30/09/2024 Environment and energy | Ministry of Industry and Advanced Technology
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The UAE has launched a groundbreaking initiative to reduce energy
consumption tariffs for the industrial sector in Ras Al Khaimah, Fujairah,
Ajman, and Umm Al Quwain. This initiative is part of the National Strategy for
Industry and Advanced Technology, known as Operation 300bn, which aims to boost
the growth and competitiveness of the industrial sector. The Energy Tariff
Reduction Initiative provides greater incentives and advantages for industrial
companies, fostering a business environment that encourages expansion and
innovation. The goal is to enhance UAE products' competitiveness in local and
international markets, increase National In-Country Value, and promote
technological transformation.
Endorsed by the Industrial Development Council under the chairmanship of
His Excellency Dr Sultan Ahmed Al Jaber, Minister of Industry and Advanced
Technology, the initiative was developed in collaboration with federal and
local government entities, including the Ministry of Energy and Infrastructure
and the Etihad Water & Electricity Company as well as the private sector.
It was announced at the third edition of the Make it in the Emirates Forum in May
2024, a high-profile event that brought together stakeholders from sectors
including industry, technology, finance, and investment. The forum positioned the
initiative as a groundbreaking initiative to reduce operational costs, facilitate
business, and enhance the industrial sector's competitiveness.
Aligned with the UAE's broader goals, the initiative represents a crucial
step toward enhancing the country's investment climate, attracting more
investments to the industrial sector, and enhancing collaboration between
government bodies and private enterprises. The Etihad Water & Electricity
Company has already begun accepting applications from industrial companies
looking to benefit from the new, competitive tariff structure, which is
expected to support over 50 industrial companies within the next two years.
Key Features of The Energy Tariff
Reduction Initiative
The Energy Tariff Reduction Initiative introduces new pricing categories
for industrial companies, particularly those with monthly energy consumption
exceeding 10,000 megawatt-hours. The tariffs now range from 32
fils/kilowatt-hour to 26 fils/kilowatt-hour. Additionally, the new system
offers incentives, such as flexible fees for installation and connection
services, which can be added to monthly consumption charges or paid upfront at
a 20% discounted rate compared to traditional installation fees. Furthermore,
all customers in this category are exempt from insurance fees, and there are no
additional charges for meter usage.
The initiative is expected to significantly enhance the productivity and
cost-efficiency of industrial companies in these four emirates. Lower operating
costs will foster growth and competitiveness within the UAE's industrial
sector, ultimately improving the competitiveness of UAE-made products in both
regional and global markets.
Alignment with Sustainability Goals
The Energy Tariff Reduction Initiative is closely aligned with the UAE's
national objectives of achieving sustainable development and improving energy
efficiency. Collaboration between the Ministry of Industry and Advanced
Technology and its partners in both the public and private sectors has also
resulted in the launch of the Industrial Decarbonization Roadmap, aimed at
reducing carbon emissions in the industrial sector by 93% by 2050. This roadmap
was unveiled at COP28 in support of the UAE Net Zero by 2050 Strategic
Initiative. The initiative also aligns with ongoing efforts between the
Ministry of Industry and Advanced Technology and the Ministry of Energy and
Infrastructure to develop federal regulations for energy management in
industrial establishments. These regulations will help improve operational
efficiency, reduce energy consumption, and lower emissions in the industrial
sector.
Early Outcomes and Future Prospects
As of September 2024, Etihad Water & Electricity had received several
applications from industrial plants seeking to benefit from the new tariffs,
with many more applications under review. The initiative is expected to support
the UAE's sustainable development goals, advance the transition to a green
economy, attract additional investments to the industrial sector, and enhance
the competitiveness of the national economy.
By reducing energy costs, increasing sustainability, and promoting
industrial growth, the Energy Tariff Reduction Initiative marks a major step
forward in fostering a more dynamic and competitive industrial landscape in the
UAE.
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