Giant Abu Dhabi utility scheme provides hope to Gulf power and water sector, says GlobalData
The issue on April 27 of the tender for the contract to develop Abu Dhabi’s mega power transmission project has provided a major boost to the market
Faced with contrasting demand trends for electricity and water following the COVID-19 outbreak – changing customer behavior and remote working are driving water demand higher, while temporary lockdowns curtail electricity demand – the near-term prospects for investment in new capacity are uncertain, says GlobalData, a leading data and analytics company.
Jennifer Aguinaldo, Energy & Technology Editor at GlobalData, comments: “Tender closing dates for projects such as Qatar’s Facility E independent water and power project (IWPP) have been postponed or extended to allow bidders more time to prepare proposals as they grapple with supply chain disruption, as well providing clients with more time to reassess their priorities and review project spending amid historically low oil prices. However, the issue on April 27 of the tender for the contract to develop Abu Dhabi’s mega power transmission project has provided a major boost to the market.”
Abu Dhabi issued the tender a few weeks after it announced plans to develop two waste-to-energy plants, which together will have the capacity to generate 150MW of electricity. With a planned capacity of 3,200MW and costs estimated to reach up to $2bn, the project’s scale is massive, and the decision to pursue a build, operate, own and transfer (BOOT) model is equally significant. On paper at least, the proposed project ticks all the top concerns a power project needs to meet these days.
Aguinaldo continues: “It will reduce Adnoc’s carbon footprint by 30% and offer potential cost optimisation by replacing Adnoc’s offshore gas turbines with more sustainable sources such as renewable energy. The gas supply, meanwhile, will generate additional revenue for Adnoc and the emirate compared with burning it onsite. Despite the seeming complexity and novelty of a sub-sea cable transmission project, it is a project that some long-term investors may not want to miss.
“It will also likely reinforce the GCC infrastructure sector, particularly Abu Dhabi’s, as a safer investment haven compared to other sectors or markets post COVID-19.