HAWAIIAN ELECTRIC

PROPOSES FIRST INCREASE IN OAHU BASE RATES IN 6 YEARS

Investment of $900M in grid upgrades for reliability and renewable energy since 2011

New benchmarks proposed for customer service performance, reliability, and rooftop-

solar interconnection

Integration of more renewable energy

WE ARE NOT ALONE

UNITED ARAB EMIRATES (UAE)

“Best-known as a hydrocarbon-exporter, the country has emerged as a

significant investor in renewable energy globally and a political advocate

for these technologies.”

EDISON ELECTRIC INSTITUTE (EEI)

“Today, a profound transformation is underway across the United States

as the way energy is produced and used is changing due to changes in

technology, policy and customer expectations.”

SUSTAINABLE FERC PROJECT (PROJECT)

“[F]uel prices, technology shifts, the economy, increasing use of demand-

side management, and other changes have shaped the power sector far

more significantly than environmental standards.”

“The grid does face reliability challenges due to aging infrastructure, lack

of investment, and greater climate extremes. Transitioning to a lower

carbon electric system is an opportunity both to reduce air pollution and

to build a more reliable, modern energy system based on flexible

generating technologies, smart grid technologies, and more efficient

energy use.”

The social progress, order, security and peace of each country

are necessarily connected with the social progress, order, security and peace

of all other countries.

– Pope John XIII

HAWAIIAN ELECTRIC PROPOSES FIRST INCREASE IN OAHU BASE RATES IN 6 YEARS

https://www.hawaiianelectric.com/hawaiian-electric-proposes-first-increase-in-oahu-base-rates-in-6-years

Web Accessed: December 17, 2016

Company cites spending $900M in grid upgrades for reliability, renewable energy

Benchmarks proposed for customer service performance and other key areas

HONOLULU, Dec. 16, 2016 - Hawaiian Electric today proposed the first increase of Oahu base

rates in nearly six years to help pay for operating costs, including system upgrades to increase

reliability, improve customer service and integrate more renewable energy.

The request is for a 6.9 percent increase in revenues, or $106 million.

If approved, a typical Oahu residential customer using 500 kilowatt hours a month would see

an increase of $8.71 a month to $141.03, based on December 2016 bills. Thanks to lower fuel

prices and cost containment efforts, bills reflecting the new rates, if the full amount were

approved today, would still be lower than the average bill in 2015.

After review by the Public Utilities Commission, any change would likely not take effect until

the second half of 2017 at the earliest. The rate filing is part of a required periodic regulatory

review.

As part of the filing, Hawaiian Electric is proposing new benchmarks to measure its

performance and link certain revenues to goals in key areas, including customer service,

reliability, and communication for the rooftop-solar interconnection process.

Since 2011, Hawaiian Electric spent more than $900 million replacing and upgrading equipment

to improve the efficiency and resilience of the Oahu power grid. That work includes the

replacement of 6,800 poles and 4,800 transformers, implementation of advanced cybersecurity

measures, and proactive clearing of trees and other vegetation from around poles and power

lines, resulting in fewer and briefer outages during storms.

During the same period, the number of approved private rooftop solar systems on Oahu has

risen from 5,000 to nearly 54,000. Hawaiian Electric increased resources to expedite the review,

inspection, and approval of systems so they can be safely connected to the grid and has been

nationally recognized for research and technical advances aimed at bringing more renewable

energy online.

Many of the grid improvements are aimed at accelerating Hawaiian Electric's switch from fossil

fuel generation to a portfolio of renewable energy resources, with the goal of reaching 100

percent renewable electricity by 2045.

Hawaiian Electric has also spent more than $25 million over the past six years improving

customer service by increasing staff and investing in new technology, creating paperless billing,

providing more online options and significantly reducing call-waiting times.

The percentage of customer calls answered within 30 seconds went from 24 percent in 2012 to a

forecasted 80 percent in 2016. In surveys of customers who called to stop, start or change electric

service in 2015, 93 percent said they were satisfied with the experience.

The company has absorbed a significant amount of these increased costs in the years between

rate cases without passing them on to customers.

