Middle East
ESSENTIAL INSIGHTS HTS FOR MIDDLE EAST WATER, GAS AND ELECTRICITY PROFE PROFESSIONALS FESS FE SSIO SSIO IONA N LS
July 2010
• Vol 4. Issue 7
WIRELESS WONDERLA WONDERLAND AND Wireless technology hnology is coming to thee Middle East
GEARING UP
Dr Sultan Ahmed Al Jaber, Masdar CEO
Switchgear iss adapting to a new grid d
MASDAR MOVES FORWARD Renewed impetus for Abu Dhabi’s renewables drive
COOL & CALCULATING: MAKING DISTRICT COOLING TARIFFS WORK Palm District Cooling wants to move to a new tariff structure
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CONTENTS
July 2010 Issue 7 Switchgear is adapting to a new set of requirements.
2 COMMENT Governments need to scale back subsidies to avoid power outages.
4 REGIONAL UPDATE A round-up of some of the biggest headlines in the region.
10 WEBPAGE A look at the web content of utilities-me.com.
11 NEWS ANALYSIS I The French are not giving up on UAE nuclear business.
28
Wireless technology is gaining traction in the Middle East
Shams I is the world’s largest solar plant of its kind.
23 16
13 NEWS ANALYSIS II District cooling needs to rethink its tariff structure.
16 MASDAR REVITALISED Shams I shows that Abu Dhabi has not given up on green.
23 WIRELESS WORLD Wireless technology is about to come to a utility near you.
28 SWITCHING GEARS Switchgear is adapting to a changing grid.
33 INTERCONNECTION ABB talk about the crucial Phase I of the GCC Interconnection Grid. Qatar is investing heavily in power and water.
Jose de la Fuente, Telvent, talks SCADA
47
36 PEOPLE METER Jose de la Fuente from Telvent talks about SCADA.
39 PROJECTS A listing of the latest projects in the region
42 TENDERS UME lists the business opportunities that are to be had.
36 www.utilities-me.com
47 QATAR SNAPSHOT Whats going on in the Qatar Power and Water sector?
July 2010
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Utilities Middle East 1
COMMENT Middle East
The heat is on
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Subsidies must go to if a summer of discontent is to be avoided GETTY IMAGES
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The dark side of the sun? The Gulf region is already facing record temperatures.
R
eported power outages in Saudi Arabia, Sharjah, and talk of reducing working hours to conserve energy in Kuwait: the summer is well and truly on its way. Peak loads are bearing down once again on a power infrastructure overburdened by the rapid increase in demand. Ministries and utility providers are not blind to the fact that scorching temperatures are skewing the supply-demand balance, and governments have been busy investing their petrodollars in upgrading their countries’ power generation capacity. A quick perusal of the news pages (or a click through the utilities-me.com news section) reveal a picture of consistent and unrelenting investment in plants, substations and grids all over the GCC. This month’s features section concerns itself with Masdar’s record solar power plant, the GCC interconnection grid and switchgear, amongst other things. All well and good, yet still the summer heat looms large over the region. And while the efforts of the likes of Adwea and the SEC are commendable, it surely will not have escaped their attention that they are catering for a population that pays little heed to saving energy or conserving water. And why should they, as both water and electricity are highly subsidised, and few efforts are made to educate them on the merits of restraint?
Subsidies are based on delicate socio-economic considerations. In a big country such as Saudi Arabia, they serve to support great swathes of the population that have otherwise not seen the benefits of the kingdoms vast oil wealth. In smaller entities such as Kuwait, the government can afford to be generous and bestow on its citizens a cradle to grave benefits system. Considering the difficulties utilities have in delivering the goods, power and water make for poor political instruments. It is time governments realised this, and pushed through meaningful reform. Saudi Arabia has taken a step in the right direction, with higher electricity tariffs in effect since July 1. But these increases exclude households, which account for 53 percent of power consumption in the desert kingdom. It is debatable whether governments really have a choice anyway. Power plants take years to build. Power outages are here, now. Quick fix solutions are not usually known for their lasting impact. In this case, slapping a price tag on unreasonable consumption might just keep the air conditioning units working over the summer, and make real headway in leading the GCC down the road of sustainability.
Florian Neuhof, Editor Email: florian.neuhof@itp.com
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REGIONAL UPDATE
KSA might enrich uranium Saudi Arabia would aim for comprehensive nuclear programme, says consultant Saudi Arabia could mine and enrich uranium to fuel power plants if it embarks on a civilian nuclear energy programme, a consultant preparing a draft nuclear strategy for the kingdom told Reuters. The KSA would want to play a role in as many of the stages of generating nuclear power as possible eventually, said David Cox, president for energy at the UK branch of Finnish management consultancy Poyry. “Enrichment could happen there and the same with mining uranium...,” said Cox. “But outsourcing will happen initially.” Earlier in the month, Saudi’s King Abdullah City for Atomic and Renewable Energy appointed the consultants to help prepare a draft of the national vision and high level strategy in the area of nuclear and renewable energy. Poyry will evaluate the economic and technical feasibility of its involvement in all stages of the nuclear power generation cycle, Cox said, adding that the study would be ready within “a couple of months.”
The Kingdom could be building uranium enrichment plants, such as this one in Brazil, in future.
Saudi Arabia’s neighbour the United Arab Emirates became the first country in the Gulf Arab region to embark upon a nuclear
power generation programme last year. Any programme the kingdom embarks upon would take as much as 20 years to complete, according
to Poyry, and would be comparable in size to the UAE’s US$40 billion programme. In spite of its abundant oil reserves, the kingdom is struggling to keep up with the rapidly increasing energy demand. Saudi Arabia saw power demand grow by more than eight percent last year. Total demand is expected to grow to more than 60,000MW by 2020 from a current capacity of around 40,000MW. Without reducing the rate of energy consumption growth, the Kingdom could see oil available for export drop some three million barrels per day (bpd) to less than seven million bpd in 2028, Khalid al Falih, the chief executive of state oil firm Saudi Aramco, said earlier this year. The KSA and the United States signed a nuclear cooperation deal in 2008. France said in 2009 it was close to finalising a civilian nuclear agreement. The kingdom has also talked to Russia about nuclear cooperation. Saudi Arabia has potential for a large number of uranium deposits, recent research suggests.
SEC signs sub- Power cuts hits KSA amid rising temperatures station contract Power cuts were experienced were provoked by record-high that they are geared to tackle the Saudi firm Al Osais Inabensa Co. has won a multimillion dollar contract to build a substation in Riyadh. The Saudi Electricity Company (SEC) has signed a contract with the local company to construct the US$77 million electric substation, reported the Asharq Al Awsat daily. The project, which is expected to be completed in 27 months, will improve transmission and distribution capacities in the south east of Riyadh and support electrical loads in the second industrial city, said Ali Al Barak, SEC chief executive.
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in various regions across Saudi Arabia as demand for electricity increased in response to a severe rise in temperatures. “The power cuts have been mainly due to climatic conditions and the unusual rise in temperatures,” Abdul Salam Al-Yamani, vice chairman of the Saudi Electricity Company (SEC) told the Saudi Gazette newpaper. Repeated power cuts over the last few days have increased fears of a repetition of last summer, when continual power failures
temperatures. As temperatures hit 50 degrees Celsius, Buraidah and other towns were left without power for over an hour , the paper reported. A regional SEC official said that power demand had reached “historic highs” last week. Last summer, a SEC official in Qassim noted that a significant rise in demand from the previous year was due to the 13 percent “habitual” annual growth in the region. In Makkah, SEC supervisor Wa’il Hassanain told the paper
expected rise in temperatures, “particularly in Ramadan”. “Demand is projected to increase by 40 percent on last year around the beginning of August,” the supervisor said. “We have laid out a plan to identify early the lines that may be subject to extra pressure. The main cause of failures is demand overload,” he continued. Households account for 53 percent of power consumption in the desert kingdom and much of it is used for air-conditioning. www.arabianbusiness.com
REGIONAL UPDATE
Work less, sweat less Kuwaiti MPs call for shorter working hours after power scare Kuwaiti members of parliament approved a recommendation to shorten summer working hours to save electricity, as the emirate grappled with record heat and a major power crisis. The non-binding recommendation followed an emergency parliamentary session to discuss the crisis, and called for working hours of government employees to be changed from the present 7:30 until 14:30 to 7:00 until noon, the AFP newswire reports. The recommendation comes as soaring temperatures almost led to power cuts in the oil-rich OPEC member state. Temperatures rose to 52 degrees Celsius, the highest in more than 30 years. Parliament also called in a senior government minister to provide explanations. Bader AlShreiaan, minister of electricity and water, told MPs the government would be tackling the problem by putting in short-term measures to reduce power load during the summer, and would be looking to improve long-term power production, reports KUNA News. Al-Shreiann said the ministry had installed equipment to raise the efficiency of the power stations that bore the brunt of the increases in demand. The maintenance of power lines was also being increased in an effort to reduce the effect of weather changes and humidity on conductivity, the minister added. Government officials said the power crisis was due to mistakes accumulated since 1988, when Kuwait built its last power plant despite an eight percent annual rise in electricity demand. The emirate is now working to put things right. In September 2009, Kuwait signed a US$2.7 bilwww.arabianbusiness.com
HIGHLIGHTS ABB WINS US$90 MILLION SEC CONTRACT The Saudi Electricity Company (SEC) has awarded ABB a contract to set up an substation in Riyadh City, Saudi Arabia, an ABB spokesperson has confirmed. The deal is worth around US$90 million, reported the Jeddah-based Okaz daily reports on Saturday, citing Ali Al Barrak, SEC chief executive. The substation will be set up within 27 months after the contract’s signing in the King Abdullah Financial District in the north of Riyadh.
EGYPT’S FIRST SOLAR PLANT TO BE OPERATIONAL BEFORE END OF 2010 Egypt’s first solar plant will become operational by the end of the year, electricity and energy minister Hassan Younes said in a report published on Monday on his ministry’s website. The plant will be one of only four solar plants in the world with a 140MW capacity, says the report. Egypt wants to produce 20 percent of its energy needs from renewable sources by the end of 2020.
