Middle East
ESSENTIAL INSIGHTS FOR MIDDLE EAST WATER, GAS AND ELECTRICITY PROFESSIONALS
MISTER SMART SAP’s Maher Chebbo talks smart grids
June 2010 • Vol 4. Issue 6
MEMBRANE SOLUTIONS TedMBR technology has much to offer
KEEPING COOL
How d distict istiict cool cooling ling h has as evol evolved lved d to meet th the he ch challenges halllenges off the d downturn ownturn
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CONTENTS
June 2010 Issue 6
15
News Interview: The Masdar-DoE MoU.
2 COMMENT The downturn has prompted a drive towards a leaner, meaner utilties sector
4 REGIONAL UPDATE A round-up of some of the biggest headlines in the region.
15 NEWS INTERVIEW Former insider comments on the Masdar-DoE MoU.
18 IN THE KNOW SAP’s Dr. Maher Chebbo talks smart grids. Dr. Maher Chebbo, SAP, talks about the drivers behind smart grid development.
District cooling is faced with a changed environment.
18 33
23 FORWARD FOCUS Q&A with Ian Mitton, HP, about ICT grid technology
28 NUCLEAR UPDATE A look at how far the GCC is down the road to nuclear power
33 DISTRICT COOLING In spite of tough times, the future is bright.
37 ECONOMIC CITIES The challenges facing utility providers.
40 POWERING IRAQ Plans to boost the electricity generation capacity are ambitious MBR technology fits into visions for the future.
Dr Paul Boulos, MWH, on water networks.
44
44 MEMBRANE GAME MBR technology is gaining ground in the GCC
48 PEOPLE METER Dr. Paul Boulos, MWH, is in the spotlight.
50 PROJECTS & TENDERS A listing of the latest projects and tenders in the region.
48 www.utilities-me.com
56 UAE SNAPSHOT A look at electricity demand and supply in the UAE.
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Utilities Middle East 1
COMMENT Middle East
The upside of a downturn The recession has encouraged a move towards efficiency
Registered at Dubai Media City PO Box 500024, Dubai, UAE Tel: 00 971 4 210 8000, Fax: 00 971 4 210 8080 Web: www.itp.com Offices in Dubai & London ITP Business Publishing Ltd CEO Walid Akawi Managing Director Neil Davies Managing Director Itp Business Karam Awad Deputy Managing Director Matthew Southwell Editorial Director David Ingham VP Sales Wayne Lowery Publishing Director Jason Bowman Business Development Manager, Saudi Arabia Rabih Naderi Editorial Group Editor Dan Canty Tel: +971 4 210 8255 email: daniel.canty@itp.com Editor Florian Neuhof Tel: +971 4210 8845 email: florian.neuhof@itp.com Advertising Commercial Director Jude Slann Tel: +971 4210 8693 email: judith.slann@itp.com Sales Manager Raed Kaedbey Tel: +971 4210 8573 email: raed.kaedbey@itp.com Studio Group Art Editor Daniel Prescott Designer Angela Ravi Photography Director of Photography Sevag Davidian Chief Photographer Khatuna Khutsishvili Senior Photographers Efraim Evidor, Thanos Lazopoulos, Staff Photographers Jovana Obradovic, Rajesh Raghav, Ruel Pableo, Lyubov Galushko, Isidora Bojovic Production & Distribution
The slowdown in construction has resulted in an efficiency drive in the utilities sector.
‘T
he big boys use the crisis to get even bigger,” says Tawfiq Abu Soud, executive director at Drake & Scull Water and Power. His company builds district cooling facilities and has been hit by the decline in construction that resulted from the financial crisis. Drake and Scull responded by adapting to the new requirements of the market. Development in Dubai had taken place at breathless speed, and with scant regard towards resources. In the district cooling sector, plants were constructed without careful deliberation about the actual needs of new developments, say industry players, an approach that resulted in the creation of significant dead assets. Then suddenly, as funding dried up and projects development slowed down considerably, the mood changed. The last thing that cash-strapped developers and utility providers wanted was to pay for a bloated infrastructure, and EPC contractors were charged with delivering cooling systems that fitted the needs of developments. This often meant a shift to smaller plants, built to meet the requirements of individual developments. Abu Soud speaks of a more mature market. The case for decentralisation is also being
made in the wastewater industry. A move towards more, but smaller plants would save on sewage pipes and transportation costs, which can be higher than the actual cost of treatment. Once again, efficiency savings are there to be had. A more sophisticated approach is not confined to the private sector, however. Driven by the competitive instincts, Dubai’s Electricity and Water Authority (DEWA) has been keen to upgrade its electricity network, says Dr. Maher Chebbo, EMEA vice president of utilities & communication industries at SAP. While much of the movement towards energy efficiency in the utilities sector will be driven by common sense and an authority with an eye on the ball, it is undoubtedly also a consequence of market players coping with tough times. A more modern utilities infrastructure that is fit for purpose, and truly efficient, will in no small part be a legacy of the crisis. Boys don’t only get bigger, they become more mature.
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REGIONAL UPDATE
Iraq aims to boost power capacity Capacity boost depends on foreign investment, says electricity minister. Iraq is aiming to boost its power capacity to 27,000MW within the next four years by opening up its gas sector to foreign investment and sealing a gas capture deal with Royal Dutch Shell. Reaching the ambitious power capacity target would depend mainly on finalising a an agreement with Shell to capture and use gas now being burned in the southern oilfields around Basra, and on output from three gas fields due to be auctioning off in September, Iraq’s electricity minister Karim Waheed told the Reuters news ser vice. Iraq is close to signing a final deal between its South Gas Company, Shell and Japan’s Mitsubishi, after it sent the final draft of the agreement to the cabinet for approval, according to Iraqi oil minister Hussain al Shahristani. Shahristani also said that Iraq will invite 45 international companies, which were prequalified for two oil auctions last year, to bid to develop Akkas gas field in Iraq’s western desert, Mansuriyah gas field in eastern Iraq and Siba in the southern oil hub of Basra. If Iraq does not come to an agreement with Shell, the ministr y will have to rethink its power plans, said Waheed. He put Iraq’s available power capacity at 9,000 MW, and installed capacity at
An engineer walks past gas being burned off at an Iraqi oilfield in the south of the country.
around 11,000 to 12,000MW. Demand is estimated to be at least 12,000 MW. The OPEC member state would need to invest at least US$3-4 billion per year to reach that target, said the minister. He did not elaborate on how Iraq plans to raise
such funds. The countr y has struggled to finance its previous power generation plans. Seven years after the US led invasion, Iraq’s national grid still only supplies a few hours of power each day. The Iraqi capital Baghdad is expected to enjoy
only about eight hours of electricity a day when temperatures hit 50 degrees Celsius in the summer, Waheed said. With the new power plans, Baghdad, with current 3,000 MW of power available, could finally have sufficient electricity within two years.
Empower’s Business Bay district cooling project enters Phase 3 Emirates Central Cooling Systems Corporation (Empower) began the third phase of the 70.000 refrigeration tonne (RT) district cooling network for the Bay Square area within the Business Bay project in Dubai, the company has announced.
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The Empower has already completed two phases of the project, supplying an area stretching along Dubai’s main Sheikh Zayed Road with 50,000 RT of district cooling. Empower is contracted to provide district cooling to the entire Business Bay development.
“We divided the implementation of district cooling network of Business Bay, which is one of the busiest and dynamic business spots not only of Dubai but also of the Middle East, into three phases as per demand and supply,” said Ahmed Bin Shafar, chief executive
officer at Empower. State-owned Empower’s other district cooling projects include large-scale real estate developments such as the Dubai International Financial Center, Healthcare City, Jumeirah Beach Residence and the City Of Arabia complex. www.utilities-me.com
REGIONAL UPDATE
HIGHLIGHTS
Kuwait: Nuclear study to be ready next year
ORACLE LAUNCHES UPGRADED WORKFORCE MANAGEMENT SYSTEM
Research to determine feasibility of nuclear programme Bishara said water consumption was expected to double, and demand for electricity could triple to 30,000 megawatts by 2030. Nuclear energy could provide about 6,000MW of the needed electricity, he said. It would also help cut carbon dioxide emissions, which reaches 30 tonnes annually per capita, compared to around 10 tonnes in industrialised nations.
About two thirds of energy consumed in Kuwait is used up by air conditioning, and electrical power is heavily subsidised by the state. In April, Kuwait and France signed an agreement to develop nuclear energy for peaceful purposes. A memorandum of understanding with the US Department of Energy over training and equipment could be signed this month. GETTY IMAGES
A study into the viability and cost of a civil nuclear energy project in Kuwait will be ready for decision makers by early next year, a senior official said. “We hope as we see it now, the decision should be by the end of this year, early next year,” Ahmad Bishara, the secretary general of the Kuwait National Nuclear Energy told the Reuters newswire. If a decision is taken to adopt nuclear energy, a plant could be operational by 2020, he said. Bishara declined to specify how much Kuwait planned to spend on the project, but said the cost of nuclear-generated electrical power would be around US$4.5 billion for every 1,000MW. The study is being carried out by international consultants, who Bishara declined to name. The consultants were asked to look at three to four sites for a nuclear station, the economic feasibility, the available technology as well as the necessary legal framework. Kuwait has a power capacity of around 11,000MW, and is in the process of building a conventional 2,000MW power plant.
SEC PLACES SUKUK
Will Kuwait go nuclear? The feasibility study will help the government make a decision.
SEC power generation capacity has grown The Saudi Electricity Company (SEC) says its power generation capacity rose to almost 45.400MW in the first quarter of 2010, up 76 percent from the 25.800MW recorded in April 2000. The length of the utility’s electricity transmission networks increased 45 percent to nearly 42.800 kilometers, from 29.600 www.utilities-me.com
Oracle’s Utilities Mobile Workforce Management 2.0 system enhance fieldwork planning and scheduling, says the company. The new system includes a computational grid that feeds up to a year’s worth of planned maintenance and inspection field activities into the system, allowing the user to assign the right crew at the right time, in any area the utility serves. The application also automates routine assignments by creating schedules based on complete data sets about each technician’s qualifications, experience, availability and work history.
kilometers in 2000, while the distribution grid grew 63 percent to nearly 368.400km from almost 226.700km over the period, reported the Jeddah-based Okaz newspaper, citing an report by the majority state-owned SEC. Over the same period, the number of subscribers increased to 5.77 million from 3.5 million.
The SEC recently reported an increased net loss in the first quarter, which the company explained with higher costs from buying power as well as lower seasonal demand. The net loss increased to US$208.5 million from US$205.5 million a year earlier, the company disclosed in a statement on the Saudi bourse website.
The Saudi Electricity Company has raised US$1.87 bn from a seven-year Islamic bond at 95 basis points above Saudi Interbank Offered Rate (Sibor), according to sources familiar with the matter. Saudi Electricity raised the tenor to seven years, up from the five year notes it issued in its previous two sukuks, the sources said. Saudi Electricity has set the price guidance for the bond at 95 basis points above Sibor.
AL JABER GROUP In the May edtion, UME reported that Siemens won an order worth US$22m to built and modify substations in the north of the UAE. This work is actually undertaken by the Al Jaber Group, while Siemens is supplying the bulk of the electrical equipment for the project.
June 2010
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Utilities Middle East 5
REGIONAL UPDATE
Wastewater’s profit potential Increasing amounts of energy can be harnessed from wastewater sludge. Sludge can represent 20 and 50 percent of wastewater treatment cost, as plants need to dispose vast quantities of the byproduct on a regular basis. As a result, utilities have started to look at ways to extract value from the waste material, developing technologies that already hold the potential to recover value to the tune of US$25bn, according to Lux Research, who conducted the study. Lux Research estimates that the development of those technologies will increase the market opportunity for resource recovery to US$45bn by 2020. Technologies focused on recovering energy from sludge show the most promising value proposition, according to the report, and are expected to capture 64 percent of the overall market in 2020. The report finds that improving production of biogas are most likely to recoup costs. Several technologies – including ultrasonic cavitation, mechanical disintegration and thermal hydrolysis – aim to improve on anaerobic digestion, a well-established method for extracting biogas from sludge. Deriving alternative fuels,
Sewage plants will become increasingly important providers of energy, according to the study.
such as syngas and biodiesel, from sludge is also viable. These approaches offer benefits such as relatively low capital costs, and high solids removal, but have the drawback of being equipment-intensive. Nutrient and material recovery technologies are as yet too complex and energy-intensive to pro-
duce value added, according to Lux Resarch. The exception is crystallization technology, which uses a minimum of chemicals and a simple process design to recover up to 85 percent of phosphorus from wastewater. “Sludge production volumes will continue to grow with increasing population and country wealth,”
concludes Heather Landis, an analyst for Lux Research and the report’s lead author. “By turning sludge from a costly material to treat into a profitable revenue stream, recovery technologies make fertile hunting grounds for executives and investors looking for opportunities in the hydrocosm.”
Power project in Egypt sees considerable investor interest Investor interest has been strong in Egypt’s first build-own-operate (BOO)-based combined-cycle power plant project, with 19 companies and consortia submitting pre-qualification applications. The Electricity and Energy Ministr y will now evaluate the submissions, with an announcement of the bidder short-list expected during June, after which the pre-qualified companies will www.utilities-me.com
be able to submit their formal bids for the project, according to the Reuters newswire. Egypt has already awarded a number of build-own-operatetransfer (BOOT)-based projects. It has chosen the BOO route for this project in order to improve the investor terms by offering some additional longevity, says Sam Ciszuk, Middle East energy analyst at IHS Global Insight.
