2008 Annual Report
Regulation & Supervision Bureau
For the water, wastewater and electricity sector in the Emirate of Abu Dhabi
1 January 2008 â€“ 31 December 2008
Delivery Ensuring the delivery of world-class water, wastewater and electricity services for the Emirate of Abu Dhabi. Water, power and wastewater services are provided by a range of government-owned and private companies. We regulate and supervise these companies with the aim of ensuring world quality services. Constantly improving delivery standards, we ensure the quality and reliability of services which are fundamental to the life of the Emirate.
Annual Report The Regulation and Supervision Bureau (the Bureau) publishes this Annual Report in order to discharge its duties under Articles (56) and (58) of Law No (2) of 1998, with respect to the maintenance of a public register. The Bureau is established in law to exclusively regulate and supervise the Emirateâ€™s electricity and water sector. It is an independent body whose functions and responsibilities are described fully in Law No (2) of 1998. Also, the Bureau exercises its powers in the wastewater sector through the application of Law No (17) of 2005. Laws No (18) and (19) of 2007 and Law No (12) of 2008 provide further powers and responsibilities to the Bureau.
Why regulate? Electricity, water and wastewater industries are typically dominated by a monopoly operator, often state-owned, or by a small number of companies which tend to cooperate with each other. In both cases there is little incentive for efficiency and the interests of the final consumer typically do not enjoy a high priority. Regulated markets are designed to overcome those shortcomings. Through regulation, the benefits of competition are introduced while the tendency to monopolistic or oligopolistic practices is controlled.
Abu Dhabi’s experience Abu Dhabi privatised its electricity and power sectors in 1999 and wastewater in 2005. With one of the world’s most difficult and demanding climates, the Emirate must have world class delivery of services. Without them all normal life would cease. The Bureau, established in 1999, is tasked with ensuring the safe, reliable and efficient delivery of power, water and wastewater services. Consulting closely and continuously with the companies operating in these sectors, it controls prices, draws up regulations, ensures compliance and investigates any health or safety incidents. Our key objectives are to: • ensure future capacity and product availability matches customer demands and meets the 2030 Government Strategic Vision; • promote optimal utilisation of water, wastewater and electricity; • minimise unit costs at all levels; • ensure quality-of-service standards are met at all times; • promote health and safety by all stakeholders and, • minimise any environmental impacts from the activities of the sector.
The Bureau: what we do We regulate the water, wastewater and electricity industries in the Emirate of Abu Dhabi in the United Arab Emirates. We enforce relevant laws through the licensing of the companies who undertake activities in these industries. Regulated activities include: generation, transmission, distribution and sale of electricity and the production, transmission, distribution, sale and treatment of water including wastewater products. Once a licence is issued, we monitor activities, modify regulations where needed, and enforce the conditions of the licences. We establish and monitor technical, performance, safety and customer standards.We also oversee industry restructuring, and have the power to approve or reject mergers or acquisitions.
Contents Board of Directors Chairmanâ€™s introduction Timeline of events Performance Ensuring delivery Electricity Water Wastewater Leading Guaranteeing health and safety Towards sustainability Licence holders Financial reports and governance Public record of activities and documents
2 3 4 5 7 8 12 15 19 25 29 31 34 38
Images of Board of Directors
Text about Board of Directors
Chairman’s introduction 2008 was another year of rapid growth for the Regulation and Supervision Bureau and the industries it regulates and supervises. ‘2008 was another year of rapid growth for the Regulation and Supervision Bureau and the industries it regulates and supervises.
The Bureau is an independent government agency which ensures that a reliable and safe supply of electricity and water is provided to the people of the Emirate of Abu Dhabi and that wastewater is disposed of sustainably. The Emirate is growing rapidly and demand for both electricity and water grew between five and seven percent in 2008 – in line with the medium and longer term trend. The volume of wastewater expanded by a similar amount. The Bureau’s workload grew during the year as new companies began operations, new technologies were introduced and legislation governing the number of companies that can operate in the Emirate was amended. New regulations on electricity wiring, water supply, grey water treatment, wastewater, incident reporting and street works were introduced or revised following intensive consultation with interested parties. As the Emirate of Abu Dhabi continues to expand, an increasing number of companies are entering the industries the Bureau regulates and supervises. This creates potential challenges but, due to the robust regulatory framework and the strong existing relationships the Bureau has established, standards are not only being maintained but constantly improved.
‘During 2008 the Emirate’s first renewable power generation was licensed and introduced.’
During 2008, the Emirate’s first renewable power generation was licensed and introduced.This is a notable development, the beginning of the transition toward more sustainable technologies and a long-term sustainable industry. The people of Abu Dhabi enjoy world class utilities. The Bureau ensured this in 2008, and will continue to do so as the Emirate grows and becomes ever-more prosperous. In this report we set out the major highlights of what was a busy and successful year. H.E. Mohammed Ahmed Al Bawardi
Timeline milestone events: 2008
Streetworks and Access Regulations 2008 provide guidance on safe working and excavating in the public highway. They apply to licence holders and their agents from 1 January 2009. [see P.34]
Incident Reporting Regulations 2008 revised regulations issued to supersede the 2001 Regulations from 1 January 2009. They cover the classification of types of Incidents that are required to be reported to the Bureau and apply to all licence holders. [see P.34] Electricity Wiring Regulations 2008 amended to provide additional guidance and clarification on technical aspects. [see P.22]
Regulatory Policy Statement on Carbon Credits addresses the treatment of income earned by sector companies from the sale of Certified Emission Reductions or carbon credits. [see P.31]
2009 Price Controls review commenced expected to conclude in November 2009, it will establish the new price controls for each of the sectorâ€™s monopoly companies from 2010. [see P.25]
August July June 2008
April 2008 March
A private company is granted a wastewater licence Al Etihad Biwater Waste Water Company is the first private company to enter the wastewater sector. [see P.16] First embedded generation (wind) licence issued to ADFEC, the first licence of this kind in the Emirate. [see P.30]
Election to the Energy Regional Regulators Association ERRAâ€™s objectives include the promotion and co-operation of energy regulation and increased access to regulatory information and experience. ERRA comprises 30 countries including Jordan, Russia, the USA and Saudi Arabia.