IRAQ BUYS SOLAR DESALINATION UNITS
Heading for the door? Kuwait government workers are keen to help save electricity by going home early.
lion deal with US and Korean firms to build a 2,000MW power plant that is due to come online next summer and will be fully operational by mid-2012. Prime Minister Sheikh Nasser Mohammed al-Ahmad al-Sabah said at the time that Kuwait aims to double power capacity to more than 20,000MW within the next five years.
Last month, Kuwait’s parliament passed a law to set up shareholding companies to build new power and water desalination plants in the first privatisation of the sector. The wealthy Gulf emirate, which operates a cradle-to-grave welfare policy for Kuwaiti nationals, sells power at highly subsidised rates to its 1.1 million citizens and 2.35 million foreign residents.
Iraqi Minister of Municipalities and Public Works Riad Ghareeb said on Saturday that US$41 million had been allocated to import 350 solar-powered water desalination units in an effort to provide rural areas with drinking water, reports the Aswat Aliraq news agency. He added that it will take two years for all the desalination units to reach a total of 350 villages. The units will be supplied by a US company.
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REGIONAL UPDATE
SEC hikes electricity tariffs 9.6 percent increase for non-household users to cope with rising demand The Saudi Electricity Company (SEC) will charge government, industrial and commercial users higher rates for electricity from the beginning of July. The price hike comes in response to a sustained increase in demand, requiring infrastructure investments of close to US$80bn, reports Reuters. The move will raise by 9.6 percent the average price of electricity sold to non-household users. But the retail price would still be 3.5 percent below actual production costs, Abdullah al-Shehry, governor of the Electricity and Co-generation Regulatory Authority, told reporters. “Based on current global fuel prices, the production cost of electricity is 0.372 riyals per killowatt per hour (kwh), while these new increases will raise the average tariff for all users to 0.137 riyals up from 0.125 riyals previously,” Shehri said. According to Water and Electricity Minister Abdullah al-Husayen, the annual growth in power demand means the government needs to add 3,000MW to the power generation capacity each year, which currently stands at 40,900MW. “This huge by all standards. Over the 2009-2018 period, the growth in power demand will require 300 billion riyals in investments,” Husayen was quoted as saying. The SEC is forgoing a large amount of revenue by not includ-
The SEC has incraesed power tariffs, but has shied away from charging households more.
ing households in the rate hike. Private consumption accounts for 53 percent of energy use in the Kingdom. Much of this power is used up by air-conditioning units, which will go into overdrive during the hot summer months. Analysts believe that the SEC is missing a tick in forgoing an
increase in prices for households, and see the introduction of new tariffs as an alternative. “The country has been focusing on constantly increasing its generation capacity, while the consumption too kept increasing, reflecting an underlying trend of wasteful consumption in the countr y where power is
still highly subsidized compared to a large part of the world,” says Abhay Bhargava, industry manager at Frost&Sullivan. “It would be advisable for them to consider including households into a variable slab tariff at the least, if a unanimous hike has been discarded after consideration”
SEC signs off US$2.1 billion power project Saudi Electricity Company signed a contract with GDF Suez and two other firms to build a 1,730MW power plant, the state-owned power provider has revealed. The power utility holds a 50 percent stake in the Darmaa Power www.arabianbusiness.com
Co, which will operate Riyadh 11 independent power plant, while GDF Suez, Sojitz and local Jomaih Holding Group together hold the remaining half, the SEC said a the statment to the Saudi Stock Exchange, the Tawadul.
The project will cost US$2.1 billion and is set to be operational in two years, the SEC revealed. The built operate, own and transfer contract was signed on June 15. Riyadh-based Saudi Electricity Company has also signed a con-
tract with the consortium committing it to the purchase of the IPP’s electricity for a period of 20 years. The partnership is among six planned IPP power plant projects in the kingdom aimed at adding 11,000 megawatts of capacity. July 2010
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Utilities Middle East 7
REGIONAL UPDATE
Hitachi seeking nuclear business in Mideast Japanese technology giant Hitachi is looking to build 13 nuclear power plants in the Middle East, India and Southeast Asia, the company has said. Masayuki Fukutomi, a spokesperson from the Hitachi Middle East branch said that the Japanese firm, which was the third largest technological company by revenue in 2009, is planning to build 150 nuclear power plants across the world by 2030. The head office in Tokyo confirmed in a statement that 13 of these were likely to be located in India, Southeast Asia and Middle East, but did not give any further breakdown by countr y. Earlier this week, it was reported by the Nikkei news website in Tokyo that Hitachi’s nuclear power operations made 210 billion yen ($2.3bn) in 2009. Hitachi’s executive officer Koji Tanaka also confirmed that the firm is planning to partner with US firm General Electric to launch joint operations in Asia and the Middle East. A consortium comprising General Electric and Hitachi was one of the bids that failed to win the UAE’s recent $40bn nuclear power contract. The deal, the largest energy contract in the Middle East, was eventually won by South Korean state-owned utility firm, Korea Electric Power (KEPCO).
13 Nuclear power plants in the Middle East, India and Southeast Asia 8 Utilities Middle East
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Contracts for two IPPs in Oman awarded Plants to be operational in second quarter of 2013 The Oman Power and Water Procurement Company (OPWP) has awarded the construction and operation contracts for the country’s next two independent power projects (IPPs), Barka 3 and Sohar 2. The contracts have been awarded to a Consortium consisting of the Kahrabel GDF SUEZ Group, the Bahwan Engineering Group, the Public Authority for Social Insurance, the Shikoku Electric Company and the Sojitz Corporation. EPC contractors for the project are
Germany’s Siemens AG and South Korea’s GS Engineering, Kahrabel GDF SUEZ has disclosed in a press release. The combined investment for both projects will total at around 1,700 MUSD. Barka 3 and Sohar 2 are greenfield natural gas-fired power projects with capacity of 744 MW each. The electricity produced by each project will be sold under a 15-year Power Purchase Agreement to the OPWP. Barka 3 and Sohar 2 will be adjacent to Kahrabel’s exist-
ing Barka 2 and Sohar IWPPs, both northwest of the capital Muscat. The plants are to be fully operational by the second quarter of 2013, according to the OPWP website. Kahrabel GDF SUEZ Group is already present in the Omani power sector through involvement in the Barka 2 and Sohar power and desalination plants and the Al Rusail gasfired power plant. Together these plants have an installed capacity of 1,921MW and total water production of 268,000 m3/day.
Oman is adding to its power generating capacity by awarding the IPP contracts.
ABB wins US$8.3m GCC Grid service contract Agreement to cover substations in four countries over a two-year period. ABB has signed a service contract with the Gulf Cooperation Council Interconnection Authority (GCCIA) to provide maintenance for equipment and systems at the Gulf Interconnection Grid’s newly constructed substations. The two-year contract between
ABB and the GCCIA, which is worth $8.3 million, will aim to optimize the grid’s reliability through regular maintenance and provide technical and emergency assistance when required. “We will provide round-the-clock support to the Interconnection Grid, including frequent substation visits for preventive maintenance and
inspection as well as coordination with all suppliers for substation equipment,” said, Jalal Bageri, ABB’s Saudi Arabia country services manager. Substations covered under the agreement include Al Fadhili, Ghunan, Salwa and Ras Al Qurayha in Saudi Arabia, Al Jasra in Bahrain, Al Zour in Kuwait and Doha South in Qatar. www.arabianbusiness.com
REGIONAL UPDATE
EDITORS PICK
ONLINE ANALYSIS
Talking business: Wolfgang Braun, Siemens Wolfgang Braun, general manager at Siemens Energy T&D, talks to UME about business in the region and eleborates on developments in the switchgear sector.
Most popular headlines 1. KSA may turn to uranium enrichment 2. Power cuts hit Saudi Arabia 3. Egypt’s first solar plant to be online in 2010 4. Mott MacDonald awarded ADDC contract 5. ABB wins US$90 million SEC contract 6. ABB wins US$108m substation contract 7. Iraq buys solar desalination units 8. The upside of a downturn 9. Work less, sweat less 10. Nuclear ambitions ONLINE ONLY
SPOT POLL
Membrane technology on the rise, report finds. Already the dominant method for desalination, memebrane reverse osmosis technology is expanding into new markets, say Lux Research.
Alstom takes over Areva’s Middle Eastern transmission business Alstom and Schneider Electric take over Areva’s T&D business, in a move that sees most of the Middle East operations fall to Alstom.
Hitachi wants nuclear business in the Middle East The Japanese technology giant is looking to built 13 nuclear power plants in the Middle East, India, and South East Asia.
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July 2010
Is more investment needed in a central GCC power grid? Yes, we must link up to share power supply. It’s up to each country to sort their energy issues out.
51% 33% 8% 8%
Hmm, not sure, some countries could take advantage of this and suck up too much power. It’s too late - we’re all heading for blackout!
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NEWS ANALYSIS
French return to pick up pieces The French nuclear industry, rocked by loosing out on the GCC’s first nuclear project, is not about to give up lightly. Flamanville-3, the first EPR rector under construction, is a showpiece of French nuclear prowess.
GETTY IMAGES
Last month, a trade mission organised by Ubifrance, the agency promoting the interests of French small and medium enterprise (SME) abroad, and the Emirates Nuclear Energy Corporation (ENEC) was held in Abu Dhabi. The aim of the two-day event was to bring the French companies into contract with the key decision makers in nuclear field in the emirates, and with the consortium building the GCC’s first nuclear power plants in the UAE. The consortium around South
THIRD GENERATION Construction of the first thirdgeneration European Pressurized Reactor (EPR) known as Flamanville-3, began April 2007 in Flamanville, Normandy. Targeted completion date is for the 1,700MW plant is 2012.
