Dubai Demand Side Management Strategy 2015 Annual Report

Transcription

1 Dubai Demand Side Management Strategy Annual Report The future is efficient

2 Limited Distribution, Issue Publisher: Dubai Supreme Council of Energy Editorial Service: TAQATI Authors: Andrea Di Gregorio, Director - Continuous Improvement and Strategic Direction - TAQATI Aref Abou Zahr, Executive Director - TAQATI 2

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4 HE AHMAD AL MUHAIRBI Secretary General, Dubai Supreme Council of Energy Demand Side Management is at the core of the Dubai energy strategies. Energy efficiency is our number 1 priority, the most important single source of future energy. It is by far the single largest positive contributor to climate change, which leads us to pursue energy efficiency first, followed by renewable energy sources, and then other clean energy sources. Moderating our energy consumption is a priority, in order to ensure that we maintain secure and cost effective energy supply. This is why all the main government entities in Dubai are working in collaboration with the Supreme Council of Energy on delivering joint, ambitious energy efficiency targets. has marked other fundamental steps towards our goal of achieving 30% savings of electricity and water by Most programs are today contributing important savings as they moved from the initial pilot phases to more extensive implementation. While we are still a long way from our end objectives, I am pleased to remark that at the end of we are delivering results above targets, with 5.4% electricity savings and 3.3% water savings vs. the business as usual scenario. This achievement comes as a result of a major team effort. To all Program Owners and other collaborating entities, thank you for your tremendous contribution so far. Looking at the future, we need to be aware that our targets are becoming more and more challenging. The Programs need to expand further quickly, and we have to accelerate in addressing any barriers that are faced along the way. Along these lines, we are happy to announce that the central team in support to DSM is expanding. DSCE is enhancing its support to stakeholders delegating DSM implementation activities to a new dedicated entity, TAQATI, which is being formed within Etihad Energy Services, operating as a DSM Manager office. TAQATI will operate as a super program manager, helping Program Owners in addressing their barriers as needed. At the same time, we at DSCE will maintain our role as the custodian of strategy and policy making and ensure relevant frameworks are periodically updated as required to meet the vision of Dubai leaders. In light of the above, we would like to walk you through our achievements and progress to date in, celebrate successes of our stakeholders and partners, which serve as examples of leadership and reflect on our priorities going forward. I hope you find the report useful and I look forward to higher electricity and water savings in the coming year.

5 5 DSM Annual Report

6 FAISAL RASHID Director of Demand Side Management, Dubai Supreme Council of Energy Dear Reader, We are happy to present you the 2nd annual report on demand side management in Dubai. Over the past year good results have been achieved on all of the 9 DSM programs. Together with you, we generated savings of electricity and water translating into economic savings of billions of dirhams and millions tons of CO2, even though we have just begun our long journey toward sustainable business practices. Year has been significant in terms of implementation of the Dubai Green Building Regulations (DGBR), which mandate all new buildings as well as buildings undergoing renovation to incorporate principles of energy efficiency, reducing the life cycle costs of new developments. The program has brought in savings of approximately 156 GWh and 144 MIG. Meanwhile, for existing building stocks, the retrofit program is well on target, with Etihad ESCO leading the effort of making existing buildings more sustainable to the benefit of their owners and users. Currently, there is a strong pipeline of retrofit projects, addressing 2,250 buildings and targeting 69 GWh and 200 MIG per year of savings. Remarkable contribution to saving energy and water in our buildings is being provided by the star rating system introduced by ESMA, today generating electricity savings of about 550 GWh per year in Dubai. DSCE is also supporting advancements in the existing programs for new and existing buildings, by promoting market readiness and showcasing the construction of buildings with netzero energy consumption. Shams Dubai, the solar rooftop initiative is a new addition to our DSM Strategy and is owned and operated by DEWA. Even though the initiative has been launched recently, initial interest is considerable, and with installation of new renewable capacities on the demand side we will be achieving not just savings in electricity, but we will also reduce dependency on fossil fuels in the energy supply mix. As our journey continues, we are focusing on challenges ahead of us that need large scale intervention and require even greater commitment. Financing solutions need to be enhanced, organizational engagement support and awareness initiatives have to scale up. Educating the public will become more and more important to get higher participation and impact as programs expand. We look forward to bringing innovative and green ideas, groundbreaking and creative thinking with respect to DSM, in collaboration and partnership with all of our stakeholders. And of course, we look forward to delivering tangible benefits to the Emirate of Dubai and the UAE as a whole in the field of energy efficiency and sustainable development. 6

7 Table of Contents 1. Executive summary 2. Objectives and scope of this report 3. Context and overview of the DSM Strategy 3.1 Policy context 3.2 The DSM Strategy, roadmap and targets 3.3 Institutional framework 4. DSM Strategy achievements in 4.1 Key developments of the year 4.2 Overall performance to date 4.3 Sensitivity analysis around estimated performance 4.4 Operational dashboard 4.5 Monetizing DSM savings 5. DSM program deep dives: Program Owners views 5.1 DSM program 1: Dubai green building regulations 5.2 DSM program 2: Building retrofits 5.3 DSM program 3: District cooling 5.4 DSM program 4: Standards and labels for appliances and equipment 5.5 DSM program 5: Water reuse and efficient irrigation 5.6 DSM program 6: Outdoor lighting 5.7 DSM programs 7 and 8: Tariff rates and demand response 5.8 DSM program 9: Shams Dubai 6. Future outlook and key priorities for Strategic priorities for the coming three years 6.2 Main 2016 action items for DSCE and TAQATI 7. Acknowledgements 8. List of abbreviations 9. Contact information

8 DEMAND SIDE MANAGEMENT TARGETS DSM 2030 ELECTRICITY CONSUMPTION SAVINGS 30% BY 2030 VS. BAU WATER CONSUMPTION SAVINGS 30% BY 2030 VS. BAU 8

9 1 Executive summary 9

10 Executive summary This report, in its second year of publication, presents the status of performance of the Demand Side Management (DSM) strategy for the year. The strategy comprises 9 main programs, each having a responsible government entity for execution (Program Owners), under the supervision of the Dubai Supreme Council of Energy (DSCE). The end goal of the strategy is to deliver by 2030 yearly sustainable savings of 30% of electricity and water consumption compared to business as usual. At the end of, the DSM Strategy is achieving 2.1 TWh/year of electricity savings and 3.4 BIG/year of water savings, corresponding to 5.4% and 3.3% of baseline consumption respectively. This marks significant surplus savings vs. the targets of 1.6 TWh for electricity and 2.2 BIG for water, and also substantial growth of savings vs. 2014, +11% for electricity and +4% for water, as most programs started scaling up their actions from the initial pilot phases into larger scale implementation. This important achievement comes as a combination of efforts from all Program Owners, who are committed to yearly targets and roadmaps through 2030, and for whom the DSM Strategy is increasingly becoming part of their core activities. has been a year of progress for DSM beyond the continuous expansion of the Programs, and including multiple aspects, such as regulation, institutional set-up, capacity building. Several important achievements contributed to making the overall DSM Strategy today more robust and effective. These include the activation of the periodic monitoring and reporting on the DSM Programs, the issuance of the DSCE Directive No. 1 requiring implementation of energy audits in the government sector, the launch of large scale retrofit projects, the launch of Shams Dubai and its incorporation in the DSM Strategy as the 9th Program, and the activation of effective measures addressing the key challenges identified in previous years. The coming years starting from 2016 see a steep increase of targets. In order to address the increasing requirements, institutional support to the strategy is being enhanced through the creation of a dedicated body within Etihad Energy Services, TAQATI, providing program coordination and advisory, and responsible for important crossprogram enablers, such as awareness and capacity building. More focused intervention is being dedicated to the identified financing barriers, through preparatory work for the constitution of a Green Fund, and other mechanisms. Other specific work will need to be dedicated to unlock synergies in some programs relying on multiple stakeholders for an effective implementation, such as green building codes, district cooling and water reuse. In an evolving economic context, the DSM Strategy is expected to become increasingly important for the sustainable growth of Dubai. Energy and water savings translate in avoided cost and therefore in resources that can be diverted to other important projects for our Emirate. Therefore, while there is still a lot to be done to achieve our 2030 goals, we are confident in our ambition, as the DSM Strategy finds strong support from our leaders and key institutions. 10

11 11 DSM Annual Report

12 2 Objectives and scope of this report 12

13 Objectives and scope of this report The goal of this report is to present the achievements for of the Demand Side Management (DSM) Strategy, designed by the Dubai Supreme Council of Energy, implemented by key government entities and supported by TAQATI. Starting from the strategic context and institutional setup of DSM, this report presents a description of the 9 DSM programs, shows actual data on energy and water savings in comparison to targets, leading to an outline of priorities to be pursued in the coming years. Data presented in this document is the result of a system of key performance indicators (KPI) that DSCE is maintaining through TAQATI in collaboration with Program Owners: Dubai Electricity and Water Authority (DEWA), Roads & Transport Authority (RTA), Dubai Municipality (DM), Etihad Energy Services (Etihad ESCO), Emirates Authority for Standardization & Metrology (ESMA) and the Regulatory and Supervisory Bureau (RSB). The quantitative assessment is supported by qualitative insights provided by the authors and by Program Owners who, through a dedicated chapter of the report express their points of view on the status, challenges and future outlook of their program. This is a limited distibution report, intended for stakeholders involved in the DSM Strategy implementation. 13

14 DSM STRATEGY WAS DEVELOPED BY DSCE AS PART OF DIES 2030, TO SUPPORT DUBAI VISION OF LEADERSHIP IN ENERGY SECURITY AND EFFICIENCY DUBAI VISION: BECOME A ROLE MODEL TO THE WORLD IN ENERGY SECURITY AND EFFICIENCY.DSM 2030 SECURITY OF ENERGY SUPPLY GAS SUPPLY / LNG CLEAN COAL NATURAL GAS UTILITY SCALE SOLAR IMPORT / NUCLEAR REDUCTION OF DEMAND DEMAND SIDE MANAGEMENT STRATEGY (DSM STRATEGY) INNOVATION AND ENABLERS R&D / NEW TECHNOLOGIES POLICY & REGULATORY FRAMEWORK FUNDING & FINANCING PPP (IPP MODEL)1 1) PPP = Private-Public Partnership; IPP = Independednt Power Producer SUSTAINABLE GROWTH WASTE MANAGEMENT GREEN MOBILITY INVESTMENT IN CLEAN AND SMART TECHNOLOGIES 14

15 3 Context and overview of the DSM Strategy 15

16 Context and overview of the DSM Strategy The DSM Strategy is aligned with the strategic agenda of Dubai and the UAE. 3.1 POLICY CONTEXT The DSM Strategy is part of the Dubai Integrated Energy Strategy 2030, whose main goals are to secure uninterrupted energy supply and moderate the growing energy and water demand of Dubai, hence increasing sustainability and competitiveness of its economy. In a context of high dependency on energy imports and fast growth of the economy, optimization of energy demand is a strategic priority for the Emirate. It moderates the need for expansion of generation capacity, and frees up resources for strategic investments and spend. At the same time, demand side management creates new jobs and capabilities in the field of energy efficiency which will be useful for the long run, supports safety and the environment through best practices and lower emissions, and contributes to the idea of Dubai as a smart city through its reliance on new technologies. The convergence of such important, multiple goals in the DSM Strategy makes it well integrated with the Dubai and UAE agendas, as outlined in Exhibit 2 on the next page. Demand Side Management Targets Electricity consumption savings: 30% by 2030 vs. BAU Water consumption savings: 30% by 2030 vs. BAU DIES 2030 Supply Side Targets (Energy Mix) Clean Energy Share: 25% by 2030 Exhibit 1: DSM as part of DIES