February January 2008
Electricity Wiring Regulations issued to replace the wiring rules issued by the ADWEA, for full implementation by the end of the year. [see P.22]
Performance Annual production for 2008 Electricity Water (potable)
34,452 GWh, up 1% percent (includes exports). 198,648 MG [893,917 ML], up 5.3% percent.
Installed capacity Electricity Water (potable)
9,069 MW 636 MGD [2,887 MLD]
System demand Electricity
Water supply Wastewater treatment
Hourly peak: 6,620 MW, up 6.9 percent (31 August 2008). This includes export of 864 MW at the time of the peak. Hourly peak for the Emirate of Abu Dhabi: 5,756 MW, up 8.9Â percent. Transmission peak: 599.2 MGD [2,720 MLD] up 5.2 percent (25-09-08) including Northern Emirates demand. 128 MGD, average, received at wastewater treatment plants [583,000 m3/d]; equivalent annual total of 46,720 MG, up 10.8 percent.
Average unit costs Electricity Water
AED 32.7 per kWh AED 23.7 per TG
Sector turnover Electricity Water Wastewater
AED 6,154 million AED 5,307 million AED 1,002 million
Customers Electricity Water Wastewater
326,068, up 4.1 percent 243,745, up 5.2 percent 243,745 (estimated)
Water quality Total tests
166,985 for 69 parameters, including the bromate reduction study.
Khadija Bin Braik Making sure companies live up to environmental standards is a passion for Khadija Bin Braik, a Senior Environmental Engineer with the Bureau. Working closely with the Abu Dhabi Environmental Agency, Khadija is a member of the team that monitors the environmental performance of the companies providing power, water and wastewater services. Part of her job is to stop problems before they happen, identifying areas where regulations can help stop accidents or pollution. Regular liaison visits with the operating companies ensures dialogue and help Khadija and the Bureauâ€™s other regulators understand and address problems as they arise. Khadija studied industrial engineering as an undergraduate. After joining the Bureau she was sponsored by the Bureau to undertake a Masters in Environmental Engineering, which she completed by the end of the year.
Ensuring delivery Leading Towards sustainability Guaranteeing health and safety
Abu Dhabi, situated on the north east coast of the Arabian peninsula, has a hot and frequently humid climate. It receives very little rainfall. Without power for air conditioning and water purification, life in the Emirate would be difficult and there would be severe constraints on population levels. The reliable and economic delivery of electricity, water and wastewater services allows the modern cities of Abu Dhabi and Al Ain to exist on the scale they do today. Under Law No (2) of 1998, our overall task is to ensure the reliable and economic delivery of electricity and water to the people of the Emirate. The Abu Dhabi economy continued to grow quickly in 2008. Demand for electricity, water and wastewater services grew at rates between five and seven per cent. This growth was lower than in previous years. However, it came after a long period of rapid expansion and significantly more growth is expected in future years. This meant that, in 2008, the companies operating in the industries we supervise had to continue to invest significant sums in expanding infrastructure. They also had to cope with significantly higher peaks in demand.
Electricity | Water | Wastewater Generation The total amount of electricity generated in 2008 was 34,452,127 megawatt hours (MWh), 0.9 percent more than in 2007. This relatively low rate of growth reflected the reduction in exports of electricity to the Northern Emirates from 5,614,875 MWh in 2007 to 2,971,273 MWh. Abu Dhabi also imported 3,354 MWh from Takreer, which is part of the Abu Dhabi National Oil Company’s (ADNOC). The remote areas company, RASCO, generated 75,368 MWh. Electricity generation 12,000
10,000 8,000 6,000 4,000 2,000 0 APC
The highest level of electricity demand, 6,620 MW, was recorded on 31 August. It was 6.9 percent higher than the 2007 peak. Not all of this was consumed in Abu Dhabi: 670 MW was exported to the Federal Electricity and Water Authority (FEWA), 184 MW to Sharjah Electricity and Water Authority (SEWA) and 10 MW to Takreer. Peak demand for the Emirate of Abu Dhabi itself, 5,756 MW, was also recorded on 31 August. The peak demand was 8.9 percent higher than in 2007.
Electricity demand growth (MW)
‘Exports still play an important role in contributions to our peak’
10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
Available capacity Actual peak demand Exports
Transmission systems Transmission system performance measures Two key measures are used to determine the performance of the electricity transmission system. They are the percentage of time the system is not operating - ’System Unavailability’ and the amount of ‘Energy Lost’.
System unavailability increased in 2008 compared to 2007 mainly due to planned outages associated with construction and maintenance activities.
Transmission system unavailability
â€˜Continued improvements in reducing system incidentsâ€™
1.8% 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0%
Transmission incidents There were four transmission system incidents in 2008 which resulted in the loss of 50 MWh of energy, a marked improvement on 2007â€™s loss of 164 MWh. The causes of the 2008 losses were a mixture of weather (fog) and protection devices failing.
180 160 140 120 100 80 60 40 20 0
5 4 3 2 1 2006
Number of incidents
Number of incidents
Energy lost MWh
Transmission system incidents
Distribution Once electricity has been generated and transported it then passes through the distribution system.To assess the performance of the distribution system, we use two measures: • disruptions per customer and • minutes lost per customer The performance of the two companies that operate the system, the Al Ain Distribution Company (AADC) and the Abu Dhabi Distribution Company (ADDC) varied in 2008. The performance of the Al Ain company appeared to worsen but, due to changes in recording procedures and poor data, it is difficult to draw solid conclusions from the information available. The Abu Dhabi company’s performance has remained steady over the last three years. Both companies are working on ways to improve, countering problems such as weather damage and trees on overhead lines, as well as planned outages for maintenance and other work.
