Utilities Middle East - June 2010

Middle East

An ITP Business Publication

ESSENTIAL INSIGHTS FOR MIDDLE EAST WATER, GAS AND ELECTRICITY PROFESSIONALS

An ITP Business Publication

NUCLEAR POWER: THE GCC IS GEARING UP FOR THE NUCLEAR AGECountries across the region are getting ready to follow Abu Dhabi’s example

June 2010 • Vol 4. Issue 6

MEMBRANE SOLUTIONS

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MISTER SMART SAP’s Maher Chebbo talks smart grids

How distict cooling has evolved to meet the challenges of the downturn

NUCLEAR POWER: THE GCC IS GEARING UP FOR THE NUCLEAR AGECountries across the region are getting ready to follow Abu Dhabi’s example

How ddiistiict coolliing hhas evollvedd to meet thhe chhallllenges off the ddownturnKEEPING COOL

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CONTENTS

www.utilities-me.com June 2010 ● Utilities Middle East 1

2 COMMENTThe downturn has prompted a drive towards a leaner, meaner utilties sector

4 REGIONAL UPDATEA round-up of some of the biggest headlines in the region.

15 NEWS INTERVIEWFormer insider comments on the Masdar-DoE MoU.

18 IN THE KNOWSAP’s Dr. Maher Chebbo talks smart grids.

23 FORWARD FOCUSQ&A with Ian Mitton, HP, about ICT grid technology

28 NUCLEAR UPDATEA look at how far the GCC is down the road to nuclear power

33 DISTRICT COOLINGIn spite of tough times, the future is bright.

37 ECONOMIC CITIESThe challenges facing utility providers.

40 POWERING IRAQ Plans to boost the electricity generation capacity are ambitious

44 MEMBRANE GAMEMBR technology is gaining ground in the GCC

48 PEOPLE METERDr. Paul Boulos, MWH, is in the spotlight.

50 PROJECTS & TENDERSA listing of the latest projects and tenders in the region.

56 UAE SNAPSHOT A look at electricity demand and supply in the UAE.

June 2010Issue 6

1833

Dr. Maher Chebbo, SAP, talks about the drivers behind smart grid development.

48

District cooling is faced with a changed environment.

Dr Paul Boulos, MWH, on water networks. 44MBR technology

fi ts into visions for the future.

15News Interview: The

Masdar-DoE MoU.

COMMENT

2 Utilities Middle East ● June 2010 www.utilities-me.com

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‘The big boys use the crisis to get even bigger,” says Tawfi q Abu Soud, exec-utive director at Drake & Scull Water

and Power. His company builds district cooling facilities and has been hit by the decline in con-struction that resulted from the fi nancial crisis. Drake and Scull responded by adapting to the new requirements of the market.

Development in Dubai had taken place at breathless speed, and with scant regard towards resources. In the district cooling sector, plants were constructed without careful deliberation about the actual needs of new developments, say industry players, an approach that resulted in the creation of signifi cant dead assets.

Then suddenly, as funding dried up and proj-ects development slowed down considerably, the mood changed. The last thing that cash-strapped developers and utility providers wanted was to pay for a bloated infrastructure, and EPC contrac-tors were charged with delivering cooling sys-tems that fi tted the needs of developments. This often meant a shift to smaller plants, built to meet the requirements of individual developments. Abu Soud speaks of a more mature market.

The case for decentralisation is also being

made in the wastewater industry. A move towards more, but smaller plants would save on sewage pipes and transportation costs, which can be higher than the actual cost of treatment. Once again, effi ciency savings are there to be had.

A more sophisticated approach is not confi ned to the private sector, however. Driven by the com-petitive instincts, Dubai’s Electricity and Water Authority (DEWA) has been keen to upgrade its electricity network, says Dr. Maher Chebbo, EMEA vice president of utilities & communica-tion industries at SAP.

While much of the movement towards energy effi ciency in the utilities sector will be driven by common sense and an authority with an eye on the ball, it is undoubtedly also a consequence of market players coping with tough times. A more modern utilities infrastructure that is fi t for pur-pose, and truly effi cient, will in no small part be a legacy of the crisis. Boys don’t only get bigger, they become more mature.

Florian Neuhof, Editor Email: fl [email protected]

The upside of a downturnThe recession has encouraged a move towards efficiency

Middle East

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The slowdown in construction has resulted in an effi ciency drive in the utilities sector.

REGIONAL UPDATE


Iraq aims to boost power capacityCapacity boost depends on foreign investment, says electricity minister.

An engineer walks past gas being burned off at an Iraqi oilfi eld in the south of the country.

Iraq is aiming to boost its power capacity to 27,000MW within the next four years by opening up its gas sector to foreign investment and sealing a gas capture deal with Royal Dutch Shell.

Reaching the ambitious power capacity target would depend mainly on finalising a an agree-ment with Shell to capture and use gas now being burned in the southern oilfields around Basra, and on output from three gas fields due to be auctioning off in September, Iraq’s electricity min-ister Karim Waheed told the Reu-ters news service.

Iraq is close to signing a final deal between its South Gas Com-pany, Shell and Japan’s Mitsubi-shi, after it sent the final draft of the agreement to the cabinet for approval, according to Iraqi oil minister Hussain al Shahristani.

Shahristani also said that Iraq will invite 45 international compa-nies, which were prequalified for two oil auctions last year, to bid to develop Akkas gas field in Iraq’s western desert, Mansuriyah gas field in eastern Iraq and Siba in the southern oil hub of Basra.

If Iraq does not come to an agreement with Shell, the minis-try will have to rethink its power plans, said Waheed. He put Iraq’s available power capacity at 9,000 MW, and installed capacity at

Empower’s Business Bay district cooling project enters Phase 3Emirates Central Cooling Sys-tems Corporation (Empower) began the third phase of the 70.000 refrigeration tonne (RT) district cooling network for the Bay Square area within the Busi-ness Bay project in Dubai, the company has announced.

around 11,000 to 12,000MW. Demand is estimated to be at least 12,000 MW.

The OPEC member state would need to invest at least US$3-4 bil-lion per year to reach that target, said the minister. He did not elab-orate on how Iraq plans to raise

The Empower has already com-pleted two phases of the proj-ect, supplying an area stretching along Dubai’s main Sheikh Zayed Road with 50,000 RT of district cooling. Empower is contracted to provide district cooling to the entire Business Bay development.

“We divided the implementation of district cooling network of Busi-ness Bay, which is one of the bus-iest and dynamic business spots not only of Dubai but also of the Middle East, into three phases as per demand and supply,” said Ahmed Bin Shafar, chief executive

offi cer at Empower. State-owned Empower’s other district cool-ing projects include large-scale real estate developments such as the Dubai International Financial Center, Healthcare City, Jumeirah Beach Residence and the City Of Arabia complex.

such funds. The country has struggled to finance its previous power generation plans.

Seven years after the US led invasion, Iraq’s national grid still only supplies a few hours of power each day. The Iraqi capi-tal Baghdad is expected to enjoy

only about eight hours of elec-tricity a day when temperatures hit 50 degrees Celsius in the summer, Waheed said. With the new power plans, Baghdad, with current 3,000 MW of power avail-able, could finally have sufficient electricity within two years.

REGIONAL UPDATE


Will Kuwait go nuclear? The feasibility study will help the government make a decision.

Kuwait: Nuclear study to be ready next yearResearch to determine feasibility of nuclear programme A study into the viability and cost of a civil nuclear energy project in Kuwait will be ready for decision makers by early next year, a senior offi cial said.

“We hope as we see it now, the decision should be by the end of this year, early next year,” Ahmad Bishara, the secretary general of the Kuwait National Nuclear Energy told the Reuters newswire.

If a decision is taken to adopt nuclear energy, a plant could be operational by 2020, he said. Bishara declined to specify how much Kuwait planned to spend on the project, but said the cost of nuclear-generated electrical power would be around US$4.5 billion for every 1,000MW.

The study is being carried out by international consultants, who Bishara declined to name. The con-sultants were asked to look at three to four sites for a nuclear station, the economic feasibility, the avail-able technology as well as the nec-essary legal framework.Kuwait has a power capacity of around 11,000MW, and is in the process of building a conventional 2,000MW power plant.

Bishara said water consump-tion was expected to double, and demand for electricity could triple to 30,000 megawatts by 2030.

Nuclear energy could provide about 6,000MW of the needed elec-tricity, he said. It would also help cut carbon dioxide emissions, which reaches 30 tonnes annually per capita, compared to around 10 tonnes in industrialised nations.

About two thirds of energy con-sumed in Kuwait is used up by air conditioning, and electrical power is heavily subsidised by the state.

In April, Kuwait and France signed an agreement to develop nuclear energy for peaceful pur-poses. A memorandum of under-standing with the US Department of Energy over training and equip-ment could be signed this month.

ORACLE LAUNCHES UPGRADED WORKFORCE MANAGEMENT SYSTEMOracle’s Utilities Mobile Workforce Management 2.0 system enhance fi eldwork planning and scheduling, says the company. The new system includes a computational grid that feeds up to a year’s worth of planned maintenance and inspection fi eld activities into the system, allowing the user to assign the right crew at the right time, in any area the utility serves. The application also automates routine assignments by creating schedules based on complete data sets about each technician’s qualifi cations, experience, availability and work history.

SEC PLACES SUKUKThe Saudi Electricity Company has raised US$1.87 bn from a seven-year Islamic bond at 95 basis points above Saudi Interbank Offered Rate (Sibor), according to sources familiar with the matter. Saudi Electricity raised the tenor to seven years, up from the fi ve year notes it issued in its previous two sukuks, the sources said. Saudi Electricity has set the price guidance for the bond at 95 basis points above Sibor.

AL JABER GROUPIn the May edtion, UME reported that Siemens won an order worth US$22m to built and modify substations in the north of the UAE. This work is actually undertaken by the Al Jaber Group, while Siemens is supplying the bulk of the electrical equipment for the project.

HIGHLIGHTS

SEC power generation capacity has grown The Saudi Electricity Company (SEC) says its power generation capacity rose to almost 45.400MW in the fi rst quarter of 2010, up 76 percent from the 25.800MW recorded in April 2000.

The length of the utility’s elec-tricity transmission networks increased 45 percent to nearly 42.800 kilometers, from 29.600

kilometers in 2000, while the dis-tribution grid grew 63 percent to nearly 368.400km from almost 226.700km over the period, reported the Jeddah-based Okaz newspaper, citing an report by the majority state-owned SEC.

Over the same period, the number of subscribers increased to 5.77 million from 3.5 million.

The SEC recently reported an increased net loss in the fi rst quar-ter, which the company explained with higher costs from buying power as well as lower seasonal demand. The net loss increased to US$208.5 million from US$205.5 million a year earlier, the company disclosed in a statement on the Saudi bourse website.

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REGIONAL UPDATE


Wastewater’s profi t potentialIncreasing amounts of energy can be harnessed from wastewater sludge.

Sewage plants will become increasingly important providers of energy, according to the study.

Sludge can represent 20 and 50 percent of wastewater treatment cost, as plants need to dispose vast quantities of the byproduct on a regular basis. As a result, utili-ties have started to look at ways to extract value from the waste mate-rial, developing technologies that already hold the potential to recover value to the tune of US$25bn, according to Lux Research, who conducted the study.

Lux Research estimates that the development of those tech-nologies will increase the market opportunity for resource recovery to US$45bn by 2020.

Technologies focused on recov-ering energy from sludge show the most promising value proposition, according to the report, and are expected to capture 64 percent of the overall market in 2020.

The report fi nds that improv-ing production of biogas are most likely to recoup costs. Several tech-nologies – including ultrasonic cavitation, mechanical disintegra-tion and thermal hydrolysis – aim to improve on anaerobic diges-tion, a well-established method for extracting biogas from sludge.

Deriving alternative fuels,

duce value added, according to Lux Resarch. The exception is crystallization technology, which uses a minimum of chemicals and a simple process design to recover up to 85 percent of phosphorus from wastewater.

“Sludge production volumes will continue to grow with increasing population and country wealth,”

such as syngas and biodiesel, from sludge is also viable. These approaches offer benefi ts such as relatively low capital costs, and high solids removal, but have the drawback of being equipment-in-tensive.

Nutrient and material recovery technologies are as yet too com-plex and energy-intensive to pro-

Power project in Egypt sees considerable investor interestInvestor interest has been strong in Egypt’s first build-own-oper-ate (BOO)-based combined-cycle power plant project, with 19 com-panies and consortia submitting pre-qualification applications.

The Electricity and Energy Ministry will now evaluate the submissions, with an announce-ment of the bidder short-list expected during June, after which the pre-qualified companies will

be able to submit their formal bids for the project, according to the Reuters newswire.

Egypt has already awarded a number of build-own-operate-transfer (BOOT)-based projects. It has chosen the BOO route for this project in order to improve the investor terms by offering some additional longevity, says Sam Ciszuk, Middle East energy analyst at IHS Global Insight.

“In the wake of the recent global recession—and because of chronic fears over a shortage of gas feedstock in Egypt—inves-tors have been more reluctant to take on long-term projects where they will be shut into a 20-year set-price electricity offtake contract with the state, but might perhaps have to even out gas feedstock fluctuations with more expen-sive diesel for prolonged periods,

and see their profit margin being wrecked,” says Ciszuk.

While offshore gas extraction is increasing again after the gov-ernment agreed to pay upstream producers more for expensive deepwater gas in 2008, analysts believe that adding longevity to the projects and making the own-ership situation stable has helped make the project attractive to bidders.

concludes Heather Landis, an analyst for Lux Research and the report’s lead author. “By turn-ing sludge from a costly mate-rial to treat into a profi table reve-nue stream, recovery technolo-gies make fertile hunting grounds for executives and investors looking for opportunities in the hydrocosm.”

