Dewa to award Hassyan clean coal power plant contracts by June

Dubai Electricity and Water Authority (Dewa) plans to award contracts by June to build the emirate’s first clean coal-powered plant, the authority’s chief executive said.

The Hassyan coal-fired power plant Phase 1, which is based on an independent power producer model, is expected to produce 1,200 megawatts by 2020.

Dewa extended until March 26 the bid deadline for the Hassyan project, for which it had shortlisted eight companies.

“We will create a special purpose vehicle that will be responsible for the financing [of Hassyan], which will be 80 per cent,” said Saeed Mohammed Al Tayer, the chief executive of Dewa. “We expect at the end the power purchase agreement to be US$5 per million British thermal units.” All electricity plants in Dubai run on gas for now, but by 2030 Dubai is planning to get 5 per cent of its energy needs from solar power 12 per cent from coal, 12 per cent from nuclear and the remainder from gas. Dubai intends to get nuclear power from Abu Dhabi, where the authorities are building the Barakah Nuclear Power Plant.

Dewa is negotiating with two companies that are bidding for a contract to expand the existing power and desalination plant, the M Station, by adding about 700MW of capacity, he added. The Dh10 billion gas-fired M Station, the largest power plant in the UAE, has a capacity of 2,060MW and 140 million gallons of water a day.

The authority also hopes to award soon the contract for a 100MW solar photovoltaic plant. Saudi Arabia’s Acwa Power is so far the lowest bidder for the project, which is expected to be commissioned before the summer of 2017. Acwa had bid 5.98 cents per kilowatt-hour for Phase 2 of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai.

The bid submitted for the project was much lower than its competitors, which included Spain’s Fotowatio and the Abu Dhabi-based green energy firm Masdar. Mr Al Tayer said the drop in oil prices had not translated into significant savings for Dewa because it uses only some imported liquefied natural gas to produce power. LNG prices are fixed in long-term contracts linked to oil prices.

“The effect of LNG is minimal because most of the gas we are consuming is dry gas,” he said.

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