Al Ain Distribution Company power interruptions
Abu Dhabi Distribution Company power interruptions 200
2006 2007 2008 SAIFI (Minutes lost per customer) SAIFI (Interruptions per customer) x 100
SAIFI (Minutes lost per customer) SAIFI (Interruptions per customer) x 100
Water | Wastewater
Abu Dhabi is an extremely dry emirate. There is little rain and almost all of the Emirate’s drinking water is produced using desalinisation plants. In 2008, net water production increased by 5.3 percent to 198,648.29 million gallons (MG) or 893,917.3 million litres (ML). Thermal desalination was used to produce around 96 percent of the water, while reverse osmosis was used for the remaining four percent. Production by reverse osmosis was limited by an algal bloom known as “red tide”. (See Environment section)
Water production by companies ‘Red tide impacted on Sembcorp’s water output in 2008.’ Million gallons (000)
40 35 30 25 20 15 10 5 0
Water quality To ensure the quality of the Emirateâ€™s water, we require water producers and network operators to test their product frequently. There are two types of tests: those that measure maximum Prescribed Concentration or Value (PCV) of materials in the water and sampling frequency measures of total dissolved solids (TDS). In 2008, water producers and distributors conducted 165,985 tests, three percent more than in 2007, which measured 69 different determinants of water quality. Water producers undertook 19 percent of the tests, with the remaining 81 percent conducted by the distribution companies. Water producers reported 99 percent compliance for both types of test. Distribution companies reported 91 percent compliance with PCV and 92 percent compliance with TDS. Overall industry compliance with the TDS, averaged between sampled parameter and sampling frequency, improved from 94 to 95 percent. Overall PCV compliance remained at 93 percent; levels of TDS at the production plants and bromate in the network were the cause of most of the problems.
Sectorâ€™s overall compliance with Water Quality Regulations measures 98% 96% 94% 92% 90% 88% 86% 84%
To ensure top water quality, companies are rewarded or penalised for their performance in meeting targets.
Transporting and distributing water The Emirate has an extensive pipe system to deliver water to consumers. On 25 September, the system carried 599.2 MG to consumers, the highest volume in one day for the year. It is 5.2 percent more than 2007â€™s peak demand and significantly higher than the average of 547 million gallons per day (MGD). Peak supply to the Northern Emirates was 23.6 MGD which occurred on 30 July. Growth in volumes since 1999 is shown below.
Water peak supply 700
Peak in MIGD
500 400 300 200
The Emirateâ€™s water distribution systems continue to expand as demand grows.The total length of the distribution system is now approximately 9,000 km. On average, ADDC and AADC receive 375 MGD and 150 MGD respectively.
Water metering To determine consumer pricing and revenue flows for companies, an extensive water metering system has been installed and is continuously being expanded. Three levels of metering are used: from production to transmission, transmission to distribution and from distribution to customers. Other metering is also used to help companies assess the performance of their systems. We use our pricing powers to encourage companies to maintain and operate the most effective metering systems possible. During 2008, distribution companies continued installing digital meters, replacing older, less reliable and capable, mechanical models. Digital meters allow automatic meter management, which results in more accurate billing and customer services. By the end of 2008, 66 percent of all meters in operation in all parts of the system were digital.
Electricity | Water |
In 2008, two types of wastewater treatment works were licensed: permanent works for the cities of Abu Dhabi and Al Ain and temporary works for labour camps. Etihad Biwater Waste Water Company was given a licence to build two treatment works for the Abu Dhabi Water and Electricity Authority (ADWEA): at Al Wathba, close to Abu Dhabi city, and at Al Saad in the Al Ain region. Three-year licences for two smaller works servicing labour camps were granted to Archirodon Construction (Overseas) Co. S.A. and ALDAR Laing O’Rourke.
Legislation and regulation The law governing wastewater treatment was altered in 2008. Under Law No (12) of 2008 treated sewage effluent (TSE), until now only used for irrigation of urban areas, can be used for further purposes, for example in district cooling plants. To ensure continued, safe and efficient operations, we undertook two public consultations. “Developing a Framework for Trade Effluent Control” and “Wastewater Residuals Reuse” were published in June 2008 and six-week consultations were undertaken. A wide range of stakeholders, including government agencies, wastewater service providers and developers, agreed there was a need for a framework controlling trade effluent discharges and wastewater residual reuse. Following consultation, we began drafting two regulations with the intention of setting up new guidelines in 2009. In order to develop sound policies on wastewater treatment we require companies in the industry to provide annual information submissions. The Abu Dhabi Sewage Services Company (ADSSC) made its first full submission in September. The audited submission contained business data from 2005 to 2007 and projections to 2013. It also allows the Bureau to develop policies, regulations and recommendations on the basis of sound and comprehensive data.
Nick Carter With more than a decade’s experience in Abu Dhabi’s fast evolving utility industries, Nick Carter understands the pressures rapid growth and restructuring can place on infrastructure and services. Educated in the UK and with extensive experience in London and the south-east of England, Nick came to Abu Dhabi to join the team leading the transition from government owned and operated utilities to a regulated competitive environment. As Director General of the Bureau, Nick knows that providing leadership and clear guidance to the companies operating in the utility industries – electricity, water and wastewater – is essential. Abu Dhabi’s natural environment is such that the city is completely dependent on secure and reliable supplies of electricity and water. Hands-on consultations and continuous dialogue are the tools of the trade. Rules are essential. But so is an intimate understanding of the pressures that the companies in all parts of these industries face.
Leading Guaranteeing health and safety Towards sustainability
In order to cope with the Emirate’s continuing rapid growth and ensure the reliable and economic supply of electricity, water and wastewater services, we must plan ahead so that sufficient capacity is available.. Working with all the companies active in these industries, we monitor and approve investment plans, provide feedback and advice and co-ordinate capacity expansions plans to ensure sufficient infrastructure is in place to meet medium and long-term demand. In this leadership role we must also ensure that evolving technical and service standards are taken into account while always keeping in mind the interests of customers.
