Hydro work to begin in August

DUBAI, UNITED ARAB EMIRATES - Construction of a multi-billion dollar power station to generate electricity using hydrogen extracted from coal may begin in August this year, the chief of Dubai Electricity and Water Authority (Dewa) said.

“It is currently in the feasibility studies stage but we will begin the construction of the plant in the next few months, probably by August,” Dewa Managing Director and Chief Executive Saeed Mohammed Al Tayer told Emirates Business.

Although electricity will be generated from coal – a popular but dirty source of energy – the technology aims for zero emissions and the processes will be done outside the emirate.

Dewa has recently signed agreements with private companies from Canada, United States and China to develop a 2,000 MW hydrogen IGCC (integrated gasification combined cycle) coal power plant.

ChinaÂ’s Samena Power and Energy will build the plant, while the hydrogen used to fuel the plant may be shipped from Sino Global InternationalÂ’s plant in Louisiana.

Skyline Services of Canada, who will supply the technology to produce electricity and desalinate water, is not new to the region as it has already provided a Canadian energy company with an implementation strategy for the development of IGCC power plants in the UAE, the company said in a statement.

Skyline said it is currently working on developing CTL (coal to liquid) and IGCC projects in the GCC and also in Pakistan.

In addition, the company in partnership with International Resource Strategies Corporation from Canada, operating under Sino Eastern, is developing coal gasification projects in the Samena (South Asia, Middle East and North Africa) region.

Sino Eastern, via an exclusive co-operation agreement with Sino Global International – who will also develop the first private power plant in Dubai – leverages its relationships with Chinese companies to be able to deliver high-value projects.

Dewa is seeking to diversify production sources as much as possible to contribute to the protection of the environment and to curb the authorityÂ’s reliance on gas for power generation.

Currently, Dubai is being supplied by gas from Abu Dhabi, Qatar via the Dolphin Energy project and by its own fields.

But this ‘cheap supply’, which Dubai has been buying at the old contracted price will soon cease to flow, according to Khalid Al Awadi, gas operations manager at the government-controlled Emirates General Petroleum Corporation (Emarat).

The price of gas, Al Awadi said had increased 10-fold and Dubai has no choice but to buy it at the current price. Oil liquids, on the other hand are not environmental friendly and are costlier. A hydrogen plant, Dewa said, is an environmentally-friendly option as it does not produce any emissions, but it is also more expensive.

Industry sources say it would cost $1,400 a kW to build a conventional coal-fired plant and $1,800 a kW to build the gasification-based plant. The amount of investment that Dewa will make has still not been determined as the project is in the feasibility study stage, Al Tayer, said, adding: “We can take about 51 per cent of the whole cost if we wish.”

However, securing financing for this project from banks could prove difficult, sources say, as in addition to a tight credit market, it has to be proven first that this kind of project is viable.