Power sector in the UAE had been seeing a rise in tandem with the economic growth it has achieved over the last decade. Power generation capacity in the country grew at a compounded rate of 12 percent per annum during the last 5 years and current capacity stands at about 30,000MW. Power consumption meanwhile grew at a slightly lesser pace of 8 percent pa during the same period, Kuwait Financial Centre (Markaz) said recently.

Markaz recently published the executive summary of their infrastructure series covering power, airports, seaports, roads & railways, ict and water.

Currently 98 percent of the power plants are fired by natural gas and the remaining 2 percent are run by liquid fuels. Contribution of natural gas as fuel in the power sector is just 49 percent in Saudi Arabia and 29 percent in Kuwait.

This gives UAE an advantage as gas-fired plants are efficient and the fuel is cheaper as well compared to oil. Although the country’s gas consumption has outpaced production, it imports natural gas from Qatar through the Dolphin gas pipeline.

Over the next four years, Markaz estimates consumption to grow at 8.5 percent annually, with much of the growth coming from Abu Dhabi. While Dubai expects consumption to grow at 3.5 percent over the next decade and at 2.5 percent from 2020-30, Abu Dhabi expects demand to grow by 11 percent annually till 2015. Abu Dhabi Water & Electricity Company (ADWEC) supplies electricity to Abu Dhabi, Al Ain and also exports the surplus to Northern Emirates. Additionally, by 2014, FEWA is expected to stop its generation and rely on ADWEA for power. According to ADWEC estimates, power exports to northern Emirates are expected to increase from 2,400 MW in 2012 to 5,827 MW in 2020.

Markaz expects large investments in alternate energy space. Abu Dhabi’s Economic Vision - 2030 aims at generating 7 percent of its energy requirements from the renewable resources. Masdar, also called Abu Dhabi Future Energy Company, concentrates on carbon free power generation. Masdar Power is developing a 100MW Shams 1 Concentrated solar power (CSP) power plant in the western parts of Abu Dhabi. They are also working on a 30MW wind farm in addition to a plan to construct the world’s largest hydrogen power plant by 2015.

Emirates Nuclear Energy Corporation (ENEC) was formed to harness the power of nuclear energy. By 2017, they envisage constructing the first nuclear power plant and by 2020 UAE will have 4 nuclear power plants in total with a gross installed capacity of 5,600MW with an estimated capital cost of around $ 20 billion.