Generating electricity, producing water During 2008, work continued on the extension of Emirates Sembcorp Water and Power Company’s (ESWPC) Fujairah F1 water and power plant. Comprising a 250 MW turbine and a 540 ton per hour (t/hr) heat recovery boiler, the plant began operations late in 2008 and will be fully operational in 2009. [line spacing deleted] Capable of producing 100 MG of water daily, the plant employs both multi stage flash (MSF) and reverse osmosis (RO) desalination units. Most of the water produced will go to the Al Ain area. Construction work commenced on the 2,000 MW and 130 MGD Fujairah Asia Power Company (FAPC) site at Qidfa, also in Fujairah. Despite exceptional red tide events, a small reverse osmosis plant has been successfully operating at the site during most of 2008 to trial some of the design features of the FAPC desalination systems. Work also continued on the gas-powered plant Shuweihat 2. With capacity to produce 1,600 MW of electricity and 100 MGD of water it is being built by the S2 Ruwais Power Company. On 30 October, two extra generators at the Taweelah Asia Power Company (TAPCO) plant began commercial operation.TAPCO can now produce 2,000 MW of electricity and 160 MGD of water.
Water and power plants are expensive, high technology, installations. Planning, developing and building them often takes many years. To ensure that sufficient capacity is added, we have to plan at least five years in advance. To address these planning needs, the Abu Dhabi Water and Electricity Company (ADWEC) produces a SevenYear Capacity Planning Statement which the Bureau must approve.ADWEC’s 2008 statement, approved in August, forecasts long-term average growth rates of 6.7 percent for peak electricity demand and 3.4 percent for water demand. To meet this demand growth, ADWEC has recommended deferring the retirement of existing generating capacity at Al Ain and Umm Al Nar power stations to 2012, and the construction of significant new co-generation capacity in 2011 and 2012. Expansion of the electricity transmission system In order to carry ever larger volumes of electricity, the transmission system is continuously being upgraded.During 2008,there were three main additions:a 132/22 kV primary substation for Yas Island; a 220/132 kV grid substation at Asab, to feed the Abu Dhabi Company for Onshore Oil Operations and a 400/220 kV grid substation at Sweihan. To strengthen the Emirates National Grid, a 400 kV overhead line from Qidfa (Fujairah) to Dhaid, including a new 400/132 kV grid station at Qidfa, was commissioned. This provided a direct connection for the Federal Electricity and Water Authority (FEWA) electricity system to Abu Dhabi. Previously, exports of power were made via the Sharjah and Dubai grid. Industry restructuring Ensuring sufficient capacity requires that we oversee the commercial structure of the electricity, water and wastewater industries. Mergers and acquisitions must be assessed and approved. In 2008, the following restructuring took place in the electricity industry: • Al Mirfa Power Company took over the Al Ain power station, previously owned by Bainounah Power Company. • Al Mirfa’s licence was modified to add an extra 256 MW of capacity to its existing capacity of 380 MW. • The Bainounah site at Mina was closed.
Assessing capital spending We also assess and approve the capital spending plans of operating companies. In 2008, we assessed TRANSCOâ€™s spending plans for the next five years. This process is collaborative. Observations and recommendations were given to TRANSCO in order to ensure funding for new projects was efficiently managed. Linking in to the wider GCC infrastructure As the Emirateâ€™s infrastructure expands and develops, it is increasingly linked with the infrastructure of other UAE Emirates and that of other Gulf Co-operation Council (GCC) countries. To ensure that this is done in a logical and efficient manner, we take part in the working groups developing those links. During 2008, we played an active role in the working groups establishing the contractual basis for the connection of GCC electricity grids. These contracts include a General Agreement between GCC Member States, a Power Exchange and Trading Arrangement, to which both ADWEC and TRANSCO would be parties, and an Interconnector Transmission Code. Raising wiring standards In 2007, we issued new regulations covering wiring installations for buildings. During 2008, the impact of these regulations was observed in a number of projects, including major real estate developments, hotels and high-rise towers. Difficulties and concerns raised by contractors and engineering companies were considered and addressed with the issue of an Amendment to the Regulations in November 2008. New connection charges As costs rise the prices we set must be assessed and adjusted. During 2008, we issued a consultation document on the structure of charges for new connections to the distribution system. The current method uses a flat rate AED/kW charging method, related to the size of new connections. It is proposed to retain a similar methodology but with different bands and updated costs per kW.
Water Expanding transmission infrastructure During 2008, a 1,600mm diameter pipe from Taweelah to Abu Dhabi Island was completed. This provides additional security of supply to several areas of the mainland and to Abu Dhabi Island. Work continued on expanded water supply systems for Al Reem, Saadiyat, and Yas Islands, where major real estate developments are underway. Other ongoing developments include the reinforcement of two existing 1,600mm lines from Fujairah to the Al Ain Region and a 1,600mm main from Mussafah to Abu Dhabi Island, both scheduled for completion in 2010. Need to improve water supply to Al Ain Water supply to Al Ain, the Emirate’s second city, remains a concern with most residents only receiving an intermittent service of between five and 18 hours a day. The infrastructure currently in place can supply 170 MGD [770 MLD]. When water production is disrupted by factors such as red tide, the supply can fall to 135 MGD. Completion of the Fujairah 2 production project and the associated transmission schemes will meet most of the city’s projected demand. However these projects will not be completed until 2010. Forecast peak demand is unlikely to be fully satisfied even with the new capacity. Expanding the Fujairah to Al Ain transmission system Fujairah 2’s 130 MGD production capacity will increase the Fujairah complex’s total capacity to 230 MGD. A third 1,600 mm diameter pipeline is being added to the Fujairah to Al Ain Region network to carry the additional supplies. Some of the extra product will be supplied to the Northern Emirates which received 18 MGD on average in 2008.
Wastewater A mainly gravity-powered, 40-kilometre long, deep sewer tunnel is to be built linking Abu Dhabi Island with the mainland. The Strategic Tunnel Enhancement Program (STEP) is a five-year project being run by ADSSC. It will provide sufficient capacity to cope with the city of Abu Dhabiâ€™s fast growing population while allowing the removal of older, less efficient infrastructure. STEP will include a series of link sewers and two pumping stations. Many developers wish to provide their own sewerage systems. We therefore also considered a range of enquiries regarding the possibility of providing private sewerage services for labour camps, residential developments, hotel complexes, business developments and industrial centres. Many developers are also considering the possibility of collecting and treating grey water for reuse.
