Special Features
Outlook of UAE Power Sector
The UAE economy has been growing at an unprecedented rate. Therefore, all the factors which facilitate and complement the growth such as the size of the population, the number of new residential and commercial buildings and the new businesses have been growing. The economic growth of the country can seriously be constrained if the energy sector does not grow in tandem with the rest of the economy. If the growing demand for energy is not met, bottlenecks will emerge in the economy.Given the importance of the energy sector to the growth of the economy, it is important to trace the future developments in this sector.
The BMI forecasts that UAE overall business environment will remain attractive in the Middle East/Africa (MEA) regional context and the long term economic and political risks are exceptionally low. There has been a considerable progress in power market deregulation, privatisation and liberalisation. The growth outlook for power generation and primary energy demand is healthy. In the BMI Business Environment Ranking matrix, UAE receives a composite score of 38, which ranks UAE second out of eight countries included in the MEA region.
Power generation and consumption The BMI report forecasts that UAE will account for 5.77% of the regional power generation by 2011. The BMI report estimates that MEA power generation for 2007 is 1,136 terawatt hours (twh), representing an increase of 5.8% over 2006. The report forecasts an increase in regional power generation to 1,473 twh by 2011, representing an increase of 29.7% between 2007 and 2011.
In 2007, the thermal power generation is estimated to be 1,005 twh, accounting for 88.4% of the total electricity supplied in the MEA region. The report forecast for 2011 is 1,289 twh, implying 28.3% growth. This reduces slightly the market share of thermal power generation to 87.5%. This reduction is partly anticipated in response to environmental pressures to promote renewable energy sources and nuclear power generation. The UAE thermal power generation in 2006 is estimated at 58.8 twh, or 6.19% of the regional total. By 2011, UAE is expected to account for 6.60% of regional thermal power generation. BMI is forecasting an average 7.4% annual increase in generation to reach 85 twh by 2011, all of which will be thermal.
BMI is forecasting that electricity consumption per capita will increase by 2% over the period 2006-2011. The UAE power consumption is expected to increase from an estimated 56.6 twh in 2006 to 82 twh by 2011. Therefore, it is expected that the consumption demand for electricity will be met by the generation capacity.
