Around the clock power from the sun and at record-low prices is exciting and better for the environment, but how does that impact you?
Most in the UAE have seen an increase in our power bills this year (especially those of us in the capital adding on municipality tax). Yet we keep hearing about all of these world-record breaking prices for solar power in both Abu Dhabi and Dubai.
So the amount we pay for electricity should also be less, right? Wrong.
Many think the price of power is simply that — the cost of the actual electricity, but you don’t just have dinner appear on your table when it’s time to eat. Ingredients are purchased at the market, time is spent prepping and cooking and the finished meal is placed on a plate before serving.
Power, no matter if it comes from gas, coal or the sun, is created, but other ingredients such as transmission lines are required. A power substation must then prep, or convert, the energy before it arrives (on a plate) at your home enabling you to turn on your lights.
But this doesn’t mean that the falling prices won’t impact your future meals. The main issue in the UAE’s case is that electricity is still subsidised.
It’s as though your parents paid for the ingredients for dinner while you only purchased the plate. As the technology costs drop for the entire power generation recipe, the government is able to stop dedicating a portion of its money for your bill without your wallet even noticing.
That isn’t all.
Notice how Abu Dhabi residents pay more for power during certain times of the day and year whereas in Dubai, there’s a fuel surcharge that fluctuates with the market prices? During peak times, more people are simultaneously using appliances such as air conditioners. This requires the utility to increase their power output to make sure you stay cool.
It’s akin to buying more food for the holidays as a revolving door of guests show up for dinner. Or the petrol used — which increases with each trip to the market because you forgot the eggs.
What you may not know is that a power plant is designed to run based on the time that the community needs it the most.
But as Abu Dhabi has it — that is only for three months starting from July to October. That means that the costs to build the plant was based on how much power is needed in the hottest months, as opposed to a plant that only handles the less intense months of the year.
Simply put: you make a feast, but many nights, it’s just your family of four.
Now we’re seeing two types of solar power in the UAE. One, known as solar photovoltaic (PV), allows for the power from the sun to immediately go to the grid — which is great during those peak times — like making extra food for when you know you have more people coming for dinner.
The other is concentrated solar power (CSP) which is already seen in Abu Dhabi with the Shams power plant. However, Dubai will be the first city in the world that can have a power plant provide electricity from the sun 24 hours a day thanks to its storage capabilities. Or when you spend all day cooking enough spaghetti sauce to feed a village, but place it in the freezer for those nights that you don’t feel like slaving away in the kitchen.
All of this eventually trickles into your power bill though you likely won’t notice. That also means that you probably won’t notice any fluctuation in oil prices because it simply won’t impact you — thanks to solar.
Follow The National's Business section on Twitter