REGIONAL UPDATE


ABB wins US$108m substation order in KSAABB has won an order worth US$108m from the Saudi Electric-ity Company (SEC), Saudi Arabia’s national power transmission and distribution provider, to construct six new substations. The order was booked in the fi rst quarter, accord-ing to ABB.

Four of the substations, rated at 115/13.8 kV will be located in Saudi Arabia’s eastern region. The other two substations, rated at 110/13.8kV, will be built in the west-ern cities of Jeddah and Mecca.

“These substations will enhance the capacity of the region’s power transmission and distribution systems and help to meet grow-ing demand for power,” said Peter Leupp, head of ABB’s Power Sys-tems division. “They will also help strengthen grid reliability and improve the effi ciency of the regional grid.”

As part of the turnkey contract, ABB will be responsible for the design, supply, installation and commissioning of the substations,

Dolphin’s delayed gas pipeline completedTransportation capacity now sufficient for Fujairah II IWPP

The pipeline during construction, before being lowered into the ground.

Dolphin Energy last month announced the completion of the Taweelah-Fujairah gas pipeline’s delayed second milestone.

The pipeline will now have the capacity to supply the existing Fujairah I Integrated Water and Power Plant (IWPP), as well as the Fujairah II project, which will be the biggest water and power plant in the UAE, and is expected to come online within Q2.

With the second milestone com-plete, Dolphin Energy is now able to transport 350 million cubic feet of natural gas per day to the east coast of the UAE, a gas transpor-tation capacity suffi cient to fully operate both of the power stations.

The project’s original comple-tion date had been March 1, which the company failed to meet due to diffi culties in attaining permission for the pipeline to cut across roads and land close to industrial installa-tions, Dolphin said in a statement. Permissions were needed for crossing fi ve major roads and more

which are scheduled for comple-tion in 2012.

Under the terms of the contract, ABB will provide gas-insulated switchgear, transformers, medi-um-voltage switchgear, low-voltage auxiliary systems and the network protection systems.

In addition, ABB will also equip the six substations with automa-tion, control and communication solutions, so making them fully compliant with the global IEC 61850 standard.

than 150 restricted locations.This additional transportation

capacity is made possible by the completion of a 128km long, 48 inch wide pipeline from Dolphin’s Taweelah receiving facilities to a hot tap connection on the existing Al Ain Fujairah 24 inch pipeline.

“The construction challenge has been phenomenal consider-ing the timeframe and the tough conditions associated with laying a 48 inch pipeline across the harsh desert and mountainous terrain,” said Ibrahim Ahmed Al Ansari, general manager, Dolphin Energy.

UAE ELECTRICITY DEMAND TO GROW 10 PERCENT ANNUALLY Electricity demand in the UAE is forecast to grow ten percent per annum to 2013, according to a report from research fi rm RNCOS. The report, en-titled said the Middle East power industry is one of the fastest growing elec-tricity markets in the world and “rapid industrialisa-tion and surging residen-tial sector consumers will trigger electricity demand in UAE to grow at a com-pound annual growth rate of ten percent during 2010 to 2013.”

PALM UTILITIES RECEIVES AWARD FOR ENERGY EFFICIENT DESALINATIONPalm Utilities received the Best Water Project Award during the Arab Invest-ment Summit 2010 held recently in Abu Dhabi. The utilities provider was recognised for its use of the Dual Work Exchanger Energy Recovery (DWEER) system used at the Palm Jumeirah seawater reverse osmosis (SWRO) plants.

SEWAGE FLOODS DUBAI’S INTERNATIONAL CITYIn the fi rst week of May, raw sewage emerged from the drainage system to fl ood car parks and streets in the International City residential complex in Dubai, The National re-ported. It took several days for property developer Nakheel, who owns the complex, to clear the vicin-ity of the odorous sludge, according to the paper.

HIGHLIGHTS

REGIONAL UPDATE


Russia: Iran is nearly nuclear Bushehr plant could provide Iran with reverse engineering opportunies

2MW park consists of 9,300 solar modules, and occupies 11,577 meters of roof space

An Iranian journalist in front of the Bushehr site earlier this year.

The photovoltaic installations in the KAUST.

The 1,000MW Bushehr nuclear power plant in Iran is nearing com-pletion, according to the head of the Russian Federal Atomic Energy Agency. His statement corrobo-rates a statement made by an Ira-nian offi cial about the imminent launch of the plant, while disagree-ing on the precise timing of the plant coming online.

Sergei Kiriyenko told press that ““the preparation of the Bushehr nuclear power plant for its launch is going according to plan. The launch has been set for the end of the summer, and we are on schedule,”

“This plant will be launched according to schedule at the end of the spring and will run the same as the other nuclear plants in the world,” Ali Akbar Saleh, head of Iran’s Atomic Energy Organiza-tion was quoted by the Iranian news agency ILNA in March. The Iranian spring ends in late June.

The Bushehr plant has been

attempts to dissuade Russia from moving ahead with the project, have caused further delay.

Iran is hoping to launch the con-struction of a large number of NPPs to meets its spiralling power demand, and an operational Busher plant would enable Iran to make

delayed for years following Ira-nian diffi culties to pay the Russian contractors on schedule, technical hold-ups as the original—but never completed—1970s German design of the facility was being returned to a Russian design. Political hold-ups, with US sanctions on Iran and

First solar park in Saudi Arabia completed on the roofs of KAUST

Saudi Arabia’s fi rst large scale solar park has been completed, it was announced on Wednesday. The 2MW park consists of 9,300 solar modules erected on the roof of the King Abdullah University of Science and Technology in Jeddah.

The park was designed and engi-neered by German solar company Conergy, who supervised the con-struction and the commissioning of the complex, while the installation works and operational management were implemented by National Solar Systems. The project was managed by Saudi Aramco, and was executed by several large construction con-tractors including Saudi Oger.

The 2 MW solar plant consists of two rooftop solar installations with a capacity of one megawatt each, installed on the north and south laboratories of the university. The power system features over 9,300 high-effi ciency solar modules with Conergy Suntop III mounting sys-tems and Conergy 280K central inverters. The photovoltaic plant occupies 11,577 square meters of roof space and produces 3,332 mega-watt hours of clean energy annually, while also saving up to 33,320 tons of carbon emissions.

“This project demonstrates that the development of alternatives to traditional fossil fuel has taken on a

new urgency, even in oil-rich coun-tries like Saudi Arabia,” says Marc Lohoff, head of Conergy Asia Pacifi c and the Middle East.

Saudi Arabia, the largest oil pro-ducer of the Organization of Petro-

leum Exporting Countries with approximately one-fi fth of the world’s proven oil reserves, is plan-ning to make solar power a major contributor to energy supply in the next fi ve to 10 years, according to the Kingdom’s Minister for Petro-leum and Mineral Resources.

“Saudi Arabia aspires to export as much solar energy in the future as it exports oil now,” said Ali Al-Naimi, in an interview with Reuters. The latest sustainability research report from Bank Sarasin further predicts that the use of solar energy in the Middle East will grow at an annual rate of more than 50 percent in the next fi ve years.

the technological leap towards a more wide-ranging nuclear pro-gramme. “Operating the Bushehr facility could therefore allow Iran some reverse engineering opportu-nities and help it leap forward with its own designs, something that has worried the international commu-nity although Iran’s large uranium enrichment programme has been a more important source of concern,” says Sam Ciszuk, Middle East ana-lyst at Global Insight.

Holger Rogner, section head at the IAEA, says that worries about operational safety, at least, are largely unfounded: “In Iran the issue is enrichment, people don’t know where the material is going. But in terms of safety, I think they have a well educated nuclear work-force, and I don’t think they have interest to leave a bad example for the world. If people adhere to their manuals and do their job conscien-tiously, things should be OK.”


REGIONAL UPDATE

KSA should adopt renewables regulation by 2011, government offi cal saysAramco official: 10 percent of power could come from renewables by 2020

A high level government offi cial has advocated the approval of a reg-ulatory framework for investment in renewable energy by 2011. The news comes as a top executive at oil giant Saudi Aramco said that renew-ables could account for 10 percent of the kingdoms power output by 2020.

The proposed measures should include government funding for the renewable sector, and the estab-lishment of feed-in tariffs deter-mined by an auction process, said Adullah al Shehri, governor of the Saudi Electricity and Cogeneration Authority (ECRA).

Saudi Arabia would be the fi rst GCC country to create the regula-tory framework to promote renew-ables, setting a benchmark for region and laying the groundwork for an ambitious expansion of the renewables sector.

"We developed the policy and we were ready as regulators to submit to our board for approval and then take it to the council of ministers," Sheri told Reuters. Government body ECRA is the regulator of the water and desalination sector. ECRA had previously set a June 2010 target for the approval of reg-ulation on renewables.

There would be no progress if the proposals were not accepted."If they don't provide the funds noth-ing will move forward."

ECRA has also suggested that an auction should take place for power produced from renewable sources on a feed-in tariff model: "We sug-gest that there will be an auction...and the result of that auction will determine the price. The lowest

between seven to 10 percent of peak electricity generated by renew-ables by 2020, most likely solar...that represents roughly 5 gigawatts by 2020. Can we achieve that target? It's feasible."

"We believe large scale power generation from solar can be achieved near the end of this decade, near 2020. Beyond 2020, the economics will be clearly in the favour of deployment of solar power," Reuters reported Khow-aiter as saying. Aramco has held dis-cussions with Abu Dhabi's Masdar City for future collaboration, Khow-aiter revealed.

price will be the feed-in tariff for the next three years."

The government also needed to clarify which body would be regu-lating renewables contracts going forward. "Anybody who wants to invest in renewables in Saudi Arabia will fi nd it diffi cult to know who to talk to," Shehri said. The future role of ECRA will be to issue project licenses, he added.

Meanwhile Ahmad al Khowaiter, director of the new business evalua-tion department at Aramco, voiced his optimism about establishing a sizeable renewable sector in the kingdom: "The proposed target is

The Gulf Arab state has said it was investing US$80 billion to boost power generating capacity to 60,000MW by 2020. Installed capac-ity in the kingdom had reached 46,000MW by March, an offi cial has said. It was around 43,000MW in 2009, with peak demand at around 40,000MW. Shehri said peak power demand reached 41,000 megawatts in 2009.

The kingdom announced in April it would set up a scientifi c centre called King Abdullah City for Atomic and Renewable Energy. The centre would be in charge of promoting research and sealing future deals.

Regulation is needed if Saudi Arabia wants to develop the generation of renewable energy, says the ECRA governor.

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REGIONAL UPDATE


ELIPS wins fi rst order for insulated pipesJV hoping to win orders from district cooling as well as oil & gas clients

ELIPS, the joint venture between Empower and Logstor, was awarded its fi rst contract for insu-lated pipes by the Energy City development in Qatar, two months after opening its factory in Jebel Ali, Dubai, in January.

The order for 13km for district cooling piping was won by Log-stor, the Danish piping company that owns 49 percent of ELIPS. A “good proportion” of the piping will be manufactured at the Jebel Ali plant, revealed Sohrap Zuberi, director at ELIPS and at majority owner Empower.

Zuberi also confi rmed that ELIPS is bidding for orders in the oil and gas markets.

Zuberi believes that placing the fi rst order with Energy City will generate more business. “The moment they see the quality of what we are supplying, that’s the best selling point for us to do it again. Getting 10 kilometers the fi rst time round is harder than get-ting 50 kilometers next time.”

With Empower keen to secure a supply of high quality insulated piping for its district cooling proj-ects, it signed the JV agreement with Logstor in 2007, “Empower needs pipes with the same level of reliability as used in the oil and gas market,” says Zuberi.

Logstor’s expertise in this fi eld resulted in a plant that is not only able to deliver piping for district cooling use. The factory can also supply piping to oil and gas proj-ects. This fl exibility is unique to the UAE, according to Zuberi.

pushed as a unique sales point by the company. “At the moment, the number one thing your cus-tomer will look at is not whether your product is environmentally friendly. He is more interested in service, quality, durability, return on equity,” admits Zuberi. Before ELIPS can translate their environ-mental kudos into a sales advan-tage, customers have to be edu-cated to see the benefi ts, he says.

And the potential advantages are plain to see, according to Zuberi: “We believe that once there is more competition, we will

have a competitive advantage, as others don’t have the technology to produce with cyclopentane. And we won’t have to make alterations to our factory once environmen-tally friendly pipes become the norm. Other producers will face a huge technology investment to change this.”

While Empower entered the JV with the objective of securing backward integration, Zuberi says that Empower offers no takeoff guarantee to ELIPS, who have to convince the parent company on price and quality.

Being able to service differ-ent markets provides a safeguard against fl uctuations in demand. “We are able to bid for both indus-tries from one business,” says Zuberi.

It does, however, also pose challenges due to the length and dimensions of a typical oil and gas order, as one such project can con-sequently take up between six months and a year of production capacity, leaving typical plants unable to service its core dis-trict cooling market. To avoid bot-tlenecks, the ELIPS factory can expand its production capacity at short notice, and is able to call upon a fl exible workforce.

Zuberi is particularly proud of his new product’s environmental benefi ts. ELIPS are the only pro-ducers of pipes in the Middle East to use cyclopentane as insulation material, a more eco-friendly alter-native to conventional materials.

