Dubai names Harbin, ACWA preferred bidders for clean coal plant

The 1,200 megawatt power plant is the first phase of the Hassyan clean coal project

Dubai has chosen a consortium including China’s Harbin Electric and Saudi Arabia’s ACWA Power as the preferred bidder to build and operate a 1,200 megawatt clean coal power plant, the state utility said, as the emirate seeks to diversify its energy mix to meet rapidly rising demand.

The plant is the first phase of the $1.8bn Hassyan clean coal project under planning by Dubai Electricity and Water Authority (DEWA). One unit of 600 MW is to be operational by March 2020 and another unit of the same size by March 2021.

Lacking the huge oil reserves of its neighbour Abu Dhabi, Dubai is striving to broaden its sources of energy as the population rises. It has set a target to diversify its energy mix by 2030 to include 7 per cent from clean coal, 7 per cent from nuclear power, 15 per cent from solar and 71 per cent from gas. Currently, a larger proportion of Dubai’s energy comes from gas.

DEWA will be the major stakeholder with a 51 per cent share in the company established to build and operate the Hassyan plant.

But the bulk of the cost will be shouldered by the consortium. It is talking to Chinese-state owned credit agency Export-Import Bank of China and lenders including Industrial and Commercial Bank of China, Bank of China, Standard Chartered and Abu Dhabi’s First Gulf Bank about a $1.4bn loan for the project, Paddy Padmanathan, chief executive of ACWA Power, told reporters on Tuesday on the sidelines of an event to announce the preferred bidder.

DEWA will finance around a further $200m of the project, with the consortium raising the final chunk from equity, officials said.

The consortium bid to provide electricity at a levelised cost of 4.501 U.S. cents per kilowatt hour based on May 2015 coal prices, DEWA said.

Harbin Electric and Alstom of France will build the plant while those companies as well as ACWA and U.S.-based NRG Energy will operate it, DEWA said on Tuesday. DEWA said it plans to launch two additional projects to bring the eventual total capacity of Hassyan to 3,600 MW.

Dubai has also launched plans to build a solar park with a potential capacity of 1,000 MW to help cut its energy imports.