< Previous40 MEP Middle East | October 2019 www.mepmiddleeast.com SUPPLIER NEWS ENERGY CERTIFICATES Dubai Electricity & Water Authority (DEWA) will sell consumer goods fi rm Unilever nearly 21,000 International Renewable Energy Certifi cates (iREC). Each certifi cate is equivalent to one mega- watt-hour of electricity, and once acquired can be sold on to organisations that wish to secure renewable energy to power their operations. The agreement has been facilitated by the Dubai Investment Development Agency (Dubai FDI) and supports Unilever Middle East’s strategy to become carbon neutral by 2030. “At DEWA, we work in line with the vision and directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, to transform Dubai into a global hub for clean energy and green economy,” said HE Saeed Mohammed Al Tayer, MD and CEO of DEWA. “We also support the Dubai Clean Energy Strategy 2050, which aims to provide 75% of Dubai’s total power output from clean en- ergy sources by 2050 and make Dubai the city with the lowest carbon footprint in the world. “We also work to achieve the Demand Side Management Strategy, which was launched by the Dubai Supreme Council of Energy to reduce energy and water demand by 30% by 2030.” The purchase will allow Unilever Middle East to cover 100% of the energy consump- tion requirement of two of its key manu- facturing sites, namely the Personal Care Factory in Dubai Investment Park and the Lipton Factory in Jebel Ali, as well as its headquarters that covers the Middle East and North Africa, offsetting 9,116 tonnes of CO2 emissions. “We are committed to ensuring that our UAE offi ces and manufacturing sites transi- tion 100% of their electricity requirements to clean energy,” said Cem Tarık Yüksel, MD of Unilever Gulf. “This is part of our ambition of becoming carbon neutral by 2030 by eliminating fossil fuels from our operations and directly sup- porting the generation [with] more renew- able energy than we consume.” Fahad Al Gergawi, CEO of Dubai FDI, added: “Through our dedicated Investor Aftercare Programme, Dubai FDI was able to facilitate Unilever’s ambitions and connect Unilever with DEWA, thus accom- plishing an exemplary investment project aligned with the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum that every investment in the development of clean energy sources is at the same time an investment to protect the environment for future generations.” HE Saeed Mohammed Al Tayer, MD and CEO of DEWA. Manufacturer Emerson snaps up Spence and Nicholson product lines ACQUISITION Engineering and tech firm Emerson has acquired the Spence and Nicholson product lines from Circor International. The transaction will see Spence and Nicholson’s steam regulators, control valves, safety relief valves, temperature regulators, steam traps, and other steam accessories added to Emerson’s portfolio. “This addition to our Final Control business demonstrates the continued value of bolt-on acquisitions that fill strategic gaps in our portfolio and diversify our product offerings in growth markets,” said Lal Karsanbhai, executive president of Emerson’s Automation Solutions business. “By adding Circor’s premium steam technologies and profitable product lines, we will strengthen our position to help customers optimise their operations and enhance energy efficiencies.” DEWA issues International Renewable Energy Certifi cates to Unilever Agreement supports Unilever Middle East’s long- term strategy to become carbon neutral by 2030 SPONSORSHIP Empower will participate in the sixth World Green Economy Summit (WGES) as a Global Sponsor. Themed ‘Innovative Technologies for a Sustainable Economy’, the 2019 installment of the conference will be held under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, on 20-21 October at the Dubai International Convention & Exhibition Centre. “WGES is a reflection of Dubai’s efforts to become a global hub for the green economy and sustainable development, by establishing a culture of innovation, providing innovative solutions, and offering safe solutions according to the best global practices in this field,” said Ahmad Bin Shafar, CEO of Empower. “This works to transform all the cities in the UAE to leading smart cities.” Empower unveiled as World Green Economy Summit Global Sponsor October 2019 | MEP Middle East 41 www.mepmiddleeast.com SUPPLIER NEWS Masdar and EDF to establish JV energy services company JOINT VENTURE AGREEMENT Abu Dhabi Future Energy Company (Masdar), a subsidiary of Mubadala Investment Com- pany, and French low-carbon electricity fi rm EDF have signed an agreement to establish a 50:50 joint venture energy services company (ESCO). At a ceremony held during the World Ener- gy Congress in Abu Dhabi, the agreement was signed by Masdar CEO Mohamed Jameel Al Ramahi and EDF’s senior VP for Africa, Mid- dle East and Mediterranean, Valerie Levkov. “Today’s signing is a refl