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Event Review: Global IWPP Summit

Utilities leaders review ways to rein in rising costs of new projects

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Richard Menezes, executive vice chairman & managing director, Utico.
Richard Menezes, executive vice chairman & managing director, Utico.
Fareed Al Yagout,  President, National Power Company, Saudi Arabia.
Fareed Al Yagout, President, National Power Company, Saudi Arabia.
Ivano  Iannelli,  chief executive officer, Dubai Carbon Centre of Excellence.
Ivano Iannelli, chief executive officer, Dubai Carbon Centre of Excellence.
Victor Martinez,  senior technical manager, Renewable Generation Division, NOMAC.
Victor Martinez, senior technical manager, Renewable Generation Division, NOMAC.

It has been a volatile market and like any other industry, Utilities too is susceptible to the high and lows of the economy. To help utilities companies understand the risks involved in the establishment of new projects, Fleming Gulf organised the 2nd Global IWPP (Independent Water and Power Projects) Summit in Ras Al Khaimah recently. The three-day summit was inaugurated by H E Sheikh Mohammed Bin Kayed Al Qasimi, Chairman of Department of Economic Development in Ras Al Khaimah and hosted government representatives, policy-makers, regulatory authorities, utilities companies, financial institutions and technology leaders.

Nick Carter, Director General of the Regulation and Supervision Bureau, the independent regulatory body for the water, wastewater and electricity sectors of Abu Dhabi, opened the summit with a keynote address, during which he underlined the importance of reining in costs, especially during the establishment of new projects. Carter pointed out that even as utilities providers explore the most competitive options to secure funding for their projects, the role of private capital was still not completely understood or often viewed with skepticism. Underlining the role for private equity in projects, he said, “With the high number of projects being announced by governments in the region, private equity can help the developers to complete their projects on time and at less risk to governments.”

Abdullah Al Hajri, Executive Vice President-Customer Services, Dubai Water And Electricity Authority, underlined the need for employing sophisticated technologies to serve customers better. An important technology highlighted at the event was enhanced (HEPA) filtration for gas turbine machinery, which is said to increase plant power output and reliability. A panel also discussed the opportunities that await private sector players in existing and upcoming government projects.

Utico

Tell us a bit about your company’s role in Ras al Khaimah.

Utico Middle East has been at the forefront of power generation and desalination in the private sector, providing utilities including transmission, distribution, metering, collection and customer service. Most of our plants are based in Ras Al Khaimah where we manage the power and water needs for the Northern Emirates and Oman. In Ras Al Khaimah, Utico operates several power-generation plants as well as seawater desalination facilities.

Last year, we announced a Dhs1.5 billion coal-fired power plant to be set up in Ras Al Khaimah in collaboration with Shanghai Electric to generate 270 MW of clean coal power. This project is on schedule and following the environment clearances we achieved recently, we will be going ahead with the construction shortly.

How is the power sector in RAK growing?

The major advantages of Ras Al Khaimah are its strategic location and the huge support of the Government here. In terms of the power and utilities industry, Ras Al Khaimah is continuously setting the benchmark for other regional power players to follow. Internationally, there is growing recognition for RAK as one of the world’s major utilities innovation hubs as well as large-scale industries and tourism. The two Global IWPP summits we organised last year and this year has attracted more than 1,500 people from across the globe, consolidating the region’s reputation.

The US$450 million projects announced by Utico involve Independent water and Power projects, transmission and distribution to be co-developed and financed by Utico.

Where is RAK heading in terms of renewables?

RAK has been at the forefront of renewable innovation when it formed an Innovation Centre with world renowned Swiss R&D company CSEM in 2004/2005. It has the largest R&D and database for solar as well as other industry specific products, manufacturing, renewables which can be tapped into by any part. Moreover, it is a centre where PhD students from all over the world come to do their research and thesis.

National Power Company

Tell us about your company’s current activities.

National Power Company’s (NPC) current activities include successful operation of the first co-generation IPP that was established in Saudi Arabia and started its commercial operation on the year 2005. This IPP is offering to its customer electricity as well as industrial steam at very competitive rates. The customers are satisfied with our project performance and availability as the latest record are 98.6%. NPC has maintained very clean and successful reputation with all international players in the IPP/IWPP business.

NPC is presently working in R& D for solar energy projects with King Abdul Aziz City for Science and Technology.