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Korea’s Kepco had shocked the French nuclear energy industry by winning the contract to built four nuclear reactors in the UAE for a total of US$20 billion. The French had been confident that their bid, based on the new European Pressurised Reactor (ERP), would come up top. But the consortium based around Areva, EDF and GDF Suez paid little heed to the the demands and requirements of the UAE decision-makers, who effectively looked to outsource the whole project, according to Holger Rogner, section had at the International Atomic Energy Agency (IAEA). Kepco, whose winning bid was both cheaper and more comprehensive, are now preparing for the reactors to come online by 2020. A good time for the French SME, and some of the heavyweights, to come back into the picture, believes Romain Keraval, man-
450 billion KWH Annual production of nuclear power in France
ager for infrastructure, transport and industry at Ubifrance. “The project is just starting, right now the members of the consortium are listing their potential suppliers. Its definitely the right time to get them connected with the service providers, and as you know, France is a very skilled actor in this field.” The scale of the project means that the consortium, which apart from Kepco also includes Doosan Heavy Industries and US company Westinghouse, is unable to source exclusively from South Korea, notes Keraval. The trade mission is a shrewd
move, as few counties are as well placed to gain ancillary business from the project. France produces 78 percent of its electricity from 58 nuclear reactors, and is busy exporting nuclear generated power to its neighbours. Such enthusiasm for nuclear power has spawned not just giants of its trade such as Areva or EDF, but a plethora of small and medium sized companies that service the industry. Keraval estimates that there are around one hundred companies that can be regarded as tier one SME’s with plenty of smaller companies able to deliver smaller services or components. July 2010
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Utilities Middle East 11
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NEWS ANALYSIS
Tariff troubles Palm District Cooling are planning to adopt a new model for financing their district cooling plants, hoping to replace an incremental reimbursement with an upfront charge. But will this model be accepted, and is it the best way to encourage end users to reduce their energy consumption?
D
istrict cooling companies have not been left unscathed by the recession, as banks were unwilling to dispense credit, and the district cooling business was affected by the slowdown in construction activity. This has left the industry searching for new ways of gathering the necessary funds for the construction of their plants. Palm District Cooling have come up with what they see as a viable alternative to the existing model,
Shafiq Khoori, managing director at Palm District Cooling
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says Shafiq Khoori, managing director at the company. Up to now, district cooling companies have covered the costs of constructing plants and piping through an annual capacity charge, by which the capital investment is recovered over the life time of a plant by charging end users a set amount every year. Palm, who have supplied district cooling to the Palm Jumeirah, Jumeirah Lake Towers and Discovery Gardens developments in Dubai, are now looking to recoup construction costs with an upfront charge paid by the develope developer of residential complexes. “We’ve developed a new tariff model to move away from the annual capacity c charge,” says Khoori. “This model mirrors how an investment iin a conventional system looks like. lik For example: if you are building a typical building here in Dubai, yyou buy your own chillers, so there iis a cost outlay. We said, instead of people paying this money towards toward their own chillers, we collec collect these moneys, and we build a central cooling plant network, and and a netwo
“We have to find out the concerns of all stakeholders, because it is a new model, and we have to address all the doubts and questions.” Shafiq Khoori, Palm District Cooling
serve them with district cooling. There is no ongoing capital recovery. Its upfront, and it costs a similar amount to what it costs to have a chiller.” The company is hoping to implement the new model at one of the projects they are currently involved in. “We are trying to implement it here at Jumeirah Village South for the first time,” reveals Khoori. Residents would only be charged for the consumption on a meter basis under the new model, says Khoori. He admits that his company will have work on its hands to convince stakeholders of the model, starting with the developers. "We have to find out the concerns of all stakeholders, because its a new model, and we have to address all the doubts and questions. So we are trying to show developers that the cost is very nominal and will not make their properties unmarketable.” Convincing the sceptics might be
an uphill task. “This proposal essentially solves a problem by replacing it with a bigger one,” says Hans Altmann, regional manager at Techem, who produce radio metering devices and advise on power consumption issues. He believes that developers faced with an upfront capital investment on district cooling would simply pass that cost down to prospective buyers of their properties. The additional cost would not be negligible, as Khoori argues, and would place developers at a distinct disadvantage when trying to sell their residential units. “A district cooling provider following such a model would improve his cash flow, but makes the properties in questions less attractive,” Altmann says. Furthermore, the new proposal could lead to property owners eschewing the district cooling option, avoiding huge upfront costs by turning to conventional split unit July 10
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Utilities Middle East 13
NEWS ANALYSIS
GETTY IMAGES
Palm District Cooling keep the Palm Jumeirah cool.
“District cooling could become the biggest consumer of energy in the Emirates within a short period of time.” Hans Altmann, Techem
air conditioning, which comes at a much lower capital expenditure. “End users would in that case not be too concerned whether that is an environmentally friendly option or not,” adds Altmann.
INCENTIVISING SAVINGS Like it or not, the cost of building a district cooling or a central cooling plant will have to be borne by someone. The challenge is to come up with a pricing structure that incentivises reduced consumption while also covering the costs. Fixed capacity charges currently represent a big part of the end user’s cooling bill, says Altmann. Only a
small proportion of what a consumer ends up paying actually corresponds to the consumption of individual apartments. Consequently, efforts to lower consumption will only be rewarded by a negligible reduction of the overall bill. “If I want to save on my cooling bills, I can only do so on ten or 20
Hans Altmann, regional manager, Middle East and North Africa, at Techem
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percent of the bill. And I personally wouldn’t want to sweat to save 20 dirhams or so.” Yet reducing energy consumption has become imperative in the GCC, due to the massively expanding demand for power and a nascent environmental awareness. Fortunately, models that encourage energy savings already exist in Europe’s district heating sector, and can be adapted to the region’sdistrict cooling industry. European countries, where district heating has
been in use for decades, have long since adopted a pricing mechanism in which households not only pay for water and energy costs in proportion to their usage, but also pay their part of the fixed costs in relation to their usage. Under such a system, consumers who are keen to reduce their utility bills will end up with real savings, ings says Altmann. “Unlike here, in countries such “U as Germany and France it has been G enshrined in law that fixed costs ensh have to be part of the cost equation for households,” he says. “You have h to make saving attractive to people.” m According to Altmann, there are Acc currently discussions about such a curr law in Dubai, but it is hard to predict when whe it will come into force. It is debateable whether enticing end users is high on the list of district cooling providers. It is equally debateable whether decisions such deb as these should be down to them. Altmann is adamant that the indusA try needs to be regulated proptr eerly, and he makes a strong case: “District cooling could become the biggest consumer of energy in the Emirates within a short period of time.” www.utilities-me.com
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01.06.2010 10:34:10 Uhr
MASDAR
Masdar moves forward As doubts started to surface about Abu Dhabi’s commitment to its renewables drive, a record-breaking solar project and the region’s first feed-in tariff policy are a bold reaffirmation of the Emirate’s ambitions.
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MASDAR
Shams I has renewed optimism about Masdar City, Abu Dhabi’s flagship green project.
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Utilities Middle East 17
MASDAR
O
n June 9, Masdar, the state-owned organisation promoting renewables and cleantech, announced that it had awarded the contract for the construction and running of the world’s largest concentrated solar power plant. Coming in the wake of job cuts at Masdar City and speculation about the future of the carbon neutral city being constructed in Abu Dhabi, this was good news indeed. The 100MW Shams I independent power plant (IPP) comes at a cost US$600 million, and will be operational by the third quarter of 2012. The plant will be majorityowned by Masdar, who will hold a 60 percent stake in the project, with Abengoa and Total holding a 20 percent stake each. The plant will consist of 768 parabolic trough collectors, to be supplied by Abengoa, stretching over an area of 2.5
square kilometres. It will displace approximately 175,000 tonnes of CO2 per year, equivalent to planting 1.5 million trees or removing 15,000 cars from Abu Dhabi’s roads, Masdar proudly points out. Shams I will be located 120 kilometres from Abu Dhabi in Madinat Zayed, an area set aside for future solar projects. Construction is to begin within three months of the announcement.
CONFIDENCE BOOSTER Masdar is the cornerstone of Abu Dhabi’s renewable energy drive. Delays to both Masdar City and Shams I due to the global financial downturn and illiquid credit markets, as well as reports about the organisation slashing about twenty percent of Masdar City’s workforce, led some to believe that the renewables flagship was running out of steam. At the Shams I
An Abengoa parabolic solar trough of the kind that will be used at Shams I.
“Shams I [will not only be] opening the door for renewable energy projects in the UAE, but also for technology transfer.” Dr. Sultan Al Jaber, Masdar CEO
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press conference, Dr. Sultan Al Jaber, Masdar’s CEO, was keen to dispel such doubts. “Shams I is one of the many projects we are hoping to develop in the coming years to meet this target,” said Al Jaber, who then went on to outline the benefits of this benchmark energy project. “Shams I will allow Masdar to transfer to Abu Dhabi the knowhow and expertise we have gained from our involvement in developing world-class renewable energy projects abroad, thus not
only opening the door for renewable energy projects in the UAE but also for technology transfer. [...] Shams I will help us lower the costs of future projects.”
GREEN TARIFF One of the most significant aspects of Shams I is the introduction of a ‘green tariff’, by which the government compensates ADWEC, the Abu Dhabi Water and Electricity Company, for the shortfall in revenue stemming from subsidised electricity rates and high produc-
SANTIAGO SEAGE, CEO AND CHAIRMAN AT ABENGOA, COMMENTS ON THE PROJECT.
Are you satisfied you have finally been awarded the contract for Shams I? Like in any international bidding process, these things take time and are difficult, and obviously we took our time, but we are very happy, and we feel very good about it. Masdar made their decision on who they felt is best qualified and who offered the most competitive price. Are you looking at other projects in the region? At this point in time our key project in the region is Shams I and I think its large enough
and important enough and a breakthrough in the region. We hope other countries will follow, that these countries will see that solar can be a very important resource for the region. But from our point of view our focus is going to be on Shams I. Is Shams I a benchmark project? Its going to be a milestone in the region, because of the size, because of the fact that Masdar and the Abu Dhabi government are supporting it, and we hope it will be an example for others.