“In the wake of the recent global recession—and because of chronic fears over a shortage of gas feedstock in Egypt—investors have been more reluctant to take on long-term projects where they will be shut into a 20-year setprice electricity offtake contract with the state, but might perhaps have to even out gas feedstock fluctuations with more expensive diesel for prolonged periods,
and see their profit margin being wrecked,” says Ciszuk. While offshore gas extraction is increasing again after the government agreed to pay upstream producers more for expensive deepwater gas in 2008, analysts believe that adding longevity to the projects and making the ownership situation stable has helped make the project attractive to bidders. June 2010
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REGIONAL UPDATE
HIGHLIGHTS UAE ELECTRICITY DEMAND TO GROW 10 PERCENT ANNUALLY Electricity demand in the UAE is forecast to grow ten percent per annum to 2013, according to a report from research firm RNCOS. The report, entitled said the Middle East power industry is one of the fastest growing electricity markets in the world and “rapid industrialisation and surging residential sector consumers will trigger electricity demand in UAE to grow at a compound annual growth rate of ten percent during 2010 to 2013.”
PALM UTILITIES RECEIVES AWARD FOR ENERGY EFFICIENT DESALINATION Palm Utilities received the Best Water Project Award during the Arab Investment Summit 2010 held recently in Abu Dhabi. The utilities provider was recognised for its use of the Dual Work Exchanger Energy Recovery (DWEER) system used at the Palm Jumeirah seawater reverse osmosis (SWRO) plants.
Dolphin’s delayed gas pipeline completed Transportation capacity now sufficient for Fujairah II IWPP Dolphin Energy last month announced the completion of the Taweelah-Fujairah gas pipeline’s delayed second milestone. The pipeline will now have the capacity to supply the existing Fujairah I Integrated Water and Power Plant (IWPP), as well as the Fujairah II project, which will be the biggest water and power plant in the UAE, and is expected to come online within Q2. With the second milestone complete, Dolphin Energy is now able to transport 350 million cubic feet of natural gas per day to the east coast of the UAE, a gas transportation capacity sufficient to fully operate both of the power stations. The project’s original completion date had been March 1, which the company failed to meet due to difficulties in attaining permission for the pipeline to cut across roads and land close to industrial installations, Dolphin said in a statement. Permissions were needed for crossing five major roads and more
The pipeline during construction, before being lowered into the ground.
than 150 restricted locations. This additional transportation capacity is made possible by the completion of a 128km long, 48 inch wide pipeline from Dolphin’s Taweelah receiving facilities to a hot tap connection on the existing Al Ain Fujairah 24 inch pipeline.
“The construction challenge has been phenomenal considering the timeframe and the tough conditions associated with laying a 48 inch pipeline across the harsh desert and mountainous terrain,” said Ibrahim Ahmed Al Ansari, general manager, Dolphin Energy.
SEWAGE FLOODS DUBAI’S INTERNATIONAL CITY
ABB wins US$108m substation order in KSA
In the first week of May, raw sewage emerged from the drainage system to flood car parks and streets in the International City residential complex in Dubai, The National reported. It took several days for property developer Nakheel, who owns the complex, to clear the vicinity of the odorous sludge, according to the paper.
ABB has won an order worth US$108m from the Saudi Electricity Company (SEC), Saudi Arabia’s national power transmission and distribution provider, to construct six new substations. The order was booked in the first quarter, according to ABB. Four of the substations, rated at 115/13.8 kV will be located in Saudi Arabia’s eastern region. The other two substations, rated at 110/13.8kV, will be built in the western cities of Jeddah and Mecca.
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“These substations will enhance the capacity of the region’s power transmission and distribution systems and help to meet growing demand for power,” said Peter Leupp, head of ABB’s Power Systems division. “They will also help strengthen grid reliability and improve the efficiency of the regional grid.” As part of the turnkey contract, ABB will be responsible for the design, supply, installation and commissioning of the substations,
which are scheduled for completion in 2012. Under the terms of the contract, ABB will provide gas-insulated switchgear, transformers, medium-voltage switchgear, low-voltage auxiliary systems and the network protection systems. In addition, ABB will also equip the six substations with automation, control and communication solutions, so making them fully compliant with the global IEC 61850 standard. www.utilities-me.com
REGIONAL UPDATE
Russia: Iran is nearly nuclear Bushehr plant could provide Iran with reverse engineering opportunies The 1,000MW Bushehr nuclear power plant in Iran is nearing completion, according to the head of the Russian Federal Atomic Energy Agency. His statement corroborates a statement made by an Iranian official about the imminent launch of the plant, while disagreeing on the precise timing of the plant coming online. Sergei Kiriyenko told press that ““the preparation of the Bushehr nuclear power plant for its launch is going according to plan. The launch has been set for the end of the summer, and we are on schedule,” “This plant will be launched according to schedule at the end of the spring and will run the same as the other nuclear plants in the world,” Ali Akbar Saleh, head of Iran’s Atomic Energy Organization was quoted by the Iranian news agency ILNA in March. The Iranian spring ends in late June. The Bushehr plant has been
An Iranian journalist in front of the Bushehr site earlier this year.
delayed for years following Iranian difficulties to pay the Russian contractors on schedule, technical hold-ups as the original—but never completed—1970s German design of the facility was being returned to a Russian design. Political holdups, with US sanctions on Iran and
attempts to dissuade Russia from moving ahead with the project, have caused further delay. Iran is hoping to launch the construction of a large number of NPPs to meets its spiralling power demand, and an operational Busher plant would enable Iran to make
the technological leap towards a more wide-ranging nuclear programme. “Operating the Bushehr facility could therefore allow Iran some reverse engineering opportunities and help it leap forward with its own designs, something that has worried the international community although Iran’s large uranium enrichment programme has been a more important source of concern,” says Sam Ciszuk, Middle East analyst at Global Insight. Holger Rogner, section head at the IAEA, says that worries about operational safety, at least, are largely unfounded: “In Iran the issue is enrichment, people don’t know where the material is going. But in terms of safety, I think they have a well educated nuclear workforce, and I don’t think they have interest to leave a bad example for the world. If people adhere to their manuals and do their job conscientiously, things should be OK.”
First solar park in Saudi Arabia completed on the roofs of KAUST 2MW park consists of 9,300 solar modules, and occupies 11,577 meters of roof space Saudi Arabia’s first large scale solar park has been completed, it was announced on Wednesday. The 2MW park consists of 9,300 solar modules erected on the roof of the King Abdullah University of Science and Technology in Jeddah. The park was designed and engineered by German solar company Conergy, who supervised the construction and the commissioning of the complex, while the installation works and operational management were implemented by National Solar Systems. The project was managed by Saudi Aramco, and was executed by several large construction contractors including Saudi Oger. www.utilities-me.com
The 2 MW solar plant consists of two rooftop solar installations with a capacity of one megawatt each, installed on the north and south laboratories of the university. The power system features over 9,300 high-efficiency solar modules with Conergy Suntop III mounting systems and Conergy 280K central inverters. The photovoltaic plant occupies 11,577 square meters of roof space and produces 3,332 megawatt hours of clean energy annually, while also saving up to 33,320 tons of carbon emissions. “This project demonstrates that the development of alternatives to traditional fossil fuel has taken on a
The photovoltaic installations in the KAUST.
new urgency, even in oil-rich countries like Saudi Arabia,” says Marc Lohoff, head of Conergy Asia Pacific and the Middle East. Saudi Arabia, the largest oil producer of the Organization of Petro-
leum Exporting Countries with approximately one-fi fth of the world’s proven oil reserves, is planning to make solar power a major contributor to energy supply in the next five to 10 years, according to the Kingdom’s Minister for Petroleum and Mineral Resources. “Saudi Arabia aspires to export as much solar energy in the future as it exports oil now,” said Ali Al-Naimi, in an interview with Reuters. The latest sustainability research report from Bank Sarasin further predicts that the use of solar energy in the Middle East will grow at an annual rate of more than 50 percent in the next five years. June 2010
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Utilities Middle East 9
REGIONAL UPDATE
KSA should adopt renewables regulation by 2011, government offical says Aramco official: 10 percent of power could come from renewables by 2020
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June 2010
price will be the feed-in tariff for the next three years." The government also needed to clarify which body would be regulating renewables contracts going forward. "Anybody who wants to invest in renewables in Saudi Arabia will find it difficult to know who to talk to," Shehri said. The future role of ECRA will be to issue project licenses, he added. Meanwhile Ahmad al Khowaiter, director of the new business evaluation department at Aramco, voiced his optimism about establishing a sizeable renewable sector in the kingdom: "The proposed target is
between seven to 10 percent of peak electricity generated by renewables by 2020, most likely solar... that represents roughly 5 gigawatts by 2020. Can we achieve that target? It's feasible." "We believe large scale power generation from solar can be achieved near the end of this decade, near 2020. Beyond 2020, the economics will be clearly in the favour of deployment of solar power," Reuters reported Khowaiter as saying. Aramco has held discussions with Abu Dhabi's Masdar City for future collaboration, Khowaiter revealed.
The Gulf Arab state has said it was investing US$80 billion to boost power generating capacity to 60,000MW by 2020. Installed capacity in the kingdom had reached 46,000MW by March, an official has said. It was around 43,000MW in 2009, with peak demand at around 40,000MW. Shehri said peak power demand reached 41,000 megawatts in 2009. The kingdom announced in April it would set up a scientific centre called King Abdullah City for Atomic and Renewable Energy. The centre would be in charge of promoting research and sealing future deals. GETTY IMAGES
A high level government official has advocated the approval of a regulatory framework for investment in renewable energy by 2011. The news comes as a top executive at oil giant Saudi Aramco said that renewables could account for 10 percent of the kingdoms power output by 2020. The proposed measures should include government funding for the renewable sector, and the establishment of feed-in tariffs determined by an auction process, said Adullah al Shehri, governor of the Saudi Electricity and Cogeneration Authority (ECRA). Saudi Arabia would be the first GCC country to create the regulatory framework to promote renewables, setting a benchmark for region and laying the groundwork for an ambitious expansion of the renewables sector. "We developed the policy and we were ready as regulators to submit to our board for approval and then take it to the council of ministers," Sheri told Reuters. Government body ECRA is the regulator of the water and desalination sector. ECRA had previously set a June 2010 target for the approval of regulation on renewables. There would be no progress if the proposals were not accepted."If they don't provide the funds nothing will move forward." ECRA has also suggested that an auction should take place for power produced from renewable sources on a feed-in tariff model: "We suggest that there will be an auction... and the result of that auction will determine the price. The lowest
Regulation is needed if Saudi Arabia wants to develop the generation of renewable energy, says the ECRA governor.
www.utilities-me.com
REGIONAL UPDATE
ELIPS wins first order for insulated pipes JV hoping to win orders from district cooling as well as oil & gas clients
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Being able to service different markets provides a safeguard against fluctuations in demand. “We are able to bid for both industries from one business,” says Zuberi. It does, however, also pose challenges due to the length and dimensions of a typical oil and gas order, as one such project can consequently take up between six months and a year of production capacity, leaving typical plants unable to service its core district cooling market. To avoid bottlenecks, the ELIPS factory can expand its production capacity at short notice, and is able to call upon a flexible workforce. Zuberi is particularly proud of his new product’s environmental benefits. ELIPS are the only producers of pipes in the Middle East to use cyclopentane as insulation material, a more eco-friendly alternative to conventional materials. This has, however, not yet been
“Getting [an order for] 10 kilometres the first time round is harder than getting 50 kilometres next time. ” Sohrab Zuberi, director, ELIPS
pushed as a unique sales point by the company. “At the moment, the number one thing your customer will look at is not whether your product is environmentally friendly. He is more interested in service, quality, durability, return on equity,” admits Zuberi. Before ELIPS can translate their environmental kudos into a sales advantage, customers have to be educated to see the benefits, he says. And the potential advantages are plain to see, according to Zuberi: “We believe that once there is more competition, we will
have a competitive advantage, as others don’t have the technology to produce with cyclopentane. And we won’t have to make alterations to our factory once environmentally friendly pipes become the norm. Other producers will face a huge technology investment to change this.” While Empower entered the JV with the objective of securing backward integration, Zuberi says that Empower offers no takeoff guarantee to ELIPS, who have to convince the parent company on price and quality. ELIPS
ELIPS, the joint venture between Empower and Logstor, was awarded its first contract for insulated pipes by the Energy City development in Qatar, two months after opening its factory in Jebel Ali, Dubai, in January. The order for 13km for district cooling piping was won by Logstor, the Danish piping company that owns 49 percent of ELIPS. A “good proportion” of the piping will be manufactured at the Jebel Ali plant, revealed Sohrap Zuberi, director at ELIPS and at majority owner Empower. Zuberi also confirmed that ELIPS is bidding for orders in the oil and gas markets. Zuberi believes that placing the first order with Energy City will generate more business. “The moment they see the quality of what we are supplying, that’s the best selling point for us to do it again. Getting 10 kilometers the first time round is harder than getting 50 kilometers next time.” With Empower keen to secure a supply of high quality insulated piping for its district cooling projects, it signed the JV agreement with Logstor in 2007, “Empower needs pipes with the same level of reliability as used in the oil and gas market,” says Zuberi. Logstor’s expertise in this field resulted in a plant that is not only able to deliver piping for district cooling use. The factory can also supply piping to oil and gas projects. This flexibility is unique to the UAE, according to Zuberi.
