DUBAI: The United Arab Emirates (UAE) stands as a regional exemplar of electricity supply security and stability, underpinned by its abundant natural gas and oil reserves among the largest worldwide.
These resources enable the UAE to generate ample electricity to meet domestic consumption while preserving substantial export revenues from its oil production. Predominantly, natural gas serves a dual role: fueling power generation and being reinjected into oil fields to enhance extraction efficiency.
The strategic utilisation maintains a balanced energy ecosystem that supports both immediate power needs and long-term production optimisation.
Escalating demand
According to GlobalData, a data and analytics firm, the UAE’s power capacity is set to expand significantly, reaching an estimated 79.1 gigawatts (GW) by 2035. The growth reflects a compound annual growth rate (CAGR) of approximately 3.4 per cent from 2024 to 2035.
Concurrently, the nation’s power generation is projected to climb at a CAGR of 3.8 per cent over the same period, culminating in an impressive 281.3 terawatt-hours (TWh) of electricity annually. These metrics underscore the robust trajectory of the UAE’s energy sector, driven by escalating demand fueled by demographic expansion and urbanisation.
Attaurrahman Ojindaram Saibasan, a power analyst at GlobalData, highlights the significant investment opportunities that the UAE’s power sector presents.
“The government’s commitment to expanding and modernising its generation and supply infrastructure is expected to focus primarily on gas-based thermal power plants. Unlike oil-based generation capacity, which is predicted to remain steady, gas-fired power facilities will witness marked growth.”
The development, he said, not only positions gas turbine manufacturers to benefit but also signals a strategic pivot towards more efficient and cleaner power generation methodologies.
Diversification strategy
In alignment with its environmental goals and geographic advantages, the UAE has proactively fostered solar power generation. The country’s abundant sunshine and vast expanses of undeveloped land provide ideal conditions for large-scale solar parks, encompassing both photovoltaic (PV) and Concentrated Solar Power (CSP) technologies.
These initiatives are intended not merely to satisfy local electrical demand but also to enable power exports, reinforcing the UAE’s role as a regional energy hub.
Moreover, the UAE’s historical reliance on natural gas imports from Qatar, necessitated by rising electricity consumption, has motivated a diversification of the energy portfolio.
Recognisng the vulnerabilities of exclusive dependence on natural gas, Saibasan said the UAE is actively incorporating renewable and nuclear energy sources.
“The diversification strategy enhances energy security, mitigates risks associated with fuel supply fluctuations, and aligns with global sustainability trends.”
The UAE’s electricity demand surge is closely tied to its demographic dynamics, with the population currently around 11 million and expected to reach nearly 12 million by 2030. The notably large expatriate community, constituting approximately 88% of the population, significantly elevates residential and commercial energy consumption.
Additionally, mega urban development projects like Masdar City and Expo City Dubai exemplify futuristic, smart city models that emphasise sustainability but inherently raise electricity usage.
“These developments emphasise the need for an expanded and technologically advanced electrical grid capable of supporting increased load and integrating smart infrastructure solutions,” Saibasan said.