17 NATIONAL AGENDA National agenda 2021 vision Shaping the next years of UAE development Green growth strategy Promoting sustainable growth DUBAI AGENDA Dubai Plan 2021 Reinforcing Dubai s positioning as a global center and destination EXPO 2020 Supporting a new wave of growth DIES 2030 & DSM Strategy 2030 Making Dubai a role model in energy efficiency and security Smart Dubai Making Dubai the smartest city in the world How the DSM Strategy fits UAE and Dubai strategy Promotes energy conservation Creates additional jobs and capabilities Supports energy security Supports safety and environment Contributes to the creation of a smart city Yearly targets have been established for the DSM Strategy and its Programs. Exhibit 2: DIES and DSM in the context of the Dubai and UAE policy agenda 3.2 THE DSM Strategy, ROADMAP AND TARGETS The DSM Strategy comprises 9 Programs, designed to address different aspects of energy and water consumption. Over the course of, Shams Dubai was added to the original set-up as the 9th DSM Program. Deployment of the programs is supported by a series of enablers and implementation mechanisms, including for example institutional setting and capability building, public awareness, measurement and verification, policy and regulation, financing, information systems, governing by example, technologies and studies. initiatives, building success cases and developing an initial market which the private sector can then leverage in subsequent phases. Remarkable examples of this approach are the initial test of the Dubai Green Building Regulations (mandatory for government entities only in the initial years), and the implementation of the retrofit program (supported by a DSCE Directive for government entities), and the development of green procurement guidelines (to be initially tested by DSCE entities). A key mechanism that has been broadly adopted in the strategy is the principle of governing by example, whereby the government places the first steps in new 17

18 Context and overview of the DSM Strategy DSM Goal Dubai to become a role model in energy efficiency by implementing costeffective electricity and water demand saving measures and developing a green service market 9 DSM Programs 1. Building regulations 2. Building retrofits 3. District cooling 4. Standards & labels for appliances & equipment 5. Water reuse and efficient irrigation 6. Outdoor lighting 7. Power and water tariff rates 8. Demand response 9. Shams Dubai 8 DSM Implementation Mechanisms Institutional setting and capability building Governing by example Policies and regulations Technologies and studies Information systems Financing mechanisms Public awareness Measurement and verification Exhibit 3: Architecture of the DSM Strategy, with its 9 Programs and its 8 Implementation Mechanisms Program Scope Building regulations Building retrofits District Cooling Standards and labels Water Reuse and Efficient Irrigation Implement and periodically update the existing DM green building code to increase energy and water savings by double the current DGBR rates. Introduce a labelling scheme for buildings Execute a retrofitting program for the existing buildings, targeting the main consumption drivers: cooling, lighting, water, industrial processes, building envelope, etc. Ambition to retrofit about 30,000 buildings by 2030 Start from government buildings, followed by commercial and residential buildings Increase penetration of district cooling (DC) from 16% of refrigeration capacity in 2011 to 40% in 2030 by regulating the district cooling industry Introduce minimum energy efficiency standards and a star rating system for appliances and equipment Categories cover: air conditioners, lamps, large appliances, water heaters, electronics, electric motors and water fixtures Reduce use of desalinated water for irrigation by promoting efficient landscaping practices and irrigation technologies and maximizing the use of TSE (100% of public areas irrigated with TSE) 18

19 Program Scope Outdoor Lighting Change of Tariffs Rates Demand Response Shams Dubai Use more efficient lighting fixtures (retrofitting 75% of existing lights) and expand the switch-off initiative to 100% of residential areas Review tariff rates to promote energy conservation and economic efficiency of consumption decisions Gradually introduce time-of-use tariffs, curtailable load management and direct load control to reduce future capacity needs and environmental impacts Encourage households, building owners and commercial and industrial institutions to install PV panels to generate electricity, and connect them to DEWA s grid to allow transfer of surplus generation The government of Dubai is committed to achieving ambitious energy and water consumption savings targets, associated to the implementation of the 9 DSM programs. At the end of the foreseen journey, in 2030, we expect savings of about 19 TWh of power and 46 BIG of water compared to business as usual. These overarching goals of savings are the sum of individual program targets as shown in Exhibits 4 & 5. Targeted electricity savings from DSM programs. 2030F, TWh -5.1 (27%) Building regulations -4.6 (24%) Tariff Rates -4.2 (22%) Standards and Labels for Appliances -3.4 (18%) District Cooling -1.7 (9%) Building Retrofits -0.2 (1%) Outdoor Lighting -19 (100%) Total DSM 2030 Exhibit 4: 2030 DSM targets 19

20 Context and overview of the DSM Strategy Targeted water savings from DSM programs. 2030F, BIG (32%) Building regulations -9.6 (21%) Tariff Rates -8.1 marks the begining of the Ramp- Up Phase of the DSM Strategy. (17%) Water reuse and efficient irrigation -8.1 (17%) Standards and Labels for Appliances -5.6 (12%) Building Retrofits -46 (100%) Total DSM 2030 Exhibit 5: 2030 DSM targets A well-defined roadmap, agreed upon by Program Owners and DSCE through a specific DSM Policy document, provides guidance for the long journey through The Preparatory and Initiation Phases of DSM implementation have been completed, leading to an established institutional set-up, agreed goals and roadmap, and activation of all Programs. We are now in the Ramp-Up Phase of implementation, when initial activities need to be rapidly scaled up. Emerging capabilities need to be consolidated, pilot projects need to progressively move into larger scale roll-out, programs need to start delivering substantial savings. In this phase, significant contribution is still expected from the government in leading by example, pioneering implementation, showcasing success stories and favoring development of an energy efficiency market. However, increasing participation from the private sector is also expected in the coming 5 years. We expect, at the end of the Ramp-up phase, in 2020, savings of up to 8-10% of business as usual demand. The last 10 years of the strategy, between 2020 and 2030, foresee a second wave of DSM measures, raising the bar for some key programs, and increasing 20

21 Context and overview of the DSM Strategy penetration of measures affecting a large portion of Dubai governmental and private sector. A plan of such duration needs to be subject to degrees of flexibility, not on the level of ambition, but on the ways (measures, technology choices, speed) in which savings are captured. As new technologies and best practices around the world continue to emerge, and Dubai growth patterns evolve, the DSM Strategy will undergo periodic revisions, to fit a changing context. 4% 8% - 10% 15% - 20% 30% Preparation Activation Ramp-up Second wave Dubai Integrated Energy Strategy 2030 preparation Demand Side Management Strategy 2030 preparation Mobilization of stakeholders Institutional and regulatory set-up (E.g. DSM Exec. Comm., Super ESCO, TAQATI) Regulation (E.g. retrofits, DC, DGBR) and government engagement through directives/ guidelines (audits, green procurement) Establishment of KPIs and M&V Pilot projects (E.g. RTA LED pilot projects) Development of DSM capabilities and organization Government leading by example: - Retrofits - Green Procurement - Energy Management Implementation of financing mechanisms Full roll-out of the programs Scale up of existing measures: - DGBR update - Tariffs review - ESMA standards continuous update - Full implementation of Demand Response Periodic review of the strategy, targets and programs Exhibit 6: DSM roadmap through

22 Context and overview of the DSM Strategy A dedicated DSM Executive Committee works as an action oriented body to facilitate implementation of the DSM Strategy. 3.3 INSTITUTIONAL FRAMEWORK Implementation of the DSM Strategy is supervised by the Dubai Supreme Council of Energy (DSCE). The DSCE, chaired by HH Sheikh Ahmed bin Saeed Al Maktoum, comprises top executives from key Dubai government institutions, including DEWA, RTA, DM, EGA, ENOC, DUSUP, DPA, DNEC and DPE, and governs broad aspects of energy supply and demand in Dubai. Each DSM Program has its respective government entity responsible for execution (Program Owner), selected on the basis of its responsibilities and strengths, focused on delivering results and on addressing challenges specific to the program it owns. A DSM Executive Committee, chaired by DSCE and comprising senior representatives from all Program Owners, has been established to ensure coordination and support to the DSM Strategy. On the date of publication of this report, Members of the DSM Executive Committee are: H.E. Ahmad Al Muhairbi (Secretary General, DSCE) Chairman Yousef Jebril (EVP Power & Water planning, DEWA) Vice-Chairman Abdulla Rafia (Assistant Director General, Dubai Municipality) Nazem Faisal (Director, Roads and Facilities Maintenance Department, RTA) Graeme Sims (Executive Director, RSB) Stephane Le Gentil (CEO, Etihad Energy Services) Samer Khoudeir (Chief Sales & Marketing Officer, Empower) Shamma Al Rahmah (Manager, Business Planning & Performance management, ENOC) Mustafa Al Yousuf (Board Member, RSB) Faisal Rashid (DSM Director, DSCE) Secretary Aref Abou Zahr (Executive Director, TAQATI) Exhibit 7: One of the DSM Executive Committee meetings, September 28 22

23 Context and overview of the DSM Strategy A dedicated office, TAQATI, established within Etihad Energy Services (a DEWA venture), is supporting stakeholders in planning and managing their relevant DSM programs, monitoring and verifying performance as well as delivering specific cross-program enablers in the fields of awareness, capacity building, and financing. Supervision DSCE Board Direction DSM Executive Committee Support DSCE DSM Directorate Management DSM Manager DSM Program Implementation Teams DSM Programs Program Owners 1 Building regulations DM 2 Building Retrofits Etihad ES 3 District Cooling (DC) Etihad ES & RSB 4 Standards for appliances & equipment ESMA Implementation Water reuse and efficient irrigation Outdoor lighting Power and water tariff rates DM RTA DM DEWA 8 Demand response DEWA 9 Shams Dubai DEWA Exhibit 8: Governance structure for the DSM Strategy 23

24 Context and overview of the DSM Strategy With nine (9) distinct DSM Programs, the Demand Side Management Strategy resembles the single most integrated approach to Energy Efficiency globally. Our goal of 30% energy reduction by 2030 confirms Dubai s commitment to be one of the most sustainable cities in the world. TAQATI, Dubai Energy Efficiency Program, is established with the mission to Identify and lead the implementation of result-driven energy and water efficiency strategies and be the driving mentor that can help achieve Dubai s sustainability goals. There are 6 key enablers to facilitate this mission: Advisory and Implementation support Awareness improvement Capacity building Financing mechanisms Special projects Continuous improvement TAQATI as DSM Program Manager Aref Abou Zahr, TAQATI Executive Director Engaging the program owners and numerous stakeholders across all levels of their organization is a key success factor in our institutional setup. That s why we have assembled a team that combines a unique blend of management consulting and industry expertise, and embodies the DNA of our brand; including: effective program and risk management, communication and collaboration skills, diversity and cultural fit. This team will be completely dedicated to collaboratively support our program owners to turn strategy into action plans, address key risks, develop market capacity, raise awareness, and identify, develop, source funding and rollout special projects to achieve the DSM targets. 24

