Demand Side Management in Abu Dhabi and the UAE; Challenges and Opportunities

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1 Demand Side Management in Abu Dhabi and the UAE; Challenges and Opportunities Global Sustainable Cities Network 15 th April 2015 Bruce Smith Advisor, ADWEC 1

2 Consumption Patterns in Abu Dhabi vs. Benchmarks Domestic Water Consumption 1) - In L/ Capita/ Day - (Data varying between 2002 and 2009) Domestic Electricity Consumption 1) - In MWh/ Household - (2008) Abu Dhabi Abu Dhabi (2009) 34.5 Qatar 555 KSA 20.9 Kuwait 385 Dubai 363 Lebanon 255 KSA 235 Egypt 190 UK 146 Norway 17.1 USA 12.5 Canada 11.6 Australia 7.9 France 5.8 UK 4.5 Jordan 4.1 France 137 Oman 136 Germany Iran Germany 122 World Average: L / capita / day Egypt 2.2 World Average: 3.5 MWh / household 1) Consumption figures vary across sources. Values used in these graphs are based on agreed-upon figures with relevant stakeholders. 2) Source: Global Footprint Network; FAO - AQUASTAT; International Energy Agency (IEA) Statistics Division; Env2030 Team analysis 2

3 Energy Efficiency: - the Opportunity Historical Focus on Meeting Demand But lack of focus on Efficiency ADWEA has met demand increases of 7.3% per year for electricity and 9.5% for water But per capita Demand is now amongst the highest in the world for both water and power Sector Costs Abu Dhabi heavily subsidizes the utility sector: 2012 electricity and water subsidy was $3.75b and forecast to rise to $ b by 2017 In % of water costs and 53% of electricity costs was paid directly by government through subsidies How much could be saved? Electricity The Cooling Plan targets a 15% reduction in total consumption by Potential savings from deferred capital investment of over USD$1.6b to 2020 and annual generation cost savings of AED2billion How much could be saved? Water The potential for reducing water use from DSM measures is estimated at 129MIGD, (of which landscape irrigation = c. 90MIGD) Theoretical maximum savings of up to AED 4.1billion 1 per year by Based on 2010 average generation cost of 18 fils/kwh and 30 AED/TIG: Source ADWEC

4 Energy Efficiency Cheap but Not Easy Per capita consumption of water and electricity in the GCC region is the highest in the world Per capita emissions of CO2 are amongst the highest in the world Ecological footprint per resident is the highest in the world (ref: WWF) Subsidy levels are high, rising and unsustainable. 4

5 Why is delivering DSM at scale so hard? Complexity in Control and Coordination. The development of Abu Dhabi s Comprehensive Cooling Plan has involved the following 16 stakeholders: Executive Affairs Authority, Abu Dhabi Water and Electricity Authority, Abu Dhabi and Al Ain Distribution Companies, Environment Agency, Urban Planning Council, Abu Dhabi and Al Ain Municipalities, Department of Municipal Affairs, Mubadala, Tabreed, Regulation and Supervision Bureau, Masdar, Taqa, Masdar Institute. Quality and Conformity Council Delivering significant and quantifiable savings remains challenging 7 years after work started. 5

6 Barriers to Implementation 1. Complexity 2. Lack of Coordination & leadership 3. Clarity about the target market distortions and internal cross-subsidies 4. Lack of Data 5. Lack of skills and capability 6

7 Key Components of a DSM Strategy Measurement and Validation But which are the responsibility of the utility in Abu Dhabi? Customer Engagement Technological Innovation Codes and Standards Pricing Incentives 7

8 Components of a DSM Strategy Measurement and Validation Customer Engagement Technological Innovation Codes and Standards Pricing? Incentives 8

9 Why focus on cooling? Components of Demand External Exhaust Fans, 1.6% Consumption, 0.1% Lights, 7.4% Other Internal, 5.1% Hot Water Boilers, 8.4% Other Common Equipment, 11.8% Fan-Coil Units, 8.1% Chillers, 57.5% Over 60% of total electricity consumed in the residential, commercial, and institutional sectors is used for air conditioning. Ref: Municipality of Abu Dhabi City. ADM Energy Consumption Management Program in Existing Buildings, October 31, Abu Dhabi Water & Electricity Authority 9

10 January April July October January April July October January April July October January April July October January April July October January April July October January April July October January April July October Abu Dhabi Demand Profile GWh Abu Dhabi Global Energy Demand

11 Cooling load and temperature Abu Dhabi s electricity consumption is driven by the need for cooling in residential, commercial and institutional buildings. The weather and associated need for A/C drives Abu Dhabi s peak demand. A/C drives peak consumption and is the most expensive power to generate. Reducing A/C consumption and demand is the best short-term opportunity in Abu Dhabi. January August December Contribution of Cooling to Electrical Load During the Year Improving A/C efficiency will yield significant fuel savings and offset costly peak fuel sources such as diesel and liquid natural gas (LNG). Ref: Masdar Institute of Science and Technology, Afshin Afshari 2010.

12 Flat Summer Load Profile Abu Dhabi : Typical August Demand profile Aug 06 Mon 2012 UAE-Summer Aug-12 Time: Hrs Demand Difference Variation MAX 16: MIN 6: % Source: ADWEC data 12

13 UK and US Load Profiles show much more daily variation: UK-Winter Jan-12 Time: Hrs Demand Difference Variation MIN 6: MAX 17: % Source: UK national grid USA-New England Time: Hrs Demand Difference Variation MIN 2: MAX 18: % Source: iea & FERC

14 Abu Dhabi Global Demand Profile GWh 8,000 7,000 6,000 5,000 4,000 3, ,000 1, Global Demand Difference MIN (GWh) 3378 MAX (GWh) %

15 What Must Policies Address? Leadership Standards Prices 15

16 Conclusions: 5 Key Policy Recommendations 1. Appoint a Credible lead / coordinating entity and leader 2. Standards Set and enforce them 3. Measurement and Validation in place and credible 4. Prices Establish principles 5. Require efficiency options to be integrated into resource planning 16