This has, however, not yet been

“Getting [an order for] 10 kilometres the fi rst time round is harder than getting 50

kilometres next time. ”Sohrab Zuberi, director, ELIPS

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REGIONAL UPDATE


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Cut carbon, not consumption, consumers say

While nine out of ten consumers in the GCC want their country to reduce its reliance on fossil fuel power generation, two thirds are unwilling to reduce their energy consumption

ONLINE ANALYSIS

Most popular headlines1. Kuwait’s nuclear study to be ready next year2. First solar park in Saudi Arabia completed3. KSA could adopt renewables regulation by 2011 4. Iraq reconstruction accelerates5. GE wins US$300m gas turbine contract in KSA6. ABB wins US$108m substation contract7. Wind energy predicted slow growth in ME8. Kuwait’s nuclear study to be ready in 20119. Wastewater byproduct holds profi t potential10. Powering Ahead

ONLINE NEWS

GE wins US$300m gas turbine contract in KSA

SPOT POLL

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Wind energy predicted slow growth in the Middle East

Wastewater byproduct holds profi t potential

Five GE steam turbines are scheduled to be installed by the second quarter of 2012 at the Qurayyah open cycle power plant.

The potential for harnessing energy from wastewater sludge will almost double over the next decade as technology advances, a study suggests.

As governments have not moved to provide frameworks to boost the industry, the market will remain slow for now, an insider says.

NEWS ANALYSIS


L ate in April, Masdar and the U.S. Depart-ment of Energy (DoE) signed a Memoran-

dum of Understanding (MoU) to promote collaboration on clean and sustainable energy technologies.

While a detailed plan for coop-eration will be worked out over the coming months, it is already clear that the MoU will allow Masdar to participate in DoE-funded projects, while the department will receive R&D support from the Masdar Institute of Science and Technol-ogy, a not-for-profi t, post-gradu-ate research institute dedicated to renewable energy.

Another key objective, says Masdar, is to provide better and

Masdar are developing the world's fi rst carbon neutral city in Abu Dhabi.

The exchange between Masdar and the Department of Energy stretches back to your time as the COO of the depart-ment’s renewable energy divi-sion. Now it has been forma-lised in an MoU. What is driving this increasingly close relationship between the two bodies?There is a growing recognition that incumbent energy players have a pivotal role to play in aiding the world’s energy transforma-tion. It is not just about access to capital – it is about tapping energy experts who have decades of expe-rience planning and managing large-scale energy infrastructure projects.

easier access for small and medium sized enterprises within the United Arab Emirates and the United States to enter their respective mar-kets. The UAE is already the top Middle Eastern destination for US goods - in 2009 US exports into the emirates totalled US$12.1bn.

Paul Dickerson, head of Haynes and Boone’s Cleantech Practice Group, was chief operating offi -cer at the DoE’s Offi ce of Energy Effi ciency and Renewable Energy (EERE). Between early 2006 and late 2008, “one of the greatest growth spurts in the short history of cleantech,” he oversaw EERE’s work in developing and commer-cialising alternative and renewable energy technologies. Paul Dickerson, partner, Haynes and Boone

Cleantech Cooperation Masdar and the US Department of Energy have signed a Memorandum of Understanding. Paul Dickerson, a former top official at the DoE, comments on the implications.

NEWS ANALYSIS


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Are you enthusiastic about the new partnership? Is it in line with the vision you had for the cooperation between the UAE and the US during your time at the DoE?Absolutely. The MoU is exactly the kind of relationship we anticipated building when I led the fi rst-ever US clean energy trade mission to the UAE during my time at the Energy Department.

What are the key benefi ts of the agreement?In my view, the biggest near-term opportunity is in building technol-ogy. By taking on the world’s big-gest zero-carbon urban project in Masdar City, our friends in Abu Dhabi are going to gain access to all kinds of unprecedented informa-tion on building effi ciency – what works and what doesn’t. And they will gain a treasure trove of infor-mation from the DOE’s national laboratories on breakthrough tech-nologies that are just waiting for a venue to shine.

Is the MoU good news for companies trying to gain access to new markets?The MoU is great news for compa-nies trying to gain access to new markets. Achieving scale for these emerging technologies is probably their most diffi cult challenge. Once companies can prove their technol-ogies’ worth on a grand scale like Masdar City, then buyers won’t be far behind.

What else needs to be done to promote alternative

energies in the GCC? Given the region’s rich solar resources, it is probably just a matter of time before other GCC nations jumpstart their own deploy-ment projects. Countries can get a head start now by implementing additional policies that incentivize the use of solar energy and energy effi cient technologies.

The UAE and GCC coun-tries in general are also invest-ing heavily in nuclear and con-ventional gas power plants. Do you think renewables will become a signifi cant part of the region's power generation mix ?Over time, renewables will become a signifi cant part of the power gen-eration mix in the GCC. But ‘time’ is the operable word because the world is in for a long energy trans-formation. That means we will need to continue to rely on traditional energy sources in the interim.

Which green technologies hold the most promise in the GCC, and which countries do you believe will play a leading role in developing them?Clearly, the UAE has taken a lead-ership role in this space. In partic-ular, they have done a very impres-sive job in employing some of the region’s historic Arabic building designs to take advantage of their abundant solar resources. Their work in using Abu Dhabi’s warm winds to cool buildings is wildly innovative. Saudi Arabia’s use of solar energy in its water desalina-tion plants is going to look incredi-bly prescient years from now.

“The MoU is exactly the kind of relationship we anticipated when I led

the fi rst-ever US clean tech trade mission to the UAE.”

SMART GRIDS


As a key industry fi gure who has helped shape the future of the European energy sector, Dr. Maher Chebbo, EMEA vice

president of utilities & communication industries at SAP, has a thing or two to say about smart grids in the GCC.

Power Player

SMART GRIDS


T o call Maher Chebbo an expert on information and communication technol-

ogies (ICT) in the power indus-try is somewhat of an understate-ment. When the European Union decided to modernise the region’s power grid, he was appointed as one of the members of the Euro-pean Technology Platform (ETP) responsible for paving the way for a smart grid in Europe. (see box) Chebbo is thus responsible for selling SAP’s ICT products to suppliers and transmission com-panies, as well as helping to shape the environment in which these products will be used.

Chebbo is proud of his work for the EU, where he is also active on a number of other bodies, and likes to talk about the ETP charged with coming up with a blueprint for a European smart grid. “This plat-form defi ned a vision, based on the question: Why do we need to do the smart grid? Its simple. We need to achieve the target decided by the European member states,” says Chebbo. The EU has set the bar high. It aims to reduce C02 emissions by 20 percent by 2020, as well as increase the use of renewable energy to 20 percent of overall production, and reduce energy consumption by 20 per-cent. Of those three targets, the fi rst two are mandatory.

The Union has put its money where its mouth is. At the begin-ning of this month, an initiative was launched to execute more than 20 projects worth two billion Euros proposed by distribution and transmissions companies.

With a market share of 65 per-cent for ITC and CRM applica-tions in the utilities sector, SAP is well equipped to contribute to the vision of the smart grid, believes Chebbo. (see box) The company has provided software to around 1,500 utilties worldwide, and has been active in the fi eld since its inception in 1972.

Since the liberalisation of the European energy market in 2007, the company is confronted with a changed sector. Whereas SAP would previously supply verti-cally integrated energy giants who encompassed everything from power generation to transmission and distribution, it now caters to companies with no direct ties to each other.

The changes to the market in Europe did not pose a huge chal-lenge to the company, as its prod-

ucts were structured in a way that made it easy to adapt. Rather than having to develop new software, SAP was able to unbundle its pro-grammes in much the same way was the EU had unbundled the market. “We are offering unbun-dled solutions in Europe, and the full package for vertically inte-grated companies like in the US,” says Chebbo.

He explains how the company responded to the EU ruling: “We developed two things. One was a

“In Dubai, Abu Dhabi, Bahrain, Qatar, each of these utilities want to show that they

are better than the others. They want these projects to be a showcase. ”

solution for unbundling – the inter-company data exchange. That solution enables the communica-tion between the distributor and the retailer. The other was energy data management. This is for the collection of consumption data on meters and helps to bill custom-ers. We also made more develop-ments around balancing, in calcu-lating how much the supplier has to pay for the usage of the network to the distributor.”

COMPETITIVE SPIRIT Whereas in Europe the develop-ment of smart grid is driven by the desire to reduce energy con-sumption, decision-makers in the Middle East are motivated by dif-ferent ambitions. “In Dubai, Abu Dhabi, Bahrain, Qatar, each of these utilities want to show that they are better than the others. They want these projects to be a showcase,” says Chebbo.

Company representatives

Chebbo believes that grids will increasingly be managed via the internet.

SMART GRIDS

www.utilities-me.com

coming to do business in the region are best advised to tread carefully. “If you come to them and make the mistake to compare them with another one, they will not like it. Each one believes they are the best, and they want to be the best.”

Nothing motivates like competi-tion, of course, and progress is evi-dent in the GCC. SAP, for one, are not complaining. “In the last two years we have had a lot of requests for proposals to built CRM sys-tems, and we’ve seen a lot of smart metering bids. I would say the region is not far away from the proj-ects we see in Western Europe, for

20 Utilities Middle East ● June 2010

instance.”Dubai’s Electricity and Water

Authority (DEWA) is amongst SAP’s clients, and are showing considerable interest in upgrading

European Union member states are aiming to incraese the use of renewables.

‘Smart Grid’ has become one of the buzz words in the in-dustry. The term describes the increasing sophistication of acquiring and using data for billing, customer relationship management, and energy effi ciency. Smart grips are instrumental for the addition of renewables into the energy mix, with smart metering and the management of power ex-change facilitating the move towards feed-in tariffs and small-scale renewable energy production coming online.

The term has its origins in the efforts of the European Union to create a grid capable of supporting environmental targets. “The story of the

smart grid started in Europe in 2005,” explains Chebbo. “That year, the European Commission created a tech-nology platform, bringing in stakeholders from the market and asking them to think about the next 10 years. The platform was called the Euro-pean Technology Platform for Electricity of the Future, and it included representatives from utitlies, academia, suppliers and technology companies like SAP – I was and still am part of it.We started thinking about how to call this electricity of the future initiative, and we came up with smart grid. That term is now used even by Obama.”

SMART GRID – DO YOU SPEAK EU?

“There will be a shift from just electricity management to information management.

There will be much more data on the network, more ICT in the networks. ”

their networks. “I would say that Dubai is really pushing, DEWA wants to implement smart meter-ing and other project later and they really keen to invest in this kind of software,” says Chebbo.

DEWA has already implemented software to manage their billing and CRM services, and are now in the process of applying SAP to their network services provider, according to Chebbo. Towards the end of the year, the utility will adopt smart metering. “It is impor-tant whether the management of a company is smart enough or not.

DEWA has a smart management in place, who look outside, and come and ask questions,” says Chebbo.

Good management is by no means guaranteed, however, and Chebbo identifi es mismanage-ment as one of the obstacles in the way of modernising grids. “The other problem we have is a lack of understanding between the man-agement and the workforce doing the project. There is a kind of dis-connect sometimes between the management and the experts who know the network and the IT.” This can be exacerbated if the man at the top fails to consult those around him. “Sometimes the board of a company is not acting like a board but you have the CEO and the rest of the world, and everything depends on the agenda of the CEO.”

Unfortunately, the lack of common decision making is noth-ing unusual in the region. Despite working with the GCCIA, the body responsible for the GCC Intercon-nection Grid, Chebbo believes

SMART GRIDS

www.utilities-me.com22 Utilities Middle East ● June 2010

that cooperation between GCC countries leaves to be desired. He refers to something that former US vice president and environmen-tal guru Al Gore recently said at an SAP event: “If you want to go fi rst, you go alone. If you want to go far,

SAP has been active in the utilities sector ever since the company was founded 1972. After the focus had initially been on back offi ce and ERP, the scope since widened to include other areas. SAP offers enterprise asset management software, designed to help manage the construction and maintenance of infrastructure assets such as power plants

and networks. Its customer in-formation system encompass-es the tools used by utilities to bill their customers and carry out their customer relation-ship management operations. Finally, SAP’s energy data management systems help its clients collect information about consumption patterns, and can be used to optimise the running of the grid.

SAP IN THE UTILITIES SECTOR

you go with others.” It is a message decision makers in the GCC would do well to take on board. “Each one is trying to go alone. The GCC grid is the exception, I think they can cooperate much more in all the other areas. They have to learn

how to cooperate much more like the Europeans are doing with their smart grids.”

Apart from the obvious compar-ison to the European Union, the efforts of other countries could serve as an example to GCC gov-ernments. China and India, for example, who are keen to expand the reach of the electricity network, have developed programmes both at a federal and a state level. “If they want to implement a full smart grid, they need a programme at the GCC level which goes down into the dif-ferent countries, with a smart grid platform where you have the sup-pliers and the network compa-nies and the regulators all coming together to decide how to imple-ment the smart grid network of the future,” argues Chebbo.

Whatever the pace of develop-

ment or the motivation for adopt-ing smart grids, Chebbo has a very clear vision of the future of grids. “The customers and the plants, renewables and the central produc-tion of power, all that will be con-nected like you have internet today that is connecting everybody, that will be the case in every region and every country. There will be a shift from just electricity manage-ment to information management. There will be much more data on the network, more electronics and ICT in the networks. We believe that internet will be much more important in the future and will be the network that will have all these things communicate well together every time.”

It is a fair bet that Chebbo will be there to help put this vision into place.

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SMART GRID TECHNOLOGY


Smart grids rely on smart software, something that HP, who pride themselves as the world’s largest technology company, with 30-odd years experience in infrastructure and integration services, are well-equipped to provide. Utilities Middle East caught up with Ian Mitton, director at HP Utilities Industries and spoke to him about the latest technologies, their acceptance by the utilities industry, and the market in the Middle East

Sensing opportunity

What are the challenges utilities are faced with?The operating pressures that utilities are under are threefold. Firstly, there is the issue of secu-rity of supply – making sure the lights stay on. Then there is the environment – reducing green-house gas emissions, greener fuels, getting into renewables,

How do you defi ne the term smart grids?Term smart grid is a very broad term; it has become almost syn-onymous with meaning utilities. This causes a lot of confusion with customers. In the purest sense it is the transmission and distribution part, with the end point being the smart meter, and

the front end being the generator. But you could argue that there is a bit more to that and the term smart grid is used to incorporate the generation side, and not only the smart meter at home, but also the smart home and home auto-mation.

