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No plans to change utility tariffs in Abu Dhabi

But RSB keen to promote nega-watts concept, says bureau head

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The roll out of smart metering in Abu Dhabi is almost complete.
The roll out of smart metering in Abu Dhabi is almost complete.

There are currently no plans to change the tariff structure for electricity and water in Abu Dhabi, in spite of a roll out of smart meters in the emirate that would enable variable tariffs, says the head of the emirate’s regulatory body for the sector.

“The sector in Abu Dhabi is now virtually covered in smart meters. There is something like 600 000 smart meters installed for both water and electricity, that programme is almost complete,” said Nick Carter, director general of the Regulation & Supervision Bureau (RSB), at the Smart Grids Middle East conference held in Dubai.

Smart meters make variable tariffs possible, as they give utilities providers almost real time information about consumption.
Carter also said that no tariff changes are being planned, and that the Bureau is concentrating its efforts on raising awareness about the real cost of power and water amongst consumers.

“For us, it is more about education,” said Carter

From January, Abu Dhabi’s resident will receive bills that show the “waived cost”, or the amount by which electricity and water is being subsidised. In the case of UAE nationals, this can amount to 84 percent of the total cost, says the RSB.

Nevertheless, observers believe that subsidies will eventually be scaled back, or that tariffs will be changed to discourage energy consumption during peak hours.

As utilities across the GCC are struggling to keep up with increasing demand, calls for “shaving the peak load” have become louder. As generation capacity has to match consumption, a lower peak demand would reduce the need to invest in new power projects.

Abu Dhabi currently has an installed generation capacity of 10,00MW according to a MEED estimate. In 2009, the Abu Dhabi Water and Electricity Company (Adwec) estimated the peak load to be at 6,255MW, with demand during peak hours growing at a rate of seven percent in the UAE.

While refusing to comment on near term tariff changes, Carter said the bureau is keen to promote the concept of nega-watts to reduce peak demand, with the emphasis being on lowering the electricity used for air conditioning.

The Nega-watts principle works by paying customers to not consume electricity instead of having the utilities to provide at a very high cost, said Carter.

“We’re extremely keen to look at the possibility of demand management though the disconnection of building management systems being programmed to disconnect A/C systems at maybe 80 to 90 percent through their duty cycle,” he added.

“Electronic systems integrated in communications systems would allow us the regulator to develop nega-watt type tariffs, which actually give people an incentive to reduce their A/C at just certain types.”
 

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