Hawaiian Electric rates are "decoupled" - a regulatory model that periodically adjusts rates to

remove the company's need to increase sales to recover a level of PUC-approved costs for

providing service to all customers. The company is required to submit full rate cases every three

years for an updated review by the PUC of the current costs of service.

__________________

HAWAIIAN ELECTRIC RATE HIKE PROPOSAL SEEKS 7% INCREASE

By Duane Shimogawa. Pacific Business News. December 16, 2016.

http://www.bizjournals.com/pacific/news/2016/12/16/hawaiian-electric-rate-hike-proposal-

seeks-7.html Web Accessed: December 17, 2016

Hawaiian Electric Co. is proposing to raise rates by nearly 7 percent, which would be the first

increase in base rates on Oahu in nearly six years, the utility said Friday.

Pacific Business News broke the story about the proposal from Hawaiian Electric Co., a

subsidiary of Hawaiian Electric Industries Inc. (NYSE: HE), to raise rates, which would help pay

for operating costs, including system upgrades to increase reliability, improve customer service

and integrate more renewable energy.

The request, which still needs Hawaii Public Utilities Commission approval, is for a 6.9 percent

increase in revenues, or $106 million.

If approved, a typical Oahu residential customer using 500 kilowatt hours a month would see

an increase on a monthly bill of $8.71 up to $141.03, based on December 2016 bills.

The utility said that thanks to lower fuel prices and cost containment efforts, bills reflecting the

new rates, if the full amount were approved today, would still be lower than the average bill in

2015.

Hawaiian Electric said any change in bills would likely not take effect until the second half of

2017 at the earliest, and that the rate filing is part of a required periodic regulatory review.

The state’s largest utility also is proposing new benchmarks to measure its performance and

link certain revenues to goals in key areas, including customer service, reliability and

communication for the rooftop solar interconnection process.

Since 2011, Hawaiian Electric has spent more than $900 million on upgrading the Oahu power

grid, including the replacement of 6,800 poles and 4,800 transformers. It also has approved

nearly 54,000 private rooftop solar systems.

Additionally, the utility said it has spent more than $25 million during the past six years

improving customer service by increasing staff and investing in new technology.

Hawaiian Electric said it has absorbed a significant amount of these increased costs in the years

between rate cases without passing them on to customers. The utility’s rates are “decoupled,” a

regulatory model that periodically adjusts rates to remove the company’s need to increase sales

to recover a level of PUC-approved costs for providing service to all customers. The company is

required to submit full rate cases every three years for an updated review by the PUC.

_____________________

HECO SEEKS 6.9 PERCENT RATE INCREASE FOR OAHU

By Kathryn Mykleseth. Honolulu Star Advertiser. December 16, 2016.

http://www.staradvertiser.com/2016/12/16/business/business-breaking/heco-seeks-6-9-percent-rate-increase-for-oahu/

Web Accessed: December 17, 2016

Hawaiian Electric Co. is seeking to raise rates for Oahu customers by 6.9 percent.

The state’s dominant electric utility submitted a filing for the increase today with the state

Public Utilities Commission. If approved, it would boost revenue for the company by $106

million and increase customers’ bills by $8.71 a month based on the December bills.

The bill for an Oahu household using 500 kilowatt-hours in December was $132.32.

HECO said the base rate increase would help improve customer service, pay for operating costs

and add more renewable energy resources to the electric grid. The utility said it has spent more

than $900 million replacing and upgrading equipment on Oahu.

HECO said due to lower fuel prices, if its proposed rate case is approved, the average bill still

would be lower than the bills customers saw last year.

The last rate case that HECO filed seeking an increase was in May 2010. HECO asked for a 6.6

percent increase at that time. The total amount requested was $113.5 million, according to

HECO. The PUC ended up approving a 3.4 percent increase in September 2012. That resulted in

a revenue increase of $58.1 million.

The PUC has to complete its review and issue its decision before nine months from the date that

HECO filed this latest application.

HECO’s base rate is only part of the rates customers see on their bills.

The rates customers pay change monthly, as rates include HECO’s base rate as well as

surcharges such as the Energy Cost Adjustment, the Purchased Power Adjustment, IRP Cost

Recovery, Revenue Balancing Account Adjustment, and the Renewable Energy Infrastructure

Program.

