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Dubai Electricity and Water Authority (DEWA) introduced a new tariff structure for residential and commercial consumers that became effective on 1st January 2011.
A new tariff structure or slab system was first introduced on March 1st 2008 by DEWA - aimed at encouraging consumers to conserve energy. DEWA has again increased electricity charges from 20 fils KWh to 23 fils for monthly consumption below 2000 KWh and from 33 fils to 38 fils per KWh for consumption of more than 6000 KWh per month.
According to a survey by leading energy conservation specialist and total facilities management company Farnek Avireal, energy bills for consumers will roughly double.
“Consumers, particularly commercial, that did nothing to arrest consumption or waste after the first slab tariff increase in March 2008, will have electricity bills that in some cases will have soared by an additional AED1.1mn during the past twelve months,” said Markus Oberlin, General Manager, Farnek Avireal.
Average individual electricity usage is said by DEWA to be 20,000 KWh hours per annum and 130 gallons of water daily, putting Dubai among the cities with the highest consumption per person in the world, with one of the highest carbon footprints per capita.
The Farnek Avireal survey, based on actual buildings, shows a Dubai office tower of around 35,000 square metres on Sheikh Zayed Road, which for the calendar year 2007 had an annual electricity bill of AED2.5 million. In 2011 electricity charges for the same building will have doubled to AED5.14mn.
Similarly, a hotel of around 20,000 square metres in the New Dubai area which had annual energy costs of AED1.5mn will now be paying over AED3mn in 2011.Homeowners are not spared either. A typical villa in Jumeirah with a previous annual energy bill of AED23,850 in Jan 2008 will see a rise of up to 70 per cent from Jan 2011 to around AED40,500.
Farnek Avireal believes its intelligent energy and cost-saving solutions, already in widespread use throughout the United Arab Emirates, could substantially reduce the impact of the latest DEWA tariffs especially on commercial and industrial businesses.
“It is critical that businesses plug in these increased expenses into their profit and loss accounts, because it will have an adverse effect on the bottom line. Moving forward, there is an undeniable business case to reduce energy demands and, therefore, utility bills," said Oberlin.
"Dubai is already looking at coal fired power stations, a cheaper alternative to oil and gas in the short term, while plans to introduce solar power plants within the next 2-3 years and nuclear reactors by 2020 take shape. Sustainable, clean, renewable energy is the future. We must reduce our carbon emissions before we damage the environment irreparably,” added Oberlin.
Before the slab tariff was introduced in March 2008, the investment cost of Farnek Avireal's own Energy Saving Module – which reduces electricity consumption from air conditioning and refrigeration systems by up to 20 per cent – could be paid back in utility costs savings within 22 months.
"Having had two price increases inside three years our Energy Saving Devices could now in some instances have pay back periods of less than 12 months – that makes good business sense and environmentally it’s absolute common sense,” said Oberlin.