Customer protection One of our most important leadership responsibilities is to protect the rights of customers. We identified a range of practices during the year which the two distribution companies must track and record. We assisted them to develop a code for disconnecting customers for non-payment and procedures for handling customer complaints. A code of practice on advising customers about the efficient use of water and electricity is being developed. We also continued our investigation into the level of customer debt, and meetings were held throughout the year with the distribution companies to discuss their debt reduction plans. The distribution companies were able to demonstrate some progress on certain aspects, for example, improved dialogue with major debtors. But other aspects, such as the introduction of new payment methods, continue to be delayed. Both companies were told that they must have a range of bill-payment options in place by the end of 2008 or price control penalties would be applied. The companies have made progress in this area. However, some essential payment services, such as the ability for customers to access water and electricity account information and pay via the companiesâ€™ websites, are yet to go live. We will continue to monitor delivery of these payment services.
Maintaining and improving service standards Monthly performance against the standards of service codes was monitored closely throughout 2008. An audit of each companyâ€™s data capture and reporting procedures was undertaken and the results will be reviewed in 2009. We continued to work with the Abu Dhabi Sewerage Services Company (ADSSC) in order to develop a code of service standards, which is to be implemented in 2009. The code will be distributed to customers and ADSSC will report on its performance. Liaising with others to ensure standards work To ensure standards and codes work in the way they are designed to, we undertake a continuing dialogue with authorities and key stakeholders. With such a large number of construction and infrastructure projects underway in the Emirate, we regularly consult on electricity, water and wastewater standards and regulations. Highlights for 2008 include a dialogue with the Urban Planning Council on the Estidama (new building) design codes and with the Environment Agency Abu Dhabi (EAD) on the Uniform Plumbing Code, the Water Resources Master Plan and the Strategic Aquifer Storage project. Working with the Abu Dhabi Future Energy Company (ADFEC), we developed codes for carbon credits and established standards for the first renewable energy projects in the Emirate. Developing regulations for reclaimed water reuse and controlling trade effluent, we consulted with its partners in the EAD, UPC, the Health Authority (HAAD), Department of Municipal Affairs (DMA) and the Food Control Authority (ADFCA) as well as key engineering designers, developers and specialist contractors in the sector.
Economics and tariffs Starting the 2009 Price Controls Review In November, we issued the First Consultation Paper for the 2009 Price Controls Review. This looks at the price controls for each of the four network companies (AADC, ADDC, ADSSC and TRANSCO), and for ADWEC and RASCO. Price controls are important because they set a cap on the revenues which the companies can recover from their licensed activities. As water and electricity tariffs for customers are subsidised, they also help determine the subsidies provided to the industry. Furthermore, price controls are designed to provide incentives for cost efficiency and performance improvement from monopoly companies. The present price controls expire at the end of 2009 and new controls – to be known as Price Control Four (“PC4”) – will commence on 1 January 2010. We intend to issue further consultation papers in 2009 culminating in the PC4 Final Proposals to be issued in September 2009. Economic regulation of wastewater In February 2008, ADSSC accepted our final proposals for its first price control, to run from the incorporation of the company in 2005 until the end of 2009. The controls were the subject of a thorough consultation process in 2007 and were included in an amendment to ADSSC’s licence in March 2008. They introduce a cap on ADSSC’s Maximum Allowed Revenue (MAR), similar to that of the other network companies in the sector. The control allows for a MAR of AED 776.72 million (in 2005 prices) in each year over the control period. In late 2008, we commissioned independent consultants (KPMG) to support its analysis of the financing arrangements of ADSSC, and took further advice from Ernst & Young, the company’s auditors. The price controls also include a Performance Incentive Scheme for ADSSC, with incentives for timely regulatory submissions. In March 2008, ADSSC submitted its first audited Price Control Return, and audited Separate Business Accounts covering the period 2005 – 2007 were submitted in June 2008.
Lindsay Hill Reliable electricity and water supplies, and fast and efficient disposal of wastewater are absolutely essential to modern life in the Emirate. Supplies must be maintained and Lindsay Hill knows exactly how vital this is.The demands placed on utilities in the vast expanses of the Australian outback were a good preparation for Lindsay, the Bureauâ€™s Director of Power and Production. Extensive experience on that dry continent prepared him well for the even more extreme conditions in the Emirate of Abu Dhabi. A veteran electricity distribution expert who began his working life as an engineer, Lindsay and his team must ensure that the Emirateâ€™s ever increasing demand for water and electricity is met. That means maintaining an overview of the industry, ensuring companies have sufficient generation capacity and that the transmission and distribution systems can carry the load.
Ensuring delivery Ensuring delivery Leading Leading Towards sustainability
Guaranteeing health and safety Towards sustainability
Guaranteeing the highest possible health, safety and environmental standards in the electricity, water and wastewater industries is a major part of our responsibilities. In consultation with all the companies in the sector, we develop health, safety and environmental regulations and standards and regularly monitor compliance with them.
Regulation In 2008, we undertook intensive consultations on two new sets of regulations: the Incident Reporting Regulations and the Streetworks and Access Regulations. Both Regulations were issued in December 2008 came into force on 1 January 2009, and apply to licence holders and their contractors. The Incident Reporting Regulations ensure the timely reporting of any operational, health and safety or environmental incidents in the Emirate.They specify how incidents are to be classified, reported, notified and investigated. The Streetworks and Access Regulations provide direction on how streetworks are managed and executed. Police and municipal authorities took an active role in the consultations leading to these sets of regulations. Incidents During 2008, there were four fatalities involving employees of contractors of employees working for a licence holder. Abu Dhabi Sewerage Services Company (ADSSC) Two employees working for a maintenance sub-contractor died from toxic fumes while trying to unblock a sewage pipe on Abu Dhabi Island. TRANSCO An employee working for a contractor at the Fujairah power station site died from an electric shock when trying to remove some test leads connecting a 400 kV overhead line.
Performance trends and auditing We monitor investigations of all safety, health and environmental incidents with a view to developing new regulations if needed. It also compiles and analyses incident data from all network and production companies.