25 25 DSM Annual Report

26 4 DSM Strategy achievements in 26

27 DSM Strategy achievements in witnessed the roll-out of regulation, institutional setup and capacity building activities 4.1 KEY DEVELOPMENTS OF THE YEAR has been a year of progress for the DSM Strategy beyond the continuous expansion of the Programs, and including multiple aspects, such as regulation, institutional set-up, capacity building. Several important achievements contributed in to making the overall DSM Strategy more robust and effective. These include: - The activation of the periodic monitoring and reporting on the DSM Programs. A process and its underlying tools are established to collect progress information on DSM activities from Program Owners, validate and consolidate overall results which are used to understand any deviations and steer corrective actions. This report is one of the outcomes of such a process. - The issuance of the DSCE Directive No. 1 requiring implementation of energy audits in the government sector. Promoting the concept of Government Leading by Example, HH Sheikh Ahmed bin Saeed Al Maktoum, Chairman of DSCE issued the Directive, and HE Ahmad Al Muhairbi, Secretary General of DSCE, issued detailed Implementation Guidelines in support. Exhibit 9: Extract from DSCE Directive No. 1, Energy and water audits for government entities in Dubai - The launch of large scale retrofit projects, including the largest guaranteed energy saving retrofit project in the Middle East agreed by EZW and Etihad ESCO to increase energy performance of 157 buildings in JAFZA, the retrofit of 7 DEWA office buildings, the retrofit of lighting in power stations, with expected savings from those projects ranging from 32% to 72% of baseline consumption. 27

28 DSM Strategy achievements in Exhibit 10: HE Saeed Al Tayer, Chairman of Etihad ESCO, HE Sultan Bin Sulayem, Chairman of EZW, HE Khalifa Al Daboos, Chairman of National Bonds Corporation, and Mr. Ahmed Ismail, Chairman of ENOVA signed a deal on November 19 to retrofit 157 buildings in Jafza, the largest guaranteed energy saving project in the Middle East. The signing ceremony was attended by HE Abdul Rahman Saleh Al Saleh, Director General of the Department of Finance in the Government of Dubai. - The launch of Shams Dubai and its incorporation in the DSM Strategy as the 9 th Program. The program implements the Executive Council Resolution number 46 of 2014, issued by HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council. It was made operational by DEWA in March, and opened an entirely new source of opportunities for energy users to save on their energy bills, by generating part of their needs and transferring any surplus to the grid. (with implementation of switchoff measures and new quantity standards for public irrigation), paving the way for larger scale implementation in the coming years. - The activation of other effective measures addressing the key challenges identified in previous years. These include for example awareness efforts conducted by DM in support to the implementation of the DGBR, and enhancements in the star rating system for appliances introduced by ESMA. - Completion of successful pilot projects in the fields of outdoor lighting (e.g., residential LED implementations in Al Barsha South 1&2, delivering over 50% energy savings) and water reuse 28

29 DSM Strategy achievements in Exhibit 11: Illustrative example of a label issued by ESMA for dish-washers, incorporating energy and water consumption performance in one combined rating - Continuous build-up of central DSM capabilities, through studies (e.g., design work in the field of energy intensity mapping), initiation of debate on foresight topics (e.g., Nearly Zero Energy Buildings), workshops on relevant projects (e.g., building retrofits), and partnerships of different kind (e.g., DSCE partnerships with FEDARENE, DTCM, Land Department, Los Angeles Bureau of Street Lighting, Dubai Airports) Exhibit 12: A screenshot of the energy intensity mapping tool, developed by the Dubai Supreme Council of Energy to integrate energy consumption data and technical asset data from multiple government entities and calculate energy and water intensity indicators for buildings in Dubai. The tool is expected to go live in the 3rd quarter of

30 DSM Strategy achievements in Exhibit 13: Nearly Zero Energy Buildings workshop, held on October 7, organized by the Dubai Supreme Council of Energy in collaboration with The Change Initiative in Dubai Exhibit 14: HE Sultan Butti Bin Mejren, Director General of Dubai Land Department and HE Ahmad Al Muhairbi, Secretary General of Dubai Supreme Council of Energy sign an MOU at Dubai Sustainable Cities Summit on December 17, for sharing of information and best practices in the field of energy efficiency. 30

31 DSM Strategy achievements in 4.2 OVERALL PERFORMANCE TO DATE marks another remarkable year in terms of DSM performance. Electricity savings at the end of stand at 2.1 TWh, marking a 29% surplus vs. the 1.6 TWh target of the year. Water savings stand at 3.4 BIG, with a 54% surplus vs. the 2.2 BIG target. When compared to business as usual, which is the reference for our 30% targets by 2030, those consumption savings represent about 5.4% and 3.3% of total baseline consumption for electricity and water respectively. Electricity savings BASE CASE In, the DSM strategy has saved 2.1 TWh of electricity and 3.4 BIG of water, exceeding the assigned targets TWh BIG Savings mainly due to DEWA 2011 tariff review Savings as % of baseline: 4.6% 5.0% 4.9% 5.1% 5.4% Water savings Savings mainly due to DEWA 2011 tariff review Initial savings from ESMA regulation, DGBR and retrofits Initial savings from water reuse program Over 50% of savings are expected from other programs than the DEWA 2011 tariff review Over 50% of savings are expected from other programs than the DEWA 2011 tariff review Savings as % of baseline: 4.0% 4.0% 3.6% 3.4% 3.3% Source: Program Owners, TAQATI analysis Exhibit 15: Achieved DSM savings vs. targets at the end of Targets Savings Consumption savings from the DSM Programs moderate business as usual consumption, which is undergoing an increase trend due to a variety of factors including the sustained growth in economic activity and wealth, the initiation of large scale development projects, climate change, and limited consumer awareness. Per capita consumption of electricity stands roughly at 2010 levels, after a few years of decrease following the 2011 tariff review. Per capita consumption of water is still below 2010 levels, but increasing. 31

32 DSM Strategy achievements in Such trends in per capita consumption are better understood when looking at the different consumer sectors. The residential sector was among the most responsive to the 2011 tariff review, but at the end of consumption habits have largely come back to pre-dsm levels. The government too, despite initial measures being undertaken, shows increasing unitary consumption, while there is more stability in the commercial sector, at least recently. The only sector showing substantial and continuous improvement over the long run is the industrial sector. Electricity consumption per person Water consumption per person Market consumption patterns since the 2011 tariff review indicate that both awareness and technical energy efficiency measures are vital to attaining targeted energy savings 000 kwh per person year % -0.8% 0% -4% IG per person year Exhibit 16: Trends in consumption per capita Consumption xx % CAGR

33 DSM Strategy achievements in Indexed Power consumption per account (2010 = 100%) Indexed Water consumption per account (2010 = 100%) Residential nationals Residential expats Industrial Commercial Government Confirmation of importance of price signals. However, consumption behavior seems to be moving back toward pre-2011 levels. Increase in the commercial, with recent stabilization Government sector showing a steep increase trend MWh/customer month (Power) or KIG/customer month (Water) in Note: Definition of customer types refers to applied contract/tariff. Reported consumption refers to billed consumption. Source: DEWA Exhibit 17: Unitary consumption trends by economic sector Consumption trends are in line with the targets of the DSM Strategy, where the DSM Programs have been calibrated more towards stabilizing per capita consumption rather than bringing a substantial decrease of the same. However, there is overwhelming conviction among executives and experts operating in the field of energy efficiency, that more can be done in the area of behavioral change. In a scenario of growth of the economy and its infrastructure leading to the Dubai Expo 2020, raising awareness of building owners and energy users, and establishing sustained energy management processes and capabilities in both the government and the private sector will become more central in the DSM Strategy, through a series of coordinated initiatives. 33

34 Going back to the results of the DSM Strategy, a remarkable fact is the contribution of an increasing number of programs to the overall achievement, which makes the current level of savings increasingly robust. While the tariff review applied in 2011 by DEWA still brings the majority of savings, its share of the total achievement is decreasing, as a result of substantial savings brought by other programs such as the ESMA standards and labels for appliances, the green building regulations from DM and free zones, and district cooling. Other programs, which inherently target a lower consumption base, such as Outdoor Lighting from RTA and DM, are contributing not only to the consolidated results, but also to increasing visibility and general public awareness of the strategy. BASE CASE DSM Program- Water Savings 2014 Savings MIG Savings MIG Target MIG Delta YoY (%) Dev. vs. target (%) Comments 1 Building regulations (2017) +65% + Savings from DM and Trakhees codes on 906 commissioned buildings 2 Building retrofits (2016) +12% + Initial savings from 2 reported projects 3 District Cooling n/a n/a n/a n/a n/a No water savings expected from this program 4 Standards and labels n/a (2016) No data for water savings available at this time 5 Water Reuse and Efficient Irrigation (2016) +292% + Initial savings from new irrigation standards and quantity/time optimization 6 Outdoor Lighting n/a n/a n/a n/a n/a No water savings expected from this program 7 Tariff Rates 3,180 3,103 2,231-2% +39% Effect of 2011 tariff review, gradually decreasing over time 8 Demand Response n/a n/a n/a n/a n/a No water savings expected from this program Total 3,318 3,444 2,231 +4% +54% Total as % of baseline 3.4% 3.3% 2.1% Source: Program Owners, TAQATI analysis Exhibit 18: Water savings by DSM Program 34

35 BASE CASE DSM Program- Electricity Savings 2014 Savings GWh Savings GWh Target GWh Delta YoY (%) Dev. vs. target (%) Comments 1 Building regulations (2017) +67% + Savings from DM and Trahkees codes on 906 commissioned buildings 2 Building retrofits 4 12 (2016) +175% + Savings from 27 projects (13 new in ) addressing 27 buildings & facilities 3 District Cooling (2017) +7% + Savings from DC efficiency gains based on data from 4 out of 5 operators only 4 Standards and labels % ~0 Savings from A/C: 535GWh, Washing machines: 3GWh, Refrigerators: 13GWh 5 Water Reuse and Efficient Irrigation n/a n/a n/a n/a n/a No electricity savings expected from this program 6 Outdoor Lighting % ~0 96% savings from RTA, 4% from DM. 85% from switchoff, 15% from LED 7 Tariff Rates 1,361 1,293 1,058-5% +22% Effect of 2011 tariff review, gradually decreasing over time 8 Demand Response n/a n/a n/a n/a n/a No consumption savings expected from this program (only peak reduction) Total 1,909 2,116 1, % +29% Total as % of baseline 5.1% 5.4% 4.2% 9 Shams Dubai n/a 0.3 n/a n/a n/a Generation in from the first 3 projects with installed capacity of 1.1 MW Grand Total 1,909 2,117 1, % +29% Source: Program Owners, TAQATI analysis Exhibit 19: Electricity savings by DSM Program 35

36 DSM Strategy achievements in An important impact of energy and water savings is the lower CO2 emissions resulting from avoided generation, which today relies in large part on non-renewable sources. Since its inception until the end of the DSM Strategy has abated CO2 emissions by over 4 Mn Tons. 6,000 BASE CASE 5,000 4, , , , Source: Program Owners, TAQATI analysis Exhibit 20: Amount of CO2 emission abatement from the DSM Programs (kton) 4.3 SENSITIVITY ANALYSIS AROUND ESTIMATED PERFOR- MANCE The estimated yearly performance has been tested against degrees of uncertainty in key parameters used for the estimation of savings, resulting in different scenarios around our base estimate within which the actual savings from the DSM Strategy are expected to lie. The conservative case represents a minimum level of savings, obtained after discounting all sources of uncertainty. Such scenario is significant to inform the most risk avert or capital intensive decisions associated to implementation of the DSM Strategy as a whole, such as supply side or other infrastructure developments for which service security and continuity are paramount. The optimistic case on the contrary is meant to recognize that some performance parameters of the programs may actually be outperformed, as a result of either more efficient developments than initially foreseen or higher levels of activity than reported. Such scenario is meant to provide a fair range to compare results of the DSM Strategy with other benchmarks at a national and international level. Overall, we can conclude that at the end of, the DSM Strategy is delivering between 3.6% and 6.1% of electricity savings and between 1.9% and 3.3% of water savings vs. business as usual. 36