To me the smart grid is simply the part in the middle.

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24 Utilities Middle East ● June 2010 www.utilities-me.com24 Utilities Middle East ● June 2010

and also encouraging consum-ers to use less energy. Having said that, electricity demand is going to grow, but if we use less, that growth won’t be as severe. Finally, there is customer man-agement – customers satisfac-tion. This is extremely important for deregulated markets, like we are seeing in the US, Europe and Australia.

Is deregulation going to become increasingly promi-nent?I think deregulation in time will hit more markets. Certainly the European Commission is unbun-dling the business, they’re saying you have to be electricity gen-erators, transmission compa-nies, distribution companies, or retailers, and have those as sep-arate bundles. That whole area of deregulated markets, you can see how there is a big pressure on customer management there.

“Everyone is talking about smart grids, I’d argue in many ways the system is pretty intelli-

gent already.”Ian Mitton, director, HP Utilities Industries

HP are using their Teclo software to smarten up grids.

What about the Middle East?In the Middle East de-regulation won’t happen any time soon. Yet as a utility provider in the region, you still want to make sure from customer management point of view that your customer is satis-fi ed, because even though they have only one place to buy their electricity from, if they are kept happy they don’t phone you, and that means you don’t need a very big call centre, which obviously means lower cost.

utilities haven’t really embraced yet, but to which they are becom-ing more aware as they are rolling out their projects: the scalability issue of managing the network.

As a utility running a grid, you can manage fi ve to 10 kilometres and you can get by because the head end systems on the meter systems give you the alarms and the alerts. You might have a head end system for every two to three kilometres. As you scale up to 100 or 1000 kilometers, you’ve got a storm of alarms coming form that network.

We’ve heard numbers of maybe fi ve percent of all meters and devices are alarming and alert-

ing at any given point. With a million meters, that

means that at any given stage 50,000 meters are sending alarm sig-nals. When you’ve to a storm like that, how do you differentiate?

What does HP offer util-ities companies looking to improve their customer man-agement operations?From an automation management point of view, we’ve seen a great opportunity to leverage our expe-rience in the Telco sector. HP is pretty pervasive in Telco, 80 per-cent of text messages in the world are touched somewhere by HP software, and all the big carriers use HP software to manage their networks to manage their data. So what we’ve done is take the soft-ware we use for network manage-ment, service activation and data management within the Telco sector and applied it to utilities.

How does the soft-ware derived from the Telco sector benefi t your clients?The key differentiator HP has is in an area that

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“In the Middle East, de-regulation won’t happen any time soon. Yet as a utility provider in the region, you still want to make sure your customer is satisfi ed. ”

At the International Petro-leum Week in February, the two companies announced that they are working to develop a wireless sensing system collecting high resolu-tion data to detect oil and gas reservoirs. Key to this project is HP’s CeNSE programme, which relies in developing tiny sensors, or accelerom-eters, which can be deployed in vast numbers.

“We have started our fi rst CeNSE project with Shell, put-ting these accelerometers in the drill bit and putting them on the ground, so that you can triangulate and try and fi nd where the best location for oil is,” explains Ian Mit-ton, director at HP Utilities Industries.

While the accelerometer gives CeNSE its “feel,” the system’s “taste and smell” are just around the corner, says Peter Hartwell, senior researcher at HP and project team lead. Researchers in the

group are using nanomateri-als to boost a standard chemi-cal and biological detection technology to 100 million times its usual sensitivity rates. That could lead to de-tectors small enough to clip onto a mobile telephone. With a wave over produce, the sensor could, for example, warn consumers of salmo-

nella on spinach leaves or pesticides present in organic produce.

Deploying CeNSE would en-able real-time data collection for a range of applications, says HP, such as bridge and infrastructure health monitor-ing, geophysical mapping, mine exploration and earth-quake monitoring.

MAKING SENSEHP and Shell look to deploy new sensory technology in oil and gas exploration

You need very strong network-ing tools and correlation engines. That’s were we’re fi nding we’ve got something very unique.

Are utility companies quick to implement this tech-nology? We are met with the usual util-ity response – which is slow. The decision-making process for utili-ties is very long-winded. Our tech-nology is being bought by utilities worldwide, but once these proj-ects start, they take a long time to roll out. Getting the infrastructure in place, to get the integration with the backoffi ce, that can take the best part of a year.

What is the latest innova-tion HP is pursuing in the fi eld of smart grids?Everyone is talking about smart grids, I’d argue in many ways the system is pretty intelligent already. Where they can improve it is in granularity. Here we are developing our CeNSE (Central Nerve System for the Earth) technology. The idea of calling it CeNSE is to mimic the human senses, so you’ve got eyes, ears, nose, touch, and apply that to the grid. We have started a fi rst project using CeNSE in coopera-tion with Shell . (see box)

At the moment a sensor on a grid is a very expensive unit, costing about 2,000 dollars, If you could

are often followed by mudslides, which kill more people than earth-quakes. If we put sensors on the wires, we would know when the earth starts to go.

How is your smart busi-ness in the Middle East going?In the Middle East there’s not so much activity at the moment. We’ve been in discussion with a good few of the utilities, but noth-ings come to fruition yet.

How come?Is suspect that it has to do with the return on investment. We have found in a good few cases that cus-tomers have struggled with that. They’ve thrown a couple of mil-lion dollars at a pilot, bought some meters, got some software, and plugged it all together. But this is usually led and driven by the meter department, and they are only looking at automating their current process.

What they haven’t looked at is the holistic approach, the bene-fi ts our software can bring to the whole organisation. Our systems can bring down costs for call cen-tres, as utility companies are able to identify a problem with the end user as soon as it occurs. They can also locate problems on the grid immediately, so that repair teams don’t have to drive up and down the power lines looking for the damage.

The reason why we haven’t been selling our software in the ME is probably for the same reason why many of these pilots have started and stopped, they can’t identify the return on investment.

A HP accelerometer

make a sensor for a few dollars, and pepper them out on the grid, then you’ve got much more granu-larity. That is what I think is going to be the next stage of the grid.

We are talking to utilities in the US, Europe and in Japan about what can we use these sensors for. In Japan, for instance earthquakes

NUCLEAR UPDATE


Abu Dhabi’s plunge into the nuclear age has put the Middle East on the nuclear map. UME examines the state of play, and speaks to Holger Rogner of the IAEA.

Nuclear ambitions


NUCLEAR UPDATE


ity of 1,400MW each. The fi rst of these will be completed in 2017, and all four are planned to come online by 2020.

The economic rationale behind oil-rich countries going nuclear is straightforward, and boils down to a simple maths, says Holger Rogner, section head at the Department of Nuclear Energy at the International Atomic Energy Agency (IAEA): “With the price of oil around 70 to 80 dollars per barrel, its a very simple calcula-tion: Imagine you produce your oil at a cost somewhere between two to fi ve dollar per barrel, and you need three barrels of oil to pro-duce the equivalent of one barrel of electricity. If you use that oil for domestic power generation, you will get about15 dollar, if you sell it on the international markets you will get around 210 to 240 dollars.

Nuclear power is coming to the GCC, and to the wider region. Burdened

with the lion’s share of power gen-eration in the United Arab Emir-ates, and devoid of vast resources of natural gas some of its neigh-bours enjoy, it is perhaps not sur-prising, that Abu Dhabi has taken the lead in the push towards alternative sources of energy.

Last November. the emirate signed a US$20bn contract with a consortium led by the Korea Electric Power Cor-

poration (Kepco), which includes Samsung,

Hyundai, Doosan Heavy Industries,

Westinghouse and Toshiba, for four

nuclear reactors with a capac-

NUCLEAR UPDATE


state visit by French President Niklas Sarkozy in May 2009 was undermined by warnings from European regulators that there was insuffi cient independence between the day-to-day safety sys-tems and emergency systems on the EPR. Areva is subject to fur-ther bad press over the delays in the construction of the Olkiluoto 3 nuclear plant in Finland. The plant was scheduled to become opera-tional last year, instead Areva are as yet unable to confi rm a comple-tion date.

One of the main sticking points for the Abu Dhabi government is likely to have been the high costs associated with the French bid. Here the US-Japanese bid, which centred around General Electric and Hitachi, was also left want-ing, some say. “The Korean bid

Just take that as a back of the enve-lope calculation.”

In addition, some GCC coun-tries, such as Abu Dhabi and Kuwait, and are looking to reduce their dependence on imported gas as a feedstock .

While the interest in nuclear power amongst GCC states can thus hardly be surprising, a few eyebrows were raised when the Kepco consortium was awarded the Abu Dhabi contract.

The Areva-led consortium, in particular, was stunned, as it had been confi dent of clinching the deal. The group of French com-panies, which consisted of Areva, GDF Suez, Total, Vinci and EDF, were convinced of the superiority of their product, Areva’s European Pressurised Reactor (EPR).

But the fanfare of an offi cial

was 40 to 50 percent cheaper than the competition,” says Michio Hayashibara, director at Marubeni Power and Asset Management. “In their domestic market, Japanese producers are used to the client expecting very high safety stan-dards and being willing to pay for it. But they should offer good qual-ity as well as a good price.”

But Kepco are unlikely to have won the bid solely on the back of price calculations, says Rogner. He believes that Abu Dhabi, like all the countries in the Middle East who are seeking to develop nuclear power, are looking at sev-eral factors. “Its not just selling the plant, it is about education, about the fuel supply, about other services. Its not just the technol-ogy per se, it’s the package. That’s what the French didn’t understand

in the UAE deal, they thought, ‘We have the best technology, what can go wrong?’”

Kepco’s offer was the package with which Abu Dhabi felt most comfortable with, says Rogner. He points out that EDF was initially not willing to commit to operating the plant. This turned out to be a seri-ous strategic blunder in the bar-gaining process, as the emirate was not interested in running the plants itself, and has effectively outsourced the nuclear project to the Koreans. EDF did change its stance later on, but it was too little, too late.

By being the fi rst to go nuclear in the Middle East, Abu Dhabi has certainly been getting a lot of attention on the international stage, as well as envious glances from its neighbours.

These are, however, not likely

Delays in the construction of theEuropean Pressurised Reactor at the Olkiluoto 3 nuclear plant in Finland undermined the French bid to built the nuclear power plants in Abu Dhabi.

NUCLEAR UPDATE


“I don’t think the other countries will necessarily follow the UAE template of

outsourcing everything. ”

to follow the blueprint for nuclear development set out by the emir-ate. “I don’t think the other coun-tries will necessarily follow the UAE template of outsourcing everything, I know for example that other countries are hoping to develop their own human resources base,” says Rogner. He believes that while aspiring coun-tries will very likely make use of outside help initially, they will aim to develop their own expertise, run their programmes indepen-dently of a foreign operator.

WHOSE NEXT?And which Middle Eastern coun-try will be the next to step into Abu Dhabi’s footsteps and commit to nuclear energy? Jordan and Egypt are the Arab states that have so far made the most progress in devel-oping their programmes. In November, Australia’s Worley-Parsons was appointed to carry out a feasibility study for Jordan’s fi rst 1,000MW nuclear reactor, to be built near the port of Aqaba. Shortly afterwards the govern-ment awared a US$173m con-tract for a nuclear research reac-tor to the Korea Atomic Energy Research Institute and Daewoo Engineering & Construction.

WorleyParsons is also advis-ing Egypt on its plan to build a 1,200MW reactor. During the next eight years, the fi rm will chose the site and the technology, as well as over-see the construction and the start-up of the plant.

In May, Russia’s energy minister Sergei Shamtko admitted that Russia may help Syria built an nuclear power plant.

region by Sarkozy. The MoU will go a long way in overcoming Gallic gloom over the UAE debacle, and more or less guarantees the involve-ment of French companies in future Kuwaiti nuclear projects.

As of yet, no timeline for the development of nuclear capacity has been revealed by the kingdom. A set of studies on the viability and cost of a nuclear energy project in Kuwait will be ready for decision makers by early 2011, however.

WORK TO DOThe countries seeking to join the nuclear age clearly have work to do to. “Key challenges are the

lack of infrastructure, and by that I mean soft infrastruc-ture such a nuclear law, human resources, independent regula-tors, education, all these aspects,”

Rogner identifi es the main hurdles.

Furthermore, time delays can arise from the need to adhere to international conventions. “As soon as laywers get involved, it doesn’t speed up the process.”

Another problem that has been fl agged up is that of grid capac-ity. Most of the countries in the Middle East currently have small grids, which would cause diffi -culties if a nuclear plant with sig-nifi cant output came online. “The largest unit on the grid should

an output of no more than 10 per-cent of grid capacity,” says Rogner. “So you put in a 1,700MW --reac-tor online, than you should have a 17GW grid, which most countries don’t have.”

Due to the enormous electric-ity growth rates of countries in the Middle East, grid capacity will probably have caught up by the time the fi rst reactors come online. “Current demand growth rates are roughly doubling every 10 years. If that continues, most of the coun-tries will be there, or in that order anyway,” says Rogner.

Rogner stresses that the IAEA is there to help countries over-come their teething problems and ensure a smooth transition into the nuclear age. “We as the agency stand ready to help those coun-tries to do it right. Of course we are not a police agency , but if member states want to know how to do it best, we are there to help.”