Health and safety performance fatalities and LTIâ€™s 25
20 15 10 5 0
The use of health and safety performance data includes overall trends and statistics such as lost time days per million man hours worked, including contractors. During 2008, there were 24 Lost Time Injuries (LTIs) an increase on previous years. Protecting the environment We monitor the environmental performance of all companies operating in the sector. In 2008, there was a decrease in the amount of chemicals used in certain processes and a reduction of by-products generated from other processes. Improvements were achieved through process modifications, regular preventative maintenance, and increased awareness. Moreover, companies focused on managing waste effectively and minimizing the adverse effects on the environment. Several operators reported a reduction in the amount of waste sent to landfills and an increase in recycling rates. This reduction was achieved through the implementation of effective waste segregation procedures, increasing awareness, training of workers in waste minimization techniques, and changes to contractual arrangements with waste disposal contractors. Environmental permits We are satisfied that licence holders have continued their efforts to meet targets set in their environmental permits. A wide range of environmental activities were carried out during the year and numerous action plans were completed. The progress made demonstrates the commitment of operators to environmental protection
Environmental issues Two major environmental issues affected water supply in the Emirate in 2008: red tide and bromate levels. Neither is new. Bromate levels are a long-standing question in the water industry and are being well managed. Red tide played a more significant role due to its impact on desalinisation through reverse osmosis. Red tide Red tide is an algal bloom which persisted over the winter months of 2008, affecting large areas of coastline in Fujairah and other areas on the Gulf of Oman. Algae are microscopic organisms which can multiply rapidly under certain conditions, either man-made or natural. Red tide results in decreased levels of dissolved oxygen in the sea, killing many fish and disrupting the marine ecosystem. When algae reproduce in dense concentrations they become visible as discoloured patches of ocean water, often reddish or brown in colour. Red tide makes desalinisation by RO difficult and further capital works need to be undertaken to cope with this.The algae clog the membranes which remove salt from the water. In winter 2008, the RO plant was forced to close resulting in a 30 MGD shortfall in supplies of water to Al Ain, nearly one fifth of that region’s demand. In order to cope, the Al Ain Distribution Company adopted a contingency plan, limiting supply to bulk consumers, mainly irrigation farms, and regulating the supply to general customers. Consultation on Water Supply Regulations In 2008, we conducted consultations with operators and other stakeholders on a proposed review of the 2004 Water Supply Regulations. Proposed changes included regulations on the following: • Provision of ground storage tanks to low rise buildings. • Operation and maintenance responsibilities on storage tanks and water fittings. • Water losses particularly in the multi-tenanted buildings. • Fittings layout and material selection. The consultation process was completed and work on the Water Supply Regulations 2009 and Guide was undertaken. They were released in early 2009. An electronic version can be downloaded from our website.
Ali Al Mashjari For Production Manager Ali Al Mashjari, people are at the centre of everything the Bureau does. Ali, an electronics engineer educated in the US, works in the power and production unit, helping to ensure sufficient and reliable supplies of electricity and potable water for fast growing Abu Dhabi. With a strong technical background and long experience in refineries and power generation plants, Ali knows that all the technology is only worthwhile if it delivers the services people need. Ali, who deals daily with technical experts in companies generating or transmitting water and electricity in the Emirate, says it is important to ensure that everyone complies with the regulations. That is the only way to ensure a continuing high standard of service.
Ensuring delivery Leading Guaranteeing health and safety
The drive to develop a centre of excellence for alternative energy and sustainability technologies began in 2006 with the establishment of the Abu Dhabi Future Energy initiative, known as Masdar. The first practical fruits of this broad-based, strategic effort were seen on 1 June 2008, when we issued a licence to operate a wind turbine on Sir Bani Yas Island.This is the first licence of this kind issued in the region and, although for a small capacity (850 kW), it is a sign of things to come for the Emirate. Masdar City Throughout 2008, we worked closely with ADFEC on the provision of power, water and wastewater utility services at its zero-carbon development, Masdar City, located near the Abu Dhabi International Airport. We focussed on the provision of temporary utility services, potential utility tariffs, water and power demand management, wastewater reuse and permanent licensing structures. In 2009, ADFEC is to be issued a licence to build and operate, subject to various conditions, a 10 MW solar photovoltaic power plant in the Masdar City Development. The plant will provide part of the electricity required for the new city. Shams 1 In March, ADFEC applied for a licence for a 100 MW concentrated solar power plant near Madinat Zayed, 120 km southwest of the city of Abu Dhabi. Known as â€˜Shams 1â€™, this first-in-class project is expected to be commissioned in 2010. We provided guidance on regulatory aspects of the Power Purchase Agreement (PPA) and on Transmission Code requirements. The appropriate structure for a feed-in financial arrangement for Shams 1, and potentially other renewable energy projects, was also discussed.
Regulatory policy on carbon credits Under the United Nationsâ€™ Clean Development Mechanism (CDM), projects which have the effect of reducing emissions of carbon dioxide and certain other greenhouse gases may qualify to receive income in the form of Certified Emission Reductions (CERs), commonly known as carbon credits. In January 2008, the Emirates CMS Power Company (ECPC) said it intended to apply for carbon credits from a waste heat recovery scheme at the Taweelah A2 power plant. As this is a new activity for the companies we regulate, our formal consent is required, as are approvals from other government bodies. We consulted with interested parties on ways to treat income from the sale of carbon credits. Consultation papers were issued in February and June. Our objective was to create a regulatory framework conducive to the development of CDM projects. Responses were received from the Environment Agency Abu Dhabi (EAD), ADFEC, ADWEC, ECPC and SCIPCO and a Regulatory Policy Statement on Carbon Credits was published on 30 October. This framework provides a commercial environment which fosters the efficient development of CDM projects while ensuring production companies do not benefit from excessive returns. At present it only applies to conventional projects, not renewable energy projects or to carbon capture projects. Following the statement, ECPC confirmed its intention to proceed and our consent was issued in December.