ELIPS insulated pipes can be used by the oil & gas industry or in district cooling systems.
www.utilities-me.com
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REGIONAL UPDATE
EDITORS PICK
ONLINE ANALYSIS
Cut carbon, not consumption, consumers say
Most popular headlines 1. Kuwait’s nuclear study to be ready next year 2. First solar park in Saudi Arabia completed 3. KSA could adopt renewables regulation by 2011
4. Iraq reconstruction accelerates 5. GE wins US$300m gas turbine contract in KSA
While nine out of ten consumers in the GCC want their country to reduce its reliance on fossil fuel power generation, two thirds are unwilling to reduce their energy consumption
ONLINE NEWS
6. ABB wins US$108m substation contract 7. Wind energy predicted slow growth in ME 8. Kuwait’s nuclear study to be ready in 2011 9. Wastewater byproduct holds profit potential 10. Powering Ahead SPOT POLL
GE wins US$300m gas turbine contract in KSA
What’s stopping your firm from engaging in Iran?
Five GE steam turbines are scheduled to be installed by the second quarter of 2012 at the Qurayyah open cycle power plant.
Fear of further sanctions
Wind energy predicted slow growth in the Middle East As governments have not moved to provide frameworks to boost the industry, the market will remain slow for now, an insider says.
Wastewater byproduct holds profit potential The potential for harnessing energy from wastewater sludge will almost double over the next decade as technology advances, a study suggests.
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NEWS ANALYSIS
Cleantech Cooperation Masdar and the US Department of Energy have signed a Memorandum of Understanding. Paul Dickerson, a former top official at the DoE, comments on the implications.
Masdar are developing the world's first carbon neutral city in Abu Dhabi.
L
ate in April, Masdar and the U.S. Department of Energy (DoE) signed a Memorandum of Understanding (MoU) to promote collaboration on clean and sustainable energy technologies. While a detailed plan for cooperation will be worked out over the coming months, it is already clear that the MoU will allow Masdar to participate in DoE-funded projects, while the department will receive R&D support from the Masdar Institute of Science and Technology, a not-for-profit, post-graduate research institute dedicated to renewable energy. Another key objective, says Masdar, is to provide better and www.utilities-me.com
easier access for small and medium sized enterprises within the United Arab Emirates and the United States to enter their respective markets. The UAE is already the top Middle Eastern destination for US goods - in 2009 US exports into the emirates totalled US$12.1bn. Paul Dickerson, head of Haynes and Boone’s Cleantech Practice Group, was chief operating officer at the DoE’s Office of Energy Efficiency and Renewable Energy (EERE). Between early 2006 and late 2008, “one of the greatest growth spurts in the short history of cleantech,” he oversaw EERE’s work in developing and commercialising alternative and renewable energy technologies.
The exchange between Masdar and the Department of Energy stretches back to your time as the COO of the department’s renewable energy division. Now it has been formalised in an MoU. What is driving this increasingly close relationship between the two bodies? There is a growing recognition that incumbent energy players have a pivotal role to play in aiding the world’s energy transformation. It is not just about access to capital – it is about tapping energy experts who have decades of experience planning and managing large-scale energy infrastructure projects.
Paul Dickerson, partner, Haynes and Boone
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NEWS ANALYSIS
“The MoU is exactly the kind of relationship we anticipated when I led the first-ever US clean tech trade mission to the UAE.” Are you enthusiastic about the new partnership? Is it in line with the vision you had for the cooperation between the UAE and the US during your time at the DoE? Absolutely. The MoU is exactly the kind of relationship we anticipated building when I led the first-ever US clean energy trade mission to the UAE during my time at the Energy Department. What are the key benefits Guero odipit, sustrud ea cor ipisisim zzrit ipit aliquis alit numsan utpat vullame tumsan henib of the agreement?
In my view, the biggest near-term opportunity is in building technology. By taking on the world’s biggest zero-carbon urban project in Masdar City, our friends in Abu Dhabi are going to gain access to all kinds of unprecedented information on building efficiency – what works and what doesn’t. And they will gain a treasure trove of information from the DOE’s national laboratories on breakthrough technologies that are just waiting for a venue to shine. Is the MoU good news for companies tr ying to gain access to new markets? The MoU is great news for companies trying to gain access to new markets. Achieving scale for these emerging technologies is probably their most difficult challenge. Once companies can prove their technologies’ worth on a grand scale like Masdar City, then buyers won’t be far behind. What else needs to be done to promote alternative
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energies in the GCC? Given the region’s rich solar resources, it is probably just a matter of time before other GCC nations jumpstart their own deployment projects. Countries can get a head start now by implementing additional policies that incentivize the use of solar energy and energy efficient technologies. The UAE and GCC countries in general are also investing heavily in nuclear and conventional gas power plants. Do you think renewables will become a significant part of the region's power generation mix ? Over time, renewables will become a significant part of the power generation mix in the GCC. But ‘time’ is the operable word because the world is in for a long energy transformation. That means we will need to continue to rely on traditional energy sources in the interim. Which green technologies hold the most promise in the GCC, and which countries do you believe will play a leading role in developing them? Clearly, the UAE has taken a leadership role in this space. In particular, they have done a very impressive job in employing some of the region’s historic Arabic building designs to take advantage of their abundant solar resources. Their work in using Abu Dhabi’s warm winds to cool buildings is wildly innovative. Saudi Arabia’s use of solar energy in its water desalination plants is going to look incredibly prescient years from now. www.utilities-me.com
SMART GRIDS
Power Player
As a key industry figure who has helped shape the future of the European energy sector, Dr. Maher Chebbo, EMEA vice president of utilities & communication industries at SAP, has a thing or two to say about smart grids in the GCC. 18 Utilities Middle East
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SMART GRIDS
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o call Maher Chebbo an expert on information and communication technologies (ICT) in the power industry is somewhat of an understatement. When the European Union decided to modernise the region’s power grid, he was appointed as one of the members of the European Technology Platform (ETP) responsible for paving the way for a smart grid in Europe. (see box) Chebbo is thus responsible for selling SAP’s ICT products to suppliers and transmission companies, as well as helping to shape the environment in which these products will be used. Chebbo is proud of his work for the EU, where he is also active on a number of other bodies, and likes to talk about the ETP charged with coming up with a blueprint for a European smart grid. “This platform defined a vision, based on the question: Why do we need to do the smart grid? Its simple. We need to achieve the target decided by the European member states,” says Chebbo. The EU has set the bar high. It aims to reduce C02 emissions by 20 percent by 2020, as well as increase the use of renewable energy to 20 percent of overall production, and reduce energy consumption by 20 percent. Of those three targets, the first two are mandatory. The Union has put its money where its mouth is. At the beginning of this month, an initiative was launched to execute more than 20 projects worth two billion Euros proposed by distribution and transmissions companies. With a market share of 65 percent for ITC and CRM applications in the utilities sector, SAP is well equipped to contribute to the vision of the smart grid, believes Chebbo. (see box) The company has provided software to around 1,500 utilties worldwide, and has been active in the field since its inception in 1972.
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“In Dubai, Abu Dhabi, Bahrain, Qatar, each of these utilities want to show that they are better than the others. They want these projects to be a showcase. ”
Since the liberalisation of the European energy market in 2007, the company is confronted with a changed sector. Whereas SAP would previously supply vertically integrated energy giants who encompassed everything from power generation to transmission and distribution, it now caters to companies with no direct ties to each other. The changes to the market in Europe did not pose a huge challenge to the company, as its prod-
ucts were structured in a way that made it easy to adapt. Rather than having to develop new software, SAP was able to unbundle its programmes in much the same way was the EU had unbundled the market. “We are offering unbundled solutions in Europe, and the full package for vertically integrated companies like in the US,” says Chebbo. He explains how the company responded to the EU ruling: “We developed two things. One was a
solution for unbundling – the intercompany data exchange. That solution enables the communication between the distributor and the retailer. The other was energy data management. This is for the collection of consumption data on meters and helps to bill customers. We also made more developments around balancing, in calculating how much the supplier has to pay for the usage of the network to the distributor.”
COMPETITIVE SPIRIT Whereas in Europe the development of smart grid is driven by the desire to reduce energy consumption, decision-makers in the Middle East are motivated by different ambitions. “In Dubai, Abu Dhabi, Bahrain, Qatar, each of these utilities want to show that they are better than the others. They want these projects to be a showcase,” says Chebbo. Company representatives
Chebbo believes that grids will increasingly be managed via the internet.
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SMART GRIDS
coming to do business in the region are best advised to tread carefully. “If you come to them and make the mistake to compare them with another one, they will not like it. Each one believes they are the best, and they want to be the best.” Nothing motivates like competition, of course, and progress is evident in the GCC. SAP, for one, are not complaining. “In the last two years we have had a lot of requests for proposals to built CRM systems, and we’ve seen a lot of smart metering bids. I would say the region is not far away from the projects we see in Western Europe, for
“There will be a shift from just electricity management to information management. There will be much more data on the network, more ICT in the networks. ”
instance.” Dubai’s Electricity and Water Authority (DEWA) is amongst SAP’s clients, and are showing considerable interest in upgrading
their networks. “I would say that Dubai is really pushing, DEWA wants to implement smart metering and other project later and they really keen to invest in this kind of software,” says Chebbo. DEWA has already implemented software to manage their billing and CRM services, and are now in the process of applying SAP to their network services provider, according to Chebbo. Towards the end of the year, the utility will adopt smart metering. “It is important whether the management of a company is smart enough or not.
DEWA has a smart management in place, who look outside, and come and ask questions,” says Chebbo. Good management is by no means guaranteed, however, and Chebbo identifies mismanagement as one of the obstacles in the way of modernising grids. “The other problem we have is a lack of understanding between the management and the workforce doing the project. There is a kind of disconnect sometimes between the management and the experts who know the network and the IT.” This can be exacerbated if the man at the top fails to consult those around him. “Sometimes the board of a company is not acting like a board but you have the CEO and the rest of the world, and everything depends on the agenda of the CEO.” Unfortunately, the lack of common decision making is nothing unusual in the region. Despite working with the GCCIA, the body responsible for the GCC Interconnection Grid, Chebbo believes
SMART GRID – DO YOU SPEAK EU? ‘Smart Grid’ has become one of the buzz words in the industry. The term describes the increasing sophistication of acquiring and using data for billing, customer relationship management, and energy efficiency. Smart grips are instrumental for the addition of renewables into the energy mix, with smart metering and the management of power exchange facilitating the move towards feed-in tariffs and small-scale renewable energy production coming online. The term has its origins in the efforts of the European Union to create a grid capable of supporting environmental targets. “The story of the
smart grid started in Europe in 2005,” explains Chebbo. “That year, the European Commission created a technology platform, bringing in stakeholders from the market and asking them to think about the next 10 years. The platform was called the European Technology Platform for Electricity of the Future, and it included representatives from utitlies, academia, suppliers and technology companies like SAP – I was and still am part of it. We started thinking about how to call this electricity of the future initiative, and we came up with smart grid. That term is now used even by Obama.”
European Union member states are aiming to incraese the use of renewables.
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SMART GRIDS
that cooperation between GCC countries leaves to be desired. He refers to something that former US vice president and environmental guru Al Gore recently said at an SAP event: “If you want to go first, you go alone. If you want to go far,
you go with others.” It is a message decision makers in the GCC would do well to take on board. “Each one is trying to go alone. The GCC grid is the exception, I think they can cooperate much more in all the other areas. They have to learn
SAP IN THE UTILITIES SECTOR SAP has been active in the utilities sector ever since the company was founded 1972. After the focus had initially been on back office and ERP, the scope since widened to include other areas. SAP offers enterprise asset management software, designed to help manage the construction and maintenance of infrastructure assets such as power plants
and networks. Its customer information system encompasses the tools used by utilities to bill their customers and carry out their customer relationship management operations. Finally, SAP’s energy data management systems help its clients collect information about consumption patterns, and can be used to optimise the running of the grid.
how to cooperate much more like the Europeans are doing with their smart grids.” Apart from the obvious comparison to the European Union, the efforts of other countries could serve as an example to GCC governments. China and India, for example, who are keen to expand the reach of the electricity network, have developed programmes both at a federal and a state level. “If they want to implement a full smart grid, they need a programme at the GCC level which goes down into the different countries, with a smart grid platform where you have the suppliers and the network companies and the regulators all coming together to decide how to implement the smart grid network of the future,” argues Chebbo. Whatever the pace of develop-
ment or the motivation for adopting smart grids, Chebbo has a very clear vision of the future of grids. “The customers and the plants, renewables and the central production of power, all that will be connected like you have internet today that is connecting everybody, that will be the case in every region and every country. There will be a shift from just electricity management to information management. There will be much more data on the network, more electronics and ICT in the networks. We believe that internet will be much more important in the future and will be the network that will have all these things communicate well together every time.” It is a fair bet that Chebbo will be there to help put this vision into place.