Lastly, Rogner emphasises that nuclear energy needs total com-mitment to the cause. “We want to make them understand that this is a long term commitment. Once you’re in, you’re in.”

oping their programmes. In November, Australia’s Worley-Parsons was appointed to carry out a feasibility study for Jordan’s fi rst 1,000MW nuclear reactor, to be built near the port of Aqaba. Shortly afterwards the govern-ment awared a US$173m con-tract for a nuclear research reac-tor to the Korea Atomic Energy Research Institute and Daewoo Engineering & Construction.

WorleyParsons is also advis-ing Egypt on its plan to build a 1,200MW reactor. During the next eight years, the fi rmwill chose the site and thetechnology, as well as over-see the construction and thestart-up of the plant.

In May, Russia’s energy minister Sergei Shamtkoadmitted that Russia may help Syria built annuclear power plant.

WORK TO DOThe countries seeking to join thenuclear age clearly have work todo to. “Key challenges are the

lack of infrastructure, andby that I mean soft infrastruc-ture such a nuclear law, humanresources, independent regula-tors, education, all these aspects,”

Rogner identifi es the mainhurdles.

His comments came after Rus-sian president Dmitry Medvedev put the prospect of nuclear coop-eration on the table during his visit to Damascus. Russia’s move will have caused consternation amongst Western governments, who fear that Syria harbours ambi-tions to enrich plutonium for mil-itary use. In 2007, the Israeli air-force destroyed what the US said was a nascent plutonium-produc-ing reactor.

Iran, has been developing is nuclear programme for years, and may be have its Bushehr plant coming online within months , if statements made by Iranian and Russian offi cials are to be believed. (See Regional Update, page 9)

In the GCC, Kuwait is a likely frontrunner, having signed a Mem-orandum of Understanding (MoU) with the France after another, and this time more rewarding visit to the

Holger Rogner, section head at the

IAEA, says the agency is there to help

countries develop their nuclear energy

programmes.


DISTRICT COOLING


Designed to provide air conditioning to large scale developments, district cooling has had to reinvent itself to adapt to challenging times

Fit for purpose

tonnes, when all that was needed was 20,000 tonnes,” says Mohamed Yousseff, managing director at SNC-Lavalin, an EPC contractor active in district cooling.

Things changed as the world economy took a turn for the worse,

District cooling is a fairly young concept, and its rise to prom-inence coincided

with the construction boom that ended only as the fi nancial mar-kets soured in 2008. Built in an

era defi ned by largesse to service developments of ever increasing proportions, many of the district cooling plants were designed with-out careful deliberation on actual requirements. “In the past we built plants with a capacity of 50,000

The Nad Al Sheba district cooling plant at the Meydan complex under construction.

DISTRICT COOLING


“The market has matured a lot, people are more conscious of the capacity of a

district cooling plant.”Tawfi q Abu Soud, executive director, Drake & Scull Water and Power

Tawfi q Abu Soud, Drake & Scull, believes there lies opportunity in crisis.

Temporary district cooling providers have recorded a booming trade as projects have stalled.


and the pace of property devel-opment slowed considerably. As developers struggled to fi nd occu-pants for their new buildings, dead assets in district cooling plants became a common phenomenon. Some plants, already built, would simply be fi tted with less capacity, says Yousseff.

Inspired by the new spirit of aus-terity, and more familiar with dis-trict cooling, the utilities com-panies and developers are now looking to take a more consid-ered approach. “The market has matured a lot, people are more conscious of the capacity of a dis-trict cooling plant,” says Tawfi q Abu Soud, executive director at Drake & Scull Water and Power. “Three years ago, they would go and install the district cooling for the whole master plan with some additional capacity just to be safe. They didn’t dig deep inside to the load profi le of each building to see what the actual need was.”

Abu Soud sees a trend towards more customised plants arising, partially because of the fi nancial constraints experienced by the utilities companies providing dis-trict cooling. With the credit mar-kets in turmoil, securing fund-ing has been a diffi cult in the last couple of years. Even if crowned with success, the process can take up to a year. This has left district cooling companies unable to bid for as many projects as in the past, a problem for developers who cannot open their residential or commercial buildings without air conditioning.

To solve this dilemma, prop-erty developers are moving towards building their own cool-ing plant. “We had a call from a property developer from Abu Dhabi recently, who said that he had a problem. His utility provider couldn’t provide him with chilled water until 2012, but his property will be ready next march, and with-out cooling it cannot open,” recalls Abu Soud.

the move towards more custom built district cooling applications, believes Abu Soud, who speaks of a trend towards ‘distributed energy’. In order to avoid dead

assets in a plant already completed while the rest of the complex is still under construction, district cool-ing providers are now looking at building a range of smaller plants in a staged process.

“The construction of a devel-opment can be phased out, but if you are building a central plant, you can only phase parts of it out,” explains Abu Soud. “So there are a lot of dead assets, especially underground, as the infrastruc-ture for the chilled water has to be built in the beginning. There no return on investment for the capi-tal investment. That’s why we are moving to distributed energy or localised chilled water plants.”

To improve the reliability of the system, the plant will be intercon-nected, meaning that a malfunc-tioning plant can be compensated for by the remaining capacity.

TEMP SOLUTIONS While delays arising from illiq-uid capital markets have caught out utility companies and project developers, it has created busi-ness opportunities for some. Pro-viders of rental cooling solutions have fl ourished. “I can only guess why developers come to us,” says Roberto Bagatsing, group market-ing manager at RSS, one such pro-vider. “But when we went to some of the projects we were hired for, we noticed that there very few cars in front of the buildings. If a new development has only one or two tenants, there is no point running a whole district cooling plant.”

ECP contractors like Drake & Scull will increasingly be deal-ing with the property developers, supplying them with purpose built plants for individual complexes.

“We think we can provide a better solution,” states Abu Soud. “We can build a plant fi t for purpose. District cooling providers built a plant providing cooling for the whole area – so maybe the require-ments are not fi t for purpose for everyone.”

A more gradualist approach in the construction industry, cou-pled with reduced demand for new residential and offi ce space in the region, will further accelerate

DISTRICT COOLING


“In the past, we would build a plant with a capacity of 50,000 tonnes, when all

that was needed was 20,000 tonnes. ”Mohamed Yousseff, managing director, SNC-Lavalin


Conversely, if the district cool-ing plant does not come online in time, developers are desperate for a short term solution. “Most of the district cooling plants have been delayed,” says Bagatsing of the sit-uation in the UAE. As a result, RSS have been able to increase their revenue dramatically, and have worked on some of the region’s noteworthy recent developments.

The company provided cool-ing to the Atlantis Hotel, the Lost World theme park and the Dol-phin’s Habitat in the Palm Jumei-rah in Dubai from July 2007 to October 2008. With 38 air cooled chillers in duplex confi guration generating a capacity equivalent to 7,700 tonnes of refrigeration (TR), the project was the largest temporary air-cooled chiller plant connected in a single header in the MENA region, says Bagatsing. That record was later broken by RSS itself, when the company started supplying the equivalent of 13,000 TR in to the Yas Island proj-ect in Abu Dhabi in July 2009.

While those catering for tempo-rary solutions are thriving, EPC contractors are still looking for business to pick up again, with little tendering activity in the GCC so far. “Business is improving, but it won’t go back to 2007 levels, not this year, not next year. Everyone is cautious, and is trying to work in a more phased way,” says Abu Soud.

“Last year was a weak year com-pared to 2008 for the whole con-struction business, but we can see it is picking up now,” agrees SNL-Lavalin’s Yousseff.

Drake & Scull have responded

Drake & Scull provided the district cooling for the Mey-dan complex, home to the Dubai Racing Club’s racetrack.

The Nad Al Sheba district cooling plant consists of four 5000 TR electrical driven chill-ers modules and two thermal storage tanks which together have a capacity of 25,000 TR per hour for supplying chilled water at peak times.

The plant provides chilled water for the complex’s fi ve-star hotel, museum, gallery, IMAX theater, the Dubai Rac-ing club and Emirates Racing

Authority Offi ces. Nad Al Sheba is designed to further accommodate another set of four chillers modules for fu-ture needs.

“The plant has a special de-sign in order to speed up the construction. We have not partially submerged it like other plants, instead we built it fully over ground. The plant was ready to produce chilled water within six to seven months of breaking ground. That is quick,” comments Taw-fi q Abu Soud, executive direc-tor at Drake & Scull.

MEYDAN – RACING AGAINST TIME

to tougher times by venturing beyond their traditional base in the UAE. “The big boys take the crisis as an opportunity to become bigger,” says Abu Soud. The com-pany is bidding for district cooling projects in new markets such as Egypt and Libya, where a tender for the cooling of the Tripoli Inter-national Airport is in the post-bid clarifi cation stage.

A lengthened bidding process in all markets due to the credit crunch, from around two months to over half a year, has stood in the way of securing any orders in its new target areas yet, says Abu Soud.

GCC STILL THE BIGGEST DISTRICT COOLINGMARKETYet despite the recent slump, the GCC is still the big hitter when it comes to district cooling. “If you attend the conferences in Europe and the US about district cooling the references are always about the projects here in the region. Here you fi nd the projects, due to the environment, due to the tem-peratures in the region of 50,000, 60,000 or 70,000 tonnes. In Europe or the US, we are talking about maybe 5,000 tonnes,” says Youss-eff.

And Yousseff is optimistic about the long term future of the tech-nology. While the initial capital expenditure may be higher than for localised air conditioning set ups, operating costs are consider-ably lower. “The energy effi ciency is better, district cooling only con-sumes 50 percent as much power as conventional cooling, and you provide the developers with more

space,” he says. “In all aspects dis-trict cooling is a better solution, it just needs some promotion to make the people familiar with it, because its a new business.”

After being pioneered in the UAE, district cooling is now gain-ing traction in Saudi Arabia, the Arab world’s largest economy, and SNL-Lavalin only recently received an order in the Kingdom.

However, there is a word of cau-tion. The key benefi t of district cooling to end users is reduced the reduced cost of air conditioning. And unlike electricity and water, where consumers in the region depend on a monopoly of state-

owned utilities, the market for air conditioning gives end users a choice. Yousseff believes that the companies providing district cool-ing are undermining their competi-tive advantage by pricing their ser-vice out of the market. “The utility providers unfortunately came up with a fi nancial model that is very high for the end users. I’m afraid that later on, the end users might opt for the conventional solution, if district cooling is the more expen-sive option,” laments Yousseff.

There might be little reason to be concerned. As this market has proven, its participants are quick to adapt their business model.


ECONOMIC CITIES


Setting up an electrical utility service is a challenging process when providing for a city not yet in existence

Lighting up Economic Cities

A decade from now, the Arabian Penin-sula will be dotted with new Economic

Cities dedicated to attracting and incubating industries such as fi nancial services, technology, and communications media. Offering special incentives and amenities to attract businesses and encourage investment, economic cities will be critical to the fi nancial devel-opment and economic diversifi ca-tion of GCC countries. To ensure that these cities can meet their potential, GCC governments must make sure that the cities have the necessary elements to provide an effi cient and cost-effective elec-tric utility service, according to George Sarraf and Tim Gardner from Booz & Co.

POWERING ECONOMIC CITIES“The presumption is that economic cities will be developed pri¬marily through private investment. How-ever, as these cities move from concept to plan to construc¬tion, their developers will encounter some issues that can likely only be solved with the assistance of public resources,” says George Sarraf, a partner at Booz & Co.

Economic cities will be built from the ground up through a process of accelerated community engi-neering, which is often unpredict-

“ To establish all these elements de novo and shape them to a population that

does not yet exist is inherently diffi cult.”Tim Gardner, Booz & Co.

able. Urban environments involve multiple interdependencies of ser-vices and institutions. The evolu-tion of these interdependencies typically occurs in parallel with population expansion and cultural and economic development. “To

Tim Gardner, senior executive advisor, Booz & Co.

establish all these elements de novo and shape them to a popula-tion that does not yet exist is inher-ently diffi cult,” said Tim Gardner, a senior executive advisor at Booz & Co.

In these circumstances, even

familiar municipal issues can create unfamiliar challenges. The challenges consist in supplying the three institutional conditions on which an electric utility service depends: a source of investment, a mechanism for cost recovery, and a framework for regulation. Investment: The provision of elec-tric power is widely regarded as a low-risk business, with a predict-able and secure customer base, and cost coverage virtually guaran-teed. In economic cities, the size of the market is uncertain, and if the service price seems excessive, it may discourage potential custom-

ECONOMIC CITIES


“ Developers will encounter some issues that can likely only to be solved with the

assistance of public resources.”George Sarraf, partner at Booz & Co.

The entrance to the King Abdullah Economic City


“The issues posed by investment, price, and regulation raise doubts as to whether utility service in eco-nomic cities is achievable through private initiative alone. Instead, it will likely require a well-coor-dinated combination of public and private measures,” explained Sarraf.

During a city’s start-up period, the public sector may need to bear much of the initial risk of util-ity infrastructure development. Over the medium term, the public sector may need to commit to pur-chasing whatever excess power is generated for the city but not consumed by it. “Such a guaran-tee would provide an assured level of consumption and an effi cient alignment of the city’s supply port-folio with demand, thereby per-mitting tariff requirements to be reduced substantially,” continues Gardner.

If the economic city does suffer a power-price disadvantage in comparison to other siting alter-natives, it will need to focus its sales efforts on small industrial, commercial, and residential cus-tomers, for which modest incre-ments in utility bills will seem far less important than for energy-in-tensive industries. As for regula-tion, it should be conducted by an agency that has a fl exible perspec-tive and is committed to consumer fairness and to the overall success of the economic city.

In the case of economic cities, as in many other areas of social innovation, addressing any devel-opment challenges and building tomorrow’s cities is clearly within the grasp of the public and private sectors acting together.

