Abu Dhabi's next big power plant will generate the emirate's cheapest electricity since 1998.
The Dh5 billion (US$1.36bn) Shuweihat 3 project will reduce financial pressure on the capital's subsidised electricity sector.
It also shows Abu Dhabi still has enough cheap natural gas to support at least one more major power project after almost tripling generating capacity in 10 years.
A consortium of Japan's Sumitomo and Korea Electric Power Corporation (KEPCO) will build and partly own Shuweihat 3 on the western coastline by 2014, the Abu Dhabi Water and Electricity Authority (ADWEA) announced yesterday.The huge power station will have capacity to generate 1,600 megawatts, equal to almost 18 per cent of peak electricity demand, but will not desalinate water.
Factoring in the cost of the plant and the price ADWEA will pay for fuel, the new plant will generate electricity at an average cost of as little as 10 fils per kilowatt-hour (kwh) when operating at full capacity, said Sheikh Diab bin Zayed Al Nahyan, the chairman of ADWEA.
That represents a fraction of the cost of producing electricity from gas in other markets, reflecting a subsidised fuel price and ADWEA's success in securing a low-cost construction contract.
The calculated rate is "a record price equal to the price of a kilowatt in the first project carried out by the commission in 1998", Sheikh Diab told the state news agency WAM. "Shuweihat 3 has obtained the best offer under the most difficult conditions set by ADWEA," he said.
The announcement marks a rare instance of ADWEA disclosing its cost of generating electricity, and was released as the authority is lobbying the Government to raise electricity prices. The new plant is unlikely to lower utility bills.
Mohammed al Bowardi, the Secretary General of the Executive Council, said on September 27 a decision on the power price proposal would be made in four to six weeks.
Analysts estimate it costs ADWEA between 18 and 25 fils to generate each kwh of electricity when demand rises in the summer. But most consumers are charged a flat rate of only 15 fils per kwh, while Emiratis pay 5 fils.
Shuweihat 3 will generate 100mw more electricity than Shuweihat 2, ADWEA's Dh8bn plant that starts operations next summer, but the newest project will cost 38 per cent less, partly because it will not include a desalination plant.
Even without desalination, the plant's cost is far lower than global benchmarks.
The cost of each kilowatt of generating capacity at Shuweihat 3 amounts to $851, a 22.6 per cent discount to a global average published this year by the International Energy Agency.
The contract confirms KEPCO's new prominence in Abu Dhabi's energy industry, after it was awarded a Dh73.46bn contract in December last year to build the country's first four nuclear power stations.
It represents the first entry of a Korean company into the small group of European and Japanese companies that have dominated Abu Dhabi's conventional power sector for the past 10 years.
"The deal will greatly boost KEPCO's standing in the UAE electricity market that is emerging as a key market in the Middle East region," the company said yesterday.
cstanton@thenational.ae
Sri Lanka squad for tri-nation series
Angelo Mathews (c), Upul Tharanga, Danushka Gunathilaka, Kusal Mendis, Dinesh Chandimal, Kusal Janith Perera, Thisara Perera, Asela Gunaratne, Niroshan Dickwella, Suranga Lakmal, Nuwan Pradeep, Dushmantha Chameera, Shehan Madushanka, Akila Dananjaya, Lakshan Sandakan and Wanidu Hasaranga
TOUR RESULTS AND FIXTURES
June 3: NZ Provincial Barbarians 7 Lions 13
June 7: Blues 22 Lions 16
June 10: Crusaders 3 Lions 12
June 13: Highlanders 23 Lions 22
June 17: Maori All Blacks 10 Lions 32
June 20: Chiefs 6 Lions 34
June 24: New Zealand 30 Lions 15
June 27: Hurricanes 31 Lions 31
July 1: New Zealand 21 Lions 24
July 8: New Zealand v Lions
MATCH RESULT
Liverpool 4 Brighton and Hove Albion 0
Liverpool: Salah (26'), Lovren (40'), Solanke (53'), Robertson (85')
Essentials
The flights
Etihad (etihad.ae) and flydubai (flydubai.com) fly direct to Baku three times a week from Dh1,250 return, including taxes.
The stay
A seven-night “Fundamental Detox” programme at the Chenot Palace (chenotpalace.com/en) costs from €3,000 (Dh13,197) per person, including taxes, accommodation, 3 medical consultations, 2 nutritional consultations, a detox diet, a body composition analysis, a bio-energetic check-up, four Chenot bio-energetic treatments, six Chenot energetic massages, six hydro-aromatherapy treatments, six phyto-mud treatments, six hydro-jet treatments and access to the gym, indoor pool, sauna and steam room. Additional tests and treatments cost extra.
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More from Neighbourhood Watch:
UAE currency: the story behind the money in your pockets
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Key changes
Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
Keep it fun and engaging
Stuart Ritchie, director of wealth advice at AES International, says children cannot learn something overnight, so it helps to have a fun routine that keeps them engaged and interested.
“I explain to my daughter that the money I draw from an ATM or the money on my bank card doesn’t just magically appear – it’s money I have earned from my job. I show her how this works by giving her little chores around the house so she can earn pocket money,” says Mr Ritchie.
His daughter is allowed to spend half of her pocket money, while the other half goes into a bank account. When this money hits a certain milestone, Mr Ritchie rewards his daughter with a small lump sum.
He also recommends books that teach the importance of money management for children, such as The Squirrel Manifesto by Ric Edelman and Jean Edelman.
Company%20profile
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MATCH INFO
Chelsea 1 (Hudson-Odoi 90 1')
Manchester City 3 (Gundogan 18', Foden 21', De Bruyne 34')
Man of the match: Ilkay Gundogan (Man City)
The specs
Engine: 4-litre twin-turbo V8
Transmission: nine-speed
Power: 542bhp
Torque: 700Nm
Price: Dh848,000
On sale: now
The biog
Name: Fareed Lafta
Age: 40
From: Baghdad, Iraq
Mission: Promote world peace
Favourite poet: Al Mutanabbi
Role models: His parents
The specs
Engine: 3.5-litre twin-turbo V6
Power: 380hp at 5,800rpm
Torque: 530Nm at 1,300-4,500rpm
Transmission: Eight-speed auto
Price: From Dh299,000 ($81,415)
On sale: Now
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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Vaccine Progress in the Middle East