____________________

RENEWABLE ENERGY IN THE UNITED ARAB EMIRATES

NORTON ROSE FULBRIGHT. Publication | January 2011

http://www.nortonrosefulbright.com/knowledge/publications/33580/renewable-energy-in-the-united-arab-emirates

Web Accessed: December 17, 2016

Context

Outlook

Policy and regulatory framework

Estidama initiative

Dubai’s Green Building Code

Dubai Carbon Centre of Excellence

Conclusion

Context

The United Arab Emirates (UAE) comprises seven emirates (Abu Dhabi, Dubai, Sharjah, Ras al-

Khaimah, Fujairah, Umm Ul Quwain and Ajman). Abu Dhabi is the capital and the largest

emirate.

Currently, the UAE has the world’s largest per capita carbon footprint, due in part to the

amount of electricity required for desalination and air conditioning. In common with other oil

rich GCC nations, electricity production is subsidised and supplied to end users at less than the

cost of generation.

The UAE is at the forefront of the development of renewable energy in the MENA region, with

the establishment of The Abu Dhabi Future Energy Company (Masdar), the construction of the

world’s first carbon-neutral zero waste city, the annual World Future Energy Summit and the

relocation of IRENA’s headquarters to Masdar City.

Currently, there is little renewable energy produced in the UAE but this will change once the

Shams 1 solar project is operational (expected to be 2011). As well as solar, the UAE is looking

to nuclear as part of its drive to reduce its carbon footprint.

Outlook

The UAE has announced that it intends to produce 7 per cent of its electricity from renewable

sources by 2020.

Key drivers

Despite having the third largest oil reserves in the world, the UAE has probably the most

ambitious renewable energy programme, certainly in the GCC if not in the MENA region.

There are a number of motivations for this. One is the availability of natural gas. Wood

Mackenzie (a UK-based energy consultant) estimates that demand for natural gas will treble to

6 billion cubic feet a day by 2020 which means that, even with the supplies from the Dolphin

gas project, the UAE will struggle to meet demand.

Additionally, the UAE is keen to diversify its economy and sees the development and export of

green technology as means of doing this.

Major projects

Masdar City

The UAE’s flagship project is Masdar City, which aims to be the world’s first carbon-neutral city

by relying on solar, wind and other renewable energy resources. It is scheduled for completion

in 2016, with a projected cost of US$22 billion resulting in savings of US$2 billion in oil over 25

years. It is claimed that, when complete, it will use 70 per cent less electricity and 60 per cent

less water than a conventional city. The UAE intends that Masdar City will be a global clean

technology hub and it is already home to IRENA.

Other current projects include the Shams 1 solar project and a hydrogen power project.

Shams 1

The Shams 1 solar project is a planned concentrating solar power (CSP) station, to be located 120

kilometres from Abu Dhabi in Madinat Zayed. The IPP will generate 100 MW with plans to

increase capacity to 2000 MW in the future. It is estimated to cost US$600,000 million, and will

be developed by Masdar (which will hold a 60 per cent stake in the project) alongside Spain’s

Abengoa Solar and France’s Total S.A.

The plant will consist of 768 parabolic trough collectors stretching over an area of 2.5 square

kilometres, and will be developed under a 25-year build, own and operate (BOO) contract; it

will be operational by 2011. The plant is stated by Masdar to displace approximately 175,000

tonnes of CO² per year, which is the equivalent to the planting of 1.5 million trees.

An important feature of the Shams 1 solar project is the introduction of a “green payment” by

which the Abu Dhabi Ministry of Finance will compensate the Abu Dhabi Water and Electricity

Company (ADWEC) (the procurer of power under the project PPA), for the shortfall in revenue

stemming from subsidised electricity supply and the cost of production.

The Abu Dhabi Government anticipates that the production costs of renewable energy will

decrease, possibly to such a level that the green payment becomes redundant. Although Abu

Dhabi’s Regulation and Supervision Bureau (the RSB) has not revealed the financial details of

the green payment, it has said that the model will be applied to other renewable projects.

