, as stated by the

manufacturer, or the maximum rated output of a generator under given conditions. It is given in

Megawatts (MW) on a nameplate affixed to the generator.

9.1.3 Electricity Generation

Electricity generation refers to the process of generating electricity from other forms of energy. It

also refers to the amount of electricity produced. It is expressed in Gigawatt hours (GWh).

9.1.4 Electricity Consumption

Electricity consumption is the sum of electricity generated, plus imports, minus exports and

transmission and distribution losses. It is measured in Gigawatt hours (GWh).

9.1.5 Thermal Power Plant

A thermal power plant is a plant in which turbine generators are driven by burning fossil fuels.

9.1.6 Hydropower Plant

A hydropower plant is a plant in which the turbine generators are driven by falling water.

9.1.7 Nuclear Power

Nuclear power is the energy released from the fission of nuclear fuel in a reactor.


Appendix


9.1.8 Renewable Energy Resources

Renewable energy resources are those that provide energy that is naturally replenished but limited

in the amount of energy available per unit of time. Biomass, geothermal, solar, small hydro and

wind are examples of renewable resources.


Appendix


9.2 Abbreviations

Table 20: Abbreviations AADC Al Ain Distribution Company

ADDC Abu Dhabi Distribution Company

ADWEA Abu Dhabi Water and Electricity Authority

CAGR Compound Annual Growth Rate

CCGT Combined-Cycle Gas Turbine

Ckm Circuit kilometer

Cogen Cogeneration

CSP Concentrated Solar Power

DEWA Dubai Electricity and Water Authority

DSCE Dubai Supreme Council of Energy

ENEC Emirates Nuclear Energy Corporation

ENG Emirates National Grid

FANR Federal Authority for Nuclear Regulation

FEWA Federal Electricity and Water Authority

FTA Free Trade Agreement

GCC Gulf Co-operation Council

GDP Gross Domestic Product

GW Gigawatt

GWh Gigawatt hour

IAEA International Atomic Energy Agency

KEPCO Korean Electric Power Corporation

kV kilovolt

MW Megawatt

OPEC Organization of the Petroleum Exporting Countries

PV Photovoltaic

RSB Regulation and Supervision Bureau

SEWA Sharjah Electricity and Water Authority

TAQA Abu Dhabi National Energy Company

TRANSCO Abu Dhabi Transmission and Despatch Company

TWh Terawatt hour

WENRA Western European Nuclear Regulators Association

Source: GlobalData


Appendix


9.3 Bibliography

AUPTDE (2010). Statistical Bulletin 2010 Issue 19. Arab Union of Electricity, 2010. Available

from: http://www.auptde.org/Article_Files/555.pdf





CIA (2014). United Arab Emirates: The World Factbook. Central Intelligence Agency. Available

from: https://www.cia.gov/library/publications/the-world-factbook/geos/ae.html [Accessed on

March 18, 2015]

IMF (2014). World Economic Outlook Database, October 2014 [database]. Available at:

http://www.imf.org/external/pubs/ft/weo/2014/02/weodata/index.aspx [Accessed on March 18,

2015]

WNA (2014). Nuclear Power in the United Arab Emirates. World Nuclear Association, January

2014. Available from: http://www.world-nuclear.org/info/Country-Profiles/Countries-T-Z/United-

Arab-Emirates/ [Accessed on March 19, 2015]

9.4 GlobalData’s Methodology

GlobalData’s dedicated research and analysis teams consist of experienced professionals with

advanced statistical expertise and marketing, market research and consulting backgrounds in the

energy industry.

GlobalData adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and

Strategic and Competitive Intelligence Professionals (www.scip.org).

All of GlobalData’s databases are continuously updated and revised. The following methodology

has been followed for the collection and analysis of the data presented in this report.


Appendix


9.4.1 Coverage

This report covers the UAE’s power market. It examines the market structure and provides

historical and forecast data for generation, capacity and consumption up to 2030. It also looks at

the market’s regulatory structure, import and export trends, competitive landscape, and leading

active and upcoming power projects.

9.4.2 Secondary Research and Analysis

The capacity, generation and consumption data is collected and validated using a number of

secondary resources, including, but not limited to:

Government agencies, ministerial websites, industry associations, the World Bank and

statistical databases

Company websites, annual reports, financial reports, broker reports and investor presentations

Industry trade journals, market reports and other literature

GlobalData’s proprietary databases such as the Capacity and Generation Database, Power

Plant Database and Transmission and Distribution Database

Further to this, the following secondary information is collected and analyzed to project the UAE’s

power market scenario to 2030, analyzing factors such as:

Macro-economic scenario

Government regulations, policies and targets

Government and private sector investment

Contract and deal announcements

Utility expansion plans

The sector’s historical track record

Other qualitative insights built through secondary research and analysis of company websites,

annual reports, investor presentations, industry and trade journals, and data from industry

associations.


Appendix


9.4.3 Primary Research and Analysis

Secondary research is further complemented through primary interviews with industry participants

to verify the market numbers obtained through secondary research and obtain first-hand

information on industry trends.

The participants are drawn from a diverse set of backgrounds, including equipment manufacturers,

industry associations, government bodies, utilities, distributors, and academia. The participants

include but are not limited to C-level executives, industry consultants, academic experts, business

development and sales managers, purchasing managers, plant managers, government officials

and industry spokespeople.

9.5 Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior

permission of the publisher, GlobalData.

This report is a licensed product and should not to be reproduced without prior permission.

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