Dubai’s Sustainable Development Programs towards Low Carbon Economy

Taher Diab
Senior Director - Strategy & Planning
Dubai Supreme Council of Energy
Secretary General - Emirates Energy Award

The Emirate of Dubai is one of the fastest growing cities in the world. This translates into relatively high demand for electricity and water. Forecasted electricity demand for the next decade project a 5-6% yearly growth . Therefore, demand reduction and energy efficiency became a top priority on Dubai’s Green Agenda. To fuel its economic growth and maintain its regional and global prominent position, Dubai innovated a smart strategy to manage demand, diversify fuel sources, secure supply and foster green growth.

The achievements of Dubai reflect the exemplary governance model of its energy sector that is among the first-of-its-kind in the region. The Dubai Sustainable Energy Model (see Figure 1) delivered robust regulatory framework and commercial terms that attracted international and regional investors to achieve the lowest levelized cost of electricity (LCOE) for the 200 MW solar photovoltaic (PV) power plant: less than 6 US cent/kWh in early 2015, followed by another announcement for a new record of 3 US cent/kWh in 2016 . This development marked a turning point in the journey to diversify Dubai’s energy mix and demonstrated the value proposition of strategic public private partnerships (PPP) for risk management, knowledge transfer and job creation. The record breaking PPP placed solar at par with conventional sources such as natural gas and transformed how utilities, project developers, policy makers and consumers perceive solar energy in Dubai and the region.

1DEWA Sustainability Report 2013
2Based on DEWA announcements of initial bid results which was still alive as of date of writing this article.

Another pillar of Dubai Sustainable Energy Model and a crucial factor in transforming the energy market of Dubai is the review of electricity and water tariff structure. In 2011, DEWA introduced cost-reflective tariffs to incentivize lower consumption and more efficiency in the use of electricity and water. This sent positive signals to clean energy investors and helped foster partnerships with leading international firms in clean energy leveraging funding sources and balancing the risk between the government and private investors. In doing so, Dubai is also developing its local capacities through transfer of knowledge and skills.

The transformation of the energy sector in Dubai is also taking place at the customer side. Dubai residents can now generate their own electricity using solar panels that can also feed extra energy to Dubai power grid. This step will gradually transform the consumers to prosumers: a term used to describe consumers that also generate part of their own energy consumption.

One of the drivers of Dubai Sustainable Energy Model is Dubai Integrated Energy Strategy (DIES) 2030, which was launched in 2011 by the Dubai Supreme Council of Energy (DSCE), and is reviewed periodically. The DIES details a roadmap to achieve various targets by 2030, based on building a world-class regulatory framework to accelerate the diversification of the energy mix and facilitate effective demand side management. It is aligned with the national and local vision making it the launching pad to meet the UAE Vision and Dubai Plan 2021 energy sustainability objectives.

The solar tipping point of Dubai

Today, Dubai delivered on its commitment towards renewable energy and establishing the foundation of a green economy. Before October 2013, the city’s total installed solar PV capacity was about 4.5 MW scattered across residential and commercial applications. This figure tripled with the commissioning of the 13MW solar PV power plant as the first phase of the Mohammed Bin Rashid Solar Park in October 2013. Less than two years later, Dubai’s efforts to open the energy market for independent power producers reaped a new global benchmark of the cheapest unsubsidized levelized cost of energy generated by solar PV in the world for a 200 MW solar PV plant. This record breaking PPP deal placed solar at par with conventional sources such as natural gas and transformed how utilities, project developers, policy makers and consumers perceive solar energy in Dubai and the region. In addition, fostering partnerships with leading international firms in clean energy leveraged funding sources and helped balance the risk between the government and private investors. Dubai is also developing its local capacities through transfer of knowledge and skills. Couple of months following the 200MW solar PPP deal, Dubai’s Electricity and Water Authority (DEWA) announced its plan for the third phase of 800MW solar project, which is currently under tendering. These developments collectively mark a tipping point for solar energy in Dubai. Today, solar energy is considered economically feasible compared to conventional fuels at market price. The strong backing of the Dubai Government for solar projects and the announcement of a clean energy target of 25% of installed capacity by 2030 send positive signals to private investors and financiers.

