Abu Dhabi power strategy undeterred by crisis, says GlobalData

Published: 27 May 2020 - 8:07 a.m.
By: Baset Asaba

Electricity demand in Abu Dhabi is down 5% on this year’s forecast after normalizing for day-to-day weather effects, according to state utility Emirates Water & Electricity Company (EWEC).

This decline is comparatively low when compared with other markets. For instance, electricity demand between March and April compared with the same period in the previous year has fallen 11.5% in Germany and 17.2% in the UK.

Jennifer Aguinaldo, Energy & Technology Editor at GlobalData, comments: “While it can be argued that the reporting entities used different parameters to measure the decline, the downward trend in energy consumption is beyond doubt. Containment measures against the COVID-19 outbreak primarily triggered these significant declines, which have come at a rate unseen in recent times.

“EWEC also told GlobalData demand for water remains unchanged, which does not align with trends seen in Jordan and, to a lesser extent, Saudi Arabia. This discredits a potential explanation that if water demand had increased, it therefore – given that water production is largely dependent on generated power – helped to cushion against a significant electricity demand decline.”

Other explanations relate to several factors. Unlike in Dubai and other GCC cities, Abu Dhabi has only implemented a partial lockdown. This means in addition to the critical sectors – oil and gas, energy, electricity, water, healthcare, banking and telecoms – most commercial establishments were operating at limited capacities in March and April.

Aguinaldo continues: “The use of advancing or newer technologies that align demand and supply more efficiently is another consideration. In addition, Abu Dhabi’s economy remains less dependent on tourism compared with other cities in the region. Nevertheless, the main narrative holds that any negative impact COVID-19 has on utilities demand will be short-term, and that the longer-term outlook remains positive, which means growth will return subject to oil prices and overall economic recovery.”

The positive developments seen in recent weeks in Abu Dhabi affirm this expectation. Despite the pandemic and low oil prices, EWEC has made substantial progress on the 2GW Al-Dhafra solar photovoltaic independent power project.

The plan to build two new waste-to-energy plants is moving ahead, and the tender has been issued for the 3.2GW sub-sea transmission network between Adnoc and AD Power. In addition, the commissioning of the 1.4GW Unit 1 of the Barakah nuclear energy facility is under way and the plant could start operating by early next year.

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