NPC, in coordination with another research institute, is exploring the feasibility of establishing a Pilot Solar Cooling Plant in Saudi Arabia, with the primary aim of finding avenues that can lead in the long run to successfully divert the massive air-conditioning load, that consumes more than 50 of the electricity generated in the Kingdom. The success of this concept will help the Kingdom to help climate control while still achieving substantial reductions in the quantum of subsidies to users of electricity.

With the rising power demand in Saudi Arabia, how do you see the country tackling imminent shortages?

There are considerable efforts being put in from various government organizations as well as Saudi Electricity Company to speed up the enhancement of the generation capacity to meet the increasing demand. SEC are putting an incredible plan to add almost 4000MW capacity yearly by offering new EPC project as well retrofitting existing power plants. They are also making efforts for IPP projects even though the progress is very slow. The other government organizations are concentrating on utilisation of renewable energy technology to make up for the shortfall in generation capacity; however the policy guide lines have not yet been finalised. In my opinion, more efforts should be exerted towards energy conservation from all aspects. Also, the utilization of solar energy for air-conditioning should be given higher priority to shape up the peak load demand.

What do you think of the Kingdom’s plans to privatise the electricity sector by 2014?

We understand that SEC will offer one project in 2014 which was postponed from 2013. I believe they have their own strategy and implementation schedule based upon their assessment of the power sector.

Dubai Carbon Centre of Excellence

Tell us about your organisation’s role in the region.

As the first of its kind in the Middle East, DCCE provides the public and private sectors with the highest level of expertise to quantify, manage and operationalise environmental upgrades using economic metrics. The establishment captures a growing niche market catering specifically to the transition to a low carbon and green economy by consolidating knowledge and providing our restricted access. The timing and the nature of this business have been key to its rapid success. Environmental trends drive future UAE policy, which in turn are designed using the legitimacy of DCCE. DCCE today acts as a Dubai level and UAE level focal point to capture, streamline, analyse and harmonise GHG data which is then utilized by all sectors to develop country level negotiations.

Where is Dubai’s energy sector heading in terms of sustainable development?

The initiatives of the ‘Green Economy for Sustainable Development’, launched by HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, UAE Vision 2021 and Dubai Integrated Energy Strategy 2030, will drive Dubai’s strategy to reduce global warming by implementing sustainable solutions to energy production and consumption. With the population in the Emirate ofDubai growing massively, the need for power and water will increase too, inevitably affecting the environment. As a result, production will increase vastly and it will generate more emissions. Similarly so, the risk of water scarcity will prevail with a higher demand of water. The green economy framework is widely recognised as crucial in transforming Dubai into a sustainable energy hub.

The population in the emirate is growing massively and so is demand for power and water. How is this effecting the environment?

Sustainability has become a key objective of mega-events influencing new practices in event strategy, design and management. The core of the planning for Expo2020 before the bid was won, was sustainability.

NOMAC

Tell us about your company’s current activities.

NOMAC is an ACWA Power subsidiary established in 2005. In total, NOMAC is responsible for the operation of a portfolio of around 10GW of power generation and 2.2 million cubic metres per day of desalinated water production.

We have full operational responsibility for seven large projects: Rabigh, Shuaibah, Shuaibah Expansion, Shuqaiq, Qurayyah, Barka 1 and we participated in the Marafiq Jubail Project as well.

Also, NOMAC is fully responsible for the O&M of two, barge-mounted, self-supporting desalination plants, which are currently located at Yanbu, Saudi Arabia. NOMAC also provides services for the turnkey operation of renewable projects and is currently operating a 60 MW photovoltaic utility scale generation facility.

With the rising power demand in Saudi Arabia, how do you see the country tackling imminent shortages?

Energy demand is growing at nearly 8-10 per cent per year, due to population growth and higher standards of living; the domestic consumption is likely to double within the next 10 years and this will threaten the oil exporting capabilities of the Kingdom.

As the highest oil consumption per capita in the world (driven by huge domestic oil production and very low energy price) there is a need to progressively invest national initiatives to instill lower fuel consumption devices, reduced water and electricity consumption equipment and overall sustainable habits on the local society.

At the same time Saudi Arabia is the world’s top oil exporter. Blessed with enormous renewable energy resources, the Kingdom is aware about the benefits of keeping down domestic consumption generating a pocket with additional surpluses of saved oil burnings. This enables the incorporation of renewable energy into the energy mix, securing part of the demand in the mid-long term horizon and also facilitates the oil exportation at more competitive prices.

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