Dubai Carbon Abatement Strategy 2021: Local Action…Global Change

The unprecedented growth of Dubai calls for prudent strategy including performance-based program for carbon abatement. Therefore, Dubai initiated the first-of-its-kind comprehensive Carbon Abatement Strategy (CAS) in the MENA region, with a work plan that assign execution roles to its stakeholders, budget, key performance indicators (KPIs), and monitoring, reporting and verification (MRV) protocol to track progress. The Dubai Carbon Abatement Strategy 2021, details programs which integrate alternative and renewable energy to diversify Dubai’s generation mix, manage its demand to increase efficiency and develop sector-based reduction targets for Greenhouse Gases (GHG).

The design of the strategy started by defining the sectors contributing to carbon emissions, referred to as “high impact sectors”. Based on the carbon emissions profile for 2011, these sectors are: power and water, manufacturing, road transportation, and waste, as illustrated in Figure 2. A technical evaluation of the emission reduction potential for these high-impact sectors was carried out with the support of Dubai Carbon Centre of Excellence, resulting in a target of 16% reduction of greenhouse-gas emissions (GHG) by 2021 in comparison with the business-as-usual estimations for the same year.

As the DSCE and its entities embark on implementing emission reduction programs, Dubai will enjoy increased resource efficiency across all sectors. Progress is already being made demonstrated by the reported savings of the comprehensive Demand Side Management (DSM) strategy of Dubai. Between 2011-2014, electricity consumption savings exceeded the target and reached 1.9 TWh, similarly, water consumption savings exceeded the target and reached 3.5 Billion imperial gallons from 2011-2014. In addition, the Emirate is already witnessing increased investment in innovative technologies and stimulation of the private sector to contribute to this low-carbon development agenda.

Green Mobility in Dubai:

Dubai launched the Green Mobility Initiative to accelerate the uptake of hybrid and electric vehicles (EVs) as part of its efforts to support Dubai Climate Abatement Strategy (CAS) 2021 and provide alternative modes of transportation to save fuel and reduce carbon emissions.

In order to create the market for such vehicles, the Dubai Supreme Council of Energy (DSCE) and its entities followed a comprehensive approach that is founded on the principle of “leading by example” by government entities. A detailed analysis of market potential and size led to designing a staged roll-out plan that is the first-of-its-kind initiative in the region. A penetration target of 10% of hybrid and EVs in government fleet by 2021 was launched in 2016. To support the successful implementation of this target, the DSCE and its entities implemented specific initiatives, such as:

  • Developed the required electrical charging stations. Dubai Electricity and Water Authority built 100 units during 2015. More units are planned for completion in 2016. Multiple types of charging stations are built to meet the needs of its users. For example, high speed charging stations are built within some existing petrol stations, while low speed charging stations are used inside shopping malls.
  • Coordinated with the Emirates Authority for Standardization and Metrology (ESMA) to devise suitable standards and specifications for EVs.
  • Coordinating with various stakeholders to design a mix of incentives to accelerate the use of hybrid and EVs.

In addition to creating a market for hybrids and EVs, leading by example will enable the government to build the learning curve necessary to expand the deployment of such vehicles in the arid climate of Dubai. For example, hybrid vehicles were already proven to function successfully as demonstrated by the Road and Transportation Authority (RTA) of Dubai. They used over 140 hybrid taxis in 2015, reporting about 30% fuel savings and no performance challenges. The RTA is currently planning to convert 50% of its fleet to hybrid taxis by 2021.

A long term strategy for results today

The clear and supportive vision of Dubai’s leadership paved the way to develop a long term strategy and deliver phased but steady implementation progress to achieve the goals of its Integrated Energy Strategy 2030. This galvanized the trust of the private sector resulting in successful public private partnerships (PPP) that drove the cost of solar energy to unthinkable ranges, impacting the future of solar not only in Dubai but the entire region. The Emirate’s model is emerging as a benchmark for the transition to a sustainable energy future in a region historically perceived as a synonym to “oil”.

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