ITP MEDIA GROUP / BUSINESS JUNE 2020• VOL. 14, ISSUE 06 Assessing the impact of Covid-19 on electric utilities. What lies ahead? POWERING AHEADCONTENTS www.utilities-me.com June 2020 / Utilities Middle East 3 Volume 14 | Issue 06 Contents As well as aff ecting countless lives, COVID-19 has unleashed a devastating blow to the global economy, disrupting supply chains while choking off demand. Electricity demand is down signifi cantly in many territories and the market for trans- port fuel has shrunk dramatically as planes are grounded and movement restricted. The shock of the pandemic on previous assumptions and future behaviour can’t be ignored even if there is a sharp V-shaped recovery. A slower U-shaped recovery or a longer L-shaped recession will have even more profound implications. Whatever the path forward, the world will be diff erent and companies need to plan for a new normal. For utilities companies, it will be vital to combine eff ective scenario-planning with an examination of how diff erent devel- opments could aff ect their business in the short, medium and long term. Going forward, companies will need to build a high degree of fl exibility and continued resiliency into their short- and medium-term strategising. They will need to be ready to adjust operations up and down. As a minimum, companies should use their pandemic experi- ence to inform wide-ranging reviews of their business continuity and crisis management strategies. Some companies will need to go further and implement structural measures to reduce risk. Above all, the experience of COVID-19 will almost certainly accelerate momentum towards new ways of working, automa- tion and digitalisation. Companies that are further along the curve in digitising their operations have already benefi ted from greater built-in resiliency during the crisis, reducing depen- dence on human resources. Greater investments in these areas will equip companies to maintain better business continuity in their supply chains, operations and customer management, reducing the load on their workforces. Technological transformation will also have been given a boost by the experience of virtualisation and new ways of work- ing by staff during the pandemic lockdown. It is likely to accel- erate the move to a more mobile workforce, able to work virtu- ally and at distance. Resilience in the era of Covid-19 Baset Asaba, Editor Email: baset.asaba@itp.com View point POWERING AHEAD Covid-19: Can the utilities industry deal with the challenge while embracing new opportunities?CONTENTS 4 Utilities Middle East / June 2020 www.utilities-me.com Giant Abu Dhabi utility scheme provides hope to Gulf power and water sector The issue on April 27 of the tender for the contract to develop Abu Dhabi’s mega power transmission project has provided a major boost to the market 02 MHPS captures global gas turbine market share lead- ership Increase in gas turbine market share was largely responsible for worldwide order booking increasing 19.7 percent during MHPS’ fi scal year ending March 31, 2020 03 Utico sounds banks for a $500mn Sukuk Utico, a leading full service utility and the only private water and power company in the UAE,has said it is working with fi nancial institutions and banks to raise a benchmark sized Islamic bond and tap the capital markets 05 34 30 05 UPDATES 08 NEWS ANALYSIS 18 INDUSTRY TRENDS 20 COVER FEATURE 27 SPECIAL REPORT 40 PRODUCTS 08 14 18 Abu Dhabi Power Corporation (ADPower) has announced the world’s lowest tariff for solar power through a virtual read-out of five consortia’s tech- nical and commercial bids for the 2GW Solar Photovoltaic (PV) IPP project SPECIAL EDITION ALSO THIS MONTH 08 FUTURE OF RE By making the energy transition an integral part of the wider recov- ery, governments can achieve a step change in the pursuit of a healthy, inclusive, prosperous, just and resilient future 30 DIGITAL SUBSTATIONS Traditional energy network substa- tions are evolving into digital substa- tions, with major breakthroughs that may provide enormous gains for GCC utilities. These innovations are gradu- ally giving rise to an intelligent grid 18 NUCLEAR REACTORS The case for investing in advanced nuclear reactors as an alternative energy source is compelling. Why Russia and China have an advantage in the develop- ment of these reactors 34 POWERING BEYOND BORDERS GCC governments are continuing to invest heavily in additional power- generation capacity amidst growing demand. At the same time, the region is making efforts to provide impetus to intra-regional electricity trading 20 POWERING AHEAD As several countries em- bark on a phased process to ease their lockdowns, what lies ahead for the utilities industry? How fast can the industry recover from the effects of Covid-19? 