Geothermal

Masdar City is proposing to build the Gulf’s first geothermal energy facility. The US$11 billion

project will be partially built by the Icelandic company Reykjavik Geothermal. The company

has also been awarded a US$1.6 million contract to export its geothermal know-how to Masdar

City. When complete, the geothermal project will be used to power the city’s 5 MW air

conditioning system.

Hydrogen Power Abu Dhabi (HPAD)

HPAD is a 60/40 joint venture between Masdar and BP to construct the world’s first

commercial-scale hydrogen-fuelled power plant utilising fossil fuel feedstock and CCS. The

project will require a total capital investment (excluding CO² transportation and storage) of

about AED 7 billion (US$2 billion). This project will take natural gas from the grid and convert

it to hydrogen and CO². The hydrogen power plant will generate approximately 400 MW of

low-carbon electricity, and could provide more than 5 per cent of all Abu Dhabi’s current power

generation.

Solar

MBM Holdings has recently announced the formation of MBM Solar Holding Inc., which will

build a solar-grade polysilicon plant in the UAE. The US$400 million project will be the first

upstream plant of its kind to be constructed in the UAE, and is the largest planned solar plant in

the region, anticipated to cover a total area of approximately 250,000 square metres. The

planned plant will have a total capacity of 2,500 tons per annum of high quality solar-grade

polysilicon product and is expected to start production in early 2012.

Dubai - Solar power plant

Dubai Water and Electricity Authority (DEWA) plans to build the first solar power plant in

Dubai with capacity ranging between 10 and 100 MW. This project is part of the UAE’s

sustainable development plan to meet future energy demand while preserving the

environment. Dubai’s solar plant will be UAE’s second solar power station - Masdar’s Shams 1

solar power station in Abu Dhabi being the first solar plant in the GCC region. In November

2010, a feasibility study was in progress and potential sites for the project were under

evaluation. The plant will use either photovoltaic or thermal solar technology. Construction is

scheduled to commence in 2011.

Nuclear

In early 2010, the UAE Foreign Minister, His Highness Sheikh Abudullah bin Zayed Al Nahyan,

at an address in Paris before the International Conference on Access to Civil Energy stated that:

“The United Arab Emirates' interest in developing nuclear energy is motivated by the need to

develop additional sources of electricity to meet future demand projections and to ensure the

continued rapid development of its economy. Analysis conducted by official UAE entities has

concluded that national annual peak demand for electricity is likely to triple by 2020, reflecting

a cumulative annual growth rate of roughly 9 per cent from 2007 onward. In evaluating

different options to meet this demand, nuclear energy emerged as a proven, environmentally

promising and commercially competitive option which could make a significant contribution to

the UAE's economy and future energy security.”

Accordingly, the UAE established a Nuclear Energy Program Implementation Organisation

which set up the Emirates Nuclear Energy Corporation (ENEC). ENEC is an Abu Dhabi public

entity, with the remit to evaluate and implement nuclear power plans within the UAE. It will

also act as a government investment arm by making strategic investments in the nuclear sector,

both domestically and internationally.

In 2009, the Federal Law Regarding the Peaceful Uses of Nuclear Energy was signed. It

provides for the development of a system of licensing and control of nuclear material, as well as

establishing the Federal Authority of Nuclear Regulation (FANR). FANR is an independent

entity charged with overseeing the regulation of the whole of the UAE’s nuclear energy sector

as well as appointing the regulator’s board.

In implementing the development of nuclear power in the region, the UAE Government plans

to “offer joint-venture arrangements to foreign investors for the construction and operation of

future nuclear power plants” similar to the existing IWPP structures, which are 60 per cent

government owned and 40 per cent owned by joint venture partners.

Last year ENEC announced the selection of a bid from a consortium led by the Korean company

KEPCO for the construction of four APR-1400 reactors.

Policy and regulatory framework

The UAE has announced that it aims to produce 7 per cent of electricity from renewable sources

by 2020. Furthermore, as outlined above the UAE is home to some of the region’s most high-

profile initiatives in the field of developing energy from renewable sources.

In July 2009, Sultan Al Jaber, the Chief Executive Officer of Masdar, announced plans for Abu

Dhabi to launch its Energy Vision 2030. As part of Energy Vision 2030, Abu Dhabi has finalised

a new energy formula that will help develop an average price for the whole of its energy

portfolio.