37 DSM Strategy achievements in 4.4 OPERATIONAL DASHBOARD In addition to monitoring electricity and water savings, a series of key performance indicators is being tracked and reported for each program. The indicators are relevant to interpret results, identify any obstacles, and understand progress of activities which will deliver savings in the coming years. Program Operational KPIs Value Value (2014YE) (YE) Issues and mitigation actions 1. Building regulations No. of DGBR buildings commissioned under DM (cum.) No. of Green buildings commissioned under Trakhees (cum.) No. of DGBR permits issued (DM) Penetration (% total GFA) in commissioned buildings (DM) DGBR Penetration (% total GFA) in permitted buildings (DM) ,600 10,600 >0% 6.3% 18% 74% Some Free Zones do not yet apply a green building code with similar standards as DM: consultation is ongoing, aiming at more complete adoption Savings assumptions from implementation of green building codes need to be further validated to better support any future updates: a project is planned to articulate and verify assumptions 2. Building retrofits No. of retrofitted buildings (cum.) No. of equivalent retrofitted buildings (cum.) Avg. % savings vs. baseline (cum.) No. of accredited ESCOs Slower than planned implementation of audits in the government calls for higher central support Financing solutions 12% 27% need to be identified, in particular for retrofits in the private and residential sectors 3. District Cooling DC penetration ~18% N/A DC efficiency (kw/tr delivered) DC efficiency vs. air cooled avg. DC capacity utilization (at peak) ~0.88 ~ % +37% ~60% ~60% While DC plants are becoming more efficient, adoption of DC needs to accelerate to meet increasing targets: incoming regulation needs to be supported by strong awareness activities 37

38 DSM Strategy achievements in Program 4. Standards and labels Operational KPIs Appliance power +27% efficiency improvement vs. (AC) baseline Appliance water efficiency improvement vs. baseline Value Value (2014YE) (YE) From % N/A Share of 4 star appl. 15% 22% Share of 5 star appl. 23% 24% Issues and mitigation actions Adoption of higher classes of appliances (4 and 5 stars) is increasing, but still far from best practices Awareness and promotional measures need to be explored 5. Water Reuse and Efficient Irrigation 6. Outdoor Lighting 7. Change of Tariffs Rates 8. Demand Response 9. Shams Dubai TSE utilization ~85% ~92% Efficient landscaping and irrigation penetration (% of ~5% ~7% landscaping area affected by DSM measures) Penetration of LED ~3% ~4% Switch-off penetration in residential streets 100% 100% Elasticity of demand 15-30% 15-30% Elasticity degradiation 10-25% 10-25% Number of installed smart meters ~100k ~200k Adoption of DR trial N/A N/A Installed capacity (MW) Pipeline of new installations (MW) N/A (program started in ) 1 70 (04/2016) While measures to improve TSE consumption for irrigation are clear, there are challenges in using saved TSE for other applications in lieu of desalinated water A working group is being established to identify solutions Successful pilot projects are paving the way for LED implementation in new developments However, a detailed plan is needed for the retrofit of existing conventional lights Assumptions on impact of tariff changes need to be further verified after a few years of implementation As the smart grid is expanding, the initial measures for DR, in particular TOU, need to move from the design to the test phase (preparation is ongoing) The target of having solar panels on each roof by 2030 requires a combined set of measures from the regulatory and awareness sides, supported by intermediate targets or levels of aspiration Source: Program Owners, TAQATI analysis Exhibit 21: DSM operational dashboard 38

39 DSM Strategy achievements in The DSM strategy has brought AED 4Bn in savings on electricity and water bills since MONETIZING DSM SAVINGS Energy and water savings translate into monetary savings in the form of avoided cost, freeing up resources that can be diverted to other purposes. From the perspective of the Dubai economy as a whole, the main monetary benefits are the following: Lower operating cost: a1. Lower operations and maintenance cost for power and water generation, transmission and distribution, including cost of fuel, replacement parts, etc. a2. Lower maintenance cost for energy/water consuming equipment (due to less intensive operating regimes) Lower capital investments in generation capacity and new equipment: b1. Capital investment avoidance for new generation capacity b2. Lower replacement and disposal cost of energy/water consuming equipment, as less intensive operating regimes usually translate in its extended duration A simplified estimate of monetary savings quantifies the economic benefits for end users at average electricity and water tariffs. The analysis suggests that the DSM Strategy brought to the Dubai economy cumulative savings on the bill of about AED 4.0 Bn in the period 2011-, and over AED 900 Mn in only Total Source: Program Owners, TAQATI Analysis Exhibit 22: Estimate of consumers savings on the bill resulting from DSM Programs (Bn AED) The achieved monetary savings come in part as a result of investments in energy efficiency. The DSM Strategy expects those investments to produce by 2030 an NPV of over AED 60 Bn. With such reward in mind, the Dubai government is strongly committed to addressing any challenges the DSM Strategy may face along its journey towards a more efficient Dubai. 39

40 DEMAND SIDE MANAGEMENT (DSM) STRATEGY OF DUBAI DUBAI TO BECOME A ROLE MODEL IN ENERGY EFFICIENCY BY IMPLEMENTING COST-EFFECTIVE ELECTRICITY AND WATER DEMAND SAVING MEASURES AND DEVELOPING A GREEN SERVICE MARKET BUILDING REGULATIONS BUILDING RETROFITS DISTRICT COOLING STANDARDS AND LABELS IRRIGATION AND TSE OUTDOOR LIGHTING TARIFF RATES DEMAND RESPONSE SHAMS DUBAI 40

41 5 DSM program deep dives: Program Owners views 41

42 BUILDING REGULATIONS 27% 32% AS % OF TOTAL CONSUMPTION SAVINGS OF THE DSM STRATEGY 42

43 5.1 DSM PROGRAM 1: DUBAI GREEN BUILDING REGULATIONS RAISING THE EFFICIENCY BAR FOR NEW DEVELOPMENTS IN DUBAI KEY FACTS Program with the highest impact, contributing about 30% of the overall targets of the DSM Strategy 20% electricity savings expected from the DGBR in new construction vs. previous regulation 40% electricity savings expected from future updates of the code PROGRAM SCOPE Implement and periodically update green building regulations, targeting higher levels of energy efficiency LEARNINGS FROM THE IMPLEMENTATION OF THE GREEN BUILDING CODE AND FUTURE EVOLUTION Abdulla M. Rafia, A.D.G. for Engineering and Planning, DM A few years have passed since Dubai Municipality introduced in 2011 the Dubai Green Building Regulations (DGBR), following the vision of His Highness Sheikh Mohammed Bin Rashid AL Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai. Exhibit 1: Dubai Green Building Regulations The DGBR are today among the most important regulations in Dubai aiming at protecting the environment, its natural resources and ensuring health and welfare of citizens. They were written after extensively researching and studying several international green building regulatory systems and adopting only those that suit the UAE environment, economy and culture. The key targets of Dubai s Green Building Regulations are to reduce the consumption of water and electricity, and reduce waste and CO2 emissions. This is being accompanied by a reasonable and controlled increment in costs; however, future plans aim to completely prevent any additional costs vis-à-vis traditional projects. As a first step, in January 2011, the DGBR were made mandatory for governmental buildings, and optional for private ones. Then in March 2014, after having tested the regulation across over 40 government buildings, Dubai Municipality made the code mandatory for all buildings. At the end of, we have already a sample of over 400 buildings constructed according to the new requirements, and there is a massive pipeline of new construction which has been permitted in compliance with the new code. DGBR COMPLETED BUILDINGS (AS OF 31 DEC ) DM ONLY 41% Public Buildings 9% 2% Industrial Buildings Multi storey Buildings 48% Exhibit 23: The commissioned buildings compliant with the DGBR now comprise a broad variety of types Villas 43

44 5.1 DSM PROGRAM 1: DUBAI GREEN BUILDING REGULATIONS RAISING THE EFFICIENCY BAR FOR NEW DEVELOPMENTS IN DUBAI 100% 75% 50% 25% D6BR Share of Total New Permitted Area (%) 0% 2Q2014 3Q2014 4Q2014 1Q 2Q 3Q 4Q DGBR Exhibit 24: Trends towards full adoption of the DGBR Feedback from the market has been positive and very important for us to plan future evolution. On the one hand, we recognize the need from developers of higher market recognition for those buildings that abide to green standards. On the other hand, in more and more occasions we are witnessing the willingness of some property owners and developers to adopt standards which are significantly higher than the minimum DGBR requirements, which shows there is even higher opportunity to be captured. Therefore, looking forward, we see a few important priorities: 1. Ensure the value of DGBRcompliant buildings is fully recognized in the market, by means of adequate property prices and rents. Dubai Municipality is already working on a rating system for buildings, Saa fat, which will leverage the work done on the DGBR and quantify the level of adoption of green standards vs. the minimum requirements. The purpose is to provide more visibility to efficient developments and therefore support adoption of higher than minimum standards from developers. 2. Keep pursuing full compliance to the code, by strengthening control and enforcement processes. The DSM Strategy of Dubai relies on the full implementation of the DGBR to achieve its 30% electricity and water savings targets, and we will ensure that every new building contributes to such ambitious targets. 3. Support the idea of more homogeneous green building codes across the different areas of Dubai. There are over 20 Free Zones in Dubai, and the adoption in those areas of different green building standards is at the same time a loss of opportunity and a source of inefficiency for the real estate value chain. The DGBR is applied today in the Dubai Municipality jurisdiction and in some Free Zones which rely on DM for building permitting. Other Free Zones, under Trakhees, adopt different green building regulations, even if partially in line with DM s. Other Free Zones do not apply similar standards. Dubai Municipality is ready to work on this field in collaboration with the other concerned government institutions. In conclusion, green buildings are a vital part of Dubai s strategic plan to become a green city, through sustainable urban development. We at Dubai Municipality will ensure the continuous update and application of the code in line with best practices and the evolving needs of the city. 44

45 5.1 DSM PROGRAM 1: DUBAI GREEN BUILDING REGULATIONS RAISING THE EFFICIENCY BAR FOR NEW DEVELOPMENTS IN DUBAI GOING BEYOND THE MINIMUM STANDARD TOWARDS NEARLY ZERO ENERGY BUILDINGS Saeed Al Abbar, Chairman, Emirates Green Building Council What is a Nearly Zero Energy Building? Nearly Zero Energy Buildings (nzeb) are buildings that have a very high energy performance and the low amount of energy that these buildings require come mostly from renewable energy sources. nzeb represent the next paradigm in sustainable buildings and provide the stepping stone between current practice of green building codes and rating systems and the eventual adoption of net zero or positive energy buildings, which will ultimately need to become mainstream in order to achieve the Paris COP21 climate change objectives of decarbonizing the global economy. What are the most notable international trends in the field of nzeb? The nzeb concept has been widely adopted in Europe under the Energy Performance of Buildings Directive (EPBD) 2010/31/EU. This directive requires all new buildings to be nearly zero-energy by the end of 2020 and all new government buildings must be nearly zeroenergy by Each EU member state has developed and submitted a National Plan for increasing the number of nzeb, which will also include the definition of nzeb as it applies in their state. It should be noted that the definition of nzeb can vary between countries. For example; Denmark has set an nzeb definition of 20 kwh/m2 per year whereas in France it is 50kWh/m2 per year. 45