14 WATER SECURITY Finding effective solutions to global water- stress issues has become more urgent than ever, especially in exceptional circumstances such the present novel Coronavi- rus outbreak Most popular news stories on www. Utilities-me.comitiesNews Abu Dhabi Power Corporation (ADPower) announced last month the world’s lowest tariff for solar power. ADPower’s subsidiary, Emirates Water and Electricity Company (EWEC), delivered a virtual read-out of fi ve consortia’s technical and commercial bids for the 2 GW Solar Photovoltaic (PV) Independent Power Producer (IPP) project – to be located in Abu Dhabi. The project has received, from the fi rst-ranked bidder, the world’s most cost-competitive tariff for solar PV energy, set at AED 4.97 fi ls/kWh (USD 1.35 cents/kWh) on a Levelised Electricity Cost (LEC) basis, which is approximately 44% lower than tariff set three years ago on the ‘Noor Abu Dhabi’ project – Abu Dhabi’s fi rst large-scale solar PV project and a world record tariff -setter at the time. The Al Dhafra Solar PV project will have the capacity to power approximately 160,000 house- holds across the UAE with electricity. It will be almost double the size of the approx- imately 1.2 GW Noor Abu Dhabi solar plant – amongst the largest operational solar PV plants in the world – which commenced commercial oper- ations in April 2019. Once operational, the Al Dhafra Solar PV proj- ect will lift Abu Dhabi’s total solar power genera- tion capacity to approximately 3.2 GW. This will reduce the Emirate’s CO2 emissions by more than 3.6 million metric tons per year – equal to remov- ing around 720,000 cars from the road – improv- ing effi ciency and driving sustainability, while catering for the growth in demand across the UAE. “Abu Dhabi has illustrated a remarkable step- change in the way the Emirate generates power through an enhanced focus on sustainability and renewable technologies,” said Jasim Husain Thabet, Chief Executive Offi cer and Managing Director of ADPower. “The water and electricity sector intends to play a critical role in meeting the target of having 50% of Abu Dhabi’s energy needs served from renewable and clean energy sources by 2030, as well as the reduction of the generation system’s average carbon intensity by more than 70%, com- pared to 2015. The Al Dhafra Solar PV project will play a criti- cal role in delivering these ambitions, and we look forward to working with our partners to deliver this landmark project.” Othman Al Ali, Chief Executive Offi cer of EWEC, said that securing such competitive tariff s on the emirate’s energy projects is fundamental to sup- port economic growth across all sectors in the UAE. The Al Dhafra Solar PV project will include the fi nancing, construction, operation and mainte- nance of the solar plant, including installation of solar PV modules, inverters, connection to the transmission network and associated facilities. In July 2019, EWEC received 48 expressions of interest from potential bidders in respect of the Al Dhafra Solar PV project, out of which 24 bid- ders were qualifi ed to bid for the project after sub- mitting Statements of Qualifi cation. In Novem- ber 2019, fi ve bids were received for both the Al Dhafra Solar PV project. REGIONAL UPDATE // ESSENTIAL INSIGHTS FOR MIDDLE EAST WATER, GAS AND ELECTRICITY PROFESSIONALS Abu Dhabi announces world’s lowest solar power tariff Largest solar power plant in the world to generate 2 GW of power, equivalent to powering approximately 160,000 households Solar Power www.utilities-me.com June 2020 / Utilities Middle East 5Silk Road Fund acquires stake in ACWA Power RenewCo ACWA Power, a leading developer, owner, and operator of power generation and water desalination plants recently announced the completion of the transaction to introduce Silk Road Fund as a partner and a 49% shareholder in ACWA Power Renewable Energy Holding Ltd (ACWA Power RenewCo). ACWA Power RenewCo is ACWA Power’s renewable energy platform that currently owns a number of its existing renewable energy projects. The platform capitalises on the rapidly growing potential for renewable energy in emerging markets and currently owns ACWA Power’s concentrated solar power, photovoltaic solar, and wind assets across the United Arab Emirates, South Africa, Jordan, Egypt and Morocco, yielding an aggregate power capacity of 1668 MW. “Our collaboration will enhance ACWA Power’s ambitious growth plans in the renewables sector in MENA, Africa, Asia and Central Asia,” Paddy Padmanathan, Chief Executive Offi cer of ACWA Power. “This is a strategic step for us in supporting the economic transformation envisioned by the Belt and Road initiative as well as Saudi Arabia’s forward- looking Vision 2030.” tise to accelerate the transforma- tion of the UAE’s power and water sector and the capacity to pursue new growth opportunities in inter- national markets. TAQA will benefi t from enhanced revenues, a robust cap- ital structure producing stron- ger cash generation, with poten- tial for signifi cant and sustainable dividends and business growth. When the transaction is com- pleted, TAQA’s assets will include majority stakes in almost all power and water generation TAQA shareholders approve transfer of ADpower assets Shareholders of Abu Dhabi National Energy Company PJSC (“TAQA” or “Company”) have voted at the Company’s Annual General Assembly to approve the transfer of the majority of Abu Dhabi Power Corporation’s (“ADPower”) water and electricity generation, transmission and dis- tribution assets to TAQA, which is owned by ADQ, one of the region’s largest holding companies. This transaction creates one of the largest utilities companies in the GCC, and a top-10 integrated utilities player in the EMEA region by regulated assets. The transaction, which is scheduled to close in the third quarter of 