Abu Dhabi benefits from low cost energy sources, and consequently renewable energy will be

comparatively expensive. Sultan Al Jaber has been reported as saying:

“For us, because we have low-cost energy sources, and renewable energy is going to

be expensive, we are going to inject it into one formula so that we have one price for

all energy production. Low cost energy sources will help bring the renewable

energy production cost down …. We are going to look at it with a holistic approach.

We are setting a new model on how renewable energy production is actually being

tackled and the cost of renewable energy production is being calculated.”

However, to date no further details regarding the model have been forthcoming.

Estidama initiative

Abu Dhabi launched the Estidama initiative which is stated to make the Emirate the

sustainability capital of the Middle East, by the implementation of a program for sustainable

buildings and communities.

The program was initiated by a group of government agencies and developers, including the

Abu Dhabi Urban Planning Council (UPC), Abu Dhabi Municipality (ADM) and Masdar.

The program forms part of Abu Dhabi’s Plan 2030. Plan 2030 is an Urban Structure Framework

Plan published by the UPC in September 2007 and is a high level framework governing the

future of Abu Dhabi’s urban development. It provides principles, policies and ‘conceptual

solutions to shape the growth of Abu Dhabi over the next quarter of a century’ (as opposed to

providing specifications for the development of any individual site).

As part of the Estidama a new Abu Dhabi building code, (the Code) has been launched. The

Code incorporates mandatory sustainable building principles. The Abu Dhabi Urban Planning

Council has also introduced a rating system against which new buildings will be assessed.

Dubai’s Green Building Code

Dubai’s much anticipated Green Building Code (the Green Code) was approved by the

government in 2010 and will be rolled out in phases. The Green Code, jointly developed by

DEWA and Dubai Municipality, sets out optional and mandatory regulations in order to make

buildings in Dubai compatible with environmental requirements which include a set of factors

such as site selection, efficient use of energy and water, indoor environmental quality, and

waste management. These regulations aim generally at reducing electrical energy consumption,

rationalising water consumption and the optimum use of renewable energy. All these factors

will contribute effectively in reducing gas emissions, reflecting positively on public health.

Dubai Carbon Centre of Excellence

The Dubai Carbon Center of Excellence (DCCE) was established under the directives of the

Supreme Council of Energy with a view to leveraging Dubai’s carbon potential through a clean

development mechanism in cooperation with the United Nations Development Programme

(UNDP) for both technology and competence transfer into the Emirate.

The DCCE was established as a public/private joint stock company with a paid up capital of

AED10 million. The DCCE’s founding shareholders include DEWA, Dubai Aluminum,

Estidama, ENOC, and Emirates Airlines.

The DCCE will have the task of focusing on carbon-project opportunities, but will

simultaneously act as the Dubai-based stimulant to develop a carbon efficient economy, whilst

developing carbon incentives for the Emirate’s key stakeholders.

The DCCE’s main objectives are to create the region’s leading knowledge repository on carbon

matters, establish a climate change fund to provide capital and incentives to attract global

leading technology companies, and create a portfolio of Dubai-based environmental credits and

advising emission reduction projects to meet the needs of Dubai institutions and achieve

carbon-neutrality.

The DCCE will be mainly responsible for the trading and sourcing of carbon credits, i.e. it will

act as a broker for its own book of credits and as broker of clients’ credits to DCCE’s network of

institutional buyers internationally, including Government funds, utilities and large

corporations in compliance markets. This will be vital for all local airlines traveling to Europe as

they will need to offset carbon levels that are imposed on their European routes; rather than

buying the carbon credits from the global trading market at significant margins, airlines can buy

these credits from the DCCE at attractive rates.

Conclusion

Despite the critical role of oil and gas for the UAE, the country has made groundbreaking

commitments in alternative energy. The UAE is taking steps to reduce carbon emissions

through major initiatives in both Abu Dhabi and Dubai.

