Farnek Avireal warns energy bills will double

An energy bill of 23,850AED in January 2008 will rise 70% to 40,500AED

Markus Oberlin, general manager, Farnek Avireal.
Markus Oberlin, general manager, Farnek Avireal.

Farnek Avireal claims commercial and industrial businesses are in for a shock when they receive their electricity bills because anyone who failed to take any energy saving measures will find their bill has doubled.

A new tariff structure was first introduced on 1 March 2008 by Dubai Electricity and Water Authority (DEWA) encouraging consumers to conserve energy. Effective from 1 January 2011, DEWA raised its tariff again.

Thermal power stations produce 93% of the UAE's the total energy supply and they are primarily powered by 70% gas and 30% oil.

"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 AED1.1million during the past 12 months," said Markus Oberlin, general manager, Farnek Avireal.

On January 1, DEWA increased electricity charges from 20 fils per kilowatt hour (KWh) to 23 fils for monthly consumption below 2,000KWh and from 33 fils to 38 fils per KWh for consumption of more than 6,000KWh per month.

DEWA said average individual electricity usage is 20,000KWh 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 35,000m2 on Sheikh Zayed Road, with an annual electricity bill of AED2.5million in 2007. In 2011, electricity charges for the same building will have doubled to AED5.14million.

Similarly, a hotel of around 20,000m2 in the New Dubai area which had annual energy costs of AED1.5million will now be paying over AED3million in 2011.

For homeowners, a typical villa in Jumeirah with a previous annual energy bill of AED23,850 in January 2008 will have seen a rise of up to 70% from January 2011 to around AED40,500.

"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 two to three 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."

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