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SMART GRID TECHNOLOGY
Sensing opportunity
GETTY IMAGES
Smart grids rely on smart software, something that HP, who pride themselves as the world’s largest technology company, with 30-odd years experience in infrastructure and integration services, are well-equipped to provide. Utilities Middle East caught up with Ian Mitton, director at HP Utilities Industries and spoke to him about the latest technologies, their acceptance by the utilities industry, and the market in the Middle East How do you define the term smart grids? Term smart grid is a ver y broad term; it has become almost synonymous with meaning utilities. This causes a lot of confusion with customers. In the purest sense it is the transmission and distribution part, with the end point being the smart meter, and www.utilities-me.com
the front end being the generator. But you could argue that there is a bit more to that and the term smart grid is used to incorporate the generation side, and not only the smart meter at home, but also the smart home and home automation. To me the smart grid is simply the part in the middle.
What are the challenges utilities are faced with? The operating pressures that utilities are under are threefold. Firstly, there is the issue of security of supply – making sure the lights stay on. Then there is the environment – reducing greenhouse gas emissions, greener fuels, getting into renewables, June 2010
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SMART GRID TECHNOLOGY
HP are using their Teclo software to smarten up grids.
What does HP of fer utilities companies looking to improve their customer management operations? From an automation management point of view, we’ve seen a great opportunity to leverage our experience in the Telco sector. HP is pretty pervasive in Telco, 80 percent of text messages in the world are touched somewhere by HP software, and all the big carriers use HP software to manage their networks to manage their data. So what we’ve done is take the software we use for network management, service activation and data management within the Telco sector and applied it to utilities. How does the software derived from the Telco sector benefit your clients? The key differentiator HP has is in an area that
and also encouraging consumers to use less energy. Having said that, electricity demand is going to grow, but if we use less, that growth won’t be as severe. Finally, there is customer management – customers satisfaction. This is extremely important for deregulated markets, like we are seeing in the US, Europe and Australia. Is deregulation going to become increasingly prominent? I think deregulation in time will hit more markets. Certainly the European Commission is unbundling the business, they’re saying you have to be electricity generators, transmission companies, distribution companies, or retailers, and have those as separate bundles. That whole area of deregulated markets, you can see how there is a big pressure on customer management there.
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utilities haven’t really embraced yet, but to which they are becoming more aware as they are rolling out their projects: the scalability issue of managing the network. As a utility running a grid, you can manage five to 10 kilometres and you can get by because the head end systems on the meter systems give you the alarms and the alerts. You might have a head end system for every two to three kilometres. As you scale up to 100 or 1000 kilometers, you’ve got a storm of alarms coming form that network. We’ve heard numbers of maybe five percent of all meters and devices are alarming and alerting at any given point. With a million meters, that means that at any given stage 50,000 meters are sending alarm signals. When you’ve to a storm like that, how do you differentiate?
“Everyone is talking about smart grids, I’d argue in many ways the system is pretty intelligent already.” Ian Mitton, director, HP Utilities Industries
What about the Middle East? In the Middle East de-regulation won’t happen any time soon. Yet as a utility provider in the region, you still want to make sure from customer management point of view that your customer is satisfied, because even though they have only one place to buy their electricity from, if they are kept happy they don’t phone you, and that means you don’t need a very big call centre, which obviously means lower cost.
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You need ver y strong networking tools and correlation engines. That’s were we’re finding we’ve got something very unique. Are utility companies quick to implement this technology? We are met with the usual utility response – which is slow. The decision-making process for utilities is very long-winded. Our technology is being bought by utilities worldwide, but once these projects start, they take a long time to roll out. Getting the infrastructure in place, to get the integration with the backoffice, that can take the best part of a year.
What is the latest innovation HP is pursuing in the field of smart grids? Everyone is talking about smart grids, I’d argue in many ways the system is pretty intelligent already. Where they can improve it is in granularity. Here we are developing our CeNSE (Central Nerve System for the Earth) technology. The idea of calling it CeNSE is to mimic the human senses, so you’ve got eyes, ears, nose, touch, and apply that to the grid. We have started a first project using CeNSE in cooperation with Shell . (see box) At the moment a sensor on a grid is a very expensive unit, costing about 2,000 dollars, If you could
“In the Middle East, de-regulation won’t happen any time soon. Yet as a utility provider in the region, you still want to make sure your customer is satisfied. ” make a sensor for a few dollars, and pepper them out on the grid, then you’ve got much more granularity. That is what I think is going to be the next stage of the grid. We are talking to utilities in the US, Europe and in Japan about what can we use these sensors for. In Japan, for instance earthquakes
MAKING SENSE
are often followed by mudslides, which kill more people than earthquakes. If we put sensors on the wires, we would know when the earth starts to go. How is your smart business in the Middle East going? In the Middle East there’s not so much activity at the moment. We’ve been in discussion with a good few of the utilities, but nothings come to fruition yet.
HP and Shell look to deploy new sensory technology in oil and gas exploration At the International Petroleum Week in February, the two companies announced that they are working to develop a wireless sensing system collecting high resolution data to detect oil and gas reservoirs. Key to this project is HP’s CeNSE programme, which relies in developing tiny sensors, or accelerometers, which can be deployed in vast numbers. “We have started our first CeNSE project with Shell, putting these accelerometers in the drill bit and putting them on the ground, so that you can triangulate and try and find where the best location for oil is,” explains Ian Mitton, director at HP Utilities Industries. While the accelerometer gives CeNSE its “feel,” the system’s “taste and smell” are just around the corner, says Peter Hartwell, senior researcher at HP and project team lead. Researchers in the
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group are using nanomaterials to boost a standard chemical and biological detection technology to 100 million times its usual sensitivity rates. That could lead to detectors small enough to clip onto a mobile telephone. With a wave over produce, the sensor could, for example, warn consumers of salmo-
A HP accelerometer
nella on spinach leaves or pesticides present in organic produce. Deploying CeNSE would enable real-time data collection for a range of applications, says HP, such as bridge and infrastructure health monitoring, geophysical mapping, mine exploration and earthquake monitoring.
How come? Is suspect that it has to do with the return on investment. We have found in a good few cases that customers have struggled with that. They’ve thrown a couple of million dollars at a pilot, bought some meters, got some software, and plugged it all together. But this is usually led and driven by the meter department, and they are only looking at automating their current process. What they haven’t looked at is the holistic approach, the benefits our software can bring to the whole organisation. Our systems can bring down costs for call centres, as utility companies are able to identify a problem with the end user as soon as it occurs. They can also locate problems on the grid immediately, so that repair teams don’t have to drive up and down the power lines looking for the damage. The reason why we haven’t been selling our software in the ME is probably for the same reason why many of these pilots have started and stopped, they can’t identify the return on investment. www.utilities-me.com
NUCLEAR UPDATE
Nuclear ambitions Abu Dhabi’s plunge into the nuclear age has put the Middle East on the nuclear map. UME examines the state of play, and speaks to Holger Rogner of the IAEA.
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NUCLEAR UPDATE
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uclear power is coming to the GCC, and to the wider region. Burdened with the lion’s share of power generation in the United Arab Emirates, and devoid of vast resources of natural gas some of its neighbours enjoy, it is perhaps not surprising, that Abu Dhabi has taken the lead in the push towards alternative sources of energy. Last November. the emirate signed a US$20bn contract with a consortium led by the Korea Electric Power Corporation (Kepco), which includes Samsung, Hyundai, Doosan Heavy Industries, Westinghouse and Toshiba, for four nuclear reactors with a capac-
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ity of 1,400MW each. The first of these will be completed in 2017, and all four are planned to come online by 2020. The economic rationale behind oil-rich countries going nuclear is straightforward, and boils down to a simple maths, says Holger Rogner, section head at the Department of Nuclear Energy at the International Atomic Energy Agency (IAEA): “With the price of oil around 70 to 80 dollars per barrel, its a very simple calculation: Imagine you produce your oil at a cost somewhere between two to five dollar per barrel, and you need three barrels of oil to produce the equivalent of one barrel of electricity. If you use that oil for domestic power generation, you will get about15 dollar, if you sell it on the international markets you will get around 210 to 240 dollars.
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NUCLEAR UPDATE
Delays in the construction of theEuropean Pressurised Reactor at the Olkiluoto 3 nuclear plant in Finland undermined the French bid to built the nuclear power plants in Abu Dhabi.
Just take that as a back of the envelope calculation.” In addition, some GCC countries, such as Abu Dhabi and Kuwait, and are looking to reduce their dependence on imported gas as a feedstock . While the interest in nuclear power amongst GCC states can thus hardly be surprising, a few eyebrows were raised when the Kepco consortium was awarded the Abu Dhabi contract. The Areva-led consortium, in particular, was stunned, as it had been confident of clinching the deal. The group of French companies, which consisted of Areva, GDF Suez, Total, Vinci and EDF, were convinced of the superiority of their product, Areva’s European Pressurised Reactor (EPR). But the fanfare of an official
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state visit by French President Niklas Sarkozy in May 2009 was undermined by warnings from European regulators that there was insufficient independence between the day-to-day safety systems and emergency systems on the EPR. Areva is subject to further bad press over the delays in the construction of the Olkiluoto 3 nuclear plant in Finland. The plant was scheduled to become operational last year, instead Areva are as yet unable to confirm a completion date. One of the main sticking points for the Abu Dhabi government is likely to have been the high costs associated with the French bid. Here the US-Japanese bid, which centred around General Electric and Hitachi, was also left wanting, some say. “The Korean bid
was 40 to 50 percent cheaper than the competition,” says Michio Hayashibara, director at Marubeni Power and Asset Management. “In their domestic market, Japanese producers are used to the client expecting very high safety standards and being willing to pay for it. But they should offer good quality as well as a good price.” But Kepco are unlikely to have won the bid solely on the back of price calculations, says Rogner. He believes that Abu Dhabi, like all the countries in the Middle East who are seeking to develop nuclear power, are looking at several factors. “Its not just selling the plant, it is about education, about the fuel supply, about other services. Its not just the technology per se, it’s the package. That’s what the French didn’t understand
in the UAE deal, they thought, ‘We have the best technology, what can go wrong?’” Kepco’s offer was the package with which Abu Dhabi felt most comfortable with, says Rogner. He points out that EDF was initially not willing to commit to operating the plant. This turned out to be a serious strategic blunder in the bargaining process, as the emirate was not interested in running the plants itself, and has effectively outsourced the nuclear project to the Koreans. EDF did change its stance later on, but it was too little, too late. By being the first to go nuclear in the Middle East, Abu Dhabi has certainly been getting a lot of attention on the international stage, as well as envious glances from its neighbours. These are, however, not likely www.utilities-me.com
NUCLEAR UPDATE
to follow the blueprint for nuclear development set out by the emirate. “I don’t think the other countries will necessarily follow the UAE template of outsourcing everything, I know for example that other countries are hoping to develop their own human resources base,” says Rogner. He believes that while aspiring countries will very likely make use of outside help initially, they will aim to develop their own expertise, run their programmes independently of a foreign operator.
WHOSE NEXT? And which Middle Eastern country will be the next to step into Abu Dhabi’s footsteps and commit to nuclear energy? Jordan and Egypt are the Arab states that have so far made the most progress in developing their programmes. In November, Australia’s WorleyParsons was appointed to carry out a feasibility study for Jordan’s first 1,000MW nuclear reactor, to be built near the port of Aqaba. Shortly afterwards the government awared a US$173m contract for a nuclear research reactor to the Korea Atomic Energy Research Institute and Daewoo Engineering & Construction. WorleyParsons is also advising Egypt on its plan to build a 1,200MW reactor. During the next eight years, the firm will chose the site and the technology, as well as oversee the construction and the start-up of the plant. In May, Russia’s energy minister Sergei Shamtko admitted that Russia may help Syria built an nuclear power plant. Holger Rogner, section head at the IAEA, says the agency is there to help countries develop their nuclear energy programmes.
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His comments came after Russian president Dmitry Medvedev put the prospect of nuclear cooperation on the table during his visit to Damascus. Russia’s move will have caused consternation amongst Western governments, who fear that Syria harbours ambitions to enrich plutonium for military use. In 2007, the Israeli airforce destroyed what the US said was a nascent plutonium-producing reactor. Iran, has been developing is nuclear programme for years, and may be have its Bushehr plant coming online within months , if statements made by Iranian and Russian officials are to be believed. (See Regional Update, page 9) In the GCC, Kuwait is a likely frontrunner, having signed a Memorandum of Understanding (MoU) with the France after another, and this time more rewarding visit to the
region by Sarkozy. The MoU will go a long way in overcoming Gallic gloom over the UAE debacle, and more or less guarantees the involvement of French companies in future Kuwaiti nuclear projects. As of yet, no timeline for the development of nuclear capacity has been revealed by the kingdom. A set of studies on the viability and cost of a nuclear energy project in Kuwait will be ready for decision makers by early 2011, however.