The UAE has long been an important supplier of energy and is now becoming an increasingly

relevant consumer of energy as well. Whilst Abu Dhabi in particular leads the GCC countries in

relation to renewable energy initiatives, it does not benefit from a renewables regulatory

framework. Last year, Abu Dhabi announced plans to develop an energy policy that would

establish subsidies for renewable power, but it is still yet to materialise. Such subsidies for

electricity produced from renewable energy are well-established in European countries such as

Germany and Spain, and are referred to as feed-in tariffs. It is important to note that in those

jurisdictions the cost of funding such subsidies is borne by consumers. In comparison, grid

operators across the GCC are constrained by legislative obligations to purchase power for the

lowest price available from generators.

Accordingly, the implementation of a regulatory regime providing for a fixed feed-in tariff will

necessitate considerable time and cost in reviewing and amending energy legislation.

In addition, the introduction of a feed-in tariff runs other risks. If the electricity price is too low

then developers will not build renewables projects and the government is in danger of not

meeting its energy demands.

If on the other hand the tariff is too high, developers will overbuild, putting a strain on

government resources.

This raises particular issues for GCC countries, where electricity consumers have benefited from

long term heavily subsidised electricity prices, and accordingly transferring the burden to

consumers in the form of higher electricity prices is not politically feasible.

Nevertheless, Abu Dhabi does have an established track record in bringing projects - in

particular IWPPs - to market, with its power (and water) procurement model being recognised

as the most bankable model in the GCC region. A programme for the delivery of energy from

renewables sources based on the existing IWPP model used for the procurement of power and

water with an individually negotiated green tariff payable may constitute a sustainable and

appropriate strategy for a country wishing to development a significant (if not large-scale)

renewable energy programme.

______________________

CHALLENGES TO UAE SOLAR POWER REMAIN, BUT IT STILL MAKES SENSE

By Andrew Korn, Audit Partner and Power and Utilities Sector Leader for KPMG Lower Gulf,

Abu Dhabi. TheNational ǀ Business. May 5, 2016. http://www.thenational.ae/business/energy/challenges-

to-uae-solar-power-remain-but-it-still-makes-sense Web Accessed: December 17, 2016

In a country with the world’s seventh largest proven oil and natural gas reserves, and with

predictions that Abu Dhabi’s oil supplies can last beyond an­other 100 years, the UAE’s current

focus on renewable and sustainable power may seem puzzling at first glance.

But in such a fast-growing and energy-hungry country, planning for the future and looking for

alternatives make sense from a business and environmental perspective.

Numerous initiatives and policies have been introduced by government bodies in the UAE. The

country’s 2021 blueprint clearly outlines the need to develop long-term sustainable energy

sources as a major pillar for the future. It is evident that the country’s ambition is to be seen as a

nation that is responsible for developing global and regional best practices, an emerging

international role model in this area.

And in a country where there appears to be abundant potential for solar energy, steps are now

being undertaken by organisations such as Masdar to look at actively increasing the use of solar

power.

One of the challenges for large-scale solar in the UAE has been the effect of dust and sand that

can coat solar panels significantly, thereby reducing their effectiveness. However, continuing

investment and new technical advances are set to ensure that power available from solar should

become more efficient in the future.

A challenge for the alternative sector is to be cost-effective in terms of power outputs in a world

where oil prices are predicted to remain low for the foreseeable future.

One possible path for countries serious about creating a truly diverse and sustainable energy

production mix is to consider a subsidised investment model to realise large-scale renewable-

energy infrastructure projects. Conversely, the low price of oil makes it more challenging for

cost-intensive methods of fossil fuel extraction such as shale to be feasible – creating more of an

opportunity for alter­native production methods than before.

As solar photovoltaic (PV) cells become a viable option to conventional energy sources, the

UAE is emerging as a leader in increasing investments in clean energy and reducing carbon

emissions and greenhouse gases.

What is also clear here in the UAE is that there is a real commitment and determination to make

sure that clean energy production is possible and will work. It is the first country in the region

to set tangible renewable energy targets, and Dubai has recently increased its target for

renewable energy in the overall energy mix by 2030 to 25 per cent from 15 per cent.