46 5.1 DSM PROGRAM 1: DUBAI GREEN BUILDING REGULATIONS RAISING THE EFFICIENCY BAR FOR NEW DEVELOPMENTS IN DUBAI The table below provides a summary of the adoption of nzeb in various EU countries. Country Cyprus Belgium (Brussels) France Renewable National Legislation Building Energy Uses Energy Metric Energy providing the Type Included Performance Share definition Primary Regulated 180 kwh/ Residential 25% NZEDB Action Plan Energy energy m2/year Heating, Primary 45 kwh/m2/ Brussels Air, Climate Residential DHW, Energy year and Energy Code appliances Primary Regulated 50 kwh/m2/ Residential RT2012 Energy energy year Denmark Residential Primary Energy Regulated energy 20 kwh/m2/ year 51-56% BR10 Latvia Residential Primary Energy Regulated energy 95 kwh/m2/ year Cabinet regulation No383 from 09/07/2013 Exhibit 25: Examples of NZEB definitions in Europe Why are nzeb important to Dubai? nzeb should form an important part of Dubai s sustainability strategy as they will undoubtedly become the next global paradigm in sustainable buildings. Looking beyond 2030, it is crucial for Dubai s buildings to begin moving towards a near zero energy consumption in order to remain in line with global developments and support the Dubai Integrated Energy Strategy beyond Currently, the green building principles and codes are widely adopted in the market and the industry has a strong understanding of green building principles and practices. With the support of the Shams Dubai rooftop solar initiative, the right elements are in place today for early adopters to begin pioneering the nzeb concept with the potential for the concept to become mainstream by For this to be achieved, steps should be put in place from this year in order to streamline the adoption of the concept. The benefits to Dubai of beginning to implement the nzeb today are multi-faceted and would include primarily; 1. Positioning Dubai as a global leader in energy efficient buildings and thus creating a knowledge economy around the concept. 2. Keeping pace with global best practices in sustainable buildings 3. Reducing dependence on conventional electricity, which in turn provides energy security and cost savings in infrastructure development 46

47 5.1 DSM PROGRAM 1: DUBAI GREEN BUILDING REGULATIONS RAISING THE EFFICIENCY BAR FOR NEW DEVELOPMENTS IN DUBAI The chart below shows the increased adoption of nzeb and net zero energy buildings in EU Member States. As can be seen, the concept is becoming increasingly main 100% 90% 80% 70% 60% 50% stream and the share of near zero, net zero and energy plus buildings has increased from 20% in 2012 to a projected 50% of new buildings by 2016 (Source: ECOFYS ). 40% 30% 20% 10% 0% Exhibit 26: The increasing share of NZEBs in the EU Net zero energy buildings / Plus energy buildings nzeb buildings according to national definitions Buildings with an energy performance better than the national requirements in 2012 Buildings constructed/renovated according to national minimum requirements in What challenges should we expect in adopting nzeb standards? A common barrier to the adoption of nzeb is the perception that such buildings will have a higher cost and require unproven technology. However, based on a review of the action plans submitted by EU Member States it can be seen that most plans focus on providing a very strong thermal barrier around the building rather than high investments in new technology. This can therefore enable the buildings to be cost neutral as the additional investment in insulating the building is offset by capital savings in air conditioning equipment (as a result of utilizing smaller air conditioning systems in better insulated buildings) and electrical infrastructure costs (as a result of a reduced connected load). The buildings can therefore be life cycle cost competitive against conventional building designs. The table below provides the envelope thermal performance parameters for building envelope elements in the UK, giving an indication of the performance thresholds for nzeb buildings. Example 1 Balanced Example 2 Part L 2013 Backstop External Sheltered Ground Party wall Roof wall U wall floor U-value U-value value (W/ U-value U-value (W/m 2 K) (W/m 2 K) m 2 K) (W/m 2 K) (W/m 2 K) Window U-value (W/m 2 K) 1.4 Double glazed 1.2 Double glazed Exhibit 27: Examples of thermal performance parameters for building envelopes in UK 47

48 5.1 DSM PROGRAM 1: DUBAI GREEN BUILDING REGULATIONS RAISING THE EFFICIENCY BAR FOR NEW DEVELOPMENTS IN DUBAI What do you recommend as a possible action plan towards nzeb in Dubai? In order for the concept to gain adoption in the market, the following steps would be recommended: 1. Conduct pilot projects to understand the challenges and opportunities in implementing nzeb 2. Establish the benchmark performance for nzeb in the Dubai context for each building typology 3. Translate the nzeb benchmark performance into workable building regulations focusing on building envelope, cooling systems and lighting 4. Establish the mechanism to monitor the enforcement of nzeb regulations 5. Monitor the implementation of nzeb and re-evaluate targets and regulations Existing Buildings Current Regulations Best Practice kwh/m kwh/m kwh/m2 nzeb Target kwh/m2? Table: Potential nzeb target for Dubai based on views of the Author 48

49 5.1 DSM PROGRAM 1: DUBAI GREEN BUILDING REGULATIONS RAISING THE EFFICIENCY BAR FOR NEW DEVELOPMENTS IN DUBAI Some of the first examples of NZEB in Dubai The Sustainable City 95 kwh/m2/y efficient homes (DGBR: 170) 10 MWp Solar PV 100% water and waste recycling The Change Initiative LEED Platinum certified building, with a 107/110 score, awarded as the most sustainable commercial building in the world Multiple integrated technologies, supply and demand side One-stop-shop for sustainable solutions 49

50 BUILDING RETROFITS 9% 12% AS % OF TOTAL CONSUMPTION SAVINGS OF THE DSM STRATEGY 50

51 5.2 DSM PROGRAM 2: BUILDING RETROFITS REDUCING ENERGY AND WATER CONSUMPTION OF OUR BUILDINGS KEY FACTS DSCE Directive No. 1 : - Target for Dubai government entities to save 20% of their energy and water consumption by Walk-through energy audits required on buildings > 1000 sqm - Detailed energy audits and retrofits required when potential savings are >20% of consumption and payback is <10 years ~500 buildings were audited through Etihad ESCO (physical & desktop audits) 7 RFPs were launched covering 2,250 buildings: - 1 project in savings guarantee phase - 4 projects in execution - 2 projects in award phase PROGRAM SCOPE Execution of a retrofit program for energy and water efficiency, with the ambition to improve performance of up to 30,000 buildings in Dubai by 2030, saving 1.7 TWh of electricity and 5.6 BIG of water annually by 2030 STATUS OF THE PROGRAM AND LOOK AHEAD Ali Mohammed Al Jassim, Acting CEO of Etihad ESCO. In early, the DSCE enacted the Directive #1 of to mandate energy audits in Dubai Government buildings above 1000sqm and the creation by these entities of a retrofit plan of their buildings. This Directive generated a lot of activity for Etihad ESCO to support the government entities and helped us to start preparing retrofit projects for several entities. During that year we also finalized our first major project development with Economic Zones World for the Jebel Ali Free Zone Authority to retrofit 157 of their buildings. The project required Etihad ESCO to bring the financing so we have partnered with National Bonds Corporation to create a Sharia a structure that can accommodate retrofit projects. Overall since the Building Retrofit program started, Etihad ESCO has launched 7 RFPs covering 2,250 buildings. These buildings being a mix of residential villas, office buildings, staff accommodation buildings and others. A few figures give an idea of the magnitude of those projects and the potential savings. On 2,250 buildings: Total electricity baseline addressed: 255 GWh/year Electricity savings identified: 69 GWh/year (AED31m) Average savings for Electricity: 27% Total water baseline addressed: 944 MIG/year Water savings identified: 200 MIG/year (AED10m) Average savings for Water: 21% 51

52 5.2 DSM PROGRAM 2: The currently committed projects BUILDING (with Etihad ESCO alone) will allow to achieve the DSM savings targets RETROFITS for 2016 and will contribute to 80% REDUCING ENERGY of the 2017 targets. New projects AND WATER (not included here) will allow us to CONSUMPTION OF exceed the 2017 DSM targets. OUR BUILDINGS Etihad Savings (Gwh) DSM target (GWh) Looking at the future, the priorities for Etihad ESCO are now to accelerate the program and target a higher number of buildings from the Government as well as start addressing the private sector market both for commercial and residential buildings. Retrofits in the residential market are a challenge due to the owner/tenant relation. Tenants pay the energy bills and are interested to see a reduction in consumption but they will not invest heavily into a retrofit for a property that does not belong to them. Owners do not have an incentive to retrofit their properties to save energy because they will not get the financial benefits of a reduced energy bill. This is one of the key priorities on which Etihad ESCO will work with the DSCE and the RSB to find a way to create a retrofit market for the residential sector Etihad Savings (MIG) DSM target (MIG) Exhibit 28: Savings vs. targets based on the currently committed projects with Etihad ESCO 52

53 5.2 DSM PROGRAM 2: BUILDING RETROFITS REDUCING ENERGY AND WATER CONSUMPTION OF OUR BUILDINGS The largest guaranteed energy savings project in the middle east Energy retrofit of 157 staff accommodation buildings of Jebel Ali Free Zone Authority (JAFZA) Fully financed by National Bonds Corporation using a Shari a compliant structure Replacing ACs, lights and water fixtures Replacement of 5,000 old AC units with high efficiency Split Units Replacement of 85,000 old light fixtures with high efficiency LEDs Replacement of 31,000 old water fixtures with highly efficient fixtures Over 6 year, guaranteed savings Exhibit 29: Example of staff accommodation building, part of the project scope will reach 158 GWh (28% savings) of Electricity, 1.2 billion IG (36% savings) of Water equivalent to AED 132m (31% savings) Contract duration: 7 years (1 year construction + 6 year guarantee). Project being executed in Investment value: AED 64 million DEWA lighting retrofit project Replacement of 8,500 lights in 2 Power Stations with high efficiency LEDs from Philips Lighting Street Lights Outdoor Lights Industrial Lights Indoor Lights Measured and Verified savings of 15GWh each year, a 75% decrease from initial electricity consumption from lighting AED 21M investment paid back in less than 3.5 years Exhibit 30: Examples of addressed assets in the DEWA Lighting Retrofit Project 53

54 5.2 DSM PROGRAM 2: BUILDING RETROFITS REDUCING ENERGY AND WATER CONSUMPTION OF OUR BUILDINGS RSB: PROVIDING REGULATORY SUPPORT TO THE RETROFIT PROGRAM Elie Matar, Head of Electricity, RSB was the second year of the RSB s regulatory framework in support of the Building Retrofit program of the DSM Strategy. As reported last year, in its first year of operation we accredited nine Energy Service Companies (ESCO). By the end of that number had increased to 14, of which 5 had achieved full accreditation and 9 provisional. We have kept the scheme under close review, ready to alter it to ensure it is most relevant to the energy services market. In we raised the bar for provisional accreditation, requiring additional staff capabilities, aligning with the requirements for full accreditation. Also, in mid- we introduced an Energy Auditors (EA) accreditation scheme supporting the Dubai Supreme Council of Energy directive that requires energy audits of all large buildings owned by Dubai government entities. The scheme ensures a level of competency among energy auditing firms and the audit staff they employ consistent with the needs of the directive. Five audit firms had achieved accreditation by close of. Since the launch of the building retrofit program the demand for and supply of professional energy training and certification activity in Dubai has increased. saw 11 Certified Energy Managers (CEM) and 14 Certified Measurement & Verification Professionals (CMVP) receive their certifications from the Association of Energy Engineers, all registered in Dubai. Through ESCO accreditation the RSB collects data on the projects of accredited entities, which allows us to both track savings against the targets in the DIES 2030 and identify trends and patterns in market activity. A total of 23 new projects were contracted in aiming at average savings of 35% and 36% for electricity and water respectively, as reported by 8 accredited ESCOs. These contracts target savings of 54.5 GWh of electricity and 200 MIG of water per year, to be achieved by retrofitting 190 buildings. Of those projects, 13 began to deliver savings in, achieving 4.8 GWh via retrofit of 12 buildings. This brings the total energy savings achieved in from retrofit projects implemented in the past two years to 12.2 GWh. 54

