UAE is oil-rich, but struggles to get power to all

The Emirates, home to the world’s fifth largest reserves of conventional crude oil, is using its petrodollars to build one of the most modern countries on earth in a matter of decades. Vast amounts of Arabian oil money have packed its cities of Dubai, Abu Dhabi and Sharjah with spectacular skyscrapers and mosques during a fierce multiyear building boom — one that was slowed, but not stopped, by the global economic downturn.

Yet for all its oil wealth, the country has to import natural gas from its neighbors to keep its power plants humming. And, as the glimmer of candlelight in Sharjah’s industrial zones illustrates, it’s having a tough time providing reliable power for all.
The situation is only expected to become more difficult as a booming population, driven largely by an influx of workers from Asia, Europe and the Middle East, ensures those energy needs will continue to balloon.

Demand for electricity could hit 40,000 megawatts by the end of next decade, suggesting a growth rate of nine percent annually from 2007 levels, according to estimates from the UAE embassy in Washington. The country has enough gas to produce only about half that amount.

“There is a misconception that Abu Dhabi has a lot of gas,” said Philip Weems, an expert on energy at law firm King & Spalding in Dubai. “There really hasn’t been much of an incentive for producers to go out and explore for more gas, so you end up with situations like this.”

The Emirates is looking for alternatives.

Abu Dhabi is plowing some of its oil wealth into green-energy projects. But the government estimates that solar and wind power might provide only 4 to 5 percent of peak demand by 2020 at best.

AP