The UAE Vision 2021 National Agenda highlighted how sustainable development is essen­tial

for social and economic progress, by focusing on improving air quality, preserving water

resources, decreasing solid waste and implementing a green growth plan. In practical terms this

means there will be a requirement for skilled people, for increasingly locally driven innovation

and for expertise that will enhance and strengthen the energy business in the country at all

levels.

Sustainability drivers include energy efficiency, compliance with regulatory and corporate

social responsibility policies, waste and water management, and emissions reductions.

These measures are already showing results. The 2015 KPMG Lower Gulf Sustainability Report

showed that many companies in the UAE are already aligning their strategy with the

sustainability agenda outlined in UAE Vision 2021.

Abu Dhabi is also home to the International Renewable Energy Agency (Irena) and Masdar

City, while Dubai has the Moh­ammed bin Rashid Al Maktoum Solar Park.

One of the country’s high-profile solar power initiatives is the Masdar-sponsored Solar Impulse,

the flying laboratory that showcased 12 years’ worth of R&D on clean technologies. Solar

Impulse generated tremendous global attention last year when it started the first round-the-

world flight from Abu Dhabi to demonstrate how clean energies can go a long way to

contribute to a green and sustainable global economy.

Dubai Electricity and Water Authority (Dewa), which serves more than 725,000 customers in

Dubai, has earmarked sustainability as one of its key focus areas and is using its extensive

infrastructure and network to complement federal development plans for a sustainable UAE

economy.

So it seems that there is a strong and positive environment for the continued and stronger

development of solar power resources. The cost of solar panels and associated technology have

fallen significantly in recent years and they are expected to continue to become more affordable.

There are still some challenges to overcome, specifically storing power generated during the

daytime. R&D initiatives to address battery storage are gaining mom­entum, but it will take

some time before solar PV and battery storage can compete with conventional power.

With more than 300 days of abundant sunshine every year in the UAE and improved

technology and storage options, increasing solar power’s share of the energy mix should be

attain­able. Oil and gas that is not burnt to generate electri­city in the meantime can be sold or

converted into value-added products to increase the national income.

Since clean energy sources also minimise adverse health effects, the benefits of switching to

these sources extend beyond sustainable environmental development by reducing the long-

term social costs of the government and helping global economies as a whole.

____________________

RENEWABLE ENERGY PROSPECTS: UNITED ARAB EMIRATES

Best-known as a hydrocarbon-exporter, the country has emerged as a significant investor in

renewable energy globally and a political advocate for these technologies.

THE BIG PICTURE

A major rethinking of the UAE national and emirate-level energy strategies is due: as of 2014,

renewable energy is cost-competitive in the country for the first time and possibly even the

cheapest source of new power supply. Based on current incremental energy prices, the UAE

could achieve at least 10% use of renewable energy in its energy mix by 2030 (and 25% in its

power generation mix) with estimated net savings for the economy of USD 1.9 billion annually.

This is before considering health and environmental benefits or the potential to export

hydrocarbons liberated from domestic consumption. The country’s pioneering push into

renewables – based on longer-term, ‘patient capital’ goals like economic diversification,

sustainability, and job creation – can now be justified by short-term economics.

GOVERNMENT ACTION

The new business case for renewables, however, will not be realised without policy reform and

stakeholder awareness. The federal and emirate-level governments will need to clarify their

respective responsibilities for project initiation and implementation, regulate the integration of

renewable energy technologies where needed, and set timelines. To date, many governing

institutions have now been empowered to take a holistic view of the energy sector (comparing

different supply options), or to introduce a deployment programme and schedule that could

incentivise local industry development and further bring down costs. The Dubai Supreme

Council of Energy provides a valuable domestic model, bringing the emirate’s key producers

and consumers to the table for policy formulation. The UAE’s new federal energy policy

taskforce also represents a crucial, initial action to facilitate policy and investment coordination

across the seven emirates, which are largely sovereign in their energy policy.