Licence holders We grant licences to â€œPersonsâ€? (undertakings, companies, organisations) to carry out certain activities. Collectively these Persons are known as licence holders. Licences are structures which confer rights and obligations on a licence holder in order for them to undertake regulated activities. Our primary annual funding is derived from licence holders via the application of fees. Major licence holders Abu Dhabi Company for Servicing Remote Areas (RASCO) Licensed to generate, desalinate, transmit, distribute and sell electricity and water in remote areas, not connected to either of the distribution networks. However, with major installations of submarine cables connecting islands such as Sir Bani Yas and Dalma, the role of this company is diminishing. Abu Dhabi Distribution Company (ADDC) Distributes and sells water and electricity to around 225,000 customers in the old Municipality area of Abu Dhabi. Abu Dhabi Sewerage Services Company (ADSSC) ADSSC was founded in 2005 from Al Ain and Abu Dhabi Municipalities and is responsible for the collection, treatment and disposal of wastewater throughout the Emirate of Abu Dhabi. Abu Dhabi Water and Electricity Company (ADWEC) ADWEC is the single buyer of water and electricity output and capacity from producers under various Power and Water Purchase Agreements and charges the distribution companies for water and electricity, under a Bulk Supply Tariff. Al Ain Distribution Company (AADC) Distributes and sells water and electricity to around 100,000 customers in the old Municipality area of Al Ain.
Major licence holders (contd) Transmission and Despatch Company (TRANSCO) The company is responsible for all transmission voltages at 400, 220 and 132 kV including despatch of generation units, water balancing and the bulk movement of water throughout the Emirate. Al Etihad Biwater Waste Water Company Licenced to treat wastewater at Al Wathba-Abu Dhabi (up to 345,000 cubic metres per day) and at Al Saad-Al Ain (up to 92,000 cubic metres per day). Al Mirfa Power Company (AMPC) Operates three power stations at Al Mirfa, Madinat Zayed and Al Ain with a total licensed capacity of 636 MW. Water production of up to 38.7 MGD is at the Al Mirfa station only. Arabian Power Company (APC) Located at Sass Al Nakheel, APC has licensed capacities of 2,200 MW and 160 MGD, reducing to 1,550 MW and 95 MGD after 2010. Emirates CMS Power Company (ECPC) Located at the old Taweelah A2 site, the first IWPP in the Emirate is licensed to produce 50 MGD of water and generate 763 MW of electricity. Emirates SembCorp Water and Power Company (SembCorp) Located at Qidfa in Fujairah, one of the Northern Emirates of the UAE, it is licensed to produce up to 100 MGD of water. The majority of this water is delivered to the Emirate of Abu Dhabi via a transmission pipeline owned and operated by TRANSCO. SembCorp is also licensed to generate up to 861 MW of electricity. Fujairah Asia Power Company (FAPC) The second Fujairah licensed operator is situated at the Qidfa complex. A joint venture between International Power and Marubeni, the plant is currently under construction, due for completion by 2010. FAPC is licensed to produce up to 2,000 MW of electricity and 130 MGD of desalinated water from thermal (100 MGD) and reverse osmosis (30 MGD) systems.
Gulf Total Tractebel Power Company (GTTPC) Located at the Al Taweelah complex, GTTPC was the first IWPP in the Emirate to adopt existing assets (Taweelah A1). It is licensed capacities of 84.8 MGD of desalinated water and 1,600 MW of electricity. Shuweihat CMS International Power Company (SCIPCO) SCIPCO is licensed to produce up to 1,500 MW of electricity and 100 MGD of desalinated water from the Shuweihat S1 Plant, located 260 kms west of Abu Dhabi, near Jebel Dhanna. Taweelah Asia Power Company (TAPCO) Situated at the Al Taweelah Complex. TAPCO owns the old Taweelah B and B2 plants and is licensed to produce 160 MGD of water and 2,000 MW of electricity. Umm Al Nar Power Company (UANPC) Owns Baniyas power station with a licensed capacity of 120 MW, currently not in production. Small-scale licence holders Abu Dhabi Future Energy Company (ADFEC) Licensed to produce electricity up to 40 MW by embedded generation (wind and solar). Aldar Laing Oâ€™Rourke Construction L.L.C Licensed to collect, treat and dispose on average 3,000 cubic metres of wastewater per day for a period of 3 years. Aldar Properties PJSC Licensed to collect, treat and dispose on average 6,100 cubic metres of wastewater per day for a period of 5 years. Archirodon Construction (Overseas) Co. S.A. Licensed to collect, treat and dispose on average 600 cubic metres of wastewater per day for a period of 3 years.
Financial reports and governance Auditorâ€™s Report
Bureau Governance Amendments to Law Regulated Activities In order to undertake a regulated activity in the sector, companies must be either licensed or exempted from licence.The range of regulated activities is extensive and the diagram below provides an overview of the sector supply-chain from production to the final reuse of wastewater taken from sewerage services companies.
Public gardens department
Sells output to supply business
Work plan achievements Our annual work plan cited XX major work streams to be started and ideally completed within the year. Staff completed XX of these work streams. Total
Customer Services Production Networks Tariffs Wastewater
Consultants Given an ever increasing workload, we needed to use both local and international consultants to undertake a range of work streams. The consultants listed below were employed in 2008. Alpha Data
IT infrastructure Review.
CH2 M HILL
Technical evaluation of bromate control solutions (Phase II)
Complete internal IT network security audit, external network penetration test and infrastructure design review.
Ernst and Young
Regulatory audit of the Distribution Companies data capture and reporting processes on the Code of Practice for the Guaranteed and Overall Service Standards.
GHD Global Pty Ltd.
Regulatory Impact Assessment for introduction of wastewater regulations.
Capital structure and funding arrangement for ADSSC.
Legal advice on a wide range of issues.
Analysis and design of the new offices, management of IT systems procurement and installation service providers.
Public record of activities and documents In Law we have a duty to maintain a Public Register. This section of the Annual Report is constructed so as to list documents which are part of our Public Register. For the purpose of satisfying the law we maintain our Public Register using our website, where all Public Register documents are available for free view and download.
Licensing New licences Abu Dhabi Future Energy Company PJSC 01 Jun 2008 Embedded Generation Licence (Wind).
