Mirfa power and water plant to begin construction in February
GDF Suez will break ground in February on its billion-dollar Mirfa gas-fired power and water project, expected to provide enough electricity for more than 1 million homes once complete, the French energy firm said.
Mirfa is a key component of Abu Dhabi’s efforts to ramp up power and water output amid a reduction in subsidies to quell growing demand. From January 1, higher energy and water tariffs will be introduced in the emirate, expected to lead to a reduction in consumption.
According to Marie-Ange Debon, the deputy chief executive and head of international activities at the utility unit Suez Environnement, the plant could be finished in 2017, as it “usually takes two years” from the start of construction.
The project, located 120 kilometres west of the capital, will cost US$1.5 billion and generate 1,600 megawatts of electricity, with a seawater desalination capacity of 52.5 million gallons per day.
“It took time for the final decision and we were granted the project about six months ago, so now we’re really in the process [of getting construction underway],” she said, adding that the engineering and procurement of the desalination plant had already begun.
The emirate is augmenting natural gas-fired plants such as Al Mirfa with four nuclear reactors, built by the Korea Electric Power Corporation, and a renewable energy portfolio.
Official estimates put peak demand for electricity supplied by the Abu Dhabi Water and Electricity Authority (Adwea) at more than 13,000MW last year, rising to about 19,000MW in 2017, when the first reactor comes online. By the end of last year, capacity was about 14,400MW.
The new plant will replace an existing 200MW plant that caters to local demand in Mirfa.
Suez said in October that the desalination part of the project, which includes the design and construction of the plant, plus a seven-year operating contract for its Degremont unit, is worth Dh677 million.
The Mirfa desalination plant will use reverse osmosis, which removes salt and algae from seawater by using membranes and is cheaper than the other two main types of desalination used in the region – multi-stage flash and multi-effect distillation.
Suez is one of the largest desalination plant operators in the world. It built and operates the reverse osmosis plant at the Fujairah 1 independent water and power plant – the largest of its type in the region. Fujairah 1 deploys a hybrid of reverse osmosis and multi-stage flash distillation. As the Mirfa deal shows, the reverse osmosis technology continues to gain ground against other desalination systems and now accounts for the bulk of new projects in the Arabian Gulf region.
GDF Suez, the largest shareholder in Suez Environnement, signed a 25-year power and water purchase agreement with Adwea in July and reached financial close in October. Adwea holds an 80 per cent stake in the scheme, with the remainder held by the French company.
“[The Mirfa project] is an important addition to the sector and once completed will play a key role in delivering power and water competitively to meet Abu Dhabi’s growing electricity and water demand,” Faris Al Dhaheri, the Adwea director general, said in October.
The UAE is looking to tackle its growing water and power demand with rates expected to double by 2020. The country has one of the highest per capita consumption rates in the world for both water and electricity. According to the UAE State of Energy Report 2015, residents use about 550 litres of water and 20-30 kilowatt-hours of electricity a day compared to the international average of 170-300 litres and 15 kWh per day.
The need for water and electricity continues to grow across the region. Suez Environment believes the GCC is a growth area for the company in the upcoming year, amounting to 5 per cent of its project portfolio. Ms Debon added it would all depend on the visibility on the outlook of the economy. “The economy today is not as good as it was, but I still believe that the fundamentals are very strong.”
The price of Brent crude has fallen almost 50 per cent since peaks in June, and there are concerns that investment in the energy sector will follow suit. However, Suez Environnement remains bullish and said the drop in prices has helped business.
The company uses oil in various operations. “Oil companies need companies like us to treat the water that is extracted from wells and reservoirs. Even if oil prices are weak, the need for treatments of produced water will remain very high,” Ms Debron said.
Most recently the company was awarded an Dh814.9m contract for the expansion of the Doha West wastewater treatment and recycling plant. The executive added that there were still several projects, mostly revolving around water activities, that were on the books.
“The only way to meet the demand is to work,” she said. “We remain at a good level of growth in the region.”
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Updated: December 27, 2014 04:00 AM