2020, creates a regional utilities champion with the fi nancial strength and exper- TAQA Nuclear Barakah nuclear operations not affected by Covid-19 spread ENEC says that the UAE peaceful nuclear energy program has and will con- tinue to power the future social and economic growth of the nation The transaction creates one of the largest utilities companies in the GCC, and a top-10 integrated utilities player in the EMEA region by regulated assets. Emirates Nuclear Energy Corpo- ration (Enec) said following the successful loading of fuel assem- blies into the reactor, Unit 1 is at an advanced stage of start-up, while tests are still on at units 2, 3 and 4 following the completion of all construction work, said a top offi cial. “The Unit 1 will reach criticality very soon, and the Covid-19 pan- demic has not derailed our plans. We have 700 employees working on the project to meet the time- line,” said Enec CEO Mohamed Al Hammadi. Al Hammadi was having a vir- tual fi reside chat recently with Frederick Kempe, President and CEO of the Atlantic Coun- cil Global Energy Centre, on the progress being made at the Bara- kah Nuclear Energy Plant, the impact of the Covid-19 pandemic on energy systems, and the importance of decarbonised, reli- able and secure energy systems in the future. The online conversation was held under the theme of ‘Covid- 19 and the Future of the Decar- bonised Global Power System’. The event forms part of the Atlantic Council’s evolving dis- cussions and analysis of the impacts of Covid-19 and the state of the global energy industry. Al Hammadi began by high- lighting how the UAE Peace- ful Nuclear Energy Programme plants in the UAE, making it the nation’s predominant power and water, transmission and distribu- tion company. TAQA will also continue to operate in the USA, Oman, Morocco, India, Saudi Arabia and Ghana, and own oil and gas oper- ations in the UK, Netherland, Canada and Iraq. By combining TAQA’s and ADPower’s highly complemen- tary businesses – and strategic and operational expertise – the company will be well-positioned to pay consistent dividends to shareholders in the future. TAQA will also consider a fol- low-on public offering on the Abu Dhabi Stock Exchange to further diversify its shareholder base, allowing more investors on board. has and will continue to power the future social and economic growth of the nation. The programme, he stated, was simultaneously positioning the UAE at the forefront of global efforts to decarbonise the elec- tricity sector. “The Barakah plant will change the way the UAE powers its growth,” remarked Al Ham- madi. NEWS 6 Utilities Middle East / June 2020 www.utilities-me.comDubai’s RTA makes significant power and water savings Dubai’s Roads and Transport Authority (RTA) has achieved record savings in the use of power by implementing 46 projects and initiatives during 2019 as part of its Green Economy strategy. Numbers released refl ect that RTA’s savings amounted to 45 million gallons of water, 30 million litres of fuel, and 39 million kilowatt-hours. “RTA endorsed power-saving standards at par with the best in the world through launching 46 projects and initiatives resulting in record savings. Projects launched included broadening the use of solar power, using electric buses, deploying hydrogen fuel/electricity-powered taxis, fi tting power-saving streetlights, expanding the scope of online services, and recycling used carwash water,” said Nada Jasim, Director of Safety, Risk, Regulation and Planning at RTA’s Strategy and Corporate Governance Sector. “Results of power and water- saving initiatives undertaken in 2019 surpassed the targets set. Savings made amounted to 45 million gallons of water, 30 million litres of fuel, and 39 million-kilowatt hours. They resulted in reducing RTA’s carbon footprint by 102 tonnes of carbon dioxide equivalent. cedure as well as supplying PPE to all workers. With global travel restrictions limiting staff movement and many staff unable to return following Chinese New Year, Shanghai Elec- tric replaced them with workers local to the project. With the ability to work remotely, design and engineering work has been largely unaffected. Located globally, Worley, the consulting fi rm that is providing engineering, technology and technical review support to the project, has been Dubai CSP project progresses despite covid-19 The 700MW concentrating solar power (CSP) plant being built for the Dubai Electricity and Water Authority (DEWA) by a consortium between DEWA and ACWA Power called NoorEnergy 1 is progressing with construction despite COVID- 19 disruption, the owner’s engi- neer Worley has said. Contractors from Spain, China, Belgium, Denmark and the US have rallied to minimise labour, schedule and budget disruption after bringing in measures to keep workers on-site safe and staff from home well-connected. So that work could continue Shanghai Electric, the project’s EPC with Noor Energy 1 and the construction subcontractor part- ners, implemented a specialist virus prevention and control pro- CSP DEWA DEWA launches disinfection for EV green chargers DEWA also extends free charging until 31 December 2021 for non-commercial users registered in the EV Green Charger Initiative Contractors from Spain, China, Belgium, Denmark and the US have rallied