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.