Source: Masdar Institute/IRENA (2015), Renewable Energy Prospects: United Arab

Emirates, REmap 2030 analysis. IRENA, Abu Dhabi. www.irena.org/remap.

http://www.irena.org/remap/irena_remap_uae_report_2015.pdf Web Accessed: December 17, 2016

_____________________

February 11, 2015 Technical Conference on Environmental Regulations and Electric Reliability,

Wholesale Electricity Markets, and Energy Infrastructure. FERC Docket No. AD15-4- 000.

https://www.ferc.gov/CalendarFiles/20150213081431-Moore,%20Sustainable%20FERC%20Project.pdf

Web Accessed: December 17, 2016

[W]e [Sustainable FERC Project (Project)1] emphasize that fuel prices, technology shifts, the

economy, increasing use of demand-side management, and other changes have shaped the

power sector far more significantly than environmental standards.

The grid does face reliability challenges due to aging infrastructure, lack of investment, and

greater climate extremes. Transitioning to a lower carbon electric system is an opportunity both

to reduce air pollution and to build a more reliable, modern energy system based on flexible

generating technologies, smart grid technologies, and more efficient energy use.

1 Footnote, Supplied. “The Sustainable FERC Project is a coalition of environmental and other public

interest organizations throughout the United States. The Project and its partner organizations engage in

Commission proceedings involving transmission grid planning, operations and markets. The Project and

its coalition members also are active stakeholders in RTOs, ISOs, and other FERC jurisdictional entities

throughout the country. See www.sustainableFERC.org for more information.”

As the grid continues to evolve, grid planners must fully account for demand-side resources

(energy efficiency, demand response, PV solar, combined heat and power, electric vehicles, and

other storage) in load forecasting, modeling, and in the development of solutions to identified

grid needs.

Fundamental to the CPP [Clean Power Plan] is its compliance flexibility. It allows states and

generators to meet the targets using a wide range of resource choices, including state clean

energy and energy efficiency standards, shared regional compliance strategies, multi-year

averaging, and other options.

Grid regions have tariff rules in place – such as regional planning processes and cost allocation

for regional and interregional transmission facilities – that are responding to these and future

system needs. According to the Edison Electric Institute’s survey of utility transmission projects,

total transmission investment is estimated to have reached a level of $17.5 billion (real $2012) in

2013 and is projected at approximately $60.6 billion through 2024. According to the report:

These transmission investments provide an array of benefits which include:

providing reliable electricity service to customers, relieving congestion,

facilitating wholesale market competition, supporting a diverse and changing

generation portfolio and mitigating damage and limiting customer outages in

extreme weather. New transmission investments also deploy advanced

monitoring systems and other new technologies designed to ensure a more

flexible and resilient grid. At the same time, all transmission projects are

integrated into local systems in order to maintain the paramount objective of

providing reliable electricity service to customers.

[Citations Omitted. Clarification Supplied]

______

June 29, 2016 Technical Conference on Implementation Issues Under the Public Utility

Regulatory Policies Act of 1978. FERC Docket No. Docket No. AD16-16-000.

https://www.ferc.gov/CalendarFiles/20160616092747-Brogan,%20NorthWestern%20Energy%20-%20EEI.pdf

Web Accessed: December 17, 2016

Today, a profound transformation is underway across the United States as the way energy is

produced and used is changing due to changes in technology, policy and customer

expectations.

[W]e [Edison Electric Institute (EEI)2] would also encourage FERC to continue to look for

opportunities to increase communication and dialogue with state commissions so they better

understand the flexibility that FERC sees in its regulations around avoided cost issues. This

could include further discussion and clarity around the options available to state commission to

address the problems with the long term contracts that result in above market purchase,

increased customer costs, and enable the continued use of old, inefficient facilities; a discussion

or even reconfirmation of the state commission’s ability to permit zero dollar capacity payments

if capacity is not needed in the utilities service territory; and/or, the encouragement of the use of

requests for proposal (RFPs) or more competitive bidding type processes to ensure that the

avoided costs are truly reflected in the contract prices. [Citations Omitted, Clarification Supplied]

Even with our differences

There’s a place we’re all connected

Each of us can find each other’s light

There’s so much to be thankful for

– Josh Groban

2 Footnote, Supplied. “EEI is the association of U.S. shareholder-owned electric companies.

EEI’s members comprise approximately 70% of the U.S. electric power industry, provide

electricity for 220 million Americans, operate in all 50 states and the District of Columbia, and

directly employ more than 500,000 workers.” [Emphasis Supplied]