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MASDAR
“It doesn’t make sense to put in 100MW of renewable power, and then, because consumption is increasing at a breakneck pace, go ahead and put in another 200300 MW of conventional power”
MASDAR CITY – THE VISION REMAINS THE SAME
Abhay Bhargava, industry manager, Frost & Sullivan
tion cost. This is the first government initiative to promote the use of renewable energy through subsidies, and is similar to the feed-in tariffs applied in countries around the world. Feed-in tariffs usually imply that electricity companies pay providers of renewable energy a higher rate for their energy, the cost of which is then passed down to the end user. In the Middle East, where electricity is generally sold below production costs, such a model was not to be expected. “The government has to subsidise,” says Abhay Bhargava, industry manager at Frost and Sullivan, a business consultancy. “The electricity companies in the region have to get gas at a subsidised rate if they want to sell electricity at the prices that they do. Its just a continuation of the power generation policies in the region of subsidising the power generator.” The adoption of the tariffs is important to attract private inves-
tors to future renewable energy projects in Abu Dhabi, says Bhargava , who believes that the emirate is setting an example that its neighbours are likely to follow. “Abu Dhabi is giving an indicator that it can be done by other countries in the region.” Key decision makers in Abu Dhabi expect the production costs of renewable energy to come down, perhaps even to the extent that a green tariff will become redundant. “The cost per unit will come down – and might reach a point where we won’t need a green pricing mechanism,” said Nick Carter, director general of the Abu Dhabi Regulation & Supervision Bureau, at the press conference. Carter refused to reveal the financial details of the tariff, but said the model will be applied to other renewable projects.
ON TARGET? Demand for energy in the Emirate is estimated to stand at a whop-
TOTAL INVOLVEMENT The involvement of Total in renewable energy projects in the region is more proof of the company’s changed strategy. “Total has recently increased its involvement in solar technologies, making it one of its favoured future energy bets, as well as working with Masdar as a way of enhancing its relations with Abu Dhabi, where it has significant oil
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and gas interests,” writes Sam Ciszuk, analyst at IHS Global Insight, in a research note. “Its good to see Total in the picture, participating in a renewables project in the region, especially if you look at BP who have been withdrawing from renewable energy over the last year of so, both in region and globally,” adds Frost & Sullivan’s Abhay Bhargava.
Masdar City is still under construction, the first buildings are scheduled to open in Q3 2010.
Masdar City, carbon neutral project located about 17 kilometres from downtown Abu Dhabi, hopes to become a free zone brimming with companies, researchers, and academics from across the globe, an international hub for companies and organisations focused on renewable energy and clean technologies. The city will host the Masdar Institute of Science and Technology, which is collaborating with the Massachusetts Institute of Technology (MIT) to develop advanced energy solutions, sustainable technologies and policy. Construction began in 2008, and the first buildings are scheduled to open in the third quarter of 2010. Faced with delays resulting from the economic and financial turmoil of the recession, the project has been placed under review. Speaking at the launch of the Shams I projects, Masdar CEO Dr. Sultan Al Jaber fended off suggestions that a revised master plan will abandon the original size and ambitions of the project. “Masdar City is an important component of Masdar. While the review is very much re-
quired, the vision remains the same, and we won’t scale back or scale down. But we are much smarter than when we started. There have been lessons learned and we want to capitalise on them.” Asked specifically whether the development will remain carbon neutral, he repeated that “the vision remains the same.” Talking to Bloomberg at a conference at the end of June, Richard Reynolds, Masdar’s head of supply-chain management, said that the revised master plan would be announced in the following two to three weeks. One of the issues being considered in the review is “how to make Masdar economically viable,” Reynolds told the newswire. The commencement of the Shams I is likely to give the project some added momentum. “Masdar City has to be looked at as the launch vehicle for clean tech companies wanting to establish a presence in the region,” says Abhay Bhargava, industry manager at Frost & Sullivan. “I think Masdar City should get a boost by Masdar itself being active in such a large renewables project in the region.”
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MASDAR
ping 20GW by 2020, says Hilal Al Zaabi, project manager for Shams I. Carter points out that power demand increased by 11 percent in 2009. Including exports to the rest of the UAE, demand for power originating from Abu Dhabi’s power plants increased by 16 percent. Such figures drive home the need for further development of renewable sources of energy, should the seven percent target be met. Some
“The cost per unit will come down - and might reach a stage where we won’t need a green pricing mechanism. ” Nick Carter, director general, Abu Dhabi Regulation & Supervision Bureau
The 100MW Shams I IPP will be the largest concentrated solar power plant in the world.
observers, however, point out that adjustments on the generation side will not be sufficient. Efforts will need to be made curb consumption, too. “It doesn’t make sense to put in 100MW of renewable power,
and then, because consumption is increasing at a breakneck pace, go ahead and put in another 200300MW of conventional power. That just skews the equation again,” says Bhargava.
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Utilities Middle East 21
WIRELESS TECHNOLOGY
Not down to the wire Wireless technology is breaking into the region’s utilities sector. The Middle East is a relative latecomer to wireless technology, which was first put to use in the US. Europe and Asia quickly followed. And now, wireless technology is starting to make inroads into the region’s utilities sector. “The response in Middle East has been fantastic,” says Alan Baird, director of Plantweb & Wireless Marketing at Emerson. Emerson launched its wireless business in the Middle East in 2008. Despite the good reception, Baird admits that he also encountered a certain caution amongst end users. “The Middle East and Africa is quite unique whereby they want to be ver y careful
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about new technologies,” he says. “That’s why we tend to do a lot of showing people how it actually works, how easy it is. We find that once people start using wireless, they just keep on adding and adding.” Baird experience is shared by his competitors. “Middle Eastern customers have a tendency to wait and watch,” says Feroz Qureshi, technical sales consultant at Honeywell. “Not only in wireless, this is true for all technology innovations, it’s a general tendency in region. They are waiting for others to install first, so that it has been proven, then they will go and tr y it out.”
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Utilities Middle East 23
WIRELESS TECHNOLOGY An Emerson view of how wireless technology could be applied in a power plant.
However, Honeywell also testify to substantial interest in their wireless products. “We are seeing a huge interest in the Middle East, and are running pilots in several countries. I have no doubt that there will be some bigger projects coming to us soon,” says Diederik Mols, EMEA business manager for industrial wireless solutions at Honeywell. One key reason why the technology took a little longer to hit the market in the region is the need for certification needed for
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wireless products. That process can take several months and even up to one year, says Mols. “A lot of things have to do with approvals,” agrees Baird. “The local telecommunication regulatory authorities in every country in the Middle East have to give approvals because its a wireless technology.” Others feel that the awareness levels in the Middle East for what wireless solutions can do for a utility provider are not yet adequate. “The root of the problem lies in the awareness levels
about the existence of such intelligence solutions. Ever y organisation today is confronted with its own unique set of problems and this is why solutions need to be devised based on a customized approach,” says Mike Meranda, CEO of Tagstone. Despite the belated start, wireless technology has started to gain traction in the region. “We have done ever ything from irrigation plants, desalination and power plants, to oil and gas. There isn’t a countr y in the Middle East
that hasn’t got a wireless application in it,” states Baird. Are wireless applications more prominent in water or power? “Our wireless solutions get used mainly on the water side, because when we look at the power plant itself we do a lot on the water side, like measuring the conductivity and the PH. We are now doing a lot of temperature measuring in boilers as well.” Apart from its use in plants and water networks, wireless technology is also becoming more widely www.utilities-me.com
WIRELESS TECHNOLOGY
“There isn’t a country in the Middle East that hasn’t got a wireless application in it” Alan Baird, director, Emerson
used for meter reading and billing purposes in residences. One of the companies involved in supplying radio technology products to this end is Techem. MENA regional manager Hans Altmann sees a growing market for his products in the Middle East. “The UAE especially is known for the usage of latest technology and we already have heavy users of wireless technology in many industries there,” he says, adding. “Wireless applications will be used for all kinds of purposes in the future – why should this not all be the case with the measurement of consumption?”
PROCESS MONITORING Wireless business is boosted by a move towards process monitoring in power plants, says Baird, and a trend towards what he refers to as ‘preventative maintenance’. “Emerson moved from being a preventative maintenance company to a predictive maintenance company,” he explains.
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“We tr y to get the end user to be more predictive. If you can predict what is going to happen, than the shut downs and anything else are reduced.” While the transmitters used to monitor plants are often wired, wireless technology will stand to profit from this trend. “We can take a wireless transmitter, and get immediate access to measurement points we never had before. So wireless technology gives us more measurement points,” explains Baird. The cost effectiveness of joining up remote part of a plant or water network to the control centre through wireless networks leads to optimism amongst pur veyors of the technology. “If you have the network, you can plug in applications at your convenience that otherwise would be cost-prohibitive to wire,” says Mols. “For example, if you have a remote pump station for seawater pumps and you want to monitor their health, it is usu-
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Utilities Middle East 25
WIRELESS TECHNOLOGY
ally cost-prohibitive to monitor the vibration levels of that pump in real time and invest in a couple of kilometers of cable before you can do that. But with wireless technology you can plug into the network and get that data to your control room.” This means that important data used for monitoring the condition of equipment reach the ner ve centre of a utilities operation in real time. Even if there is no wireless transmitter attached to the equipment, maintenance crews are often able to relay information back to the control centre faster, while increasing the safety of the crew. “You can see if there is pressure on a certain pipe, or you can see the process data at the position where he is in the field. Maintenance staff can also enter data into the system in real time, so it works both ways,” says Mols. Meranda also believes that the management of maintenance staff can be improved through wireless applications. “Utilities companies are heavily reliant on remote technicians to complete repair jobs, monitor usage and meet customer need for longer than most other field ser vice industries have existed. Managing remote employees is always a challenge for super visors responsible,” he says. But operational expenditure can also be reduced by keeping maintenance crews out of the field in the first place. “Pumps, turbines, motors, they all use vibration transmitters, these eliminate need for monthly maintenance. To put infrastructure in for such non-critical equipment doesn’t make sense,” says Baird. Rather than sending out people with hand held devices, says Baird, wireless networks to the job for them, with transmitters sending the information back to the control centre. “So you save on infrastructure, but more on the operational expenses.”
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And in the regions climate, spending less time in remote areas of a plant or a water network will come as a relief to maintenance staff. “If I’m running a power plant in the Middle East, and I have to check on things in 43 degree heat, isn’t it easier to sit at my desk rather than you having to
“When you invest millions of dollars, you want to make sure that you get support in 10 to 20 years from now.”
designed for ultra long life. We are talking about eight years and up, even in this hot region.” Utility projects in the Middle East, and the GCC in particular, often take on massive proportions. Yet this does not perturb wireless providers such as Honeywell, with Mols stressing that wireless networks are not only robust, but also scalable. “You’re not limited to 200 applications but you can really talk about thousands of applications per network, and we can run networks over each other – that is also a key point for investment protection.”
