x Abu Dhabi, UAESunday 23 July 2017

Dh5bn power station for Abu Dhabi by 2014

Abu Dhabi's next power station will by built by 2014, cost Dh5bn and generate the cheapest electricity secured by the emirate since 1998.

The next major power station for Abu Dhabi will generate the cheapest electricity the emirate’s utility has secured since 1998
The next major power station for Abu Dhabi will generate the cheapest electricity the emirate’s utility has secured since 1998

The next major power station for Abu Dhabi will cost Dh5 billion and over time generate the cheapest electricity the emirate’s utility has secured since 1998, according to an official statement today.


The Abu Dhabi Water and Electricity Authority (ADWEA) has picked a consortium of Japan’s Sumitomo and Korea Electric Power Corporation (KEPCO) to build Shuweihat 3 on the far-western coastline by 2014.


The contract confirms KEPCO’s newfound prominence in Abu Dhabi’s energy industry, after it was awarded a Dh73.4bn contract in December
last year to build the country’s first four nuclear power stations.


Shuweihat 3 will generate 1,600 megawatts, equal to 17.8 per cent of current electricity demand.


Counting the capital cost of the plant and the price ADWEA pays for fuel, the new plant will generate electricity at an average cost of 10 to 12 fils per kilowatt-hour, said Sheikh Diab bin Zayed, ADWEA’s chairman.


That represents a fraction of the cost of producing electricity from gas in other markets, reflecting a subsidised fuel price but also ADWEA’s success in securing a low-cost construction contract. The calculated rate is “a record price equal to the price of a kilowatt in the first project carried out by the commission in 1998”, Sheikh Diab told WAM, the state news agency.


The natural-gas fuelled plant will generate more power than Shuweihat 2 – ADWEA’s Dh8bn plant that will start operations next summer – but cost 38 per cent less. The difference is explained in part by the fact that Shuweihat 3 will not include an attached desalination plant.


Even counting the water component, however, the plant’s cost is still far lower than global benchmarks.


The cost of building each kilowatt of generating capacity at Shuweihat 3 amounts to $851, a 22.6 per cent discount to the global average published this year by the Paris-based International Energy Agency.