With a total development area of 173 square kilometers, and a total cost of US$80 billion, the King Abdullah Economic City (KAEC) is one of the most ambitious proj-ects in the region. The city is located along the coast of the Red Sea, around 100 km north of Jeddah. Along with other

fi ve economic cities, is a part of a program to place Saudi Arabia among the world’s top ten competitive investment destinations by the year 2010. The fi rst stage of the city due to be completed in 2010, while the whole development is scheduled for completion by 2020. The government

expects the city to help diver-sify the oil-based economy of the kingdom by bringing direct foreign and domestic investments, and to create up to one million jobs for the youthful population of the country, where 40 percent of the population are under the age of 15.

KAEC – SAUDI ARABIA IS THINKING BIG

ers from locating there. Start-up investment in the power distribu-tion infrastructure of an economic city therefore, could be a high-risk undertaking.Pricing: In the typical power util-ity system, tariff levels are deter-mined by dividing total produc-tion costs by the number of con-sumption units expected. Given the market uncertainty faced by nascent economic cities, the pro-spective tariff level is diffi cult to calculate, resulting in a wide vari-ety of potential outcomes. This pricing challenge is compounded

if customer electricity tariffs in the larger market are subsidized, as this will make rates appear com-paratively uncompetitive. Regulation: The standard role of a power regulator is to preserve the viability and health of the provider and protect the public from any abuse of economic power. In prac-tice, this role typically is exercised through a quasi-judicial, often adversarial, process of hearings and reviews, which is ill-suited to the circumstances of an economic city. The economic city requires a scheme of regulation that rec-

ognizes the common interests of the developer, city utility, and city residents and employs innovative means of achieving them.

PUBLIC-PRIVATE PARTNER-SHIPS

IRAQ


Iraq is seeking bids for the installation of 2.5GW generation capacity as reconstruction accelerates. IHS Global Insight Middle East analyst Sam Ciszuk comments on the challenges ahead

Catching up Iraq’s Electricity Ministry is

inviting bidders to under-take the construction and installation work at power

plants as the fi rst of 72 gas tur-bines procured in 2008 start arriv-ing. The process will be a key test of the Ministry’s project manage-ment abilities and will show where in Iraq subcontractors dare and do not dare venture.

Iraq’s electricity sector has suf-

fered a large capacity defi cit for decades, having barely been able to meet the population’s mini-mum demands in the face of inter-national sanctions in the 1990s or to carry out large-scale recon-struction because of the ubiqui-tous violence in the aftermath of the 2003 invasion. An ambitious four-year plan to rebuild and qua-druple Iraq’s generating capacity was launched by Electricity Min-

GETTY

IMA

GES


IRAQ


Karim Waheed, Iraq’s Electricity Minister,

launched a 4-year plan to quadruple capacity.

ister Karim Waheed in the second half of 2007—as violence started to abate in large parts of the coun-try. But the plan was delayed as oil prices plummeted in the second half of 2008.

Launching vast reconstruc-tion efforts on such a badly dam-aged power generation and supply chain is a very complex issue, requiring considerable stability, not forgetting a consistent supply of feedstock—an issue which still has to be resolved in Iraq. Lead times for gas turbines are also con-siderable, despite Iraq’s purchase of very common and widespread technical solutions in bulk.

Hence it is only now that the real push looks imminent, with eight GE turbines ordered in late 2008 having just been delivered and another 24 expected to arrive before the year is over, according to Laith al-Mamury, head of invest-ments and contracts at the Elec-tricity Ministry.

The fi rst 125MW GE turbines will be installed in the Baghdad, Karbala, and Diwaniya provinces. Eight larger Siemens turbines with a total capacity of 1,900MW will also start to be installed some-time this year in the oil and refi n-ing hubs of Kirkuk, Baiji, and Basra, according to al-Mamury, who told Reuters that about 36 companies had prequalifi ed for the tenders—among them South Korea’s Hyundai Heavy Indus-tries, Switzerland’s ABB, Cana-da’s SNC-Lavalin, and Kuwait’s al-Ghanim Company.

The engineering, procurement and construction contracts on offer are worth about US$350,000 per installed megawatt, al-Ma-

“ Launching vast reconstructive efforts on such a badly damaged power generation

and supply chain is a complex issue. ”

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IRAQ


“Iraq will need to make headway with the development of its gas production

capacity during a very short time. ”


How important is the issue of security in the quest to rebuild Iraq’s power infrastructure?Security is one aspect but not the main aspect, because the security situation now is much better than two years ago. I would have said that the security situation will improve even more, but now with the political dynamics after the election and the stalemate continuing around the formation of a govern-ment, its going to be quite challenging.

So security remains a concern, alongside corruption, and I would also add bureaucracy to the list. You really need to have a supportive busi-ness community to sustain big projects, and make them happen. For it to happen, cur-rent legislation and regula-tion needs signifi cant reform across the board.

What stands in the way of reaching the necessary levels of power generation?Unfortunately in Iraq we do not have a master plan as such when it comes to power generation. We have the minister of oil thinking some-thing different to the min-ister of electricity. Electricity generation in Iraq is very much powered by gas.

At the moment, there is no master plan for gas. There are business proposals from various companies. But when

you get into the details of those they do not allocate a realistic volume of feedstock to elevate the level of pro-duction of electricity to reach the acceptable level. So far we are producing 5.5GW of electricity, whereas we should reach at least 24GW.

Are you optimistic that these targets can be achieved?If there is a proper policy at a national level when it comes to a gas master plan, I think its possible to reach that goal in four years. If you take it of the governments hands and leave it to the private sector to secure affordable feed stock, it is possible, I’m sure. But if the government con-tinues to control their play I don’t think Iraq will witness any development, and in-stead we will witness another seven years of the same.

How important is a stable electricity supply for the development of Iraq?Quite important, because when we talk about electric-ity we talk about energy security for industry and ag-riculture and so on. We are talking about the complete value chain for the welfare of the population, not just about switching the lights on. It is about making sure that Iraqi fruits are more afford-able than fruit imported from Europe, which at the moment is much cheaper than domes-tic produce.

Q&A: THE INSIDE VIEWLuay al Khateeb, executive director at the Iraq Energy Institute, spoke to Utilties Middle East on the sidelines of the Al-Tamimi ‘Doing business in Iraq’ conference.

approval, would be key. Shell envisages to initially only

gather associated gas currently being fl ared off, and then move on to collect the rising amounts of gas being produced along-side oil in the south. The project has been delayed for almost two years because of several contro-versies and uncertainty over how much gas Shell would be allowed to take from the oilfi eld opera-tors, given the likely need for res-ervoir re-injection. The more the project is seen as mainly supplying the domestic market, and not as a means to boost exports, the less controversial and more politically prioritised it will be.

Iraq also launched its third licensing round last week, focus-ing entirely on offering three gas fi elds in different parts of the

mury has said, adding that “the companies will present their bids within a month.”

FEEDSTOCK DEVELOPMENTUpon the award and execution of the tenders for the projects this year, Iraq could have about an addi-tional 2.5GW of generating capac-ity installed by around 2012, rising to 27,000MW as all the ordered turbines are installed. This means that Iraq will need to make head-way with the development of its gas production capacity during a very short space of time, includ-ing rebuilding and expanding its domestic gas transport infrastruc-ture—in many cases from almost complete dereliction. Movement on Shell’s South Gas deal, which is reported to have been sent to the cabinet for

IRAQ


country to developers, thus fur-ther making feedstock gas vol-umes available within three to eight years’ time.

Still, while no-one doubts that the needed gas volumes exist, the Oil Ministry and to some extent the Electricity Ministry will have to co-ordinate, scope out, tender, and project-manage pipeline, treat-ment, and pumping station con-tracts for the construction of the domestic network within a very short timeframe. This will coin-cide with Iraqi demands on the oil companies working in the country to develop its oil production capac-ity from about 2.5 million barrel per day to a massive 12 million bar-rels within seven years.

The situation will almost inevi-tably result in a massive overheat-ing of the sector, rising costs, and severe materials and skilled-la-bour shortages, delaying both the oil and gas side of the projects and threatening the power reconstruc-tion effort’s timeframe.

POWERING SECURITYIt is widely recognised that in order to fi nally secure Iraq and extend the central government’s reach to all parts of the country,

extending and maintaining core government services—includ-ing electricity—to all parts of the population is fundamental. Still, for contractors, working on large immovable infrastructure projects located in Iraq’s most densely pop-ulated regions will be a very differ-ent security challenge to the one now eagerly taken on by the oil companies. Iraq’s oilfi elds are in most cases located in the sparsely inhabited southern desert, and where fi elds in more populated and unstable areas were offered, few—if any—oil companies were willing to sign up. The Iraqi security forces will have to issue strong guarantees of per-manent security deployments around most power project areas for the foreseeable future. Even with such guarantees in place, the Electricity Ministry is still likely to face problems in secur-ing bids for projects in some of the more unruly areas of the country, including the key Kirkuk fl ash-point region and northern oil hub, despite the desperate need to extend reliable power supplies to these areas.

PROGRESS, BUT IS IT TOO MUCH TOO FAST?It fi nally appears that some key electricity projects will move ahead, able not only to power the most crucial infrastructure and oil industry installations, but to actu-ally change the power supply situ-ation in Iraq permanently. It will nevertheless be a tall order for Iraq to ensure that projects can go ahead where most needed from a security point of view—and per-haps even more so from an over-heating-sector point of view. It is almost impossible to see all Iraq’s oil, gas, and power projects being able to proceed simultaneously—especially given the absolutely massive scale of its oil projects over the coming decade. Delays and bottlenecks will be inevitable, as will rising costs and skilled labour shortages.

Still, the situation today calls for a considerable dose of optimism, with stable power supplies—albeit at a slower pace than hoped for—returning to the secure parts of Iraq and likely to be gradually extended into the more unsta-ble parts of the country as we

A woman walks past a Basra Electricity Company power plant

that has seen better days.

Sam Ciszuk, IHS Global Insight

Years of neglect and underinvestment have left Iraq’s power infrastructure unable to meet demand.

approach the middle of the decade. Undertaking some of these EPC contracts will be a signifi cant secu-rity challenge for contractors, with what still exists of the domestic engineering industry likely to be working on smaller projects on the outskirts of unruly areas, with larger international outfi ts striv-ing to rebuild the power sector in the stable parts of Iraq.

MBR


MBR technology is benefi ting from the increasing reuse of wastewater in the region. But for MBR to supercede the conventional activated sludge process, membrane costs will have to come down, and the full potential of the technology needs to be realised.

More to comeT he idea of reusing

wastewater does not sit easily with everyone. It is, after all, not a pleas-

ant thought that the grass your children are playing on, or the air that is cooling your apartment, has been subjected to water flushed down your toilet in the not too distant past.

The stigma attached to the reuse of treated wastewater is thus considered an obstacle by the advocates of membrane bioreac-tor (MBR) technology.

To add to this burden, MBR, which makes use of membranes as the fi nal stage of the purifi ca-tion process, is also fi ghting for its

place alongside the conventional approach, the activated sludge process.

There is, however, little doom and gloom about those who enthu-siastically endorse the technology. This is partially because, in spite of all inhibitions, wastewater reuse has found its place in the region’s water supply chain.

“There is now widespread acceptance of the concept for a wide range of non-potable appli-cations in most of the major econ-omies including Saudi Arabia and the Gulf States,” says Jim Hotch-kies, marketing manager at Toray Membrane Europe.

Moreover, MBR has a dis-

Treated wastewater is used for the fountain display at the foot of the Burj Khalifa in Dubai.

MBR


“MBR technology is more energy effi cient in the overall perspective. ”

Vikrant Sarin, business development manager, Aquatech

sludge processes, which includes sludge dewatering, and sludge drying. Plants with MBR technol-ogy only produce about 10 percent as much sludge as a conventional plant. People miss these points, they just talk about aeration.”

The energy requirements of the technology are likely to come down in future, as most MBR fi rms are looking for ways to increase effi ciency, including the vertical stacking of membranes to extract more effi ciency from the air scour-ing system, and higher effi ciency aerators.

The biggest savings will not arise from improving the mem-brane, sums up Klaus Kallenberg, general manager at Toray Mem-brane. “The most dramatic devel-opments in the area of MBR tech-nology are expected to come from improved process effi ciency rather than major improvements in the membrane itself.”

While process effi ciency might be the buzz word when it comes to energy savings, membranes

tinct advantage over the activated sludge process. “Can you reach the same quality of effl uent with a conventional system? The answer is clearly yes - provided that you take the additional steps to reach the same quality,” says Murat Sarioglu, principal process engi-neer at MWH Europe. But when equipped with membrane fi ltra-tion, the footprint of a plant is reduced signifi cantly. The mem-branes make redundant some of the steps otherwise needed to purify the water, such as the fi nal settlements tanks.

A smaller footprint is of a distinct advantage if you are struggling for space. This applies, for instance, to smaller, purpose built wastewa-ter plants for developments in an urban setting. Consequently, MBR is a feature of water treatment facil-ities for landmark projects such as the Palm Jumeirah or the Burj Khalifa, where treated wastewa-ter is used for the fountain display adjacent to the Dubai Mall.

DECENTRALISATIONWhile admitting that the tech-nology is not feasible for the big sewage plants, such as the new 300,000 hectolitre plant in Jebel Ali in Dubai, Sarioglu believes that a more decentralised approach is the most intelligent approach going forward. By reducing the distances sewage has to travel to the plant, and treated effl uent in turn has to travel to be reused, the cost of transportation could be slashed drastically.

“At the moment, wastewater is transported by sewers to interme-diate pumping stations, and from one station to the other,” expands Sarioglu. “In Dubai, wastewater travels 60 kilometres to reach a sewage treatment plant outside the city. And because you need the water for irrigation, you end up taking the treated water all the way back again.”