Furthermore, time delays can arise from the need to adhere to international conventions. “As soon as laywers get involved, it doesn’t speed up the process.” Another problem that has been flagged up is that of grid capacity. Most of the countries in the Middle East currently have small grids, which would cause difficulties if a nuclear plant with significant output came online. “The largest unit on the grid should
“I don’t think the other countries will necessarily follow the UAE template of outsourcing everything. ”
WORK TO DO The countries seeking to join the nuclear age clearly have work to do to. “Key challenges are the lack of infrastructure, and by that I mean soft infrastructure such a nuclear law, human resources, independent regulators, education, all these aspects,” Rogner identifies the main hurdles.
an output of no more than 10 percent of grid capacity,” says Rogner. “So you put in a 1,700MW --reactor online, than you should have a 17GW grid, which most countries don’t have.” Due to the enormous electricity growth rates of countries in the Middle East, grid capacity will probably have caught up by the time the first reactors come online. “Current demand growth rates are roughly doubling every 10 years. If that continues, most of the countries will be there, or in that order anyway,” says Rogner. Rogner stresses that the IAEA is there to help countries overcome their teething problems and ensure a smooth transition into the nuclear age. “We as the agency stand ready to help those countries to do it right. Of course we are not a police agency , but if member states want to know how to do it best, we are there to help.” Lastly, Rogner emphasises that nuclear energy needs total commitment to the cause. “We want to make them understand that this is a long term commitment. Once you’re in, you’re in.”
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DISTRICT COOLING
Fit for purpose Designed to provide air conditioning to large scale developments, district cooling has had to reinvent itself to adapt to challenging times
The Nad Al Sheba district cooling plant at the Meydan complex under construction.
D
istrict cooling is a fairly young concept, and its rise to prominence coincided with the construction boom that ended only as the financial markets soured in 2008. Built in an
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era defined by largesse to service developments of ever increasing proportions, many of the district cooling plants were designed without careful deliberation on actual requirements. “In the past we built plants with a capacity of 50,000
tonnes, when all that was needed was 20,000 tonnes,” says Mohamed Yousseff, managing director at SNC-Lavalin, an EPC contractor active in district cooling. Things changed as the world economy took a turn for the worse, June 2010
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DISTRICT COOLING
and the pace of property development slowed considerably. As developers struggled to find occupants for their new buildings, dead assets in district cooling plants became a common phenomenon. Some plants, already built, would simply be fitted with less capacity, says Yousseff. Inspired by the new spirit of austerity, and more familiar with district cooling, the utilities companies and developers are now looking to take a more considered approach. “The market has matured a lot, people are more conscious of the capacity of a district cooling plant,” says Tawfiq Abu Soud, executive director at Drake & Scull Water and Power. “Three years ago, they would go and install the district cooling for the whole master plan with some additional capacity just to be safe. They didn’t dig deep inside to the load profile of each building to see what the actual need was.” Abu Soud sees a trend towards more customised plants arising, partially because of the financial constraints experienced by the utilities companies providing district cooling. With the credit markets in turmoil, securing funding has been a difficult in the last couple of years. Even if crowned with success, the process can take up to a year. This has left district cooling companies unable to bid for as many projects as in the past, a problem for developers who cannot open their residential or commercial buildings without air conditioning. To solve this dilemma, property developers are moving towards building their own cooling plant. “We had a call from a property developer from Abu Dhabi recently, who said that he had a problem. His utility provider couldn’t provide him with chilled water until 2012, but his property will be ready next march, and without cooling it cannot open,” recalls Abu Soud.
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“The market has matured a lot, people are more conscious of the capacity of a district cooling plant.” Tawfiq Abu Soud, executive director, Drake & Scull Water and Power
assets in a plant already completed while the rest of the complex is still under construction, district cooling providers are now looking at building a range of smaller plants in a staged process. “The construction of a development can be phased out, but if you are building a central plant, you can only phase parts of it out,” explains Abu Soud. “So there are a lot of dead assets, especially underground, as the infrastructure for the chilled water has to be built in the beginning. There no return on investment for the capital investment. That’s why we are moving to distributed energy or localised chilled water plants.” To improve the reliability of the system, the plant will be interconnected, meaning that a malfunctioning plant can be compensated for by the remaining capacity.
TEMP SOLUTIONS
Tawfiq Abu Soud, Drake & Scull, believes there lies opportunity in crisis.
ECP contractors like Drake & Scull will increasingly be dealing with the property developers, supplying them with purpose built plants for individual complexes. “We think we can provide a better solution,” states Abu Soud. “We can build a plant fit for purpose. District cooling providers built a plant providing cooling for the whole area – so maybe the requirements are not fit for purpose for everyone.” A more gradualist approach in the construction industry, coupled with reduced demand for new residential and office space in the region, will further accelerate
the move towards more custom built district cooling applications, believes Abu Soud, who speaks of a trend towards ‘distributed energy’. In order to avoid dead
While delays arising from illiquid capital markets have caught out utility companies and project developers, it has created business opportunities for some. Providers of rental cooling solutions have flourished. “I can only guess why developers come to us,” says Roberto Bagatsing, group marketing manager at RSS, one such provider. “But when we went to some of the projects we were hired for, we noticed that there very few cars in front of the buildings. If a new development has only one or two tenants, there is no point running a whole district cooling plant.”
Temporary district cooling providers have recorded a booming trade as projects have stalled.
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DISTRICT COOLING
Conversely, if the district cooling plant does not come online in time, developers are desperate for a short term solution. “Most of the district cooling plants have been delayed,” says Bagatsing of the situation in the UAE. As a result, RSS have been able to increase their revenue dramatically, and have worked on some of the region’s noteworthy recent developments. The company provided cooling to the Atlantis Hotel, the Lost World theme park and the Dolphin’s Habitat in the Palm Jumeirah in Dubai from July 2007 to October 2008. With 38 air cooled chillers in duplex configuration generating a capacity equivalent to 7,700 tonnes of refrigeration (TR), the project was the largest temporary air-cooled chiller plant connected in a single header in the MENA region, says Bagatsing. That record was later broken by RSS itself, when the company started supplying the equivalent of 13,000 TR in to the Yas Island project in Abu Dhabi in July 2009. While those catering for temporary solutions are thriving, EPC contractors are still looking for business to pick up again, with little tendering activity in the GCC so far. “Business is improving, but it won’t go back to 2007 levels, not this year, not next year. Everyone is cautious, and is trying to work in a more phased way,” says Abu Soud. “Last year was a weak year compared to 2008 for the whole construction business, but we can see it is picking up now,” agrees SNLLavalin’s Yousseff. Drake & Scull have responded
to tougher times by venturing beyond their traditional base in the UAE. “The big boys take the crisis as an opportunity to become bigger,” says Abu Soud. The company is bidding for district cooling projects in new markets such as Egypt and Libya, where a tender for the cooling of the Tripoli International Airport is in the post-bid clarification stage. A lengthened bidding process in all markets due to the credit crunch, from around two months to over half a year, has stood in the way of securing any orders in its new target areas yet, says Abu Soud.
owned utilities, the market for air conditioning gives end users a choice. Yousseff believes that the companies providing district cooling are undermining their competitive advantage by pricing their service out of the market. “The utility providers unfortunately came up with a financial model that is very high for the end users. I’m afraid that later on, the end users might opt for the conventional solution, if district cooling is the more expensive option,” laments Yousseff. There might be little reason to be concerned. As this market has proven, its participants are quick to adapt their business model.
GCC STILL THE BIGGEST DISTRICT COOLINGMARKET Yet despite the recent slump, the GCC is still the big hitter when it comes to district cooling. “If you attend the conferences in Europe and the US about district cooling the references are always about the projects here in the region. Here you find the projects, due to the environment, due to the temperatures in the region of 50,000, 60,000 or 70,000 tonnes. In Europe or the US, we are talking about maybe 5,000 tonnes,” says Yousseff. And Yousseff is optimistic about the long term future of the technology. While the initial capital expenditure may be higher than for localised air conditioning set ups, operating costs are considerably lower. “The energy efficiency is better, district cooling only consumes 50 percent as much power as conventional cooling, and you provide the developers with more
“In the past, we would build a plant with a capacity of 50,000 tonnes, when all that was needed was 20,000 tonnes. ” Mohamed Yousseff, managing director, SNC-Lavalin
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space,” he says. “In all aspects district cooling is a better solution, it just needs some promotion to make the people familiar with it, because its a new business.” After being pioneered in the UAE, district cooling is now gaining traction in Saudi Arabia, the Arab world’s largest economy, and SNL-Lavalin only recently received an order in the Kingdom. However, there is a word of caution. The key benefit of district cooling to end users is reduced the reduced cost of air conditioning. And unlike electricity and water, where consumers in the region depend on a monopoly of state-
MEYDAN – RACING AGAINST TIME Drake & Scull provided the district cooling for the Meydan complex, home to the Dubai Racing Club’s racetrack. The Nad Al Sheba district cooling plant consists of four 5000 TR electrical driven chillers modules and two thermal storage tanks which together have a capacity of 25,000 TR per hour for supplying chilled water at peak times. The plant provides chilled water for the complex’s fivestar hotel, museum, gallery, IMAX theater, the Dubai Racing club and Emirates Racing
Authority Offices. Nad Al Sheba is designed to further accommodate another set of four chillers modules for future needs. “The plant has a special design in order to speed up the construction. We have not partially submerged it like other plants, instead we built it fully over ground. The plant was ready to produce chilled water within six to seven months of breaking ground. That is quick,” comments Tawfiq Abu Soud, executive director at Drake & Scull.
June 2010
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Utilities Middle East 35
ECONOMIC CITIES
Lighting up Economic Cities Setting up an electrical utility service is a challenging process when providing for a city not yet in existence
A
decade from now, the Arabian Peninsula will be dotted with new Economic Cities dedicated to attracting and incubating industries such as financial services, technology, and communications media. Offering special incentives and amenities to attract businesses and encourage investment, economic cities will be critical to the financial development and economic diversification of GCC countries. To ensure that these cities can meet their potential, GCC governments must make sure that the cities have the necessary elements to provide an efficient and cost-effective electric utility service, according to George Sarraf and Tim Gardner from Booz & Co.
able. Urban environments involve multiple interdependencies of services and institutions. The evolution of these interdependencies typically occurs in parallel with population expansion and cultural and economic development. “To
establish all these elements de novo and shape them to a population that does not yet exist is inherently difficult,” said Tim Gardner, a senior executive advisor at Booz & Co. In these circumstances, even
“ To establish all these elements de novo and shape them to a population that does not yet exist is inherently difficult.” Tim Gardner, Booz & Co.
familiar municipal issues can create unfamiliar challenges. The challenges consist in supplying the three institutional conditions on which an electric utility service depends: a source of investment, a mechanism for cost recovery, and a framework for regulation. Investment: The provision of electric power is widely regarded as a low-risk business, with a predictable and secure customer base, and cost coverage virtually guaranteed. In economic cities, the size of the market is uncertain, and if the service price seems excessive, it may discourage potential customTim Gardner, senior executive advisor, Booz & Co.
POWERING ECONOMIC CITIES “The presumption is that economic cities will be developed pri¬marily through private investment. However, as these cities move from concept to plan to construc¬tion, their developers will encounter some issues that can likely only be solved with the assistance of public resources,” says George Sarraf, a partner at Booz & Co. Economic cities will be built from the ground up through a process of accelerated community engineering, which is often unpredictwww.utilities-me.com
June 2010
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Utilities Middle East 37
ECONOMIC CITIES
ers from locating there. Start-up investment in the power distribution infrastructure of an economic city therefore, could be a high-risk undertaking. Pricing: In the typical power utility system, tariff levels are determined by dividing total production costs by the number of consumption units expected. Given the market uncertainty faced by nascent economic cities, the prospective tariff level is difficult to calculate, resulting in a wide variety of potential outcomes. This pricing challenge is compounded
if customer electricity tariffs in the larger market are subsidized, as this will make rates appear comparatively uncompetitive. Regulation: The standard role of a power regulator is to preserve the viability and health of the provider and protect the public from any abuse of economic power. In practice, this role typically is exercised through a quasi-judicial, often adversarial, process of hearings and reviews, which is ill-suited to the circumstances of an economic city. The economic city requires a scheme of regulation that rec-
“ Developers will encounter some issues that can likely only to be solved with the assistance of public resources.” George Sarraf, partner at Booz & Co.
ognizes the common interests of the developer, city utility, and city residents and employs innovative means of achieving them.
PUBLIC-PRIVATE PARTNERSHIPS
The entrance to the King Abdullah Economic City
KAEC – SAUDI ARABIA IS THINKING BIG With a total development area of 173 square kilometers, and a total cost of US$80 billion, the King Abdullah Economic City (KAEC) is one of the most ambitious projects in the region. The city is located along the coast of the Red Sea, around 100 km north of Jeddah. Along with other
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five economic cities, is a part of a program to place Saudi Arabia among the world’s top ten competitive investment destinations by the year 2010. The first stage of the city due to be completed in 2010, while the whole development is scheduled for completion by 2020. The government
expects the city to help diversify the oil-based economy of the kingdom by bringing direct foreign and domestic investments, and to create up to one million jobs for the youthful population of the country, where 40 percent of the population are under the age of 15.