55 5.2 DSM PROGRAM 2: BUILDING RETROFITS REDUCING ENERGY AND WATER CONSUMPTION OF OUR BUILDINGS contracts were almost evenly split between the Energy Performance Contracting (EPC) type and non-epc, addressing several types of buildings, mainly in the commercial space, as the figures below show. Type of Contracts Projects by Building Type Guaranteed Savings Non-EPC Shared Savings Commercial Office Government Building Residential Flat Labour Accomodation Warehouse Mixed Use Factory Exhibit 31: Type and scope of retrofit projects reported to RSB Regulatory interventions have so far focused on the supply side of the retrofit market. The RSB is also looking at options to stimulate demand as well. This could involve energy performance rating for buildings, intended to raise awareness and create incentives to improve building energy performance, thus promoting retrofit activity. 55

56 DISTRICT COOLING 18% AS % OF TOTAL CONSUMPTION SAVINGS OF THE DSM STRATEGY

57 5.3 DSM PROGRAM 3: DISTRICT COOLING TOWARDS HIGHER SCALE, MORE EFFICIENT COOLING SOLUTIONS FOR OUR BUILDINGS KEY FACTS District cooling is the most popular water cooled solution with over 70% of water cooled capacity provided by DC firms On average water cooled solutions deliver cooling at 0.93 KW/TR compared to 1.51KW/TR for aircooled solutions Peak demand only utilizes 60% of the installed distinct cooling capacity PROGRAM SCOPE Increase penetration of efficient cooling by regulating the district cooling (DC) sector in Dubai. The program assumes an increase in DC from 16% of cooling capacity in 2011 to 40% in 2030 and that DC firms continue to improve efficiency and customer satisfaction against a baseline. PROMOTING HIGHER PENETRATION OF EFFICIENT COOLING IN DUBAI James Grinnell, Head of Water, RSB Cooling can be delivered through different technologies but in all it accounts for half of electricity consumption in Dubai and as much as 60% during peak times so it s no surprise that efficient cooling is a prominent feature of the DSM Strategy. The DSM plan targets district cooling to meet 40% of demand by 2030, saving 3.36TWhs in doing so. Other DSM programs will also raise the efficiency of cooling, through equipment standards and building codes, for example. The RSB has carried out an independent assessment of the cooling market in Dubai to better understand the market share of the technologies commonly employed, to establish their on-site efficiency and to monitor progress towards the DSM Strategy s targets. The study shows 18% of Dubai s cooling demand was met by district cooling with building level water cooled solutions accounting for a further 7%. Building scale aircooled solutions account for some 25% with the remaining 50% of demand being met by smaller scale unit level air-cooled solutions such as Variable Refrigerant Flow (VRF), ducted, split or window AC units. Water-cooled solutions, whether at a district or building scale offer superior energy efficiency to their air-cooled alternatives. On average water cooled solutions deliver cooling at 0.93 KW/TR compared to 1.51KW/TR for aircooled solutions. This means that air-cooled solutions use over 60% more energy for every unit of cooling when compared to water cooled solutions. 57

58 5.3 DSM PROGRAM 3: DISTRICT COOLING TOWARDS HIGHER SCALE, MORE EFFICIENT COOLING SOLUTIONS FOR OUR BUILDINGS However, there are some applications where water cooled technology may not be an appropriate solution, for example where there is low cooling load density or intermittent demand. So it is worth noting the relative efficiency of air-cooled solutions. VRF appears to offer significantly better efficiency than traditional ducted, split or window AC, although VRF is not yet widely deployed and the assessment of its efficiency was not therefore derived from on-site measurements. kwh/trh Exhibit 32: Production efficiency of district cooling plants Whilst the improved efficiency delivered by district cooling is welcome, the market share of water cooled technology still needs to increase to 40% over the next 14 years and, whilst achievable, it is not without challenge District cooling needs to be seen as the technology of choice by both customers and developers if it is to meet the challenges set out in the DSM Strategy. At the RSB we are confident that the district cooling sector will see sustained growth when: - Customers value the service offered and the additional facilities available when buildings do not house their own cooling systems, for example when the space is used for roof top swimming pools or social areas; - Developers consider district cooling to be an attractive choice because it is attractively priced and their customers express satisfaction with it; - Investors make reasonable returns by investing in district cooling companies. The expansion of district cooling (or building level water cooled solutions) will inevitably place additional demand on water resources. District cooling plants can operate on TSE (recycled water) which is also ideal for irrigation. However in the height of summer, demand for TSE outstrips supply. We are working with the DSCE to develop an integrated water strategy that can make best use of alternative water resources, including TSE, to minimize the impact of district cooling. Cooling Technologies Market Cooling Systems Efficency () 18% 7% 25% % % 2% Central Cooling Water Cooled Central Cooling Air Cooled Variable Refrigerant Flow Ducted Split/Packaged Units Split Units/Windows AC District Cooling Exhibit 33: Cooling technologies Dubai market share and efficiency levels 58

59 5.3 DSM PROGRAM 3: DISTRICT COOLING TOWARDS HIGHER SCALE, MORE EFFICIENT COOLING SOLUTIONS FOR OUR BUILDINGS Value the service offered and the additional facilities that can be offered when buildings do not house their own cooling systems. Customers Developers DC Operators Make reasonable returns by investing in district cooling companies Consider district cooling to be their technology of choice because their customers express satisfaction with it over other technologies Exhibit 34: Conditions favoring adoption of District Cooling by stakeholders 59

60 5.3 DSM PROGRAM 3: DISTRICT COOLING TOWARDS HIGHER SCALE, MORE EFFICIENT COOLING SOLUTIONS FOR OUR BUILDINGS DSM DISTRICT COOLING TARGETS SEEN FROM THE PERSPECTIVE OF THE INDUSTRY HE Ahmad Bin Shafar, CEO, EMPOWER What challenges are DC providers facing? Like any other industry, District Cooling is also dependent on external factors such as real estate growth, urban infrastructure development and favorable Government policies. However, the Dubai landscape is very favorable and we do not find these factors impeding the growth of DC industry in the emirate of Dubai. One of the challenges that DC providers are facing is Load Planning: Real estate developers generally overestimate cooling load requirements, which results in unnecessary costs and ultimately leads to customer dissatisfaction. Another challenge or concern is utilization of potable water for District Cooling Services. We, at Empower, have implemented a solution of utilizing Treated Sewage Effluent (TSE) in combination with Reverse Osmosis (RO) technology for make-up water consumption thus eliminating the use of potable water. We believe that our continuous focus on such innovative solutions will enable us to effectively tackle such challenges and will ensure effective utilization of our scarce energy resources. How does Empower plan to contribute to achieving the 40% penetration target by 2030? District Cooling is an energyefficient solution and reduces power consumption by approximately 50% compared to traditional airconditioning systems, which in turn significantly reduces power generation and distribution infrastructure. Empower, by itself has achieved Power Plant Capacity savings of approximately 892 MW during the year. Empower is currently serving various large-scale real estate developments with a total capacity of 1,115,000 RT of cooling load. From capacity perspective, Empower is the World s Largest District Cooling Service Provider and we believe that this is a clear testament of successful implementation of DC in Dubai. We would also like to highlight that Empower has been consistently adding DC capacity year after year and has achieved a growth of 12% during the last year (i.e. ) which reflects the growing penetration of DC industry in the Emirate. Amongst various buildings connected during the year, it is worthwhile to mention that Empower connected with District Cooling Services the 60

61 5.3 DSM PROGRAM 3: DISTRICT COOLING TOWARDS HIGHER SCALE, MORE EFFICIENT COOLING SOLUTIONS FOR OUR BUILDINGS iconic development of Emirates Towers, which was earlier served through traditional air conditioning system. Empower is also in the process of constructing a district cooling plant which will replace traditional air conditioning systems that are currently serving the luxurious hotel developments of Burj- Al-Arab, Jumeirah Beach Hotel and Madinat Jumeirah in We strongly believe that Dubai Integrated Energy Strategy s (DIES) target of 40% DC penetration by 2030 is achievable and Empower will continue its endeavors to promote utilization of district cooling services by: a) Creating more awareness about District Cooling Services and its benefits b) Coordinating and working closely with the Government of Dubai and its entities for achieving their objectives c) Implementing DC services for new large-scale real estate developments d) Expanding existing DC infrastructure to serve existing developments e) Retrofitting / converting building s conventional air conditioning systems to District Cooling Services What enablers are needed to support achieving the target? a) Policy support and regulatory frame-work from the Government b) New master developments as well as urban planning must have provisions for District Cooling c) Establishment of facilities/ mechanism for DC specific education and training How should DC operators evolve? DC operators should primarily focus on: a) Investing in quality infrastructure in line with requirements of the development/(s) b) Promoting adoption of DC in new as well as retrofit developments c) Innovating and adopting solutions like TSE utilization with RO to overcome some of the potential challenges faced by DC operations d) Developing customer-centric operations with focus on high quality and comprehensive customer services e) Promoting sub-metering solutions, which results in energy accountability, energy conservation and thus greater customer satisfaction 61

62 STANDARDS AND LABELS 22% 17% AS % OF TOTAL CONSUMPTION SAVINGS OF THE DSM STRATEGY

63 5.4 DSM PROGRAM 4: STANDARDS AND LABELS FOR APPLIANCES AND EQUIPMENT PROMOTING EFFICIENT APPLIANCES KEY FACTS High-impact program, contributing over 20% of the DSM electricity targets for 2030 Standards for each class of appliances and equipment are updated every 2-3 years PROGRAM SCOPE Develop and implement Minimum Energy Performance Standards (MEPS) and Comparative Labeling Scheme relative to energy and water consumption for electrical appliances for use in the UAE. The Program covers main household appliances, particularly room air-conditioners, refrigerators/ freezers, clothes washing machines/ dryers, dishwashers, electric storage water heaters, lamps, water fixtures and others. PROGRAM STATUS AND FUTURE PLANS HE Abdulla Al Maeeni, Director General, Emirates Authority for Standardization and Metrology The Energy Efficiency Standardization and Labeling (EESL) Program of the UAE is a well-established initiative. The initial phase of the program started in 2012 covering non-ducted room airconditioners. Mandatory compliance to minimum energy efficiency ratio and test conditions under T3 (Tropical Climate) as well as provisions to comparative labeling spearheaded the program that has extended across a number of product categories and has undergone several stages of improvement. The Energy Efficiency Standardization and Labelling Program is now a well-established reality in UAE. Since early 2013, when energy performance labels were made mandatory for residential air conditioning units, the program has extended across a number of product categories, and it has undergone several steps of improvement. The program, in line with the UAE Vision 2021 and with the UAE Green Growth Strategy, supports higher penetration of more performing appliances and equipment in UAE. There are strong synergies with the DSM Strategy of Dubai, and in fact ESMA has been working closely with the Dubai Supreme Council of Energy to harmonize issuance of the labels and develop effective monitoring tools for the program. Overall, the program operates through the following levers: Remove inefficient products from the market Improve the level of efficiency on household appliances in terms of electricity and water consumption Provide information to consumers to make educated choices Provide a tool for authorities to enforce their requirements Encourage manufacturers to develop new technologies for higher efficiency levels. 63

