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Our power generation and desalination projects support the prosperity of the Gulf Region

July 2010

Responding to power and water demand rising sharply on the back of the UAE's affluence

The United Arab Emirates, on the Arabian Peninsula, stretches along the shore of the Persian Gulf and consists of seven emirates. Its total area is 83,600 square kilometers, about one-fourth the size of Japan. The largest emirate in the federation is Abu Dhabi, accounting for about 80% of the UAE's total area. Abu Dhabi also surpasses other emirates in terms of population and income, and has the world's sixth largest oil reserves. Backed by these rich natural resources, the UAE has stepped up large-scale urban redevelopment projects in recent years, resulting in rapid population growth. Consequently, people's lives have become significantly wealthy; they are building larger houses and fitting them out with more sophisticated electric appliances than before.

Demand for electricity and water has grown significantly in the UAE in line with population growth and the upgrading of people's life. As a result, a large number of companies have entered businesses to generate power (and water) for sale. They are known as independent power producers (IPP) or independent water and power producers (IWPP). Among power generation plants operating in the UAE and contributing greatly to regional development is Shuweihat S1 (S1), which is one of the major power generation and desalination plants in Abu Dhabi.

Situated 250 kilometers west of the capital Abu Dhabi, S1 generates 1,500 megawatts* of electricity, the largest of any other power plants in the area. It produces 15% of the electricity consumed in the region. S1 also has a desalination facility, creating about 450,000 tons of water per day, which represents 14% of water used in the region as of 2011. Sumitomo Corporation invested in S1 in September 2008 and has been contributing to its stable operation.

*1Megawatt=1,000 kilowatts

Fine days continue in the Emirate of Abu Dhabi throughout the year with average temperatures exceeding 35 degrees Celsius in summer

Superior system for efficient fuel use and sophisticated business management system

S1 is composed of combined cycle power generation systems, in which natural gas is burned as a primary fuel, and desalination facilities. When the power and desalination plant was constructed, it was the largest of its kind in the UAE. S1 is superior in its thermal efficiency. A gas turbine installed at the plant generates electricity using natural gas as fuel. Steam being generated by exhaust gas from the gas turbine is used in a steam turbine, generating more electricity. Exhaust steam outflowed from the steam turbine system is then used in a desalination system to create desalinated water. All of electricity and water being generated at S1 is purchased by Abu Dhabi Water and Electricity Company under a long-term purchase contract.

The business management system at the S1 plant is well controlled and it has received high acclaim along with the plant's efficiency. S1 has continued to receive commendation for its diligent efforts to manage safety from the Royal Society for the Prevention of Accidents (RoSPA) of Britain since fiscal 2007. S1 is also an environmentally friendly plant, addressing such environmental concerns as exhaust gas, discharged water, soil contamination and noise. Therefore, the plant has continued to meet the strict environmental standards of the UAE, which are the same level as international standards.

Sumitomo acquired concession of the S1 plant in 2008

Taking advantage of knowledge and know-how acquired through international business operations

In Abu Dhabi, power generation and desalination projects had been previously led by government. But a policy of placing such projects under private management has been adopted since the 1990s in order to meet the increase of the power demand and economic efficiency. Five goals have been set as part of efforts to promote privatization in the power and water supply industry, including "stable supply of electricity and water", "enhancement of service quality" and "inviting investment by both domestic and overseas companies".

Sumitomo Corporation's Infrastructure Business Unit is in charge of promoting IPP and IWPP projects overseas. The mission of the unit, "to contribute to society through infrastructure enhancement, adding our own value to it" has undertaken many projects in Asia, Europe and the United States. Among other projects Sumitomo Corporation has undertaken in addition to S1 are a power and desalination project in the Al Hidd district of Bahrain in the Gulf region and a hydro power project in Turkey's Birecik. Sumitomo Corporation regards the Gulf region in the Middle East, where power demand is increasing, as a promising area where stable operation can be expected.

The Al Hidd power generation and desalination project in Bahrain, the first privately managed power project in the country.

The Birecik hydro power plant in Turkey, the largest of its kind operated by a private business in Turkey

As a means of boosting our power generation business in the Middle East, we participated in the S1 project by acquiring an equity stake from an investment company affiliated with the Abu Dhabi government. Subsequently in 2011, we won the IPP project for the Shuweihat S3 power plant (S3) as a lead developer in Abu Dhabi. In Kuwait, Sumitomo Corporation is currently participating in the Az Zour North IWPP project, thus increasing its presence year by year in the Gulf region.

Construction site of the Shuweihat S3 power plant

Achieving prosperity and dreams of the invested regions through our commitment of IPP and IWPP

Our Infrastructure Business Unit will continue to step up IPP and IWPP projects in various parts of the world. An important business operation team, called the Abu Dhabi Operation Team was launched in Abu Dhabi in June 2009 to implement future projects. Each individual of the team has one's expertise such as plant engineering, plant operation management and finance. In 2012, Summit Global Power Ltd. was established as a wholly-owned subsidiary, and the Abu Dhabi Operation Team made a new start as Summit Global Power’s Abu Dhabi branch with new members joining the team. In the Middle Eastern countries, many IPP and IWPP projects are planned in line with the rapid population growth, industrial diversification and industrialization including Shuweihat S3 in Abu Dhabi. Summit Global Power is in charge of supporting existing plant projects and clinching new project deals, with its business area centering on the Gulf region, which is one of the world's largest plant markets, and stretching to regions as far as Africa and Europe.

By undertaking the IPP and IWPP projects around the world, we aim to contribute to achieve the prosperity and dreams of the invested regions and people.

The Abu Dhabi Operation Team consisting of a Japanese resident officer and international experts in various areas

Related Tag

  • Environment & Infrastructure
  • UAE/Bahrain
  • Electric Power & Energy

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