INVESTMENT PROTECTION
Diederik Mols, EMEA business manager, Honeywell.
go outside and find out if there is a problem,” asks Baird. Wireless devices rely on the erection of a so-called wireless mesh network (WMN). First developed by the militar y, these networks are robust, as they spread communication between several nodes, or connection points. The stability of the network, and its ability to cope with the tough conditions in the Middle East, thus is not something that concerns the wireless
companies. They do, however, have some convincing to do when speaking to potential clients. “We get asked: ‘What about sandstorms? Can the wireless deal with the high temperatures?’” says Mols. “The answer is: yes. Although there is some deterioration in the signal, it will just continue perfectly.” Mols is also keen to allay concerns about the batter y life of wireless devices. “The batteries in Honeywell applications are
For utilities considering whether to adopt wireless, investment protection is of course an important issue. In this context, it helps that the industr y has adopted an official standard, the ISA 100.11a. The standard was adopted in 2009, after representatives from vendors, end users and technology institutes had developed it for over three years. The standard was crucial for wireless to get out of the blocks, says Mols. “Once the standard was official, that was a starting point and peace of mind for end user.” A common standard protects the investment made by the end user because the technology is not proprietar y, and the client is not locked into one supplier. “When you invest millions of dollars, you want to make sure that you get support in 10 to 20 years from now, and that you are not locked in with one supplier.”
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SWITCHGEAR
Gearing up IMAGE BY ALSTOM
Switchgear suppliers are upbeat about business past and present, and are looking to adjust their products to meet the demands of a smarter grid.
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M
anufacturers of switchgear, an important component of substations, have been richly rewarded by the GCC’s drive to expand their transmission and distribution (T&D) capacities within their boundaries and across the region. The most ambitious expression of this drive is the GCC Interconnection Grid, which will fully link up the GCC member states by 2011. (see next article) Built to tackle the power outages that cause a sweat in several of the members states in the summer months, and with the prospect of an energy trading market in mind, the grid has been a good source of business. “We’re seeing double digit increases in spending across the
region,” says Mohammed Masri, division manager of power products, Middle East & Africa, at ABB. “What is most interesting is the cooperation that we’re seeing across countries, such as with the GCC Interconnection Grid. This collaborative effort will provide results much more quickly to business and residents who are still suffering from power cuts in the summer.” ABB supplied six substations for phase I of the interconnection grid that linked up Saudi Arabia, Qatar, Bahrain, Kuwait and the UAE, Areva T&D, recently acquired by Alstom and Schneider Electric, have also been active with this project, supplying the Middle East’s first high voltage direct current (HVDC) substation, as well as an integrated grid automation solution in Saudi
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SWITCHGEAR
Arabia. “We are definitely looking at the NME region in general and GCC particularly as a growing market for our company,” says Walter Dussaucy, communications director at Alstom T&D, who took over the transmission-oriented Middle Eastern Areva T&D business. With all countries investing heavily, it us merely due to its size that Saudi Arabia outstrips its neighbours in terms in terms of the scale of its T&D infrastructure build up. The Kingdom has pledged to invest a staggering US$80 billion into its electricity sector over the next decade.
“Surprisingly, switchgear technology has not reached its operational limits and there is still room for technological breakthroughs.” Walter Dussaucy, Alstom
RECESSION PROOF
ADDITIONAL DEMANDS While the region’s power industry seems pretty oblivious to the global recession, key trends in the T&D sector have not passed it by unno-
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Walter Dussaucy, Alstom
assessment (LCA), which analyses the overall environmental impact of our products from cradle to grave,” says Dussaucy. Gas-insulated switchgear (GIS) is one aspect where LCAs can be used to minimise the carbon footprint. While GIS is a favoured product in the region due to its robustness, its the use of SF6 gas also raises enviIMAGE BY ALSTOM
To the relief of switchgear suppliers, the gallop towards a comprehensive power infrastructure has hardly been slowed by the recession. “We’ve noticed that governments in the region have a long term view when it comes to investing in the energy sector. They’re looking twenty or thirty years down the line,” says Masri. Dussaucy notes that while the recession has not dented business, there has been a shift in the nature of the projects involving switchgear. “The business outlook, the basics and our assessments show that the market is the same versus the same period before the downturn. We have observed a decline in very huge projects being compensated by an increase of recurrent business.” Utilities companies did benefit from the increased competition among switchgear providers that resulted from the crisis, as these sought to win business by cutting prices. “We have observed more aggressive competition leading to a clear decrease in prices,” says Dussaucy.
sources which are unpredictable,” says Masri. “The growing importance of smart grid objectives have put a strong emphasis on the control of losses, enhanced efficiency, while there is an unprecedented consideration of the ecological footprint of our solutions. These are evaluated through a thorough life cycle
Gas-insulated switchgear is favoured in the region due to its ability to withstand extreme temperatures and adverse conditions.
ticed. Smart grids, which enable a real-time monitoring of the energy flow, accurate reading of demand levels and the coming online of renewable sources, are coming to the Middle East. These developments are placing additional demands on switchgear equipment. “The smart grid will be self-monitoring, minimizing the environmental footprint and provide realtime information to help mange distribution and power generation. All equipments and solutions needs to take the above facts into consideration when it comes to research and development, particularly the need to phase in renewable energy
LOCAL PLAYERS The switchgear market in the Middle East is not confined to big international companies. Local providers have also been active in getting their share of business. The Bin Ghalib Group has been supplying low voltage switchgear to power plants and substations in the region for some time. Fazal Ali Khan, sales manager at Bin Ghalib, believes that the market has become more competitive. “Competition has grown, as end users are compromising on quality,” he claims. Apart from those concerns, Bin Ghalib is faced with a continued dearth of local staff. “There is a shortage of qualified mid-ranking staff. This is unlikely to change soon, and we rely on imported talent from countries such as India and the Philippines.” Another way the company is overcoming the skills gap is by conducting in-house training, says Khan.
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SWITCHGEAR
IMAGE BY ALSTOM
ronmental concerns. LCA provide a wealth of indicators and a starting point for the development of GIS able to operate with the lowest possible output levels of SF6 gas, manufacturers say. Another example of how renewables are changing switchgear technology is ABB’s SafeWind switchgear. SafeWind is the slimmest medium-voltage switchgear on the market and small enough to fit through the narrow doorway of the turbine tower, says Masri. “We’ve had to design such solutions to meet the physical requirements of today’s renewables,” he adds. Siemens is another company looking to bring smaller designs to the market. “The trend goes towards denser switchgears with even higher ratings and minimized life cycle costs,” says Wolfgang Braun, general manager at Siemens Energy T&D. “Especially in growing cities, space means money. So we put a lot of effort into the development of space saving designs that offer both a compact footprint for the substation and cost reductions,.”
Grid expansion is good for business.
Mohammed Masri, sub regions division manager of power products at ABB
SWITCHGEAR MONITORING
tions,” explains Masri. “By doing so, we have enabled communication between the protection and control IEDs of distribution switchgear with the substation control room. Until just a short time ago, this could only be achieved by adding various different specific components to the normal protection relays.” Every company is working to push the boundaries. “Surprisingly, switchgear technology has not reached its operational limits and there is still room for technological breakthroughs. We are continuously investing R&D efforts to minimize the circuit breaker energy to break higher and higher currents for example,” says Dussaucy. As new technologies and concepts start shaping the T&D industry, switchgear providers work out ways to adapt the equipment. “The introduction of power electronics contributed to the revision of the concept of a switchgear, and to open new paths of application.”
Utility providers are also looking to have monitoring systems built into the existing power network to simplify maintenance and trouble shooting. Demand for such sophisticated management of networks places additional requirements on switchgear equipment. The R&D departments of switchgear providers have not been idle. “We’ve built protection and control intelligent electronic devices (IEDs) into our switchgear solu-
“We’ve noticed that governments in the region have a long term view when it comes to investing in the energy sector.” Mohammed Masri, ABB
IMAGE BY ABB
Circuit breakers in the Al Fadhili substation in Saudi Arabia.
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HIGH VOLTAGE As consequence of longer distances electricity has to travel though the GCC interconnection grid, and higher load demands stemming from increased consumption, new grids tend to be built to accommodate higher voltage levels. Utilities benefit from increasing the transmission voltage as it is more cost effective, because infrastructure investments are reduced propor-
tionately to the amount of power transmitted. Higher voltages are thus another factor that companies providing switchgear to utilities in the GCC have to take into account, says Dussaucy: “Load demand growth, together with the expansion of grids to meet the national development plan of many countries result in higher performance requirements of the switchgear that providers must develop.”
THE FUTURE IS BRIGHT The Middle Eastern market has so far provided companies with plenty of business opportunities, and more than a few challenges. But what are the projections and plans for the future? Dussaucy believes that Alstom’s newest acquisition will continue strongly under the new banner by expanding into new markets. “The Middle East last year generated approximately 10 percent of the overall business for Areva T&D. We are planning to re-enhance our presence in several countries among which Iraq remains key for the future.” Masri is similarly ubbeat. “We’re enjoying the work, even though many companies are facing challenges in terms of manpower due to the increased workload. We believe that for the next ten to fi fteen years the energy sector will continually increase investments in power generation, and network expansion and upgrading,” he says.
July 2010
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Utilities Middle East 31
GCC GRID
Desert challenge The GCC Interconnection grid is the most significant transmission and distribution projects the region has ever witnessed. Thomas Hellenas, project manager at ABB, recalls the challenges his company had to overcome while contracted for project's crucial Phase I.