to minimise labour, schedule and budget disruption Dubai Electricity and Water Authority (DEWA) has launched a programme to regularly dis- infect its electric-vehicle Green Chargers at petrol stations across Dubai, in collaboration with ENOC and ADNOC. The move sup- ports DEWA’s participation in the National Disinfection Programme. DEWA has emphasised that the health and safety of citizens and residents is one of its top priorities, as it undertakes all the necessary and precautionary measures to limit the spread of the novel coro- navirus (Covid-19), in line with the directives of the wise leadership and the recommendations of the World Health Organization (WHO). “DEWA supports the national efforts to contain the coronavi- rus outbreak, working closely with all the organisations participating in the National Disinfection Pro- gramme. We are confi dent that we will overcome this crisis soon because of the expedited mea- sures undertaken by our wise lead- ership,” said Saeed Mohammed Al Tayer, MD & CEO of DEWA. “The National Disinfection Pro- gramme has been successful thanks to the concerted efforts of individuals and organisations and the awareness of all citizens, resi- dents, and visitors who have been responsible and stayed home.” Al Tayer noted that DEWA had undertaken a number of precau- tionary measures to ensure the able to adapt its service as COVID- 19 has progressed with workers staying connected through video- conferencing and regular project meetings. “It’s a credit to every stake- holder involved that this strategi- cally important project has pro- gressed minimising schedule impacts despite facing signifi - cant logistical, staffi ng and supply chain challenges,” said Gilein Steensma, Vice President EMEA, Energy Transition. “It is a real testament to the commitment of the UAE to lead on the energy transition and show- cases the combination of geo- graphical distribution and strong capabilities of the contractors and subcontractors to adapt their approach around COVID-19.” health and safety of its custom- ers and employees, while continu- ing to deliver electricity and water services according to the highest standards of availability, reliability and effi ciency. “We have in place a plan to regu- larly sterilise our facilities, accord- ing to the highest international and health standards, using high-qual- ity approved disinfectants and sterilisers .” NEWS www.utilities-me.com June 2020 / Utilities Middle East 78 Utilities Middle East / June 2020 www.utilities-me.com NEWS ANALYSIS STAYING ON COURSE: RENEWABLE ENERGY IN THE TIME OF COVID-19 As the current crisis makes clear, we can no longer afford to make policy de- cisions and investments in isolation amid elaborately intertwined social, economic and environmental challenges, says Francesco La Camera, IRENA Director-General In a short few weeks, much of the world has been shut down due to the novel coro- navirus, COVID-19, which has crossed borders and oceans, rapidly devastating communities and livelihoods. Decisions being taken now to address the social and economic impacts of the crisis come amid profound uncertainty about both the course of the pandemic and its long-term rami- fi cations for societies across the world. The immediate priority remains to save as many lives as possible, bring the health emergency under control and alleviate hard- ship. At the same time, governments are embarking on the monumental task of devising stimulus and recovery packages. These are at a scale to shape societies and economies for years to come.www.utilities-me.com June 2020 / Utilities Middle East 9 NEWS ANALYSIS This response must align with medium- and long-term priorities. The goals set out in the United Nations 2030 Agenda and the Paris Agreement can serve as a compass to stay on course during this disorienting period. They can help to ensure that the short-term solutions adopted in the face of COVID-19 are in line with medium- and long-term development and cli- mate objectives. Stimulus and recovery packages can also accelerate the shift to sustainable, decar- bonised economies and resilient inclusive soci- eties. A coherent design approach is needed to secure political buy-in, business support and social acceptance. As the current crisis makes clear, we can no longer aff ord to make policy decisions and investments in isolation amid elaborately intertwined social, economic and environmental challenges. The fundamentally economic, more than fi nancial, nature of this crisis calls for a major state role in the response. This involves defi ning the strategies and initiating direct interventions for the way out. Expansionary budget policies may be envisaged to support this eff ort. Stimulus and recovery measures in response to the pandemic must foster economic develop- ment and job creation, promote social equity and welfare, and put the world on a climate-safe path. By making the energy transition an inte- gral part of the wider recovery, governments can achieve a step change in the pursuit of a healthy, inclusive, prosperous, just and resil- ient future. Energy transitions are already underway in many countries. These transitions have become increasingly aff ordable because of for- ward-looking policy frameworks, ongoing innovations and falling technology costs for Next >