x Abu Dhabi, UAEMonday 24 July 2017

Victim of its own success, emirate seeks new options

Sharjah's strategy of marketing itself as a centre for industry has been a success, but it has inadvertently led to an overloaded power grid.

Sharjah has successfully marketed itself as a centre for industry, but the strategy has had an unintended consequence: an overloaded power grid. For four days last week, following a power failure, families sought refuge from stifling conditions at home, while grocers were forced to toss out spoiled foods and other business owners worried about the effect of power interruptions on machinery.

The power cuts also affected Sharjah's industrial zone. Members of the emirate's business community said investors were annoyed and Sharjah's reputation was at risk. "If there are repeated cuts in industrial areas and labour accommodation centres, it will harm the emirate's economy, strategy and investment plans," said Khawla al Nouman, a member of the Sharjah Consultative Council, which advises the Government.

The power cuts resulted from an equipment breakdown at the main power plant, followed by the failure of one of its main transmission lines. Sharjah is home to about 40 per cent of UAE-based companies, and its demand for electricity long ago outstripped supply. A big problem is that the emirate does not produce enough gas to fuel power generation, so building more power stations and strengthening the distribution grid would not completely resolve its electricity woes.

Sharjah Electricity and Water Authority is trying to improve its system but the emirate needs to bring in increasing amounts of electricity and gas from the UAE at large. That is becoming more difficult; other emirates also face shortages, which they mostly overcome by burning oil for power. To alleviate Sharjah's situation, Dana Gas, a private-sector Sharjah gas company, is developing the Zora gasfield off the emirate's coast. Production could start as early as next year but Sharjah needs more than this field could provide.

Ras al Khaimah is developing a small gas field off the coast of Oman's Mussandam territory; Dubai imports liquefied natural gas (LNG); and Abu Dhabi is seeking to increase gas imports by pipeline from Qatar and develop a deposit of toxic sour gas. For the longer term, RAK, Dubai and Ajman have each announced tentative plans to build a coal fired plant, while Abu Dhabi is investing in renewable energy development through Masdar, the Government's advanced energy flagship. Abu Dhabi is also co-ordinating a civil nuclear power programme for the UAE.