T
he Gulf Interconnection Grid is one of the most important transnational infrastructure projects to have been undertaken in the Middle East for some time. Once completed, the grid will help prevent power outages, pave the way for a regional energy market and even open up the prospect of linking up with North Africa and Europe. Phase I of the new grid went online in 2009. Saudi Arabia, Qatar, www.utilities-me.com
Bahrain and Kuwait are now linked up. The UAE and Oman will be fully connected to the rest by 2011.The project is being developed under the auspices of the Gulf Cooperation Council Interconnection Authority (GCCIA). One of the largest contracts in this mega-project was awarded to ABB. The company was charged with delivering six transmission substations equipped with gas-insulated switchgear (GIS) – three in Saudi Arabia and one each
in Kuwait, Bahrain and Qatar enabling power to be delivered reliably and safely at 400kV to the power systems of all four countries. Enclosed GIS substations are among the most suitable solutions for the harsh desert climate of the Arabian Peninsula, says ABB. GIS is compact and robust, as the full metal encapsulation and indoor installation protects it from atmospheric influence and enables it to better withstand adverse conditions. GIS also contribute to the
saving of resources through their space efficiency and low maintenance needs, according to ABB. “Towards the end of the 1960s, they became a common technology in harsh environments such as the Middle East, with the desert and the heat,” says Hellenas. “Sandstorms combined with salt is very difficult for conventional substations, therefore indoor ones were developed.” To stabilise the voltage of the 400 kV cable between Saudi Arabia July 10
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Utilities Middle East 33
GCC GRID
The 400kV Al Zour gas-insulated substation in Kuwait.
and the island of Bahrain, ABB also provided 17 shunt reactors. Two of these reactors are rated at 300 MVAr and are among the most powerful three-phase reactors ever made. The company also supplied three power transformers, each rated at 650 MVA as well as all necessary auxiliary equipment, surge arrestors and 220 kV high voltage cables. As part of the turnkey project, ABB was also responsible for the comprehensive design, manufacturing, installation, commissioning and civil works. Hellenas feels that the compmany was well equipped for the task. ABB can draw on extensive experience in the field of gas insulated switchgear and shunt reactors, having so far installed more than 10,000 high-voltage bays and
34 Utilities Middle East
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“At the time, there was an exteme boom in the construction industry, and thus a lack of steel and concrete in most of the countries, especially in Qatar.” over 1,000 reactors worldwide. One of the challenges the company was confronted with was a lack of construction materials in the region due to the prevailing construction boom. “As we were contracted for a turnkey job, we were responsible for every step from base design to handing over the stations,” says Hellenas. “At the time, there was an extreme
boom in the construction industry, and thus a lack of steel and concrete in most of the countries, especially in Qatar and Bahrain. So instead of buying these materials locally as we usually do, we had to ship and import them, mainly from Saudi Arabia. To import materials without special custom duties, we needed special permits, which we acquired with the help of the util-
ities in each country.” In Qatar, there was also a shortage of suitable civil contractors. A consortium was formed with civil contractors in Bahrain and Qatar to overcome this challenge.
Thomas Hellenas, ABB
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GCC GRID
Another challenge was posed by the site and the road conditions. Unstable ground in Kuwait where the seawater was only half a meter below the surface required the entire site to be drained with pumps before any construction work could be started. In addition, several roads had to be widened and reinforced to permit the transportation of large transformers and reactors, each weighing several hundred tons. The truck transport of such bulky equipment is usually escorted and done during the night to minimize impact on normal traffic. Road barriers and ramps also had to be modified and constructed at times to facilitate transportation. One of the biggest obstacles had to be overcome even before construction began, as GCC countries worked with var ying electricity specifications. “What was unique about this project was that we were tasked with implementing one and the same specification for all the four countries we were installing substations in. We followed the GCCIA specifications, which was the same for all four countries, but which were slightly different from the specifications of the utilities in each of these countries. For example the electricity frequency in Saudi is 60Hz, whilst in the rest of the region it is 50Hz.”
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A 300MVAr shunt reactor installed for the Al Jasra substation in Bahrain during factory testing.
THE GCC INTERCONNECTION GRID EXPLAINED Upon completion in 2011, this mega-sized pooling of electricity resources will interconnect the power grids of the six Gulf states – Kuwait, Saudi Arabia, Bahrain, Qatar, the United Arab Emirates and Oman – and enable them to use their electricity resources more effectively. Due to the grid expansion on the 400
kV level in the Gulf region, a sustainable reduction of transmission losses can be achieved. The development of the grid on this high voltage level also enables the balancing of power supply between the major Gulf countries since power can be exchanged, allowing national power generation resources to be used
more efficiently. The sharing of spinning reserves leads to the increased stability of the power system and helps mitigate interruptions and blackouts, its planners hope. The interconnection will also enable the six states to establish an energy trading market and facilitate the cooperation between them.
July 10
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Utilities Middle East 35
INSIDER Q&A
PEOPLE METER Selling SCADA f
Jose de la Fuente, GCC area manager for Telvent Environment, talks about SCADA systems and developing business in the region.
: Is the GCC an important market for Telvent’s SCADA business? Yes, and in the Middle East things happen ver y fast. Despite the downturn, the market is moving ver y fast, and the scale of projects here are ver y nice. You don’t find projects of this size in Europe or even in the US. : How are new technologies received by utilities in the region? Ver y well, ver y well, there is a lot of tradition to be open to new technology, and for new contractors to come into the picture. It is ver y easy to arrange meeting to broadcast our solutions, Utilities here are keen on having new players in the SCADA picture. : How do you aim to grow your regional business? There are three important factors when we think about growth. One is to gain business from existing clients, we need our clients to keep on placing orders. A good example here is Kahramaa. [The Qatar General Electricity and Water Corporation, responsible for the regulation of the water industr y] After delivering
36 Utilities Middle East
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July 2010
the SCADA system for their new National Water Control Center in Doha, they also placed a second contract for leak detection systems with us. The second pillar is to broadcast our solutions and expertise to the end user and to their tech-
“Scada has always had broad capabilities, but the market now demands us to be more focused on sustainability.”
UNUSED POTENTIAL – PREVENTING WATER LOSS WITH SCADA SYSTEMS Water loss is a major concern for utilities worldwide. A 2006 report published by the World Bank declared that the total cost of non-revenue water for water utilities worldwide can be conservatively estimated at around US$14 billion per year. Water losses can be classified as real (physical losses) or apparent (economic or commercial). Real water losses reflect water lost from the network and not used; these losses result from leaks in the distribution system, overflows from reservoirs, washouts, etc. Apparent water losses reflect water that is actually consumed by users but is unmetered, or not correctly metered, and consequently remains unaccounted for.
It is commonly accepted that a sustainable strategy to control real water loss must embrace Active Leakage Control (ALC), says Telvent in a study. ALC can be defined as the policy of proactively searching for hidden leaks. In its most basic form, ALC consists of periodically “sweeping” the water network using one or more techniques to identify the presence of leaks in water mains. A more comprehensive approach to ALC is to make network flow measurements on a regular basis to identify new leaks as soon as possible. The sooner a leak is detected, the sooner field survey activity can begin to locate and repair the leak. Detecting leaks quickly after they form requires real-
time or near-real-time analysis of hydraulic parameters (flow, pressure, and level) throughout the water distribution system. SCADA systems are an ideal platform for performing the advanced analysis that promptly identifies leakage presence, says Telvent. Nevertheless, many water utilities still do not exploit their SCADA system to its full capability in controlling leakage, often limiting the SCADA to collecting periodic flow data to calculate water balances and estimate water loss. In contrast, the oil industry makes extensive and effective use of software tools that, installed on top of the SCADA system, proactively execute leak detection. Source: Telvent
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INSIDER Q&A
nical bodies. That’s why we are visiting them, hold workshops, and are doing web seminars. Third pillar is to address right local partner, to establish long term reliable alliances with small local companies. Need to rely on local expertise of companies here for project execution. Take the National Water Control Center in Doha. We built that in partnership with the Nass Group, one of the leaders in Bahrain for civil work and construction. They’ve done the building and installation works, we brought in the SCADA, the instrumentation, the project management capabilities. Nass is the kind of company we like, because they know a lot about construction, and we’re not a construction company. : How important is sustainability for your clients?
“Due to the growth rhythm in the GCC, there are water projects coming up with a considerable volume. ”
Sustainability is ver y much linked to SCADA. You can, for instance, associate carbon footprint with leakages. Ever y cubic meter has a carbon footprint, generated from producing it from wells or desalination plants, and by distributing it. By preventing or finding leakages we are reducing the carbon footprint. SCADA has always had broad capabilities, but market now demands us to be more focused on sustainability. Sustainability is one of key elements on designing
the networks here in the GCC, as the trend now is to be less dependent on the carbon industr y. : What is bigger business for Telvent in the Middle East, water or power? Traditionally, power projects have more volume in the Middle East, but due to the growth rhythm that we are facing in the GCC countries, there are water projects coming up with a considerable volume. Power will still have more volume because
the capital investment is much higher than with traditional water projects, but we are looking at a ver y reasonable size of projects in the water sector. : Has the role of SCADA systems in the utilities sector evolved? In former times the challenge was to obtain the data from the field in real time, nowadays the approach is how to manage that data, how to manage the huge information stream, and to spread it all over the departments of the utility. SCADA was ver y much related to maintenance, but it is not anymore. To market our product, we need to communicate with maintenance, of course, but also with the planning department, and with the corporate department, to set up key performance indicators, for them to set up a strategy for growth. So the challenge now is how to manage the information. In the GCC, ver y often we see that what is required is support modeling integrated fully in the SCADA. : Can you elaborate on the importance of security for SCADA systems? Cyber security is an important aspect these days. We have several initiatives to keep security levels up to date. One of these is the National SCADA Test Bed initiative by the US Department of Energy. Our OaSyS system has never been breached, but there’s always the threat. Think about the critical importance of the infrastructure we control, in the hydrocarbon sector in the US, for example, what if there was an attack on the reser voirs? We also manage a vast proportion of smart grid in the US. Even if an attack is not real, and just a cyber base simulation that will collapse the network, that still means that the supply is cut.