“The issues posed by investment, price, and regulation raise doubts as to whether utility service in economic cities is achievable through private initiative alone. Instead, it will likely require a well-coordinated combination of public and private measures,” explained Sarraf. During a city’s start-up period, the public sector may need to bear much of the initial risk of utility infrastructure development. Over the medium term, the public sector may need to commit to purchasing whatever excess power is generated for the city but not consumed by it. “Such a guarantee would provide an assured level of consumption and an efficient alignment of the city’s supply portfolio with demand, thereby permitting tariff requirements to be reduced substantially,” continues Gardner. If the economic city does suffer a power-price disadvantage in comparison to other siting alternatives, it will need to focus its sales efforts on small industrial, commercial, and residential customers, for which modest increments in utility bills will seem far less important than for energy-intensive industries. As for regulation, it should be conducted by an agency that has a flexible perspective and is committed to consumer fairness and to the overall success of the economic city. In the case of economic cities, as in many other areas of social innovation, addressing any development challenges and building tomorrow’s cities is clearly within the grasp of the public and private sectors acting together. www.utilities-me.com
IRAQ
GETTY IMAGES
Catching up Iraq is seeking bids for the installation of 2.5GW generation capacity as reconstruction accelerates. IHS Global Insight Middle East analyst Sam Ciszuk comments on the challenges ahead 40 Utilities Middle East
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June 2010
I
raq’s Electricity Ministry is inviting bidders to undertake the construction and installation work at power plants as the first of 72 gas turbines procured in 2008 start arriving. The process will be a key test of the Ministry’s project management abilities and will show where in Iraq subcontractors dare and do not dare venture. Iraq’s electricity sector has suf-
fered a large capacity deficit for decades, having barely been able to meet the population’s minimum demands in the face of international sanctions in the 1990s or to carry out large-scale reconstruction because of the ubiquitous violence in the aftermath of the 2003 invasion. An ambitious four-year plan to rebuild and quadruple Iraq’s generating capacity was launched by Electricity Min-
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IRAQ
“ Launching vast reconstructive efforts on such a badly damaged power generation and supply chain is a complex issue. ”
Karim Waheed, Iraq’s Electricity Minister, launched a 4-year plan to quadruple capacity.
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ister Karim Waheed in the second half of 2007—as violence started to abate in large parts of the country. But the plan was delayed as oil prices plummeted in the second half of 2008. Launching vast reconstruction efforts on such a badly damaged power generation and supply chain is a very complex issue, requiring considerable stability, not forgetting a consistent supply of feedstock—an issue which still has to be resolved in Iraq. Lead times for gas turbines are also considerable, despite Iraq’s purchase of very common and widespread technical solutions in bulk. Hence it is only now that the real push looks imminent, with eight GE turbines ordered in late 2008 having just been delivered and another 24 expected to arrive before the year is over, according to Laith al-Mamury, head of investments and contracts at the Electricity Ministry. The first 125MW GE turbines will be installed in the Baghdad, Karbala, and Diwaniya provinces. Eight larger Siemens turbines with a total capacity of 1,900MW will also start to be installed sometime this year in the oil and refining hubs of Kirkuk, Baiji, and Basra, according to al-Mamury, who told Reuters that about 36 companies had prequalified for the tenders—among them South Korea’s Hyundai Heavy Industries, Switzerland’s ABB, Canada’s SNC-Lavalin, and Kuwait’s alGhanim Company. The engineering, procurement and construction contracts on offer are worth about US$350,000 per installed megawatt, al-Ma-
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Utilities Middle East 41
IRAQ
Q&A: THE INSIDE VIEW Luay al Khateeb, executive director at the Iraq Energy Institute, spoke to Utilties Middle East on the sidelines of the Al-Tamimi ‘Doing business in Iraq’ conference. How important is the issue of security in the quest to rebuild Iraq’s power infrastructure? Security is one aspect but not the main aspect, because the security situation now is much better than two years ago. I would have said that the security situation will improve even more, but now with the political dynamics after the election and the stalemate continuing around the formation of a government, its going to be quite challenging. So security remains a concern, alongside corruption, and I would also add bureaucracy to the list. You really need to have a supportive business community to sustain big projects, and make them happen. For it to happen, current legislation and regulation needs significant reform across the board. What stands in the way of reaching the necessary levels of power generation? Unfortunately in Iraq we do not have a master plan as such when it comes to power generation. We have the minister of oil thinking something different to the minister of electricity. Electricity generation in Iraq is very much powered by gas. At the moment, there is no master plan for gas. There are business proposals from various companies. But when
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you get into the details of those they do not allocate a realistic volume of feedstock to elevate the level of production of electricity to reach the acceptable level. So far we are producing 5.5GW of electricity, whereas we should reach at least 24GW. Are you optimistic that these targets can be achieved? If there is a proper policy at a national level when it comes to a gas master plan, I think its possible to reach that goal in four years. If you take it of the governments hands and leave it to the private sector to secure affordable feed stock, it is possible, I’m sure. But if the government continues to control their play I don’t think Iraq will witness any development, and instead we will witness another seven years of the same.
“Iraq will need to make headway with the development of its gas production capacity during a very short time. ”
mury has said, adding that “the companies will present their bids within a month.”
FEEDSTOCK DEVELOPMENT Upon the award and execution of the tenders for the projects this year, Iraq could have about an additional 2.5GW of generating capacity installed by around 2012, rising to 27,000MW as all the ordered turbines are installed. This means that Iraq will need to make headway with the development of its gas production capacity during a very short space of time, including rebuilding and expanding its domestic gas transport infrastructure—in many cases from almost complete dereliction. Movement on Shell’s South Gas deal, which is reported to have been sent to the cabinet for
approval, would be key. Shell envisages to initially only gather associated gas currently being flared off, and then move on to collect the rising amounts of gas being produced alongside oil in the south. The project has been delayed for almost two years because of several controversies and uncertainty over how much gas Shell would be allowed to take from the oilfield operators, given the likely need for reservoir re-injection. The more the project is seen as mainly supplying the domestic market, and not as a means to boost exports, the less controversial and more politically prioritised it will be. Iraq also launched its third licensing round last week, focusing entirely on offering three gas fields in different parts of the
How important is a stable electricity supply for the development of Iraq? Quite important, because when we talk about electricity we talk about energy security for industry and agriculture and so on. We are talking about the complete value chain for the welfare of the population, not just about switching the lights on. It is about making sure that Iraqi fruits are more affordable than fruit imported from Europe, which at the moment is much cheaper than domestic produce.
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IRAQ
country to developers, thus further making feedstock gas volumes available within three to eight years’ time. Still, while no-one doubts that the needed gas volumes exist, the Oil Ministry and to some extent the Electricity Ministry will have to co-ordinate, scope out, tender, and project-manage pipeline, treatment, and pumping station contracts for the construction of the domestic network within a very short timeframe. This will coincide with Iraqi demands on the oil companies working in the country to develop its oil production capacity from about 2.5 million barrel per day to a massive 12 million barrels within seven years. The situation will almost inevitably result in a massive overheating of the sector, rising costs, and severe materials and skilled-labour shortages, delaying both the oil and gas side of the projects and threatening the power reconstruction effort’s timeframe.
POWERING SECURITY It is widely recognised that in order to finally secure Iraq and extend the central government’s reach to all parts of the country, A woman walks past a Basra Electricity Company power plant that has seen better days.
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Years of neglect and underinvestment have left Iraq’s power infrastructure unable to meet demand.
extending and maintaining core government services—including electricity—to all parts of the population is fundamental. Still, for contractors, working on large immovable infrastructure projects located in Iraq’s most densely populated regions will be a very different security challenge to the one now eagerly taken on by the oil companies. Iraq’s oilfields are in most cases located in the sparsely inhabited southern desert, and where fields in more populated and unstable areas were offered, few—if any—oil companies were willing to sign up. The Iraqi security forces will have to issue strong guarantees of permanent security deployments around most power project areas for the foreseeable future. Even with such guarantees in place, the Electricity Ministry is still likely to face problems in securing bids for projects in some of the more unruly areas of the country, including the key Kirkuk flashpoint region and northern oil hub, despite the desperate need to extend reliable power supplies to these areas.
PROGRESS, BUT IS IT TOO MUCH TOO FAST? It finally appears that some key electricity projects will move ahead, able not only to power the most crucial infrastructure and oil industry installations, but to actually change the power supply situation in Iraq permanently. It will nevertheless be a tall order for Iraq to ensure that projects can go ahead where most needed from a security point of view—and perhaps even more so from an overheating-sector point of view. It is almost impossible to see all Iraq’s oil, gas, and power projects being able to proceed simultaneously— especially given the absolutely massive scale of its oil projects over the coming decade. Delays and bottlenecks will be inevitable, as will rising costs and skilled labour shortages. Still, the situation today calls for a considerable dose of optimism, with stable power supplies—albeit at a slower pace than hoped for— returning to the secure parts of Iraq and likely to be gradually extended into the more unstable parts of the country as we
approach the middle of the decade. Undertaking some of these EPC contracts will be a significant security challenge for contractors, with what still exists of the domestic engineering industry likely to be working on smaller projects on the outskirts of unruly areas, with larger international outfits striving to rebuild the power sector in the stable parts of Iraq.
Sam Ciszuk, IHS Global Insight
June 2010
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Utilities Middle East 43
MBR
More to come MBR technology is benefiting from the increasing reuse of wastewater in the region. But for MBR to supercede the conventional activated sludge process, membrane costs will have to come down, and the full potential of the technology needs to be realised.
T
he idea of reusing wastewater does not sit easily with ever yone. It is, after all, not a pleasant thought that the grass your children are playing on, or the air that is cooling your apartment, has been subjected to water flushed down your toilet in the not too distant past. The stigma attached to the reuse of treated wastewater is thus considered an obstacle by the advocates of membrane bioreactor (MBR) technology. To add to this burden, MBR, which makes use of membranes as the final stage of the purification process, is also fighting for its
place alongside the conventional approach, the activated sludge process. There is, however, little doom and gloom about those who enthusiastically endorse the technology. This is partially because, in spite of all inhibitions, wastewater reuse has found its place in the region’s water supply chain. “There is now widespread acceptance of the concept for a wide range of non-potable applications in most of the major economies including Saudi Arabia and the Gulf States,” says Jim Hotchkies, marketing manager at Toray Membrane Europe. Moreover, MBR has a dis-
Treated wastewater is used for the fountain display at the foot of the Burj Khalifa in Dubai.
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MBR
tinct advantage over the activated sludge process. “Can you reach the same quality of effluent with a conventional system? The answer is clearly yes - provided that you take the additional steps to reach the same quality,” says Murat Sarioglu, principal process engineer at MWH Europe. But when equipped with membrane filtration, the footprint of a plant is reduced significantly. The membranes make redundant some of the steps otherwise needed to purify the water, such as the final settlements tanks. A smaller footprint is of a distinct advantage if you are struggling for space. This applies, for instance, to smaller, purpose built wastewater plants for developments in an urban setting. Consequently, MBR is a feature of water treatment facilities for landmark projects such as the Palm Jumeirah or the Burj Khalifa, where treated wastewater is used for the fountain display adjacent to the Dubai Mall.
DECENTRALISATION While admitting that the technology is not feasible for the big sewage plants, such as the new 300,000 hectolitre plant in Jebel Ali in Dubai, Sarioglu believes that a more decentralised approach is the most intelligent approach going forward. By reducing the distances sewage has to travel to the plant, and treated effluent in turn has to travel to be reused, the cost of transportation could be slashed drastically. “At the moment, wastewater is transported by sewers to intermediate pumping stations, and from one station to the other,” expands Sarioglu. “In Dubai, wastewater travels 60 kilometres to reach a sewage treatment plant outside the city. And because you need the water for irrigation, you end up taking the treated water all the way back again.” A shift to a more decentralised approach could make MBR the preferred wastewater treatment www.utilities-me.com
technology. Plants using the membrane technology use less space, and can be built entirely underground, explains Sarioglu. “On a stretch of 60 kilometres, you could build three treatment plants, for example. You’d get rid of the pumping station costs, and the distribution back to the city. This should be looked into.” Vikrant Sarin, business development manager at Aquatech, also believes in the benefits of a de-centralised approach. “If you look at the GCC countries, with some of the population in remote areas, it becomes difficult in connecting them in the first place, you have to tank wastewater and to supply water.” As potable water only makes up around 10 to 15 percent of consumption, it only makes sense to meet the non-potable needs of remote areas with locally treated effluent, argues Sarin. The concept is starting to catch on, sometimes with a little out-
Vikrant Sarin, business development manager at Aquatech.
“MBR technology is more energy efficient in the overall perspective. ” Vikrant Sarin, business development manager, Aquatech
side help. In April, Hitachi Plant Technologies opened a wastewater treatment plant in the emirate of Ras al Khaima. The US$4.5 million project was financed by the New Energy and Industrial Technology Development Organisation (NEDO), a Japanese governmental organisation that promotes energy and water efficiency worldwide. The plant recycles 3,000 hectolitres of sewage into 2,000 hectolitres of water treated with MBR technology for agricultural use, and 1,000 hectolitres treated further with reverse osmosis (RO) technology for industrial use. Set up in the midst of a pristine desert landscape adjacent to an indus-
trial site, with no access to a piping system, the plant is a showcase for a decentralised approach to wastewater treatment. In a region in which power is almost as precious a commodity as water, the fact that MBR technology is generally perceived as more energy-intensive than the activated sludge process is clearly a drawback. However, there are some that believe that the focus on the energy costs of the aeration process needed for membrane scouring obscures the big picture. “MBR is more energy efficient in the overall perspective,” says Sarin. “You have to include the cost of sludge handling in the activated
sludge processes, which includes sludge dewatering, and sludge drying. Plants with MBR technology only produce about 10 percent as much sludge as a conventional plant. People miss these points, they just talk about aeration.” The energy requirements of the technology are likely to come down in future, as most MBR firms are looking for ways to increase efficiency, including the vertical stacking of membranes to extract more efficiency from the air scouring system, and higher efficiency aerators. The biggest savings will not arise from improving the membrane, sums up Klaus Kallenberg, general manager at Toray Membrane. “The most dramatic developments in the area of MBR technology are expected to come from improved process efficiency rather than major improvements in the membrane itself.” While process efficiency might be the buzz word when it comes to energy savings, membranes June 2010
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Utilities Middle East 45
MBR
matter on the overall price equation. Equipping a plant with MBR is expensive, as the membranes represent a significant cost factor. Sarioglu readily concedes that the membranes currently come with a heavy price tag. But he believes that this will change, and points to past experience. “I see that as the same story as with membrane diffusers which are an integral part of conventional systems,” he says. “These cost a fortune in the nineties, and now you can get them for one seventh, one eighth of the price of what it was back then. The same will happen in MBR technology, as more suppliers come into the picture, there will be more competition in the market and prices are going to come down. In my view, this is inevitable.”
