Reforms, retrofitting and solar mean cleaner energy for Dubai

 

Decades of dramatic growth form the backbone of Dubai’s development, and its leaders wish to see that pattern continue in the future. However, concerted efforts are being made to ensure the impact of that expansion on the environment is minimised. In addition to its plans for rapid adoption of renewable energy generation, the emirate is also busy developing strategies to improve efficiencies in the use of its power and water, with efforts already yielding results.

Savings Record

In March 2017 the Dubai Energy and Water Authority (DEWA) said that almost Dh1bn ($272m) had been saved over eight years thanks to sensible energy conservation measures taken by businesses and residents in the emirate. From 2009 to 2016 DEWA customers saved more than 1.5 TWh of electricity and 6.2bn gallons of water. These savings amounted to Dh967m ($263m). The DEWA publication stated that all sectors conserved electricity over the period: the residential segment cut use by 19%, the industrial segment by 15%, government and semi-government organisations decreased usage by 12%, commercial companies by 10% and educational establishments by 9%. The same sectors made even more significant reductions in the use of water: the residential sector showed a decrease of 28%; industry, 21%; government and semi-government entities, 21%; the commercial sector, 30%; and educational establishments, 24%.

DEWA notes this decline in use was likely spurred on by its education programmes, initiatives and awareness campaigns. The resulting carbon offset of the period was 831,000 tonnes, an amount equivalent to planting 944,000 trees. Saeed Mohammed Al Tayer, managing director and chief executive of DEWA, said there was evidence of a change in attitude across the emirate, but more could be accomplished. “Despite the big savings achieved in electricity and water, the ultimate goal is to create a culture of energy conservation among all members of society,” he told OBG.

Subsidy Reforms

Another important factor influencing consumption patterns over the period was subsidy reform in water and electricity tariffs introduced in 2011. The subject was studied by the Masdar Institute and the Brookings Institution in 2016, with results published in a joint report titled “Reforming Energy Subsidies”. DEWA’s first price reforms were introduced in 2008 with a four-slab tariff system designed to reward the most efficient users. In 2011 a 15-20% increase in the slab unit cost of electricity and water was introduced for resident expatriates, industry and government. Modest electricity and water tariffs were introduced for UAE nationals – the electricity tariff being about one-third the price paid by expatriates, while the water tariff applied only to citizens using more than 20,000 gallons per month.

Alongside the introduction of slab tariffs, DEWA also added a fuel surcharge to water and electricity costs that varies monthly depending on the price being paid by DEWA generation plants. Nationals, who account for 8.7% of Dubai’s population according to 2016 estimates, are exempted from the surcharge.

Impact

Subsidy reforms resulted in price increases ranging from 35% to 48% for governmental and industrial entities, and residents. The research notes, however, that while prices in Dubai have increased, they are low by international standards. Expatriates arriving from abroad may still regard costs as comparatively low and be less inclined to moderate consumption than people who have been living in the emirate long term. It adds that although some of the increases do not apply to Emirati nationals – who may be among some of the largest consumers of water and electricity – citizens began paying for expensive desalinated water for the first time in 2011. The joint report further states that although subsidy reform and increased prices did affect consumption, the effect of the global financial crisis on Dubai’s economy from 2009 to 2011 and the arrival of many new expatriates may have skewed the price reference framework in the years between 2011 and 2016.

Patterns Of Consumption

Data from DEWA’s “Annual Statistics 2016” report shows the breakdown of utilities consumption by customer group. In terms of water, the residential segment accounted for 80.93% of all customers and consumed 60.72% of the resource, while commercial users comprised 18.44% of customers and 26.57% of consumption. Just 0.2% of the customer base was industrial, accounting for 3.13% of consumption. Government departments, mosques, schools and hospitals cumulatively comprised 0.41% of customers and 9.58% of use. Groundwater offered 466m imperial gallons (IG) of supply, with desalinated water providing 116,863m IG.

The pattern of electricity use was rather different, with 74.04% of customers in the residential segment consuming 28.52% of electricity, while commercial customers – representing just 24.62% of the customer base – consumed 47.52% of the electricity supply. Once again, the impact of industry was relatively light, accounting for 0.37% of customers and 6.84% of consumption. Desalination and power plants consumed 8.6% of the electricity supply while others, including public sector users, accounted for 8.5%.

Demand-Side Management

The Regulatory and Supervisory Bureau (RSB) was established in 2010 under the auspices of the Dubai Supreme Council of Energy (DSCE) to support the implementation of the Dubai Integrated Energy Strategy 2030 and the Clean Energy Strategy 2050. In doing so, the aims are to reduce energy demand by 30% by 2030 and to meet 75% of energy needs with clean sources by 2050. In its 2016 annual report the RSB noted the advances made in demand-side management through strategies like the retrofitting of buildings with LED lightbulbs and other energy-saving devices, and the use of district cooling solutions to provide water-based air conditioning systems to communities.

The RSB has provided accreditation for energy service companies (ESCOs) and energy auditors since 2014. In 2016 ESCOs undertook 79 projects, retrofitting 1963 buildings, including 1656 villas belonging to UAE nationals. While the cost of retrofitting was Dh194m ($52.8m), it was estimated that those efforts achieved electricity and water savings of 93.9 GWh and 210m IG, respectively.

Performance data from ESCOs is analysed by TAQATI, an entity established by the DSCE that acts as programme manager for demand-side initiatives. In 2015 the RSB reported that Etihad Energy Services had the lion’s share of the retrofit market, but by 2016 new ESCOs were collectively delivering twice the estimated savings from Etihad’s new projects. Etihad’s three new programmes in 2016 were expected to save approximately 15.65 GWh of electricity and cover 1670 property units.

District Cooling

The use of district cooling systems has been shown to play a significant role in lowering the use of electricity in air conditioning. However, savings are reduced if the chilled water used in these community-wide systems has been desalinated first, at considerable expense. The RSB report shows that substantial savings have been achieved in recent years by using treated sewage effluent (TSE) instead of desalinated water. In 2012, 24% of district cooling systems were using TSE, but this had grown to 44% in 2016. The report showed that water-cooled air conditioning using TSE has a 28% efficiency advantage over air-cooled systems.

Distributed Solar

One way DEWA plans to curb fuel costs for a steadily growing population is to encourage the use of solar energy among business and home owners, along with its own plans to develop solar power on a utility scale. Under the Shams solar initiative, private buildings can apply to have solar panels fitted by DEWA-approved contractors, after which DEWA will install smart metres and connect the building to the grid for a fee. DEWA offsets the customer’s bill accordingly when the smart metre measures the quantity of energy supplied to the property via the installed panels.

Dubai Carbon Centre of Excellence – also known as Dubai Carbon – in which DEWA holds a 35.48% stake, was created in 2011 as a joint initiative by the DSCE and the UN Development Programme. Among its other initiatives, Dubai Carbon is championing the implementation of distributed solar in the emirate. In addition to commercial premises, it is working with just under 1000 residential villas and helping to organise crowdfunding to cover some of the costs for clients. “We are including crowdfunding so that the end users and the clients can be one and the same. Dubai Carbon’s motivation is not driven by revenues, but by growing market penetration,” Ivano Iannelli, CEO of Dubai Carbon, told OBG. “If we can shave off 20% of energy demand through the provision and accessibility of distributed solar, it will have a commensurate impact on carbon emissions, and Dubai has already halved carbon emissions per capita.”

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The Report: Dubai 2018

Energy chapter from The Report: Dubai 2018

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