PROJECTS: Dubai switches from clean coal to gas for its 2.5-gigawatt Hassyan power project

Dubai Electricity and Water Authority (DEWA) announced on Thursday that it has agreed with Hassyan Energy Company to convert the 2.5-gigawatt Hassyan Independent Power Project (IPP) from clean coal to natural gas.

 

Hassyan Energy [Hassyan Energy Phase 1 PSC] is a joint venture between ACWA Power Harbin Holding Company (49 percent) and DEWA (51 percent).

 

Sheikh Ahmed bin Saeed Al Maktoum, Chairman of the Dubai Supreme Council of Energy, has approved the shift to gas, the Dubai utility said in a press statement.

 

The Hassyan plant, which uses ultra-supercritical technology, is designed to operate full time on both gas and coal and was the first clean coal-based power plant in the Middle East region.

 

Sheikh Ahmed said the step supports Dubai Clean Energy Strategy 2050 and Dubai's carbon neutrality strategy 2050, which targets 100 percent of the emirate's energy production capacity from clean energy sources by 2050.

 

"The move is also in line with international efforts to reduce relying on high carbon emissions energy sources. The initiative is consistent with the pivotal role that gas is expected to play in enabling economic growth in the UAE over the next 50 years," he said.

 

The plant is located in Saih Shuaib on the Dubai-Abu Dhabi border.

 

"The Hassyan natural gas power complex will be an addition to the Jebel Ali power and water desalination complex, which is one of the main pillars for providing Dubai with reliable, efficient and high-quality electricity and water services," said Saeed Mohammed Al Tayer, MD & CEO of DEWA and Chairman of Hassyan Energy.

 

In December 2015, DEWA had appointed the consortium of China's Harbin Electric International and Saudi Arabia's ACWA Power as the preferred bidder for Phase 1 of Hassyan IPP.

 

In June 2016, the consortium had signed a Purchase Power Agreement (PPA) with DEWA to enter into a 25-year contract to supply 2.5 GW electricity at a levelised tariff of less than 5 US Cents per kWh.

 

In December 2016, ACWA Power had announced that the project achieved financial closure.

 

The banks and financial institutions involved in the $3.4 billion limited recourse project financing included Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China, China Construction Bank, Silk Road Fund, First Gulf Bank, Union National Bank, Standard Chartered Bank, National Commercial Bank, Commercial Bank International and Emirates NBD, the company had said, noting that Phase 1 would be fully operational by March 2023.

 

The Hassyan Complex includes a water desalination project with a production capacity of 120 million Imperial Gallons of Water per Day (MIGD) using Reverse Osmosis (RO) based on the Independent Water Producer (IWP) model.

 

(Writing by SA Kader; Editing by Anoop Menon)