Telvent's Jose de la Fuente sees a strong demand for sustainable solutions from his clients in the region.
www.utilities-me.com
July 2010
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Utilities Middle East 37
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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
Huta-Hegerfeld & Huta-Marine Limited Company
53
project under construction
Desalination Plant
Doosan Heavy Industries & Const. Company / Saudi Berkefeld Filter (Witco)
245
project under construction
Desalination Plant
Desalination Plant & Drinking Emaar Economic Water Infrastructure City,Saudi Kuljian Engineering Corporation
Desalination Plant in Jeddah - Phase 3
Saline Water Conversion Corporation (SWCC)
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
Not Appointed
2500
EPC Bid
Power & Desalination Plant
Bin Jarallah Establishment for Trading & General Contracting (Bin Jarallah Group)
16
project under construction
Dam
Saudi Arabian Mining Power and Water Plant in Ras Company (Maaden) / Rio Al Zour Tinto Alcan New Dam in Abha
Ministry of Water and Electricity
Substations 9024 and 8183/8184
Saudi Electricity Company (SEC)
ABB Contracting Co.
120
project under construction
Substation
Interim Power Plant at Yanbu
The Power & Water Utilities Company for Jubail & Yanbu (Marafiq)
Not Appointed
300
EPC Bid
Power Plant
www.utilities-me.com
Zuhair Fayez & Partners
July 2010
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Utilities Middle East 39
PROJECTS
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
380kV Substation at Al Dhahiyah - Stage2
Saudi Electricity Company (SEC)
Al Toukhi Company for Industry & Trading
70
project under construction
Substation
PP11 Power Plant in Riyadh
Saudi Electricity Company (SEC)
Hyundai Heavy Industries (HHI)
2133
project under construction
Power Plant
Karan Gas Field Exploration - Utilities and Co-generation Package
Saudi Aramco
Petrofac, Saudi
500
project under construction
Co-generation Plant
Qurayyah - 2 Simple Cycle Power Plant
Saudi Electricity Company (SEC)
Arabian Bemco Contracting, Saudi Arabia; 1900 Doosan Heavy Industries & Const. Company, Saudi Arabia;
project under construction
Power Plant
Not Appointed
3000
EPC Bid
Power and Desalination Plant
Not Appointed
2000
project in concept stage
Power Plant
Alstom Power / Sidem
3,000
project under construction
Power and Desalination Plant
Foster Wheeler, Saudi Arabia
UAE
Hassyan Complex - Station P - Phase 1 (P1)
Dubai Electricity and Water Authority (DEWA)
Mott MacDonald, Dubai
Shuweihat 3 Independent Power Project (IPP)
Abu Dhabi Water and Electricity Authority (ADWEA)
Fujairah 2 (F2) IWPP
ADWEA/ Marubeni Corporation/ International Power
Water Treatment Plant - Das Island
Abu Dhabi Marine Operating Company (AdmaOpco)
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 & Construc20000 tion Company/Samsung C & T Corporation/ Doosan Heavy Industries
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 11 Company (NCC), Kuwait
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
Fichtner
KUWAIT
40 Utilities Middle East
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July 2010
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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.
CONSTRUCTION OF AL GHAFAT RESERVOIRS PHASES 1 & 2 IN DUBAI Issuer: Dubai Electricity and Water Authority (DEWA) Tender no: CNW/0129/2010 Title: Construction of Al Ghafat Reservoirs Phases 1 & 2 in Dubai Description: The scope of work includes construction of Al Ghafat Reservoirs Phases 1 & 2 in Dubai. Bond: Applicable Tender fee: 2000.00 AED Closes: Jul 1, 2010 Contact: Dubai Electricity and Water Authority, PO Box 564, Dubai, UAE. GLYCOL CHILLER SYSTEM FOR CO2 LIQUEFACTION PLANT AT JUBAIL POWER & DESALINATION PLANT Issuer: Saline Water Conversion Corporation (SWCC) Tender no: JB/P/E/423 Title: Glycol Chiller System for CO2 Liquefaction Plant at Jubail Power & Desalination Plant Description: The scope of work includes supply of glycol chiller system for CO2 Liquefaction Plant at Jubail Power & Desalination Plant. Bond: N/A Tender fee: 500.00 SAR Closes: Jul 3, 2010 Contact: www.swcc.gov.sa 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: Jul 4, 2010 Contact: www.swcc.gov.sa CONSULTANCY SERVICES FOR DEVELOPMENT OF PS16
42 Utilities Middle East
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July 2010
Issuer: Public Works Authority Tender no: PWA/ITC/016/2006-2007/R1 Title: Consultancy Services for Development of PS16 Description: The scope of work includes providing consultancy services for development of PS16 in Doha. Bond: Applicable Tender fee: 750.00 QAR Closes: Jul 4, 2010 Contact: www.ashghal.gov.qa 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 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 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 region. Bond: N/A Tender fee: 400.00 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 OPERATION & MAINTENANCE OF MASIRAH ISLAND POWER AND DESALINATION PLANT Issuer: Rural Areas Electricity Company S.A.O.C Tender no:149/2010 Title: Operation & Maintenance of Masirah Island Power and Desalination Plant Description: The scope of work includes operation & maintenance of Masirah Island Power and Desalination Plant. Bond: N/A Tender fee: 800.00 OMR Closes: Jul 5, 2010 Contact: www.tenderboard.gov.om CONSULTANCY SERVICES FOR PROJECT MANAGEMENT & SUPERVISION OF THE SEAWATER INTAKE PUMPING STATION Issuer: Majis Industrial Services S.A.O.C Tender no: 169/2010 Title: Consultancy Services for Project Management & Supervision of the Seawater Intake Pumping Station Description: The scope of work includes providing www.utilities-me.com
TENDERS
consultancy services for project management & supervision of the seawater intake pumping station no.2 (SWIPS 2) in the SIPC area, Sohar. Bond: N/A Tender fee: 137.00 OMR Closes: Jul 5, 2010 Contact: www.tenderboard.gov.om REFURBISHMENT OF FIVE CENTRIFUGAL PUMPS FOR TURBINES OF JEDDAH PLANTS PHASE - 4 Issuer: Saline Water Conversion Corporation (SWCC) Tender no: JD/RM/421 Title: Refurbishment of Five Centrifugal Pumps for Turbines of Jeddah Plants Phase - 4 Description: The scope of work includes refurbishment of five centrifugal pumps for turbines of Jeddah Plants Phase - 4. Bond: N/A Tender fee: 500.00 SAR Closes: Jul 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: Jul 6, 2010 Contact: www.swcc.gov.sa BEAUTIFICATION WORKS FOR SUBIYA IWPP Issuer: Central Tenders Committee Tender no: MEW/116/2009/2010 Title: Beautification Works for Subiya IWPP Description: The scope of work includes beautification works for Subiya IWPP. Bond: Applicable Tender fee: 40.00 KWD Closes: Jul 6, 2010 Contact: Central Tenders Committee - Ministry of Electricity & Water COMPLETE OVERHAULING OF MAIN PUMPS OF YANBU STATIONS Issuer: Saline Water Conversion Corporation Tender no: YM/R/PM/138 Title: Complete Overhauling of Main Pumps of Yanbu Stations Description: The scope of work includes the complete overhaul of the main pumps of the Yanbu Pumping Stations. The contract also includes the replacement of main worn-out spares at Phase 2 of the Medina - Yanbu Main Pumping Stations PS1 & PS2.
44 Utilities Middle East
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July 2010
KEY CONTRACT
AL-ZOUR DESALINATION PLANT - PHASE 2 Issuer: Central Tenders Committee Tender no: Title: Al-Zour Desalination Plant - Phase 2 Description: Al-Zour desalination plant, Phase 2. Bond: Applicable Tender fee: Closes: Jul 11, 2010 Contact: Kuwait’s Ministry for Electricity and Water has issued a tender for the construction of the Al Zour desalination plant, Phase 2. The scope of work includes design, construction of the plant. The tender fee is 3000.00 KWD, and the tender number is MEW/39/2008/2009. Interested parties should contact the Central Tenders Committee of Ministry of Electricity and Water by July 11, 2010.