64 5.4 DSM PROGRAM 4: STANDARDS AND LABELS FOR APPLIANCES AND EQUIPMENT PROMOTING EFFICIENT APPLIANCES Comparative labels grade each product based on their efficiency levels and are represented by a scale of 1 to 5 stars (More stars means more efficient!). They provide consumers an effective and easy to comprehend tool in support to their purchase decision. What they are Products introduced into the UAE market with the intention to use are covered by this program. Product categories to be addressed are selected based on their importance in terms of consumer demand and energy/water consumption. To what they apply How they are improved How they are enforced Technical regulations and standards are revisited every 2-3 years. Efficiency levels are upgraded, thus strategically removing less efficent products from the market. Standards and Technical Regulations are approved by the UAE Cabinet and published in the UAE Official Gazette. A transition period is typically indicated in the regulation. Control includes Certification (prior shipping, handled by ESMA), Border Control (handled by Customs) and Market Surveillance (handled by local authorities in each Emirate). Exhibit 35: Highlights of the ESMA star-labelling system Over the first 3 years of the regulation, a significant shift of products from less efficient to more efficient levels was identified. Initially, statistical analysis suggest that majority of available products in the market was falling under the 1-2 star rating. Succeeding years show that population of these products has shifted to higher star rating levels of 3-4 stars, signifying increase in awareness and substantial savings. Expanding the scope of the program also increases the potential savings. 26% 19% 11% 25% 19% 50% 40% 30% 20% 10% 0% 1 Star 2 Star 3 Star 4 Star 5 Star Share of 4 and 5 star A/C Exhibit 36: Consumer adoption of non-ducted A/C by star rating in UAE Exhibit 37: Share of 4-5 star non-ducted A/Cs over total UAE sales 64

65 5.4 DSM PROGRAM 4: STANDARDS AND LABELS FOR APPLIANCES AND EQUIPMENT PROMOTING EFFICIENT APPLIANCES Progressively, ESMA is geared to expand significantly the coverage of the program to prevent the influx of inefficient products that cannot penetrate countries with established regulations. Our commitment to environment protection and resource conservation has been the driving factor for establishing regulations at par with leading regulatory bodies across the globe. In addition to this, ESMA realizes the importance of market surveillance in enforcing such regulations and making sure that products actually sold in the market are complying with the requirements. Strong cooperation and open line of communication between ESMA, Department of Economic Development, local authorities and industry players pave the way for an effective market monitoring and enforcement. Following the vision of our Chairman, H.E. Dr. Rashid Ahmed Bin Fahad, we are committed to positioning UAE as one of the leaders in energy efficiency and water conservation regulatory bodies around the world. Rest assured, Dubai s 2030 targets are in-line with our goals, full and unhindered cooperation and support shall be provided. Lamps Water Fixtures Electric motor water pumps Clothes Washing machines and dryers A/C: Commercial External Power Suppliers Refrigerators and freezers A/C: Nonducted Dish washers Electric storage water heaters Television Sets Standby and Off mode Simple Set up Boxes Exhibit 38: Implementation roadmap for ESMA Energy Efficiency Standardization and Labeling Program Circular Expected 65

66 IRRIGATION AND TSE 17% AS % OF TOTAL CONSUMPTION SAVINGS OF THE DSM STRATEGY

67 5.5 DSM PROGRAM 5: WATER REUSE AND EFFICIENT IRRIGATION OPTIMIZING USE OF TSE TO REPLACE DESALINATED WATER WHERE POSSIBLE PROGRAM SCOPE Implement efficiency measures in public irrigation, and use the TSE made available through those measures as a substitute for desalinated water where applicable. PERSPECTIVE ON OPTIMIZING TSE USAGE Exhibits 39 and 40: Landscaping of the Airport Road, Dubai KEY FACTS TSE costs over 80% less than desalinated water 100% of public spaces under DM supervision are today irrigated with TSE TSE can be an effective substitute of desalinated water for a variety of applications, including irrigation, district cooling and industrial The Program is expected to generate over 8 BIG of water savings bt 2030 Taleb Julfar, Director of Drainage and Irrigation, Dubai Municipality Usage of Treated Sewage Effluent for public irrigation in Dubai has been a major achievement. The Dubai Emirate has realized the importance of collection and treatment of municipal water only to protect the enviroment and public health, but also to reuse the treated water in the irrigation of greenery areas and landscaping. In, the treatment capacity of the Municipal plants exceeded 600,000m3 /day. In other words, about 200 million cubic metres (about 45 BIG) of desalinated water is saved annually, which would be otherwise needed to serve our greenery. The TSE network of Dubai is one of the largest in the world, and this makes Dubai a global best practice. TSE Utilization % 95% 90% 85% 80% 75% 70% Exhibit 41: The increasing % of utilized TSE (for irrigation and other purposes) The DSM Strategy recognizes the value of TSE as an asset for Dubai, and therefore aims at further optimizing its consumption, so that the resulting excess could be diverted to other purposes which today use mostly desalinated water. The low price of TSE compared to desalinated water drives significant market demand for it, and in fact major quantities of TSE are being provided to commercial and governmental establishments, such as several new developments. District Cooling is also being served where possible, following The Executive Council Order No. 27 of

68 5.5 DSM PROGRAM 5: WATER REUSE AND EFFICIENT IRRIGATION OPTIMIZING USE OF TSE TO REPLACE DESALINATED WATER WHERE POSSIBLE Exhibit 42: The Executive Council s Order No. (27) of 2008 on using thermal storage and non- desalinated water in general central air conditioning systems in the Emirate of Dubai In line with the DSM Strategy, Dubai Municipality is already applying measures to reduce consumption of TSE for public irrigation, so that more quantities could be made available for other purposes. A oneday-per-week switch-off program is being implemented in some communities during summer times, while new quantity standards for each type of plantation have been defined and are being applied to new communities. Other efficiency measures are being considered involving more capillary metering and control systems. Plant type Unit Original Revised % Change Palm trees Lit/day % -47% Ornamental trees Lit/day % -50% Grass Lit/m2/day % Shrubs & hedges Lit/day % Ground covers, Flowers & creepers Lit/m2/day % Exhibit 43: DM irrigation standards becoming more efficient SHEIKH ZAYED ROAD JUMEIRAH JUMEIRA ROAD BURDUBAI BARSHA SH.MOHAMMED BIN ZAYED ROAD AL KHAIL ROAD DEIRA JABAL ALI LEHBAB ROAD DUBAI LAND MBR CITY DUBAI - AL AIN ROAD AL AWIR ROAD SH.MOHAMMED BIN ZAYED ROAD DWC EMIRATES ROAD EMIRATES ROAD NAD AL SHIBA AL AWIR STP JABEL ALI STP KHWANEEJ Exhibit 44: The planned expansion of the TSE network of Dubai Municipality (2025) 68

69 5.5 DSM PROGRAM 5: WATER REUSE AND EFFICIENT IRRIGATION OPTIMIZING USE OF TSE TO REPLACE DESALINATED WATER WHERE POSSIBLE While potential savings in TSE consumption from those measures could be massive if those levers are to be applied extensively, a few challenges need to be tackled in order to be able to use those saved quantities in lieu of desalinated water. The main ones are the following: - Seasonality of TSE demand vs. a more stable supply, entailing an excess TSE in winter while in the summer supply and demand are more balanced. In absence of larger storage facilities for TSE, it would be difficult to supply TSE on a continuous basis for uses different from irrigation - Impact of the blowdown of District Cooling on TSE salinity levels. With the typical 3-stage treatment of DM, the high concentration of DC blowdown results in increasingly salty TSE, undermining its current usage for irrigation - Need for new connections of TSE to District Cooling to be coordinated with the plans for development of the TSE and sewerage network Different solutions to such challenges are possible, which differ in terms of investment, benefits and position in the value chain where intervention should be applied. 69

70 OUTDOOR LIGHTING 1% AS % OF TOTAL CONSUMPTION SAVINGS OF THE DSM STRATEGY

71 5.6 DSM PROGRAM 6: OUTDOOR LIGHTING SAFE AND EFFICIENT LIGHTING SOLUTIONS FOR OUR ROADS KEY FACTS 50% target savings in consumption for outdoor lighting by % penetration of switch-off/ dimming measures in residential streets already achieved 75% of lights to be replaced with LED by 2030 PROGRAM SCOPE Adopt LED solutions for outdoor lighting in streets and other public spaces, both on new projects and through retrofits of the existing. Implement further efficiency measures such as dimming and/or partial switch-off. THE PLAN FOR IMPLEMENTATION OF LED IN DUBAI STREET LIGHTING Bassel Saad, Director, Roads & Facilities Maintenance Department, RTA Energy efficiency and sustainability are an integral part of RTA strategy, and the Outdoor Lighting program is among the initiatives with the highest potential. We at RTA have examined LED since its early developments. While waiting for the technology to mature, we have been implementing a series of actions to minimize consumption of our existing, conventional lighting assets. In 2011 we reduced operating hours at dawn and sunset by a total of 20 min per day, and then in 2013 we started implementing a switch-off program for every second light in residential areas (one-on one-off activation), which has reached 100% penetration. The cost of LED is today just a fraction of what it was just a few years ago, while performance has been improving in terms of life-span and energy consumption. Such trends drove the payback time vs. conventional lighting to very attractive levels of less than 6 years. While being reassured about the technology by a number of extensive applications worldwide, RTA has been studying deeply its potential application to the harsh environmental conditions of Dubai, and to the strict safety requirements of Dubai roads. As a result of these studies, replacement of all traffic lights to LED has been decided and it is already in advanced stage. Successful pilot projects have been completed for outdoor lighting in residential areas, for example in Barsha South 1&2, providing massive energy savings and outstanding quality standards. At the same time we have examined the potential application of LED to larger roads, and the opportunity to start retrofitting part of the existing lighting stock. Input from these first implementations has been clearly positive, and RTA can today confirm its reliance on the LED technology, in line with the DSM Strategy. Outdoor lighting is an evolving field, even beyond lighting technologies. Synergies with several smart applications are emerging around the world, such as in the fields of electric vehicle charging, wi-fi networks, city security, and renewable energy. We expect that in the next decade some of those developments will confirm their promising trends, and we will be ready to ensure that Dubai be among the first cities in capturing their benefits. 71

72 5.5 DSM PROGRAM 5: WATER REUSE AND EFFICIENT IRRIGATION OPTIMIZING USE OF TSE TO REPLACE DESALINATED WATER WHERE POSSIBLE Exhibit 45: HE Ahmad Al Muhairbi, Secretary General, Dubai Supreme Council of Energy, and Ed Ebrahimian, General Manager, Bureau of Street Lighting, City of Los Angeles sign an MOU for collaboration in the field of outdoor lighting. The signing ceremony was attended by Nazim Faisal Ali Saeed, Director of Roads & Facilities Maintenance Department, Road and Transport Authority, and by Juma Khalifa Al Fuqaei, Director of General Maintenance Dept., Dubai Municipality Highlights of the Al Barsha South 1 & 2 LED Pilot Project, RTA Total Project Fittings: pcs watt: 1329pcs watt: 390pcs. Conventional LED Savings Annual Consumption (kw) 993, , ,912 KW Annual Energy Cost (AED) 377, , ,488 AED Exhibit 46: Estimation of energy consumption benefits from the Al Barsha South 1&2 pilot project 72

73 5.6 DSM PROGRAM 6: OUTDOOR LIGHTING SAFE AND EFFICIENT LIGHTING SOLUTIONS FOR OUR ROADS Highlights of Dubai Municipality outdoor lighting program in parks and other public facilities Exhibit 47: Al Khazzan Park, the first zero-energy park in Dubai Exhibit 48: Solar-LED lighting systems at Nad Al Sheba Park, Dubai LED-solar lights already installed across Dubai parks o 3,500 through new projects o 1,000 through retrofit of conventional lights - Operating hours reduced to maximum 6 hours per night, with switch-off after 12 am - Awarded the 2016 Middle East Electricity Exhibition award for the Lighting Project of the Year 73

