September 7, 2014 / 1:57 PM / 4 years ago

Dubai's shortlists 8 firms for clean coal plant

DUBAI, Sept 7 (Reuters) - Dubai has short-listed eight companies to build a 1200 megawatt (MW) clean coal power plant, UAE officials said on Sunday, part of a $20 billion investment that aims to help to diversify the Gulf Arab emirate’s energy mix by 2030.

Dubai, one of the seven emirates of the United Arab Emirates (UAE), produces very little oil and relies on costly imports of gas to satisfy its growing energy consumption.

State utility Dubai Electricity and Water Authority (DEWA) has also put out a tender for the construction of a 100-megawatt independent solar power project (IPP), part of the emirate’s 2030 energy strategy.

DEWA also plans to expand its existing power production and desalination plant, known as the M-Station, to add about 600 MW of extra capacity, DEWA CEO Saeed Mohammed al-Tayer told Reuters.

“We expect the total investments in those three projects at more than $20 billion,” said Tayer, who is also vice chairman of Dubai’s Supreme Council of Energy.

Tayer said DEWA has no plans to issue bonds this year to raise money for the projects.

Another DEWA executive said he expected the cost of the clean coal project, known as the Hassyan power plant, which is expected to come online by 2021, to be more than $2 billion. A more accurate cost estimate will be known by the end of November, when bids from the short-listed companies are expected.

DEWA has short-listed 24 companies for its 100 MW solar project and hopes to evaluate bids by the end of October.

Chinese solar panel maker Yingli Green Energy Holding Co. , said in May it was considering taking part in Dubai’s solar energy project.

Like the rest of the Middle East, Dubai lags behind Europe and the United States in solar energy, but may eventually build up to 1,000 MW of solar power plants as part of plans to get five percent of its electricity from renewable sources by 2030.

Solar energy has struggled to take off in the Gulf despite its year-round sunshine, partly because heavily-subsidised fossil fuel makes green investments less attractive than in countries that subsidise renewables.

The UAE is one of the world’s largest oil exporters, producing around 2.8 million barrels per day. But most of the UAE’s crude production is clustered in the emirate of Abu Dhabi, which produces most of the UAE’s oil and holds over 90 percent of its reserves.

Reporting by Rania El Gamal, additional reporting by Martin Dokoupil; editing by Jane Merriman

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