Power Engineering - ADWEA plans to divest its distribution interests

9 November 2005 - Abu Dhabi Water and Electricity Authority (ADWEA) has plans to off-load its shareholding in the two distribution companies-Abu Dhabi Distribution Company (ADDC) and Al Ain Distribution Company (AADC), through the capital market to benefit the UAE nationals.

According to an annual report for the year 2004, ADWEA said that company's 60 per cent stakes in Independent Water and Power Projects (IWPPs) will be offered to the general public.

The annual report has reviewed the performance of the ADWEA and its subsidiaries across the power and water sectors, both of which have
undergone tremendous restructuring during the past six years. The separation of generation, transmission and distribution has increased the transparency of sector costs. This makes it possible to identify potential areas for efficiency improvements and cost reductions.

The competition for private investors to enter generation and desalination segment of the sector has resulted in a downward pressure on production costs especially fuel which has gone down to 79 per cent in 2004 from over 100 per cent in year 2000.

This trend of efficiency improvements is expected to continue as the share of IWPPs in production increase. The share of IWPPs is the total annual electricity generation increased from zero in 1999 to about 75 per cent in 2004. IWPPs produced about 67 per cent of the total water production in 2004 increasing from zero in 1999.

Further efficiency improvements are anticipated in the near future when the new IWPPs TAPCO add new production capacity to the system. This trend will continue with the addition of more IWPPs in the sector and the privatization of the remaining ADWEA wholly-owned production companies.

The report said that that in the past decade, total electricity system peak in Abu Dhabi rose to 4320 MW from 1900 MW, in some years a growth of more than 30 per cent was recorded, said the annual report, issued yesterday.

New transmission projects have been implemented to enhance the transmission and distribution networks to meet the rapid growing demands for electricity. For example, the electricity connection between al-Mirfa and Abu Dhabi was completed in 2000; in 2004 the double circuit overhead line from Shuweihat was completed. The Western region is connected to the main grid of the Emirates of Abu Dhabi via a backbone of 400 kV network. The second high voltage line feeding Abu Dhabi Island was commissioned in 2001 while the third high voltage line is scheduled to be completed in 2005, which will secure an uninterrupted power supply to Abu Dhabi Island.

The transmission system availability has been at over 98 per cent for the last four year, and the average time that customers were interrupted due to a fault reduced by 62.45 per cent over the same period.

During 2002 and 2003 TRANSCO implemented strategies in the area of maintenance scheduling and fault response, which contributed to this improvement.

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