The small-scale sewage treatment plant built by Hitachi in Ras Al Khaima.
“More and more additional features will come out that have not been investigated up to date ” Murat Sarioglu, principal process engineer, MWH
BETTER UNDERSTANDING
Murat Sarioglu, principal process engineer at MWH
46 Utilities Middle East
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June 2010
In addition to achieving greater cost efficiency, MBR suppliers will stand to benefit from a greater understanding of the technology, and its uses. Not everyone in the water industry in the GCC as yet fully comprehends the potential for reuse, argues Kallenberg. “While the acceptance of wastewater reuse has grown considerably across the region, there remains some lack of understanding that such reuse water is safe in almost all non-potable applications.” Yet it seems that this understanding is growing. Wastewater is increasingly used as the chilled water in district cooling, for example. To prevent scaling in the district cooling plants, the water will
have to be further filtered in a reverse osmosis (RO) process. “Here, MBR has become very viable,” says Sarioglu. “You can put an RO system directly after a MBR plant, without having to use any additional steps.” Sarioglu believes that as more research is done on the technology, the more it will grow in stature, and benefits previously unknown will come to light. “MBR has many sides to it that have not been discovered yet, and I always tr y and emphasise that in the conferences I attend. More and more additional features will come out that have not been investigated up to date. I think in the long term MBR will be the dominant process.” www.utilities-me.com
QUICK Q&A
PEOPLE METER Designing the future Managing and enhancing water resources in the Middle East is big business. Utilities Middle East spoke to Dr Paul Boulos, president of MWH’s Middle East operations and president and COO of MWH Soft.
: What are the challenges for wet infrastructure in the Middle East today? Water has always been a scarce resource in the Middle East — and that scarcity represents the biggest risk to the sustained socio-economic development of the region. With 6 percent of the world’s population but only 1 percent of the world’s renewable water resources, the region is facing ever-increasing demands on its limited resources by rapidly growing population (expected to double in the next 40 years). Per capita availability is declining sharply; in some Middle Eastern countries available water per capita is 170 cubic meters per year — far below the world water poverty line of 1,000 cubic meters per year, with Yemen being on track to become the first countr y in the world to run out of water.
This is severely reducing the region’s food output, since the vast majority of this water is used for irrigation. Compounding the problem, the hydrologic cycle is becoming less predictable as climate change continues to significantly alter temperature patterns in the region (and around the globe). There is an urgent need for a comprehensive water management plan to conser ve and produce water (and energy through hydropower in countries like Syria, Iraq, and Turkey), match consumption with supply, improve groundwater management and water quality through wastewater collection and treatment, implement more effective irrigation practices (more production for less water), evaluate alternative measures for water reuse, and educate the public in wise water use.
Business in the wastewater sector has picked up.
“There is an urgent need for a comprehensive water management plan to conserve and produce water.” 48 Utilities Middle East
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June 2010
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QUICK Q&A
“A partial recovery is underway with the wastewater sector seeing the fastest growth. ” : How does MWH help its clients to overcome these challenges? Can you name a recent example? MWH is sharing new desalination technologies that could provide limitless new sources of clean water. We’re also sharing new management approaches and creative ways of helping conserve, allocate and reuse water resources. Many
of these are simple steps like improving irrigation techniques, water monitoring and metering, reducing water loss, and implementing simple home conservation techniques. MWH recently provided a full range of planning, engineering and management services, from planning, scheduling and design to construction management and
commissioning, for Dubai’s new Jebel Ali Sewage Treatment Plant. : How does the new generation simulation and modeling software enhance water modeling? To manage water distribution systems effectively, you need reliable user-friendly computer models that integrate geographical information systems (for visualization and spatial database management and analysis) with fast and robust numerical network hydraulic, water quality and transient solvers and optimization techniques. Network modeling can greatly assist water utilities in making informed decisions to ensure the
most cost-, energy- and carbonefficient water systems — from ongoing operation and maintenance to rehabilitation, enhancement, expansion, and new design. For integrated catchment modeling, the software has to combine a geographical information system with complex hydrodynamic and hydrological models. This combination provides the information needed to assess the total impact of flood risk and emissions on receiving water quality and conceive sound remedial procedures. : In June 2009, MWH made the Middle East region one of its four distinct geographic business areas, alongside Europe, the Americas and Asia. Does that reflect a growing importance of the Middle East for your business? Definitely. Our decision to make the Middle East region a distinct business geography encompassing countries in the Middle East and several countries in the North African Mediterranean rim was spurred by a desire to increase market penetration and drive performance in a geographic area that has seen tremendous growth. : Is water infrastructure business in the Middle East recovering from the recession? What is your outlook for 2010? A partial recovery is underway, with the wastewater sector seeing the fastest growth. I would expect a 2 percent to 3 percent growth in that market. : By how much is MWH seeking to grow business in 2010? What are the core growth markets? MWH is looking to grow its wet infrastructure business in the Middle East by more than 50% percent in 2010, focusing on Abu Dhabi, Saudi Arabia, Kuwait and Libya.
www.utilities-me.com
June 2010
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Utilities Middle East 49
PROJECTS
UTILITIES PROJECT TRACKER Information is supplied by Ventures Middle East. Tel: +971 2 622 2455. URL: www.ventures-uk.com
Project Title
Client
Consultant
Main Contractor
Value / Value Range (US$. Mn)
Project Status
Project Type
SAUDI 9023/9001 Underground Cables
Saudi Electricity Company (SEC)
Al Fanar Contracting
46
project under construction
Power Transmission
380kV Transmission Line North of Riyadh
Saudi Electricity Company (SEC)
KEC International / Al Sharif Group for Contracting & Development Trading
64
project under construction
Power Transmission
Desalination Plant & Drinking Water Infrastructure
Emaar Economic City,Saudi
Huta-Hegerfeld & Huta-Marine Limited Company
53
project under construction
Desalination Plant
Desalination Plant in Jeddah - Phase 3
Saline Water Conversion Corporation (SWCC)
Doosan Heavy Industries & Const. Company / Saudi Berkefeld Filter (Witco)
245
project under construction
Desalination Plant
115kV Underground Cables in Madina 2nd Industrial City
Saudi Electricity Company (SEC)
Siemens
35
project under construction
Power Transmission
Salwa IPP
Saudi Electricity Company (SEC)
Not Appointed
290
project in concept stage
Power Plant
10J Substation & 101 Satellite Substation in Yanbu
Royal Commission for Jubail and Yanbu (RCJY)
Siemens
150
project under construction
Substation
Princess Noura Bin Abdulrahman University - High Voltage Substation
Ministry of Higher Education / Ministry of Finance
ABB Contracting Co. / Al Fanar Contracting
167
project under construction
Substation
Yanbu IWPP
The Power & Water Utilities Company for Jubail & Yanbu (Marafiq)/Saline Water Conversion Corporation (SWCC)
Mohammed A.Turki Mott MacDonald
Not Appointed
4000
project under design
Power and Desalination Plant
Qsai Dam at Jizan
Ministry of Water and Electricity,Saudi Arabia
Zuhair Fayez & Partners
Bin Jarallah Establishment for Trading & General Contracting (Bin Jarallah Group)
40
project under construction
Dam
380/110/13.8-kV Substation Expansion in Al Aziziyah Area
Saudi Electricity Company (SEC)
Siemens, Saudi
20
project under construction
Substation
Power Plant Expansion - Duba
Saudi Electricity Company (SEC)
Najm Al Jazirah for Trading Contracting & Agriculture Co.
120
project under construction
Power Plant
King Abdullah Economic City (KAEC) - Power Grid Package
Emaar Middle East Properties
Siemens
400
project under construction
Substation
Power and Water Plant in Ras Al Zour
Saudi Arabian Mining Company (Maaden) / Rio Tinto Alcan
Not Appointed
2500
project under design
Power & Desalination Plant
New Dam in Abha
Ministry of Water and Electricity
Bin Jarallah Establishment for Trading & General Contracting (Bin Jarallah Group)
16
project under construction
Dam
Substations 9024 and 8183/8184
Saudi Electricity Company (SEC)
ABB Contracting Co.
120
project under construction
Substation
50 Utilities Middle East
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Kuljian Engineering Corporation
Zuhair Fayez & Partners
www.utilities-me.com
PROJECTS Interim Power Plant at Yanbu
The Power & Water Utilities Company for Jubail & Yanbu (Marafiq)
Not Appointed
300
EPC Bid
Power Plant
Rabigh IPP - 380-KV Substation
Saudi Electricity Company (SEC); ACWA Power International; Korea Electric Power Corporation (Kepco);
ABB Contracting Co., Saudi Arabia
48
project under construction
Substation
Uqair Power Plant
Saudi Electricity Company (SEC)
Not Appointed
1500
project in concept stage
Power Plant
380 Substation at Al Dhahiyah - Stage2
Saudi Electricity Company (SEC)
Al Toukhi Company for Industry & Trading
70
project under construction
Substation
Not Appointed
3000
EPC Bid
Power and Desalination Plant
Not Appointed
1800
EPC Bid
Water Distribution
Alstom Power / Sidem
3,000
project under construction
Power and Desalination Plant
UAE Hassyan Complex - Station P Phase 1 (P1)
Dubai Electricity and Water Authority (DEWA)
Mott MacDonald, Dubai
Hassyan Sea-Water Cooling System
Dubai Electricity and Water Authority (DEWA)
Fujairah 2 (F2) IWPP
ADWEA/ Marubeni Corporation/ International Power
Water Treatment Plant - Das Island
Abu Dhabi Marine Operating Company (Adma-Opco)
Metito Abu Dhabi LLC
21
project under construction
Water Treatment
Desalination Plant near Hamriyah Free Zone
Sharjah Electricity and Water Authority (SEWA)
Aqua Engineering, Techton Engineering & Construction
122
project under construction
Desalination Plant
General Utility Plant Expansion at Ruwais
Abu Dhabi Oil Refinery Company (Takreer)
Not Appointed
500
EPC Bid
Power Plant
Upgrade of Irrigation Networks and Pumping Stations
Department of Municipalities & Agriculture-Abu Dhabi
Not Appointed
10
EPC Bid
Pumping Station
Nuclear Power Plant in Abu Dhabi
Abu Dhabi Water and Electricity Authority / Emirates Nuclear Energy Corporation
Korean Electric Power Company / Hyundai Engineering & Construction Company/Samsung C & T Corporation/ Doosan Heavy Industries
20000
project under construction
Power Plant
Installation of 11kV Cables in Dubai
Dubai Electricity and Water Authority (DEWA)
Econ Contracting LLC
25
project under construction
Power Transmission
Two Desalination Plants in Ajman
Federal Electricity & Water Authority (FEWA)
Tecton Engineering & Construction / Aqua Engineering;
200
project under construction
Desalination Plant
11kV Overhead Transmission Line for Subiya Road
Ministry of Electricity & Water (MEW), Kuwait
National Contracting Company (NCC), Kuwait
11
project under construction
Power Transmission
New Substations in Kuwait
Ministry of Electricity & Water (MEW), Kuwait
Not Appointed
30
EPC Bid
Substation
Water Storage Tanks in West Funaitees
Ministry of Electricity & Water (MEW), Kuwait
Not Appointed
500
EPC Bid
Water Distribution
Shuwaikh Desalination Plant
Ministry of Energy (Electricity & Water)
Doosan Heavy Industries & Construction Kuwait
320
project under construction
Desalination Plant
Al Zour Desalination Plant Phase 2
Ministry of Electricity & Water (MEW), Kuwait
Not Appointed
120
EPC Bid
Desalination Plant
Not Appointed
1000
Feasibility Study
Power Plant
Hyosung Group / Siemens
1500
project under construction
Power Transmission
Fichtner
KUWAIT
Parsons Brinckerhoff International, Kuwait
QATAR Solar Power Plant
Qatar General Electricity & Water Corporation (Kahramaa)
Qatar Power Transmission System Expansion - Phase 9
Qatar General Electricity & Water Corporation (Kahramaa)
www.utilities-me.com
Energoprojekt Entel, Qatar
June 2010
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Utilities Middle East 51
TENDERS
Tender activity
To add a tender to our listing, email details to lutfi.qaraman@itp.com
Visit constructionweekonline.com for the latest tender information
UME provides free access to the latest publicly available tender listings from across the GCC countries. The tenders included are aggregated from a wide variety of public and private sector sources from across the region. When possible, tenders include the issuer, name and category of the tender, opening and closing dates, narratives, fees, bonds and contracts.