ection of Masdar’s global clean energy ambitions and further sup- ports the UAE’s Energy Strategy 2050 objec- tives to increase renewable energy usage and energy effi ciency across the UAE, the region and internationally,” said Al Ramahi. “It also serves to reinforce our already strong relationship with EDF that leverages our local and international experience and world-leading expertise to expand into the non-utility solar and energy-effi ciency sector, marking another step forward for Masdar as we continue to expand our global renewable energy portfolio, which now encompasses more than 25 countries.” The two parties say the primary objective of the joint venture ESCO is to expand into non- utility scale renewables and energy-effi ciency investments, such as building energy effi ciency, solar technology below 50MW, and industrial waste heat recovery across the UAE, GCC, and other emerging countries. EDF’s Marianne Laigneau said: “Along with Masdar, our ambition is to develop innovative solutions to optimise energy consumption and reduce the carbon footprint of our custom- ers in the Middle East and in other countries where both companies already co-operate.” Last month the consortium of EDF Renewa- bles and Masdar announced it had reached fi - nancial close on the 400MW Dumat Al Jandal wind project in Saudi Arabia, the country’s fi rst utility-scale wind farm that will be the largest in the Middle East when completed. In May, the Moroccan Agency for Solar En- ergy announced that the consortium of EDF (through its subsidiary EDF Renewables), Masdar, and Green of Africa, Moroccan Inde- pendent Power Producer, was the successful bidder for the design, construction, operation and maintenance of the Noor Midelt I multi- technologies solar power plant. With a capacity of 800MW, the project is based on two technologies – concentrated solar power (CSP) and photovoltaic (PV) – the hybridisation of which is a world fi rst. PROJECT Emirates Water & Electricity Company (EWEC) has put pen to paper on an $890million water purchase agreement with Saudi-based ACWA Power. The deal entails the development of a reverse osmosis sea water desalination facility in Taweelah which, when fully operational, will serve 350,000 homes and process 900,000 cubic metres of water per day. A statement said that the plant will “set new benchmarks” for its size, efficiency and cost of water produced, and will be 44% larger than the world’s current largest reverse osmosis facility. Othman Al Ali, EWEC CEO, said: “We are delighted to launch this new initiative, which will help meet future water demand for the UAE. “The choice of reverse osmosis sea water desalination technology will play a critical part in significantly reducing water production costs, contributing to our goals to build a more sustainable and efficient water and energy sector in the UAE. “The project will also help save material fuel costs across the sector, given the flexibility that the technology provides.” The build, own and operate contract for the plant is being undertaken by a joint venture of ABENGOA and PowerChina. ACWA Power owns a 40% stake in the project company formed to be responsible for the plant, with the remaining 60% owned by Mubadala Investments Company and Abu Dhabi Power Corporation. Once the project is complete, EWEC will be the off-taker for the water output produced over a 30-year period. The plant is scheduled to commence full commercial operations in Q4 of 2022. Paddy Padmanathan, president and CEO of ACWA Power, said: “Through the Taweelah plant project and the enabling environment provided by Abu Dhabi, we are proud to be setting new global benchmarks in both the cost of desalinated water and the energy consumed in producing that water.” EWEC signs $890m water purchase deal with Saudi’s ACWA Power Marianne Laigneau, group senior executive VP of EDF in charge of the international division; Khaled Abdulla Al Qubaisi, CEO aerospace, renewables and ICT at Mubadala; Valerie Levkov, EDF senior VP Africa, Middle East & Mediterranean; and Mohamed Jameel Al Ramahi, Masdar CEO, were all in attendance for the signing of the agreement.42 MEP Middle East | October 2019 www.mepmiddleeast.com FOOTNOTE The construction industry is often said to be wrought with ineffi cient bookkeeping and outdated notifi ca- tion mechanisms. Most construction industry contracting forms, such as FIDIC, include a notifi cation requirement should anything go wrong. This requirement sometimes requires the contractor to inform the employer of any event with a potential delay impact or forfeit any right to claim an extension of time (EOT) or costs from the employer. For a variety of reasons, this notice require- ment is not always met. In fact, quite often, until the contractor sits down to prepare its EOT claim, or indeed, statement of claim for an arbitration, the contractor is not entirely aware if every