Al Etihad Biwater Wastewater Company 17 Jun 2008 Wastewater Treatment Licence. Archirodon Constructions (Overseas) Co.S.A 16 Oct 2008 Sewerage, Wastewater Treatment and Disposal. ALDAR Laing Oâ€™Rouke Construction L.L.C 27 Oct 2008 Sewerage, Wastewater Treatment and Disposal. Modifications Modifications to a licence are made subject to agreement by the licence holder.
Emirates Sembcorp Water and Power Company 01 Jan 2008 Water Desalination and Electricity Generation Licence.
Abu Dhabi Sewerage Services Company 27 Mar 2008 ED/L01/016 Sewerage, Wastewater Treatment and Disposal Licence. Derogation Abu Dhabi Water and Electricity Company 06 Apr 2008 ED/L06/005 Derogation (Specific) in respect of the incentive rates for the Annual Information Submission for Performance in 2007, 2008 and 2009.
Consents Consents confer rights and obligations on licence holders. Please note revisions or renewal of consents are listed for the sake of completeness. Abu Dhabi Water and Electricity Company (ADWEC) 08 Apr 2008 ED/L03/031 Consent for ADWEC to trade electricity with the Federal Electricity and Water Authority (FEWA). Arabian Power Company (APC) 15 May 2008 ED/L03/032 Consent for the supply and sale of demineralised water to Consolidated Contractors International Company for a period of 5 months. Taweelah Asia Power Company (TAPCO) 15 May 2008 ED/L03/033 Consent for the transfer of assets from TAPCO to TRANSCO. Gulf Total Tractebel Power Company (GTTPC) 30 Oct 2008 ED/L03/034 Consent to the merger between Suez S.A and Gaz de France forming a new company to be known as GdF Suez, and under GTTPCâ€™s Licence to a change in control of GTTPC. Shuweihat CMS International Power Company (SCIPCO) 25 Sep 2008 ED/L03/035 Consent toTAQA to transfer their equity and partnership interests in Shuweihat Limited Partnership who held a 40 percent stake in SCIPCO, to Summit Global Management VIII B.V., which is wholly owned by Sumitomo Corporation. Taweelah Asia Power Company 23 Nov 2008 ED/L03/036 Consent for the transfer of assets from TAPCO to TRANSCO. Emirates CMS Power Company (ECPC) 15 Dec 2008 ED/L03/037 Consent to ECPC for the Sale of Certified Emission Reductions from a Clean Development Mechanism Project
Consultation papers Consultation papers are designed to seek views from a range of stakeholders and other interested parties on matters which may have a significant impact on licence holders or customers. 2007 Price Control Review for ADSSC – Final Proposals For incorporation in ADSSC’s licence.
Regulatory Policy for Carbon Credits CR/E02/030 CR/E02/031 Proposals for the treatment of income from the sale of carbon credits. 2009 Price Control Review – First Consultation Paper CR/E02/032 The commencement of the review of the price controls which apply to AADC, ADDC, ADWEC, RASCO and TRANSCO, due to take effect for the fourth price controls period (PC4), from January 2010. Analysis of Electricity System Peaks CR/E03/004 Analysis of the impact of amending the definition of Peak Settlement Period for the purpose of determining BST Demand Charges. The Streetworks and Access Regulations 2008 – Final CD/R01/016 Further review of existing processes relating to works carried out in streets and public areas. Incident Reporting Regulations 2008 Changes proposed to allow easier reporting by licence holders.
Developing a Framework for Trade Effluent Control CR/T06/001 Proposals to establish a framework for managing industrial and commercial inputs to the wastewater collection system. Wastewater Residuals Reuse CR/T06/002 Proposals to control the use of treated effluent and biosolids produced by the sector.
The Water Supply Regulations and Guide CR/R01/006 This extensive revision addresses increase in sustained system water pressures, the maintenance of tanks and the need to regulate the operation of water tankers. Water Quality Management Processes for Water Delivered by Tanker CP/T03/003 Proposals for the assessment of current practices followed by the Distribution Companies and other persons supplying potable water via tankers in the emirate of Abu Dhabi and recommendations to improve the quality control of vehicle distribution and supply of potable water. Code of Practice for Disconnection of Domestic and Small business customers for non-payment CD/C01/014 Proposals for an enhanced process around the disconnection of domestic and small business customers for non-payment of utility bills, including procedures that Distribution Companies must follow before final disconnection. The Electricity Wiring Regulations â€“ Amendment No 1 CD/R01/018 Proposed amendment to the Regulations issued in December 2007, containing a number of clarifications and additional guidance. Methodology of Charges for Connection to the Electricity Distribution System CD/C01/016 To provide customers applying for a water service connection to understand the components and estimate the cost of the connection. Methodology of Charges for Connection to the Water Distribution System CD/C01/015 Proposed charges that customers are required to pay the Distribution Company when provided with a new or altered electricity connection to their premises. Regulations The Streetworks and Access Regulations 2008 ED/R01/014 Provide guidance on safe working and excavating in the public highway.
Electricity Wiring Regulations – Amendment 1 ED/R01/010 Amendment to be incorporated in the Electricity Wiring Regulations 2007. Incident Reporting Regulations 2008 ED/R01/013 Cover the classification of types of Incidents that are required to be reported to the Bureau. Publications Annual work plan 2008 ER/P01/012 Annual report for 2007 - Arabic
Annual report for 2007 - English
Scale of Charges 2008
Guide for major developers and new licensed entrants to the water, wastewater and electricity sector in the Emirate of Abu Dhabi. ER/P01/009 Reports Reports are produced either by Bureau staff or externally appointed consultants. They are not necessarily in the public domain. Audit reports Audits were completed by our staff on four sector companies as given below:
Water Supply Regulations Audit Report ADDC
Water Supply Regulations Audit Report AADC
Planning procedures Review – TRANSCO
Incident Investigation Report Fatality at Pumping Station W1 Al Maqam, Al Ain – ADSSC Project.
Reviews Review of cost, tariff and subsidy in the electricity, water and wastewater Sector of Abu Dhabi for 2007.