A shift to a more decentralised approach could make MBR the preferred wastewater treatment

Vikrant Sarin, business development manager at Aquatech.

technology. Plants using the mem-brane technology use less space, and can be built entirely under-ground, explains Sarioglu. “On a stretch of 60 kilometres, you could build three treatment plants, for example. You’d get rid of the pumping station costs, and the distribution back to the city. This should be looked into.”

Vikrant Sarin, business devel-opment manager at Aquatech, also believes in the benefi ts of a de-centralised approach. “If you look at the GCC countries, with some of the population in remote areas, it becomes diffi cult in con-necting them in the fi rst place, you have to tank wastewater and to supply water.” As potable water only makes up around 10 to 15 per-cent of consumption, it only makes sense to meet the non-potable needs of remote areas with locally treated effl uent, argues Sarin.

The concept is starting to catch on, sometimes with a little out-

side help. In April, Hitachi Plant Technologies opened a wastewa-ter treatment plant in the emirate of Ras al Khaima. The US$4.5 mil-lion project was fi nanced by the New Energy and Industrial Tech-nology Development Organisa-tion (NEDO), a Japanese govern-mental organisation that promotes energy and water effi ciency world-wide. The plant recycles 3,000 hec-tolitres of sewage into 2,000 hec-tolitres of water treated with MBR technology for agricultural use, and 1,000 hectolitres treated fur-ther with reverse osmosis (RO) technology for industrial use. Set up in the midst of a pristine desert landscape adjacent to an indus-

trial site, with no access to a piping system, the plant is a showcase for a decentralised approach to waste-water treatment.

In a region in which power is almost as precious a commodity as water, the fact that MBR tech-nology is generally perceived as more energy-intensive than the activated sludge process is clearly a drawback. However, there are some that believe that the focus on the energy costs of the aeration process needed for membrane scouring obscures the big picture. “MBR is more energy effi cient in the overall perspective,” says Sarin. “You have to include the cost of sludge handling in the activated

MBR


matter on the overall price equa-tion. Equipping a plant with MBR is expensive, as the membranes represent a signifi cant cost factor.

Sarioglu readily concedes that the membranes currently come with a heavy price tag. But he believes that this will change, and points to past experience. “I see that as the same story as with membrane diffusers which are an integral part of conventional sys-tems,” he says. “These cost a for-tune in the nineties, and now you can get them for one seventh, one eighth of the price of what it was back then. The same will happen in MBR technology, as more sup-pliers come into the picture, there will be more competition in the market and prices are going to come down. In my view, this is inevitable.”

BETTER UNDERSTANDINGIn addition to achieving greater cost effi ciency, MBR suppliers will stand to benefi t from a greater understanding of the technol-ogy, and its uses. Not everyone in the water industry in the GCC as yet fully comprehends the poten-tial for reuse, argues Kallenberg. “While the acceptance of wastewa-ter reuse has grown considerably across the region, there remains some lack of understanding that such reuse water is safe in almost all non-potable applications.”

Yet it seems that this under-standing is growing. Wastewater is increasingly used as the chilled water in district cooling, for exam-ple. To prevent scaling in the dis-trict cooling plants, the water will

The small-scale sewage treatment plant built by Hitachi in Ras Al Khaima.

Murat Sarioglu, principal process engineer at MWH

have to be further fi ltered in a reverse osmosis (RO) process. “Here, MBR has become very viable,” says Sarioglu. “You can put an RO system directly after a MBR plant, without having to use any additional steps.”

Sarioglu believes that as more research is done on the technol-ogy, the more it will grow in stat-ure, and benefits previously unknown will come to light. “MBR has many sides to it that have not been discovered yet, and I always try and emphasise that in the conferences I attend. More and more additional fea-tures will come out that have not been investigated up to date. I think in the long term MBR will be the dominant process.”

“More and more additional features will come out that have not been

investigated up to date ”Murat Sarioglu, principal process engineer, MWH

QUICK Q&A


: What are the challenges for wet infrastructure in the Middle East today? Water has always been a scarce resource in the Middle East — and that scarcity represents the biggest risk to the sustained socio-economic development of the region. With 6 percent of the world’s population but only 1 percent of the world’s renewable water resources, the region is facing ever-increasing demands on its limited resources by rapidly growing population (expected to double in the next 40 years). Per capita availability is declin-ing sharply; in some Middle East-ern countries available water per capita is 170 cubic meters per year — far below the world water poverty line of 1,000 cubic meters per year, with Yemen being on track to become the first country in the world to run out of water.

Managing and enhancing water resources in the Middle East is big business. Utilities Middle East spoke to Dr Paul Boulos, president of MWH’s Middle East operations and president and COO of MWH Soft.

PEOPLE METERDesigning the future

This is severely reducing the region’s food output, since the vast majority of this water is used for irrigation. Compounding the problem, the hydrologic cycle is becoming less predictable as cli-mate change continues to sig-nificantly alter temperature pat-terns in the region (and around the globe).

There is an urgent need for a comprehensive water manage-ment plan to conserve and pro-duce water (and energy through hydropower in countries like Syria, Iraq, and Turkey), match consumption with supply, improve groundwater manage-ment and water quality through wastewater collection and treat-ment, implement more effective irrigation practices (more pro-duction for less water), evaluate alternative measures for water reuse, and educate the public in wise water use.

“There is an urgent need for a comprehensive water management

plan to conserve and produce water.”

Business in the wastewater sector has picked up.

QUICK Q&A


“A partial recovery is underway with the wastewater sector seeing the

fastest growth. ”

: How does MWH help its clients to overcome these chal-lenges? Can you name a recent example?MWH is sharing new desalina-tion technologies that could pro-vide limitless new sources of clean water. We’re also sharing new man-agement approaches and creative ways of helping conserve, allocate and reuse water resources. Many

of these are simple steps like improving irrigation techniques, water monitoring and metering, reducing water loss, and imple-menting simple home conserva-tion techniques. MWH recently provided a full range of planning, engineering and management services, from planning, scheduling and design to construction management and

commissioning, for Dubai’s new Jebel Ali Sewage Treatment Plant.

: How does the new gener-ation simulation and modeling software enhance water model-ing?To manage water distribution sys-tems effectively, you need reliable user-friendly computer models that integrate geographical infor-mation systems (for visualization and spatial database management and analysis) with fast and robust numerical network hydraulic, water quality and transient solvers and optimization techniques.

Network modeling can greatly assist water utilities in making informed decisions to ensure the

most cost-, energy- and carbon-effi cient water systems — from ongoing operation and mainte-nance to rehabilitation, enhance-ment, expansion, and new design. For integrated catchment model-ing, the software has to combine a geographical information system with complex hydrodynamic and hydrological models. This com-bination provides the information needed to assess the total impact of fl ood risk and emissions on receiving water quality and con-ceive sound remedial procedures.

: In June 2009, MWH made the Middle East region one of its four distinct geo-graphic business areas, along-side Europe, the Americas and Asia. Does that refl ect a grow-ing importance of the Middle East for your business?Defi nitely. Our decision to make the Middle East region a distinct business geography encompass-ing countries in the Middle East and several countries in the North African Mediterranean rim was spurred by a desire to increase market penetration and drive per-formance in a geographic area that has seen tremendous growth.

: Is water infrastructure business in the Middle East recovering from the recession? What is your outlook for 2010?A partial recovery is underway, with the wastewater sector seeing the fastest growth. I would expect a 2 percent to 3 percent growth in that market.

: By how much is MWH seeking to grow business in 2010? What are the core growth markets?MWH is looking to grow its wet infrastructure business in the Middle East by more than 50% percent in 2010, focusing on Abu Dhabi, Saudi Arabia, Kuwait and Libya.

PROJECTS


UTILITIES PROJECT TRACKERInformation 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 46project under construc-tion

Power Transmission

380kV Transmission Line - North of Riyadh


KEC International / Al Sharif Group for Con-tracting & Development Trading

64project under construc-tion

Power Transmission

Desalination Plant & Drinking Water Infrastructure

Emaar Economic City,SaudiHuta-Hegerfeld & Huta-Marine Limited Company


Desalination Plant

Desalination Plant in Jeddah - Phase 3

Saline Water Conversion Corporation (SWCC)

Kuljian Engineering Corporation

Doosan Heavy Indus-tries & Const. Company / Saudi Berkefeld Filter (Witco)


Desalination Plant

115kV Underground Cables in Madina 2nd Industrial City


Siemens 35project under construc-tion

Power Transmission

Salwa IPPSaudi 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 150project under construc-tion

Substation

Princess Noura Bin Abdulrah-man University - High Voltage Substation

Ministry of Higher Education / Ministry of Finance

ABB Contracting Co. / Al Fanar Contracting


Substation

Yanbu IWPP

The Power & Water Utilities Company for Jubail & Yanbu (Marafi q)/Saline Water Conver-sion Corporation (SWCC)

Mohammed A.Turki Mott MacDonald

Not Appointed 4000 project under designPower and Desalination Plant

Qsai Dam at JizanMinistry of Water and Electricity,Saudi Arabia

Zuhair Fayez & Partners

Bin Jarallah Establish-ment for Trading & General Contracting (Bin Jarallah Group)


Dam

380/110/13.8-kV Substation Expansion in Al Aziziyah Area


Siemens, Saudi 20project under construc-tion

Substation

Power Plant Expansion - DubaSaudi Electricity Company (SEC)

Najm Al Jazirah for Trading Contracting & Agriculture Co.


Power Plant

King Abdullah Economic City (KAEC) - Power Grid Package

Emaar Middle East Properties Siemens 400project under construc-tion

Substation

Power and Water Plant in Ras Al Zour

Saudi Arabian Mining Company (Maaden) / Rio Tinto Alcan

Not Appointed 2500 project under designPower & Desalination Plant

New Dam in AbhaMinistry of Water and Electricity

Zuhair Fayez & Partners

Bin Jarallah Establish-ment for Trading & General Contracting (Bin Jarallah Group)


Dam

Substations 9024 and 8183/8184


ABB Contracting Co. 120project under construc-tion

Substation

PROJECTS


Interim Power Plant at YanbuThe Power & Water Utilities Company for Jubail & Yanbu (Marafi q)

Not Appointed 300 EPC Bid Power Plant

Rabigh IPP - 380-KV Substa-tion

Saudi Electricity Company (SEC); ACWA Power Interna-tional; Korea Electric Power Corporation (Kepco);

ABB Contracting Co., Saudi Arabia


Substation

Uqair Power PlantSaudi Electricity Company (SEC)

Not Appointed 1500 project in concept stage Power Plant

380 Substation at Al Dhahiyah - Stage2


Al Toukhi Company for Industry & Trading


Substation

UAE

Hassyan Complex - Station P - Phase 1 (P1)

Dubai Electricity and Water Authority (DEWA)

Mott MacDonald, Dubai

Not Appointed 3000 EPC Bid Power and Desalination Plant

Hassyan Sea-Water Cooling System


Not Appointed 1800 EPC Bid Water Distribution

Fujairah 2 (F2) IWPPADWEA/ Marubeni Corpora-tion/ International Power

Fichtner Alstom Power / Sidem 3,000project under construc-tion

Power and Desalination Plant

Water Treatment Plant - Das Island

Abu Dhabi Marine Operating Company (Adma-Opco)

Metito Abu Dhabi LLC 21project under construc-tion

Water Treatment

Desalination Plant near Hamri-yah Free Zone

Sharjah Electricity and Water Authority (SEWA)

Aqua Engineering, Techton Engineering & Construction


Desalination Plant

General Utility Plant Expansion at Ruwais

Abu Dhabi Oil Refi nery Com-pany (Takreer)

Not Appointed 500 EPC Bid Power Plant

Upgrade of Irrigation Net-works 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 Engineer-ing & Construction Company/Samsung C & T Corporation/ Doosan Heavy Industries


Power Plant

Installation of 11kV Cables in Dubai


Econ Contracting LLC 25project under construc-tion

Power Transmission

Two Desalination Plants in Ajman

Federal Electricity & Water Authority (FEWA)

Tecton Engineering & Construction / Aqua Engineering;


Desalination Plant

KUWAIT

11kV Overhead Transmission Line for Subiya Road

Ministry of Electricity & Water (MEW), Kuwait

National Contract-ing Company (NCC), Kuwait


Power Transmission

New Substations in KuwaitMinistry of Electricity & Water (MEW), Kuwait

Not Appointed 30 EPC Bid Substation

Water Storage Tanks in West Funaitees


Not Appointed 500 EPC Bid Water Distribution

Shuwaikh Desalination Plant Ministry of Energy (Electricity & Water)

Doosan Heavy Indus-tries & Construction Kuwait


Desalination Plant

Al Zour Desalination Plant - Phase 2


Parsons Brinckerhoff International, Kuwait

Not Appointed 120 EPC Bid Desalination Plant

QATAR

Solar Power PlantQatar General Electricity & Water Corporation (Kahramaa)

Not Appointed 1000 Feasibility Study Power Plant

Qatar Power Transmission System Expansion - Phase 9

Qatar General Electricity & Water Corporation (Kahramaa)

Energoprojekt Entel, Qatar

Hyosung Group / Siemens


Power Transmission

TENDERS

June 2010 ● Utilities Middle East 53www.utilities-me.com

UME provides free access to the latest publicly available tender listings from across the GCC countries. The tenders included are aggregated from a wide variety of public and private sector sources from across the region. When possible, tenders include the issuer, name and category of the tender, opening and closing dates, narratives, fees, bonds and contracts.