SUPPLY OF 11/0.4 KV - 1000 KVA PACKAGED SUBSTATIONS Issuer: Dubai Electricity & Water Authority Tender no: CE/0072/2010 Title: Supply of 11/0.4 kV - 1000 KVA Packaged Substations Description: The scope of work includes supply of 11/0.4 kV - 1000 KVA packaged substations. Bond: Applicable Tender fee: 200.00 AED Closes: Jun 1, 2010 Contact: www.dewa.gov.ae COMPLETE OVERHAULING, TESTING FOR LIFE EXTENSION OF TURBINE NO. 13 IN JEDDAH PLANT PH. 4 Issuer: Saline Water Conversion Corporation Tender no: JD/RM/415 Title: Complete Overhauling, Testing for Life Extension of Turbine No. 13 in Jeddah plant Ph. 4 Description: The scope of work includes overhauling and testing for life extension of Turbine No.13 in Jeddah Plant Ph. 4. Bond: N/A Tender fee: 500.00 SAR Closes: Jun 5, 2010 Contact: www.swcc.gov.sa REHABILITATION OF 13 PUMPS IN JEDDAH SUBSTATION - PHASE 4 Issuer: Saline Water Conversion Corporation Tender no: JD/R/M/197 Title: Rehabilitation of 13 Pumps in Jeddah Substation - Phase 4 Description: The scope of work includes rehabilitation of 13 pumps in Jeddah Substation - Phase 4. Bond: N/A Tender fee: 500.00 SAR Closes: Jun 8, 2010 Contact: www.swcc.gov.sa OVERHAUL OF THE TURBINE AND GENERATOR IN AL KHOBAR SUBSTATION Issuer: Saline Water Conversion Corporation Tender no: KH/5314 www.utilities-me.com
KEY CONTRACT
King Abdullah bin Abdul Aziz launches the JIC project in 2008
EPC FOR THE JUBAIL INDUSTRIAL CITY COOLING PLANT The Royal Commission for Jubail & Yanbu has issued a tender for the engineering, procurement and construction of the cooling plant for the Jubail Industrial City in Saudi Arabia. The scope of contract not only includes design, engineering, project management, procurement. It also includes supplying the equipment, materials, labours, and tools. Supervision, commissioning, documentation, technical and professional services, the supply of operating & maintenance manuals and training staff for the plant are also part of the deal. The tender number is 098-C58, and the tender fee is 14.000 SAR. Submissions have to be sent to the Royal Commission in Jubail (Tel. No.: 009663-3414127/4163 Supply Management Department Fax No.: 009663-3412201 P. O. Box 10001 Jubail Industrial City 31961). The deadline is July 14.
Title: Overhaul of the Turbine and Generator in Al Khobar Substation Description: The scope of work includes the overhaul of the turbine and generator in Al Khobar Substation. Bond: N/A Tender fee: 500.00 SAR Closes: Jun 9, 2010 Contact: www.swcc.gov.sa INSTALLATION OF FIRE FIGHTING SYSTEMS AT SEVERAL GRID STATIONS Issuer: Oman Electricity Transmission Company Tender no: 135/2010 Title: Installation of Fire Fighting Systems at Several Grid Stations Description: The scope of work includes installation of fire fighting systems at Al Hail, Al Falaj, Mahadah, MSQ
and Wadi Adai grid stations. Bond: N/A Tender fee: 200.00 OMR Closes: Jun 14, 2010 Contact: www.tenderboard.gov.om REPLACEMENT OF 153.5-MVA TRANSFORMERS AT JUBAIL-2 PLANTS Issuer: Saline Water Conversion Corporation Tender no: JB/R/E/317 Title: Replacement of 153.5-MVA Transformers at Jubail-2 Plants Description: The scope of work includes replacement of 153.5-MVA transformers at Jubail-2 Plants. Bond: N/A Tender fee: 500.00 SAR Closes: Jun 16, 2010
June 2010
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Utilities Middle East 53
TENDERS
Contact: www.swcc.gov.sa REPLACEMENT OF 169-MVA TRANSFORMER AT JUBAIL-2 PLANT Issuer: Saline Water Conversion Corporation Tender no: JB/R/E/301 Title: Replacement of 169-MVA Transformer at Jubail-2 Plant Description: The scope of work includes replacement of 169-MVA transformer for Unit No.61 & 62 at Jubail-2 Plant Bond: N/A Tender fee: 500.00 SAR Closes: Jun 19, 2010 Contact: www.swcc.gov.sa LIVE LINE WASHING OF OHTL INSULATORS AND OUTDOOR GANTRY INSULATORS Issuer: Central Tenders Committee Tender no: MEW/113/2009/2010 Title: Live Line Washing of OHTL Insulators and Outdoor Gantry Insulators Description: The scope of work includes live line washing of 400, 300, 132 and 33-kv Over-Head Transmission Line (OHTL) insulators and outdoor gantry insulators. Bond: Applicable Tender fee: 2500.00 KWD Closes: Jun 20, 2010 Contact: Central Tenders Committee - Kuwait Ministry of Electricity and Water UPGRADING JAHLOOT GRID STATION IN OMAN Issuer: Oman Electricity Transmission Company
Tender no: 146/2010 Title: Upgrading Jahloot Grid Station in Oman Description: The scope of work includes upgrading Jahloot Grid Station to 220-kV and 220-kV transmission line in Oman. Bond: N/A Tender fee: 1500.00 OMR Closes: Jul 5, 2010 Contact: www.tenderboard.gov.om ENGINEERING, PROCUREMENT & CONSTRUCTION OF 2X10 MVA IN WILLAYAT HAIMA Issuer: Rural Areas Eletricity Compant S.A.O.C Tender no: 141/2010 Title: Engineering, Procurement & Construction of 2x10 MVA in Willayat Haima Description: The scope of work includes engineering, procurement & construction of 2x10 MVA, 33/11-kV indoor substation at Willayat Haima in Al Wusta region. Bond: N/A Tender fee: 398.00 OMR Closes: Jul 5, 2010 Contact: www.tenderboard.gov.om ENGINEERING, PROCUREMENT & CONSTRUCTION OF 2X10 MVA IN WILLAYAT MASIRAH Issuer: Rural Areas Eletricity Compant S.A.O.C Tender no: 142/2010 Title: Engineering, Procurement & Construction of 2x10 MVA in Willayat Masirah Description: The scope of work includes engineering, procurement & construction of 2x10 MVA, 33/11-kV indoor substation at Willayat Masirah in Al Wusta. Bond: N/A
KEY CONTRACT
CONSTRUCTION OF AL GHAFAT RESERVOIRS PHASES 1 & 2 IN DUBAI The Dubai Electricity and Water Authority (DEWA) has issued a tender for the construction of the Phase 1&2 (120MIG) of the Al Ghafat Reservoirs in Dubai. The tender number is CNW/0129/2010. The fee is 2000 DHS, and the deadline for submissions of bids is June 2. Submissions should be sent to the Dubai Electricity and Water Authority, PO Box 564, Dubai, UAE.
54 Utilities Middle East
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June 2010
Tender fee: 400.00 OMR Closes: Jul 5, 2010 Contact: www.tenderboard.gov.om ADDING NEW P.O. UNIT AT MASIRAH WATER DESALINATION PLANT Issuer: Rural Areas Eletricity Compant S.A.O.C Tender no: 143/2010 Title: Adding New P.O. Unit at Masirah Water Desalination Plant Description: The scope of work includes engineering, procurement and construction (EPC) for upgrading water supply by adding new P.O unit (1x1000 m3 /day) at Masirah Water Desalination Plant. Bond: N/A Tender fee: 350.00 OMR Closes: Jul 5, 2010 Contact: www.tenderboard.gov.om AL-ZOUR DESALINATION PLANT - PHASE 2 Issuer: Central Tenders Committee Tender no: MEW/39/2008/2009 Title: Al-Zour Desalination Plant - Phase 2 Description: The scope of work includes design, construction of Al-Zour desalination plant, phase 2. Bond: Applicable Tender fee: 3000.00 KWD Closes: Jul 11, 2010 Contact: Central Tenders Committee - Ministry of Electricity and Water OPERATION & MAINTENANCE OF POWER & DESALINATION PLANTS IN MUSANDAM GOVERNORATE - GROUP A Issuer: Rural Areas Electricity Company S.A.O.C Tender no: 153/2010 Title: Operation & Maintenance of Power & Desalination Plants in Musandam Governorate - Group A Description: The scope of work includes operation & maintenance of power & desalination plants in Musandam Governorate - Group A. Bond: N/A Tender fee: 1500.00 OMR Closes: Jul 12, 2010 Contact: www.tenderboard.gov.om REFURBISHMENT OF SEVERAL PUMPING STATIONS - PHASE 8 Issuer: Public Works Authority Tender no: PWA/GTC/006/10-11 Title: Refurbishment of Several Pumping Stations Phase 8 Description: The scope of work includes refurbishment of several pumping stations - phase 8. Bond: Applicable Tender fee: 4000.00 QAR Closes: Jul 27, 2010 Contact: Fax: 009744950777, Contract Department, Qatar Public Works Authority www.utilities-me.com
SNAPSHOT: UAE
Power in diversity Rapidly increasing demand for electrici electricity throughout the UAE is forcing Abu Dhabi’s hand in developing more and more diverse sources of energy. With the hot and humid summer months approaching fast, energy consumption will be of foremost concern to utility providers in the United Arab Emirates. Peak power demand, a consequence of increased use of air conditioning, has in the past left some of the emirates struggling to cope. Sharjah is
growing by a record 11 percent in 2009 on a year on year basis. The Abu Dhabi Water and Electricity Company (ADWEC) projects that peak demand will have doubled to around 15,000 MW in 2015, easily surpassing the current generation capacity of 10,000 MW.
NEW CAPACITY ABU DHABI NUCLEAR POWER GENERATION BY 2020: 5,600MW source Adwec
a notable example, regularly experiencing power outages during the summer. Things are not going to get any easier for the Sharjah Electricty and Power Authority (SEWA) and utilities providers. Demand for power has been rising steadily over the years, as the UAE is taking giant strides towards industrialisation, with the petrochemical industry in particular a key growth factor. Energy demand levels might have grown more slowly in some of the emirates as a consequence of the recession. But Abu Dhabi, insulated from the global crisis by its enormous oil wealth, saw demand
UAE PEAK POWER CONSUMPTION 2008: 14,385MW 2009: 15,426MW. Source: Adwec
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June 2010
In light of this steep trajectory, it is not surprising that the Abu Dhabi is investing heavily in new capacity, and has three large scale power and water projects coming in planning. In addition, the emirate has awarded at US$20.4 bn contract for four nuclear reactors to a consortium led by Kepco in 2009. The first of reactor will be operational in 2017, and all four will be produc-
ABU DHABI PEAK POWER DEMAND PROJECTIONS 2010: 7,602 MW 2015: 15,069 MW source Adwec
ing electricity by 2020. Abu Dhabi is also investing heavily into developing renewable energy sources, and has committed to generating seven percent of its power using renewable sources by 2020. Hydrogen Power Abu Dhabi, a joint venture between Masdar and BP, hopes to tender the main EPC contract for a US$2.2bn plant. With a capacity of 400MW, the plant will be the largest hydrogen plant worldwide.
Apart from building capacity to satisfy is own ever increasing needs, Abu Dhabi’s also provides power to its northern neighbours. ADWEC supplies SEWA and the Federal Electricity and Water Company (FEWA), which delivers power to the northern Emirates. These imports will increase over time, reaching 2,500 MW by 2015. The power delivered to FEWA by ADWEC comes primarily from the Fujairah I power and desalination plant. Fujairah II, a 2,000 MW plant, is currently commissioning. Concerns over the supply of gas have been allayed with the completion of the Taweelah-Fujairah pipeline.
NORTHERN WOES Sharjah, one of the recipients of energy from Abu Dhabi, has a capacity of around 2,200 MW, sufficient to meet even peak demand. But SEWA is hampered by a lack of gas feedstock, which in 2009 resulted in load shedding during the peak demand period. Plans for the Hamriya independent power plant (IPP) had to be shelved as Sharjah failed to secure a deal for
ABU DHABI PEAK POWER EXPORTS TO OTHER UAE MEMBERS 2008: 1040 MW 2009: 1424 MW source Adwec
gas supplies from Iran, so that the emirate will likely remain dependent on Abu Dhabi’s helping hand. Since ADWEC started to provide electricity to FEWA in 2008, the later has stopped supplying industrial users and large scale residential complexes in the northern emirates. This has left the emirates exposed, as they have not had time to develop their own generation capacity. Ras-al-Khaima and Ajman both had to shelve plans to built IWPPs due to the financial crisis, leading to power shortages in those emirates.
ABU DHABI PEAK POWER CONSUMPTION 2008: 5,616MW 2009: 6,255MW
ABU DHABI’S NEW IWPPS Shuweihat 2 - Financing for the 1,500MW IWPP was completed in October 2009. Shuweihat 3 - A 1,600MW independent power project (IPP), planned for the same site as Shuweihat 2. Taweelah C – Currently in the study phase, the IWPP is planned to augment the Taweelah A1, Taweelah A2, and Taweelah B plants. It is expected to have a nameplate capacity of 2,400-2,600MW.
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