delay event was properly noti- fi ed in accordance with the contract. An industry of experts, claims consultants and lawyers exists because of the volume of documentation generated by a single con- struction project gone awry. Now imagine a world where a project manager is walking on site, iPad in one hand, opened to a screen which includes all the deliverables that have to be achieved by that day. With a simple check ‘no’, an automatic no- tifi cation, in the form of the template set out in the contract, would be sent to the employer informing the latter of the potential delay event. This notifi cation would then be automati- cally and neatly saved in a relevant folder for ‘notifi cations’ that can always be reviewed should the need arise. This may seem like an impossibility, but that may not be the case for much longer. What is a ‘smart’ contract? A contract must contain an offer, acceptance, consideration and an intention to create legal relations. A ‘smart’ contract contains all of the above, but includes within it protocols which allow for automatic enforcement of contractual conditions. Essentially, a smart contract has every- thing a traditional contract contains, except that some portions of the smart contract are Soham Panchamiya wants the industry to get smart. Reed Smith associate Soham Panchamiy observes a construction industry in dire need of modernisation, and believes smart contracts could be the start of the revolution FUTURE IS KNOCKING written in computer code. In effect, these cod- ed provisions operate to give effect to certain contractual provisions, without the parties taking any steps or expending any manpower to execute those conditions manually. What does that mean in practice? A prime example of smart contracts greatly easing the burdens on construction compa- nies is in relation to payment terms. One of the biggest issues that contractors and subcontractors face is receiving payment on time. With a smart contract in place, a protocol may be included to trigger payment as soon as delivery is certifi ed. In another scenario, an EPC contract con- tains different levels of liquidated damages provisions based on fulfi lment of specifi c milestones or project phases before comple- tion. With a smart contract in place, such damages may be imposed automatically when a milestone or condition has not been fulfi lled by a stipulated date. What are the problems? While all of this sounds wonderful in theory, the truth is that the kind of blockchain technology used to implement smart con- tracts is still young. Moreover, parties would have to invest in substantial infrastructure to be equipped to implement smart contracts in the manner intended. This is, however, the way of the future. Smart contracts are slowly becoming a common fi xture in the healthcare and com- modities industries. There is no reason to believe that the move into the construction industry is anything but inevitable. There is, however, scope for concern. How well can smart contracts understand nuance? Code for liquidated damages provisions will likely have to contain numerous exceptions for force majeure events, approved EOTs, variations, provisional works, and numerous other factors. Moreover, what happens when a smart contract has to operate in a situation that is not pre-programmed? Specifi cally, when the parties are locked in litigation or arbitration. Would payments still be made or deducted automatically? Would liquidated damages ap- ply ad infi nitum? Is there an off switch? The truth is that there is no answer be- cause smart contracts cannot account for hu- man error or human behaviour. When IBM created the Deep Blue chess- playing system in 1996, it lost its fi rst match against world champion Garry Kasparov. In 1997, Deep Blue won the rematch. The one thing we know about technology is that it always gets better with time. Smart contracts will likely have a teething phase, but what it needs is data. With enough datapoints and inputs, the technology will grow, improve, adapt and be- come a fi xture of modern business relations. Conclusion The construction industry is in dire need of modernisation: hundreds of letters are ex- changed during the life of a project, there are numerous issues with payment and enforce- ment of strict deadlines remains a perennial issue. An automated execution system such as one brought about by smart contracts could very much prove to be the start of the revolution.Celebrating 15 years of recognising the most iconic projects, influential figures and ground breaking companies in the Middle East construction sector, the Construction Week Awards are the ultimate accolade for industry professionals in the region. Come to celebrate the success of the industry and visit www.constructionweekonline.com/awards today to find out how you can be involved in the event. 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