74 TARIFF RATES DEMAND RESPONSE 24% 21% AS % OF TOTAL CONSUMPTION SAVINGS OF THE DSM STRATEGY

75 5.7 DSM PROGRAMS 7 AND 8: TARIFF REVIEW AND DEMAND RESPONSE SMART WAYS TO COLLABORATE WITH ENERGY AND WATER USERS KEY FACTS The 2011 tariff review resulted in achieving the following cumulative savings in the period 2011-: - Electricity in the range TWh - Water in the range BIG Range is due to demand elasticity and degradation assumptions Due to excessive use of ACs, summer peak load period occurs during daytime and a second peak load period is also noticed during evening About 6% of summer peak load (year 2030) can be clipped through TOU tariff, CLM and DLC initiatives PROGRAM 7: TARIFF REVIEW SCOPE Electricity and water (E&W) tariff rates to be adjusted to be cost effective and to ensure economic efficiency and align ratepayer incentives with demand-sidemanagement objectives. E&W tariffs were increased in PROGRAM 8: DEMAND RESPONSE SCOPE Demand Response (DR) program is an integral component of Dubai s DSM action plan and DEWA s Smart Grid project towards achieving a target of about 6% peak load reduction by 2030 through 3 initiatives; Time-of-Use (TOU) Tariff, Curtailable Load Management (CLM) and Direct Load Control (DLC). THE JOURNEY TOWARDS A MORE RESPONSIVE CUSTOMER BASE Yousef Jebril, EVP Power & Water Planning, DEWA The Demand Response and the Tariff Review programs have the objectives of stimulating efficient behaviors and collaboration from our customers, by responding to price signals and to specific needs of the utility. The purpose is not only to reduce total consumption, but also to shave our peak consumption, since it directly affects capacity plans and investments in generation. The Dubai load profile is characterized by existence of three periods over the day. During the high season, summer, the three periods are: valley period during late night and early morning, peak period during daytime and second peak period during evening. The Annual Load Factor (1) is about 0.63 and the Annual Load Swing (2) is about 66% due to high variability of loading between summer and winter seasons. It is by working on the variability of demand that we can maximize the use of our valuable assets over the course of the year and moderate investments in new generation capacity. 1 Annual Load Factor = Annual Average Load / Annual Peak Load 2 Annual Load Swing = [(Annual Peak Load Annual Min. Load)/Annual Peak Load] x 100 % 75

76 5.7 DSM PROGRAMS 7 AND 8: TARIFF REVIEW AND DEMAND RESPONSE SMART WAYS TO COLLABORATE WITH ENERGY AND WATER USERS Peak Day Load Profile - Load (MW) :00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 Time (hr) Exhibit 49: Dubai peak day load profile, Customers consumption patterns are not all the same, and a segmentation is needed for DSM/DR to get the maximum benefits. DEWA classifies four main customer sectors: Residential, Commercial, Industrial and others (including Government). initiatives, and the residential sector is the most responding one in the short term. Looking at total consumption, impact of the 2011 tariff reform still persists, with an adjustment in the consumption increase trends versus pre-2011 levels. Each sector reacts differently to price signals and other demand response electricity consumption shares by customer sector water consumption shares by customer sector Residential Commercial Others (including governmental) Industrial Exhibit 50: Dubai consumption shares by customer sector 76

77 5.7 DSM PROGRAMS 7 AND 8: TARIFF REVIEW AND DEMAND RESPONSE SMART WAYS TO COLLABORATE WITH ENERGY AND WATER USERS Internationally, utilities have found Demand Response to be costeffective with benefits of DR including peak load reduction, increased ability to respond to emergency events quickly, deferral of capital investments, improved reliability and increase in their customers satisfaction. Globally, the overwhelming amount of DR experience resides within USA, while Europe is a more unified story of moderate advancement based on a combination of opening market opportunities and renewable resource integration. DEWA Smart Grid / Demand Response team had the opportunity to gain good knowledge about DR planning and implementation issues during the study tour conducted in June to four world class U.S. electric utilities. DEWA is the first utility in entire MENA region to come up with an ambitious plan of full scale DR deployment to integrate DR into its utility operations using a Demand Response Management System (DRMS). This program intends to enable DEWA customers to become actively involved in a smart grid system that is observable, controllable, automated and fully integrated. DEWA DR program includes three key initiatives: (1) TOU tariff: Participants to be charged with different electricity rates during different periods of the day, (2) CLM Initiative: Participant to curtail some loads in response to utility request against incentive vide contract and (3) DLC Initiative: Participant to permit utility to control some loads against incentive vide contract. A phased implementation plan is developed to procure DRMS and integrate it into DEWA s existing systems. DR trials and pilot have been planned to be conducted in years 2016 and 2017 in order to evaluate the DR program before full scale deployment. Looking at the future, it is important to integrate the DRMS system with DEWA existing systems and ensure cyber security. In addition, we need to work into customers awareness to get them more engaged in DSM/ DR initiatives. DEWA is working on a time-based approach utilizing best international practices to overcome these foreseeable challenges. 77

78 SHAMS DUBAI Targets to be developed if required

79 5.8 DSM PROGRAM 9: SHAMS DUBAI EMPOWERING CONSUMERS IN GENERATING CLEAN SOLAR ENERGY FOR THEIR NEEDS KEY FACTS Up to 100% of electricity needs of an efficient villa can be supplied through solar PV 10% per year average price drop of solar PV modules since MW connected capacity by 30+ enrolled Shams Dubai consultants and contractors Shams Dubai is the first comprehensive framework for distributed solar in GCC PROGRAM SCOPE The program implements the Executive Council Resolution number 46 of 2014, issued by HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council, to regulate the connection of solar energy to Dubai s power distribution grid. It encourages households and building owners to install solar photovoltaic systems to generate electricity for their needs, and connect them to DEWA s grid to allow transfer of any surplus generation. STATUS OF THE PROGRAM AND FUTURE OUTLOOK Waleed Salman, EVP Strategy and Business Development, DEWA Shams Dubai supports the vision of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to make Dubai the smartest city in the world, as sustainable distributed generation is one of the distinctive features of smart cities. It also supports the diversification of Dubai s energy mix reducing dependency on gas, contributes to reducing carbon emissions and improving air quality, and supports the Green Economy for Sustainable Development initiative, adding to Dubai credentials as hub for green jobs in the region. The Program empowers electricity customers in producing clean energy and therefore acting as ambassadors of Dubai visionary leaders. By allowing customers to connect their PV systems to the DEWA grid and offset any excess generation from future electricity bills, we ensure full utilization of their investment in solar energy. While the Program is around distributed generation, we see it as a component of the DSM Strategy, as it provides electricity customers another lever to reduce their electricity cost, in addition to pure demand side opportunities. Shams Dubai has just marked its first year of implementation, and we are proud to announce that the Program is receiving positive market response. Year has seen the foundation blocks of the program fall in place. These include, among others, the development of the agents in the market, through certification processes and training for consultants and contractors; the definition of an eligibility scheme for the solar PV equipment, based on the technical standards developed for the purpose; and the development of connection, inspection and safety guidelines, and contractual agreements. 79

80 5.8 DSM PROGRAM 9: SHAMS DUBAI EMPOWERING CONSUMERS IN GENERATING CLEAN SOLAR ENERGY FOR THEIR NEEDS By the end of, 4 initial projects were completed, totaling about 1.1 MW capacity connected to DEWA s grid. At the same time, the pipeline has been building up, with about 70 MW of customer applications at different stages as of April While adopters from industrial and commercial sites are the majority at present, it is foreseen that a wave of residential customers applications will follow in the future, as the decreasing cost of installing solar PV systems will allow them to become more competitive also at small scale. The genuine interest of green customers to make their homes smarter and more sustainable is also on the rise, and this will further accelerate the uptake of the initiative among residential customers. The target to have solar PV systems on each and every rooftop in Dubai by 2030 has been announced by H.H. Sheikh Mohammed bin Rashid Al Maktoum last November. It is a long way to go before we get there, but the direction is clear, the journey has started and DEWA will make sure that no one is left behind in the march towards realizing this inspired vision. Note: More details on Shams Dubai can be found at the following link: Shams Dubai Program Enablers 1 11 Contractors/ Consultant enrollment scheme Regulatory framework 2 Equipment Eligibility scheme Technical documents (Standards etc.) 10 3 Marketing plan 9 Customer service Shams Dubai Development of technical capabilities & Internal Processes Pilot projects 4 8 Stakeholders engagement 5 Billing 7 Metering 6 Exhibit 51: Structure of the Shams Dubai project 80

81 5.8 DSM PROGRAM 9: SHAMS DUBAI EMPOWERING CONSUMERS IN GENERATING CLEAN SOLAR ENERGY FOR THEIR NEEDS Examples of initial Shams Dubai projects Emirates Engine Maintenance Center Location: Warsan-Third Capacity: 1000 kw DWC-Al Maktoum International airport Location: Jebel Ali Capacity: 30 kw 81

82 5.8 DSM PROGRAM 9: SHAMS DUBAI EMPOWERING CONSUMERS IN GENERATING CLEAN SOLAR ENERGY FOR THEIR NEEDS Examples of initial Shams Dubai projects World Trade Centre Residences Location: Trade Centre-2 Capacity: 31.1 kw Dubai Municipality Location: Al Kifaf area Capacity: 12 kw 82

83 83 DSM Annual Report

84 6 Future outlook and key priorities for

85 Future outlook and key priorities for STRATEGIC PRIORITIES FOR THE COMING THREE YEARS From the perspective of DSCE and the DSM Strategy as a whole, priorities for the coming years include actions that will support the scale-up of the main programs, and actions addressing some of the identified challenges. The main ones are the following: Ensure more extended implementation of green building codes in Free Zones, possibly targeting higher levels of harmonization among the different codes Ensure the District Cooling Program receives adequate regulatory and awareness support Introduce additional measures to further increase consumer adoption of efficient appliances Reinforce financing mechanisms in support of the retrofit program (specifically to penetrate residential and commercial markets), and identify financing solutions for irrigation retrofits Unlock synergies in water reuse, by defining and activating a set of measures which will allow savings in treated sewage effluent (TSE) from public irrigation to replace usage of desalinated water in other sectors, e.g., district cooling Monitor and provide the necessary support to Shams Dubai towards its ambitious 2030 goals Implement stronger awareness measures, supported by an energy performance labelling scheme for new and existing buildings Keep enhancing the main crosscutting capabilities in support to DSM, including awareness, capacity building, financing, energy management, monitoring and control Such priorities add to and support the existing plans followed by each Program Owner in executing its DSM Programs. 6.2 MAIN 2016 ACTION ITEMS FOR DSCE AND TAQATI For 2016, strategic priorities will be addressed by DSCE and the DSM Manager with a first set of concrete measures. The main ones are the following: Liaise with Free Zone Authorities to study the possibility to extend and harmonize application of green building codes Develop an integrated DSM awareness strategy study and launch an integrated awareness committee to coordinate the definition of more comprehensive reach-out plans in support to DSM developments Support with an awareness strategy the adoption of District Cooling solutions 85

86 Future outlook and key priorities for 2016 Support the design of the announced Green Fund, and ensure it addresses the main DSM priorities Launch a working group to develop an integrated water strategy for Dubai, maximizing utilization of the incoming TSE savings Develop a capability building study supporting implementing entities in applying DSM measures e.g., energy management guidelines. Reinforce DSM analytical capabilities, including forecasting for higher integration with supply planning, M&V and energy intensity mapping Keep developing strategic partnerships at a national and international level, to be leveraged for capability building, awareness and program implementation Exhibit 52: HE Ahmad Al Muhairbi, Secretary General of the Dubai Supreme Council of Energy, and Mr. Michael Geissler of FEDARENE sign an MOU on January 18, 2016 for collaboration in the field of energy efficiency. 86