Bond: N/A Tender fee: 500.00 SAR Closes: Jul 10, 2010 Contact: www.swcc.gov.sa OVERHAULING OF 19 MEDIUM VOLTAGE MOTORS OF YANBU PLANT Issuer: Saline Water Conversion Corporation (SWCC) Tender no: YM/R/PE/137 Title: Overhauling of 19 Medium Voltage Motors of Yanbu Plant Description: The scope of work includes overhauling of 19 medium voltage motors of Yanbu Plant. Bond: N/A Tender fee: 500.00 SAR Closes: Jul 11, 2010 Contact: www.swcc.gov.sa 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 REHABILITATION OF AL KHOBAR PLANT PHASE -2 Issuer: Saline Water Conversion Corporation Tender no: KH/R/M/302 Title: Rehabilitation of Al Khobar Plant Phase - 2 Description: The scope of work includes rehabilitation of Al Khobar plant phase ? 2. The contract includes replacement of the asbestos cement pipes and upgrading of pumping equipments and auxiliaries. Bond: N/A Tender fee: 500.00 SAR Closes: Jul 13, 2010 Contact: www.swcc.gov.sa COMPLETE REHABILITATION OF TAPROGGE BALL CLEANING SYSTEMS IN YANBU - MADINA PLANTS Issuer: Saline Water Conversion Corporation Tender no: YM/R/M/126 Title: Complete Rehabilitation of Taprogge Ball Cleaning Systems in Yanbu - Madina Plants www.utilities-me.com
TENDERS
Description: The scope of work includes providing complete rehabilitation of Taprogge Ball Cleaning Systems in Yanbu - Madina Plants. Bond: N/A Tender fee: 500.00 SAR Closes: Jul 13, 2010 Contact: www.swcc.gov.sa EPC OF JIC COOLING PLANT Issuer: Royal Commission for Jubail & Yanbu Tender no: 098-C58 Title: EPC of JIC Cooling Plant Description: The scope of work includes all design, engineering, project management, procurement, supervision, commissioning, documentation, technical and professional services, as well as operating & maintenance manuals and training for the complete delivery of a centralised cooling plant to serve the Jubail Industrial City. Bond: Applicable Tender fee: 14000.00 SAR Closes: Jul 14, 2010 Contact: Royal Commission in Jubail Tel. No.: 009663-3414127/4163 Supply Management Department Fax No.: 009663-3412201 P. O. Box 10001 Jubail Industrial City 31961 REHABILITATION AND RECONSTRUCTION OF WATER TREATMENT PLANT IN YANBU - PHASE 1 Issuer: Saline Water Conversion Corporation Tender no: YM/R/M/148 Title: Rehabilitation and Reconstruction of Water Treatment Plant in Yanbu - Phase 1 Description: The scope of work includes rehabilitation and reconstruction of water treatment plant in Yanbu - Phase 1. Bond: N/A Tender fee: 500.00 SAR Closes: Jul 17, 2010 Contact: www.swcc.gov.sa MAJOR OVERHAULING & RESIDUAL LIFE ASSESSMENT OF STEAM TURBINE & GENERATOR IN AL SHUQIQ PLANTS Issuer: Saline Water Conversion Corporation Tender no: SQ/M/M/518 Title: Major Overhauling & Residual Life Assessment of Steam Turbine & Generator in Al Shuqiq Plants Description: The scope of work includes major overhauling & residual life assessment of steam turbine & generator in Al Shuqiq Plants. Bond: N/A Tender fee: 500.00 SAR Closes: Jul 17, 2010 Contact: www.swcc.gov.sa INVITATION TO SUBMIT A PROPOSAL FOR SUPERVISION CONSULTANCY SERVICES FOR A NEW INDEPENDENT WATER AND POWER www.utilities-me.com
PROJECT (IWPP) IN SALALAH Issuer: Oman Power &Water Procurement Company Tender no: 172/2010 Title: Invitation to Submit a Proposal for Supervision Consultancy Services for a New Independent Water and Power Project (IWPP) in Salalah Description: The scope of work includes submitting a proposal for supervision consultancy services for a new independent water and power project (IWPP) in Salalah. Bond: N/A Tender fee: 100.00 OMR Closes: Jul 19, 2010 Contact: www.tenderboard.gov.om UPGRADING OF KHUWAIR SOUTH SUBSTATION Issuer: Muscat Electricity Distribution Co. (SAOC) Tender no: 171/2010 Title: Upgrading of Khuwair South Substation Description: The scope of work includes upgrading of Al Khuwair South 2, 33/11kV primary substation from 2x20 MVA to 3x20 MVA. Bond: N/A Tender fee: 850.00 OMR Closes: Jul 19, 2010 Contact: www.tenderboard.gov.om EPC FOR UPGRADING WATER SUPPLY SYSTEM AT KUMZAR WATER DESALINATION PLANT Issuer: Rural Areas Eletricity Company S.A.O.C Tender no: 170/2010 Title: EPC for Upgrading Water Supply System at Kumzar Water Desalination Plant Description: The scope of work includes
engineering, procurement and construction (EPC) for upgrading water supply system at Kumzar Water Desalination Plant. Bond: N/A Tender fee: 200.00 OMR Closes: Jul 19, 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, Public Works Authority CONSTRUCTION OF 380-KV RAS AL-ZOUR SUBSTATION Issuer: Saline Water Conversion Corporation Tender no: N/A Title: Construction of 380-kV Ras Al-Zour Substation Description: The scope of work includes design, supply and construction of 380-kV Ras Al-Zour Substation. Bond: N/A Tender fee: 50000.00 SAR Closes: Aug 21, 2010 Contact: www.swcc.gov.sa
KEY CONTRACT
CONSTRUCTION OF YANBU POWER AND DESALINATION PLANT - PHASE 3 The Saline Water Conversion Corporation have issued a tender for the construction of the Phase 3 of the Yanbu Power and Desalination Plant in Saudi Arabia. The deadline for the submission of the bid is September 22, 2010. The tender fee is 200000.00 SAR. Contacts details can be found at www.swcc.gov.sa.
July 2010
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Utilities Middle East 45
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QATAR SNAPSHOT
Qatari Ambition Like its GCC neighbours, Qatar is feeling the effects of increasing urbanisation and industrialisation. Rising deand water is leading to huge investments into the utilities mand for power an sector, and an increasingly diverse energy supply.
S
ubject to the scorching desert heat, Qatar is racing to keep up with the demands for power and water of its citizens. This is no easy task. In 2009, consumption of electricity increased by 14 percent, while water use went up by eight percent. Qatar has turned to public-private enterprise to deal with this challenge. Independent Power and Water Plants (IWPPs) have been key in coping with the dual demand for electricity and water. The first IWPP, Ras Laffan A, started operations in 2004. Ras Laffan C, now known as Ras Girtas, is destined to be the largest IWPP in Qatar, is due to become operational in April 2011. Media reports in January suggested that Qatar would also award a contract for a 2,000MW power plant during 2010. The plant is estimated to cost between US$2.5bn and $3bn and would be operational by 2012-2013, if awarded by the end of the year.
ALTERNATIVE THINKING Qatar is looking to diversify its energy supply, and is exploring nuclear and solar power options. In November 2008, Qatar announced plans to launch a preliminary study into the viability of developing a nuclear power plant in the country. The study will look for an appropriate site and assess potential to link the plant to the grid. Both Russia and France are looking to capitalise on Qatar’s nuclear ambitions. Then, in January this year, Qatar announced that it was seeking
8 percent increase in water consumption in 2009.
NUCLEAR NOTIONS Both Russia and France are already lining up to cooperate with Qatar on possible nuclear ventures. In January 2008, France’s EDF signed a memorandum of understanding (MoU) with Qatar for discussions of cooperation in nuclear power production. In October 2008, Russia and Qatar discussed the possibility of working together to develop nuclear power including initiating a draft agreement. Limited progress has been reported on Qatar’s nuclear plans over the past year.
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to construct a major new solar power plant. Reports suggest that nearly 25 local and international companies are in discussions for the launch of the plant, which will require an investment of $1bn. In addition, the Qatar Foundation announced a joint venture with
German company SolarWorld, to produce polysilicon, the main ingredient in solar panels, at a $500 million plant in northern Qatar. The Qatar Electricity and Water Corporation (Kahramaa) has commissioned France’s Sogreah to carry out a feasibility study for
9GW
Power generating capacity in 2011.
QEWC AND KAHRAMAA The Qatar Electricity and Water Company (QEWC) was established in 1990 as the government’s main vehicle for investment in the sector. The state holds a 43 percent stake in the company, with the rest owned by private investors. The company is involved in virtually all large power and water projects in the country, so it is the main partner for foreign and domestic private investors. In July 2009, the company announced an 18 percent rise in first-half net profit to US$114 million, boosted by interest income from joint ventures. The company said sales rose 20 percent, but did not provide a figure. QEWC hopes to use the experience gained in Qatar to turn into a regional player. The Qatar General Electricity and Water Corporation (Kahramaa) was established in 2000 as an independent corporation operating on a commercial basis. Kahramaa is responsible for the regulation of the water industry, and for setting water tariffs, which have been heavily subsidised for decades. Kahramaa also owns projects and develops strategy for the water sector. In power sector, the corporation’s focus is on transmission and distribution.
July 2010
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Utilities Middle East 47
QATAR SNAPSHOT
Desalination capacity in Qatar is set to rise.
what would be Qatar’s first solarpowered desalination plants. The company has been asked to look at establishing several plants. Kahramaa has suggested using parabolic trough solar technology and multi-effect distillation, though Sogreah will make its own recommendation on which technology to use and where to situate the plants.
80,000 cubic meters per day of treatment capacity. One of the latest facilities is the Doha North sewage treatment plant, commissioned by Ashghal. Due to become operational in 2011, it will have the biggest capacity of any of Qatar’s sewage plant at 40,000 million cubic meters per day, and is a major plank in Ashghal’s strategy to keep pace with growing demand.
THE WASTEWATER SECTOR Ashghal, the public works authority, is currently mulling the outsourcing of the running and maintenance of parts of the wastewater sector. The contract for a threeyear feasibility study for such a move is expected to be awarded later in the first half of the year. Qatar’s first major sewage treatment plant, built in the 1960s, was Doha South, then a 12,000m3/d facility. It has been expanded over the years to its present capacity of around 106,000 cubic meters per day. It is maintained and operated by Veolia, which was awarded the contract in April 2009. Ashghal is now looking to add another
ON THE RISE Desalinated water produced per year, in million cubic meters
2008 – 207 e 2009 – 222 f 2010 – 254 f 2011 – 279 f 2012 – 297 f 2013 – 307 f e = estimated f = forecast
14 percent Increase in power consumption in 2009.
48 Utilities Middle East
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July 2010
RAS LAFFAN A TO THE C The first Independent Power and Water Project (IWPP) in Qatar, Ras Laffan A, was built by the Ras Laffan Power Company, a joint venture between the AES Corporation, who hold 55 percent, QEWC (25 percent), Qatar Petroleum (10 percent) and the Gulf Investment Corporation of Kuwait (10 percent). Completed in 2004, Ras Laffan A generates 750MW and produces 151 million litres of desalinated water per day. Ras Laffan B started production in 2008. The plant was constructed by Q-Power, a consortium comprising the Qatar Electricity and Water Corporation, holding 55 percent, the UK’s International Power (40 percent), and Japan’s Chubu Electric Power (5 percent). At a cost of US$900 million, it generates 1,025MW and produces 60 million gallons of water. Completing the power hat-trick will be Ras Laffan C. Renamed Ras Girtas, the plant will be Qatar’s, and the GCC’s, largest IWPP, with a generating capacity of 2,730MW and 286,000 cubic meters of desalinated water. The Qatari-incorporated Ras Girtas Power Company (RGPC) will own, operate and manage the project. In March 2008, GDF Suez and Mitsui were awarded the contract to built the IWPP. The consortium will hold a 40 percent stake, with Qatar Petroleum and the Qatar Electricity and Water Corporation splitting the remaining 60 percent. Construction started in May 2009, and the plant is expected to be operational in April 2011 at a cost of $3.7 billion. Hyundai Engineering and Construction, Mitsubishi Heavy Industries and ABB have all received contract relating to the project.
This article is based on information compiled in the Qatar Infrastructure Report Q2 2010, and the Qatar Water Report Q2, 2010 published by Business Monitor International (BMI). For more information, go to www.businessmonitor.com
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