FEDERAL UTILITY AUTHORITY IN TALKS WITH RAK FOR HYDRO POWER PROJECT

▶ Regulator will also consider privatisation initiatives across the country’s distribution and transmission system

The UAE’s Federal Electricity and Water Authority is in talks with Ras Al Khaimah’s Government to develop a hydroelectric power project, even though it may consider privatisation of its transmission and distribution unit, its director general said.

Dubai’s utilities regulator is building the Gulf region’s first hydroelectric power plant at the mountainous enclave of Hatta. The 250 megawatt project at Hatta, 134km east of Dubai straddling the Hajar mountains bordering Oman, will use water resources from an existing 1,716 million-gallon capacity dam.

“We’re still in negotiations with the government of Ras Al Khaimah to develop a hydroelectric power plant as [we have identified a site] with similar topographical environment to the one at Hatta,” Mohammed Saleh said yesterday. He declined to offer more details on the proposed project.

Fewa has planned the development of 13 new power substations over the next two years at a cost of Dh1.5 billion to enhance the nationwide electrical grid infrastructure.

The director general did not rule out privatisation initiatives across the distribution and transmission system of Fewa and noted that any decision would be on the basis of good economic sense.

“If it is economically viable, then we will think about it, accordingly today there is no decision on privatisation of the transmission and distribution grid,” he said.

Fewa, which oversees utilities across the emirates, established Emirates Water and Electricity Company in November to replace the existing Abu Dhabi Water and Electricity Company, which is regulated by the Abu Dhabi Water and Electricity Authority. EWEC will unify power production and generation in Abu Dhabi and the Northern Emirates, currently served by the federal authority.

“This company will only be dealing with electricity generation and water desalination [and has] nothing to do with transmission or other activities,” said Mr Saleh.

“It’s a single buyer and main distributor of electricity as per IPPs [independent power producers], or IWPs [independent water producers] or IWPPs [integrated water and power producers] which will be only an off-taker and they will be then reselling to the power consumers,” he added.

He declined to comment on Fewa’s gas offtake arrangements on the back of new discoveries by Abu Dhabi National Oil Company, but said the regulator was in search for cheap gas that would lower tariffs for consumers.

“That’s the mandate of the company, to look for cheap gas, to look for mandate of the new companies, to try to bring electricity prices down as much as possible in terms of efficiency. Then you will use less gas and your requirements will be better,” said Mr Saleh.

The regulator is also pursuing some large desalination projects across the UAE, including plans for a scheme that has a capacity of 200 million imperial gallons per day.

The project announced by Adwea earlier this year would “decouple water from electricity and concentrate on desalination on [the basis of] reverse osmosis,” said Mr Saleh.

“It will be the most economic methodology to desalinate water.”

Reverse osmosis refers to a water purification technology that uses membranes to separate particles from untreated water.