DEWA: Partnerships core to green and lucrative future
Dubai Electricity and Water Authority (DEWA) is exceptionally active in new technology usage and highly attractive to investments. It is adopting innovation and the latest disruptive technologies of the 4IR, reshaping the traditional concepts of work mechanisms to enhance Dubai’s position as an incubator for creativity and cementing its reputation as a beacon of innovation.
Economy Middle East addressed a number of DEWA’s latest initiatives with HE Saeed Al Tayer, MD&CEO of DEWA, where we asked:
1- What role is the innovation center and the Partnership Lab for the UAE playing in light of global emphasis on renewable energy transition?
Thanks to the forward-looking vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, Dubai is on the right track to becoming the smartest and happiest city in the world.
DEWA’s Innovation Centre at the Mohammed bin Rashid Al Maktoum Solar Park is a pioneering global hub for renewable and clean energy innovations, and an educational platform that hosts events, conferences, seminars, and workshops in collaboration with local and global universities, organizations, and start-ups.
We are keen to build strategic partnerships with local, regional, and global organizations to transform Dubai into the smartest city in the world, as well as achieve the Dubai Clean Energy Strategy 2050 and the Dubai Net Zero Carbon Emissions Strategy 2050.
2- Can you update us on the tender for the 900 MW renewable energy project at the solar park?
There has been a great response from international developers for the 900MW 6th phase of the Mohammed bin Rashid Al Maktoum Solar Park. DEWA has appointed a consortium of advisors to provide consultancy services for implementing the 6th phase. The project is based on the Independent Power Producer (IPP) model and will become operational in stages between 2025 and 2027.
Read more: Dubai’s DEWA Q3 net profit up 10% to $863 mn
3- DEWA is the organizer of WETEX. How do these types of exhibitions contribute to enhancing and improving the services DEWA provides?
DEWA is the organizer of the Water, Energy, Technology, and Environment Exhibition (WETEX) and Dubai Solar Show. This is the largest exhibition of its kind in the region bringing together prominent global organizations specialized in water, clean and renewable energy, the environment, gas, green development, sustainability, and related industries. The show widens DEWA’s partners’ network and promotes adoption of innovative ideas and solutions.
4- DEWA is the first utility in the region to adopt Reliability Centered Maintenance (RCM) strategy. What does that mean in terms of maintenance, efficiency, and cost savings for the UAE?
We work continuously to enhance the reliability and efficiency of our transmission and distribution networks. The use of Reliability Centered Maintenance (RCM) & Artificial Intelligence has helped us to predict and address potential faults in a timely and efficient manner, reduce our maintenance costs, and ensure continuity of supply, thereby enhancing the happiness of our customers.
5- Does DEWA believe that green hydrogen will be an active element in the diversification of energy sources in the future? What are your outlooks in this regard?
The use of green hydrogen for power generation and fighting global warming is rising. Studies show that green hydrogen production will increase by 57% annually to reach 5.7 million tons by 2030.
The Green Hydrogen pilot plant that DEWA built in collaboration with Expo 2020 and Siemens Energy, is aligned with Dubai’s and UAE’s commitment to sustainability, supports Dubai turning into a carbon-neutral economy by 2050 as well as DEWA’s strategy to diversify energy sources.
DEWA, in partnership with Emirates National Oil Company (ENOC), is studying a proposal for building a hydrogen fueling station in Dubai, which will encourage the use of sustainable transportation, as well as the UAE’s Hydrogen Vehicles System that aims to develop the hydrogen economy in the UAE and open up local markets to hydrogen vehicles.
6- What can you tell us about the largest IPO in the EMEA region since 2019, where DEWA raised AED 22.3 billion ($6.1 billion)?
As part of the IPO, the Government of Dubai sold 18% of its shares. The proceeds from the sale of DEWA’s shares were remitted to the Government of Dubai.
For the first 9 months of 2022, DEWA’s revenue increased by 15% to AED 20.63 bn. Energy demand in Dubai during the first 9 months of 2022 increased by 5% compared to the same period in 2021. Similarly, water demand in the same period grew by 6.4%. In the first 9 months of 2022, our net profit is nearly at par with the full-year net profit of 2021. We are well-positioned to deliver the best full-year financial performance in our operating history and are optimistic about our green growth prospects.
Moreover, we have made sustained progress towards unlocking shareholder value by paying our first dividend of AED 3.1bn in October 2022, by listing our majority-owned district cooling subsidiary, EMPOWER, on the DFM, and by recommending the payment of a one-time special dividend of AED 2.03bn to our shareholders in December 2022. The next dividend of AED 3.1bn is intended to be paid in April 2023. For the financial year 2022, we expect to return AED 8.23bn in dividends to our shareholders. Assuming an IPO share price of AED 2.48 per share, this amounts to a 2022 dividend yield of 6.6%.
7- How does DEWA stand in the eyes of energy investors coming to Dubai?
Investors appreciate Dubai’s business-friendly environment which is supported by a transparent legal and regulatory framework. In recent years 5 IPP and IWPP projects have been already implemented and currently, 2 projects are in the pipeline. Energy investors have so far brought in over $10 Billion in foreign direct investment (FDI) into Dubai and more investments are expected as DEWA has announced that all new capacity additions will be implemented through the IPP/IWPP model.
We’re sending a strong message to local and international investors that Dubai offers the best choice to become their preferred investment destination.
8- How will DEWA increase its contribution to the UAE’s GDP in the next five years?
The adoption of the IPP model has created significant economic value for DEWA since we are able to procure electricity at the lowest Levelized cost. This has increased profitability and reduced our dependency on costly/uncertain fuel imports. IPP projects are usually accompanied by the import of new technology and know-how, an increase in skilled workforce, etc., all of which add to jobs and growth opportunities in the economy with a positive impact on GDP.
DEWA has also established several diversified activities related to its core businesses, which are operating profitably, and contributing to GDP, including Bottled drinking water, Energy efficiency business, data solutions, digital opportunities, district cooling service, etc.