SUPPLY OF 11/0.4 KV - 1000 KVA PACKAGED SUBSTATIONSIssuer: Dubai Electricity & Water AuthorityTender no: CE/0072/2010Title: Supply of 11/0.4 kV - 1000 KVA Packaged SubstationsDescription: The scope of work includes supply of 11/0.4 kV - 1000 KVA packaged substations.Bond: ApplicableTender fee: 200.00 AED Closes: Jun 1, 2010Contact: www.dewa.gov.ae

COMPLETE OVERHAULING, TESTING FOR LIFE EXTENSION OF TURBINE NO. 13 IN JEDDAH PLANT PH. 4Issuer: Saline Water Conversion CorporationTender no: JD/RM/415Title: Complete Overhauling, Testing for Life Extension of Turbine No. 13 in Jeddah plant Ph. 4Description: The scope of work includes overhauling and testing for life extension of Turbine No.13 in Jeddah Plant Ph. 4.Bond: N/ATender fee: 500.00 SAR Closes: Jun 5, 2010Contact: www.swcc.gov.sa

REHABILITATION OF 13 PUMPS IN JEDDAH SUBSTATION - PHASE 4Issuer: Saline Water Conversion CorporationTender no: JD/R/M/197Title: Rehabilitation of 13 Pumps in Jeddah Substation - Phase 4Description: The scope of work includes rehabilitation of 13 pumps in Jeddah Substation - Phase 4.Bond: N/ATender fee: 500.00 SAR Closes: Jun 8, 2010Contact: www.swcc.gov.sa

OVERHAUL OF THE TURBINE AND GENERATOR IN AL KHOBAR SUBSTATIONIssuer: Saline Water Conversion CorporationTender no: KH/5314

Tender activityVisit constructionweekonline.com for the latest tender information

To add a tender to our listing, email details to lutfi [email protected]

Title: Overhaul of the Turbine and Generator in Al Khobar SubstationDescription: The scope of work includes the overhaul of the turbine and generator in Al Khobar Substation.Bond: N/ATender fee: 500.00 SAR Closes: Jun 9, 2010Contact: www.swcc.gov.sa

INSTALLATION OF FIRE FIGHTING SYSTEMS AT SEVERAL GRID STATIONSIssuer: Oman Electricity Transmission CompanyTender no: 135/2010Title: Installation of Fire Fighting Systems at Several Grid StationsDescription: The scope of work includes installation of fire fighting systems at Al Hail, Al Falaj, Mahadah, MSQ

and Wadi Adai grid stations.Bond: N/ATender fee: 200.00 OMR Closes: Jun 14, 2010Contact: www.tenderboard.gov.om

REPLACEMENT OF 153.5-MVA TRANSFORMERS AT JUBAIL-2 PLANTSIssuer: Saline Water Conversion CorporationTender no: JB/R/E/317Title: Replacement of 153.5-MVA Transformers at Jubail-2 PlantsDescription: The scope of work includes replacement of 153.5-MVA transformers at Jubail-2 Plants.Bond: N/ATender fee: 500.00 SAR Closes: Jun 16, 2010

EPC FOR THE JUBAIL INDUSTRIAL CITY COOLING PLANTThe Royal Commission for Jubail & Yanbu has issued a tender for the engineering, procurement and con-struction of the cooling plant for the Jubail Industrial City in Saudi Arabia. The scope of contract not only includes design, engineering, project management, procurement. It also includes supplying the equip-ment, materials, labours, and tools. Supervision, commissioning, documentation, technical and profes-sional services, the supply of operating & maintenance manuals and training staff for the plant are also part of the deal. The tender number is 098-C58, and the tender fee is 14.000 SAR. Submissions have to be sent to the Royal Commission in Jubail (Tel. No.: 009663-3414127/4163 Supply Management Department Fax No.: 009663-3412201 P. O. Box 10001 Jubail Industrial City 31961). The deadline is July 14.

KEY CONTRACT

King Abdullah bin Abdul Aziz launches the JIC project in 2008

TENDERS


Contact: www.swcc.gov.sa

REPLACEMENT OF 169-MVA TRANSFORMER AT JUBAIL-2 PLANTIssuer: Saline Water Conversion CorporationTender no: JB/R/E/301Title: Replacement of 169-MVA Transformer at Jubail-2 PlantDescription: The scope of work includes replacement of 169-MVA transformer for Unit No.61 & 62 at Jubail-2 PlantBond: N/ATender fee: 500.00 SAR Closes: Jun 19, 2010Contact: www.swcc.gov.sa

LIVE LINE WASHING OF OHTL INSULATORS AND OUTDOOR GANTRY INSULATORSIssuer: Central Tenders CommitteeTender no: MEW/113/2009/2010Title: Live Line Washing of OHTL Insulators and Outdoor Gantry InsulatorsDescription: The scope of work includes live line washing of 400, 300, 132 and 33-kv Over-Head Transmission Line (OHTL) insulators and outdoor gantry insulators.Bond: ApplicableTender fee: 2500.00 KWD Closes: Jun 20, 2010Contact: Central Tenders Committee - Kuwait Ministry of Electricity and Water

UPGRADING JAHLOOT GRID STATION IN OMANIssuer: Oman Electricity Transmission Company

CONSTRUCTION OF AL GHAFAT RESERVOIRS PHASES 1 & 2 IN DUBAI The Dubai Electricity and Water Authority (DEWA) has issued a tender for the construction of the Phase 1&2 (120MIG) of the Al Ghafat Reservoirs in Dubai. The tender number is CNW/0129/2010. The fee is 2000 DHS, and the deadline for submissions of bids is June 2. Submissions should be sent to the Dubai Electricity and Water Authority, PO Box 564, Dubai, UAE.

KEY CONTRACT

Tender no: 146/2010Title: Upgrading Jahloot Grid Station in OmanDescription: The scope of work includes upgrading Jahloot Grid Station to 220-kV and 220-kV transmission line in Oman.Bond: N/ATender fee: 1500.00 OMR Closes: Jul 5, 2010Contact: www.tenderboard.gov.om

ENGINEERING, PROCUREMENT & CONSTRUCTION OF 2X10 MVA IN WILLAYAT HAIMA Issuer: Rural Areas Eletricity Compant S.A.O.CTender no: 141/2010Title: Engineering, Procurement & Construction of 2x10 MVA in Willayat HaimaDescription: 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/ATender fee: 398.00 OMR Closes: Jul 5, 2010Contact: www.tenderboard.gov.om

ENGINEERING, PROCUREMENT & CONSTRUCTION OF 2X10 MVA IN WILLAYAT MASIRAHIssuer: Rural Areas Eletricity Compant S.A.O.CTender no: 142/2010Title: Engineering, Procurement & Construction of 2x10 MVA in Willayat MasirahDescription: The scope of work includes engineering, procurement & construction of 2x10 MVA, 33/11-kV indoor substation at Willayat Masirah in Al Wusta.Bond: N/A

Tender fee: 400.00 OMR Closes: Jul 5, 2010Contact: www.tenderboard.gov.om

ADDING NEW P.O. UNIT AT MASIRAH WATER DESALINATION PLANTIssuer: Rural Areas Eletricity Compant S.A.O.CTender no: 143/2010Title: Adding New P.O. Unit at Masirah Water Desalination PlantDescription: 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/ATender fee: 350.00 OMR Closes: Jul 5, 2010Contact: www.tenderboard.gov.om

AL-ZOUR DESALINATION PLANT - PHASE 2Issuer: Central Tenders CommitteeTender no: MEW/39/2008/2009Title: Al-Zour Desalination Plant - Phase 2Description: The scope of work includes design, construction of Al-Zour desalination plant, phase 2.Bond: ApplicableTender fee: 3000.00 KWD Closes: Jul 11, 2010Contact: Central Tenders Committee - Ministry of Electricity and Water

OPERATION & MAINTENANCE OF POWER & DESALINATION PLANTS IN MUSANDAM GOVERNORATE - GROUP AIssuer: Rural Areas Electricity Company S.A.O.CTender no: 153/2010Title: Operation & Maintenance of Power & Desalination Plants in Musandam Governorate - Group ADescription: The scope of work includes operation & maintenance of power & desalination plants in Musandam Governorate - Group A.Bond: N/ATender fee: 1500.00 OMR Closes: Jul 12, 2010Contact: www.tenderboard.gov.om

REFURBISHMENT OF SEVERAL PUMPING STATIONS - PHASE 8Issuer: Public Works AuthorityTender no: PWA/GTC/006/10-11Title: Refurbishment of Several Pumping Stations - Phase 8Description: The scope of work includes refurbishment of several pumping stations - phase 8.Bond: ApplicableTender fee: 4000.00 QAR Closes: Jul 27, 2010Contact: Fax: 009744950777, Contract Department, Qatar Public Works Authority

SNAPSHOT: UAE


Power in diversity

Rapidly increasing demand for electricity throughout the UAE is forcing Abu Dhabi’s hand in developing more and more diverse sources of energy.

growing by a record 11 percent in 2009 on a year on year basis.

The Abu Dhabi Water and Elec-tricity Company (ADWEC) proj-ects that peak demand will have doubled to around 15,000 MW in 2015, easily surpassing the current generation capacity of 10,000 MW.

NEW CAPACITY In light of this steep trajectory, it is not surprising that the Abu Dhabi is investing heavily in new capac-ity, and has three large scale power and water projects coming in plan-ning. In addition, the emirate has awarded at US$20.4 bn contract for four nuclear reactors to a con-sortium led by Kepco in 2009. The fi rst of reactor will be operational in 2017, and all four will be produc-

ing electricity by 2020. Abu Dhabi is also investing

heavily into developing renewable energy sources, and has commit-ted to generating seven percent of its power using renewable sources by 2020.

Hydrogen Power Abu Dhabi, a joint venture between Masdar and BP, hopes to tender the main EPC contract for a US$2.2bn plant. With a capacity of 400MW, the plant will be the largest hydrogen plant worldwide.

With the hot and humid summer months approaching fast, energy consumption will be of foremost concern to utility providers in the United Arab Emirates. Peak power demand, a consequence of increased use of air conditioning, has in the past left some of the emir-ates struggling to cope. Sharjah is

a notable example, regularly expe-riencing power outages during the summer.

Things are not going to get any easier for the Sharjah Electricty and Power Authority (SEWA) and utilities providers. Demand for power has been rising steadily over the years, as the UAE is taking giant strides towards indus-trialisation, with the petrochem-ical industry in particular a key growth factor.

Energy demand levels might have grown more slowly in some of the emirates as a consequence of the recession. But Abu Dhabi, insu-lated from the global crisis by its enormous oil wealth, saw demand

Apart from building capacity to satisfy is own ever increasing needs, Abu Dhabi’s also provides power to its northern neighbours. ADWEC supplies SEWA and the Federal Electricity and Water Company (FEWA), which delivers power to the northern Emirates. These imports will increase over time, reaching 2,500 MW by 2015.

The power delivered to FEWA by ADWEC comes primarily from the Fujairah I power and desalina-tion plant. Fujairah II, a 2,000 MW plant, is currently commissioning. Concerns over the supply of gas have been allayed with the com-pletion of the Taweelah-Fujairah pipeline.

NORTHERN WOESSharjah, one of the recipients of energy from Abu Dhabi, has a capacity of around 2,200 MW, suf-fi cient to meet even peak demand. But SEWA is hampered by a lack of gas feedstock, which in 2009 resulted in load shedding during the peak demand period. Plans for the Hamriya independent power plant (IPP) had to be shelved as Sharjah failed to secure a deal for

SNAPSHOT: UAE

Rapidly increasing demand for electrici

Shuweihat 2 - Financing for the 1,500MW IWPP was complet-ed in October 2009. Shuweihat 3 - A 1,600MW independent power project (IPP), planned for the same site as Shuweihat 2. Taweelah C – Currently in the study phase, the IWPP is planned to augment the Taweelah A1, Taweelah A2, and Taweelah B plants. It is expected to have a nameplate capac-ity of 2,400-2,600MW.

ABU DHABI’S NEW IWPPS

2008: 5,616MW2009: 6,255MW

2010: 7,602 MW2015: 15,069 MWsource Adwec

5,600MWsource Adwec

2008: 14,385MW 2009: 15,426MW.Source: Adwec

2008: 1040 MW2009: 1424 MW source Adwec

ABU DHABI PEAK POWER CONSUMPTION

ABU DHABI PEAK POWER DEMAND PROJECTIONS

ABU DHABI NUCLEAR POWER GENERATION BY 2020:

UAE PEAK POWER CONSUMPTION

ABU DHABI PEAK POWER EXPORTS TO OTHER UAE MEMBERS

gas supplies from Iran, so that the emirate will likely remain depen-dent on Abu Dhabi’s helping hand.

Since ADWEC started to pro-vide electricity to FEWA in 2008, the later has stopped supplying industrial users and large scale res-idential complexes in the northern emirates. This has left the emir-ates exposed, as they have not had time to develop their own genera-tion capacity. Ras-al-Khaima and Ajman both had to shelve plans to built IWPPs due to the fi nancial crisis, leading to power shortages in those emirates.

DCX2262-1_Xia_K23_1271_v1a.indd 1 4/7/10 5:21:53 AM

Not just a long company history with continuous control and improvement of quality but also innovative engineering and a customer-oriented attitude.

With more than 40 years’ expertise, targeted product development, and flexibility in production and after-sales, we respond to the specific demands of our customers.

Vexve Water Metering’s green goal is to reduce water consumption. The Vexve Water Metering System provides valuable information on our water consumption habits.

In this system, one of the most modern and efficient flat-based metering systems, use of the Internet and the building’s power network ensures reliable data transfer. The compact water meter operates smoothly in combination with the building’s central- and apartment units. Data can be read easily when residents see their consumption to the nearest litre. Make Your Footprint a Green One – Vexve Water Metering

Vexve GroupPajakatu 11

FI-38200 SastamalaFinland

Tel +358 10 734 0800Fax +358 10 734 0839

[email protected]

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Vexve Water Metering – Make the Difference

Documents

Utilities Middle East - June 2010