The UAE’s energy sector is undergoing a transformation aimed at benefiting the industrial landscape, with significant reductions in energy consumption tariffs for 100 industrial establishments. This initiative, led by Etihad Water and Electricity (EtihadWE), marks a significant step in supporting the UAE’s growing industrial sector, particularly in the northern emirates of Ajman, Umm Al Qaiwain, Ras Al Khaimah, and Fujairah.
Table of Contents
A Strategic Collaboration for Industrial Empowerment
Spearheading this initiative is Sheikha Murad Al Balushi, the Head of the Major Industrial Initiative Committee at EtihadWE. During the World Utilities Congress 2024, Al Balushi highlighted the scope of the project, which reflects a strategic collaboration between the Ministry of Industry and Advanced Technology (MoIAT), the Ministry of Energy and Infrastructure (MoEI), and EtihadWE. The initiative is closely aligned with the UAE’s overarching vision of fostering a robust business environment and promoting industrial empowerment.
Al Balushi further noted that the number of businesses benefiting from this initiative is expected to grow to 150 industrial and technological enterprises by the end of 2026. These industrial establishments will benefit from substantial reductions in their energy costs, thereby enhancing their competitive edge in the market.
Reducing Energy Costs for Industrial Growth
One of the standout features of the initiative is its focus on offering significant discounts on energy consumption, making it easier for industries to manage their operational expenses. Industrial establishments participating in the program will receive discounts ranging from 10% to 26% per kilowatt-hour (kWh). For factories consuming over 10,000 megawatt-hours (MWh) per month, the maximum cost is capped at 26 fils per kWh.
This discount structure represents a major cost-saving measure, especially for large-scale manufacturers. By lowering electricity expenses, these businesses can invest in other critical areas, such as technology upgrades or expanding their operations. The UAE’s focus on reducing production costs will also promote competitiveness, both in the domestic market and on the global stage.
Alignment with National Strategy for Industry and Advanced Technology
The energy consumption tariff initiative is part of the UAE’s broader National Strategy for Industry and Advanced Technology, which was announced during the third ‘Make it in the Emirates’ Forum in May 2024. This strategy aims to stimulate industrial growth by fostering an investment-friendly environment and supporting sustainable development across various sectors.
By reducing energy costs, the UAE is not only encouraging existing industries to thrive but also creating a more appealing environment for new investments in the manufacturing and technology sectors. The initiative is a direct response to the growing need for energy-efficient solutions in industries that are increasingly focused on sustainability and reducing their carbon footprints.
Financial Incentives Beyond Energy Tariffs
The initiative’s benefits extend beyond mere reductions in energy costs. Industrial companies will also have access to additional financial incentives, particularly in terms of installation and network connection services. Flexible fee structures have been introduced, allowing businesses to either pay for installation services upfront with a 20% discount or integrate the fees into their monthly consumption payments.
Another noteworthy aspect of the program is the exemption from insurance fees, as well as the absence of extra costs for meter usage. These incentives offer further financial relief for industries looking to manage their expenses efficiently.
The Broader Impact on the UAE’s Industrial Sector
The impact of this initiative is expected to reverberate across the industrial sector, driving growth, innovation, and sustainability. By reducing operational and production costs, companies will be able to offer more competitive pricing for their products and services, both locally and internationally. This enhanced price competitiveness will allow UAE-based manufacturers to better compete in global markets, ultimately strengthening the country’s position as a hub for industrial innovation.
The initiative is also in line with the UAE’s long-term vision of achieving sustainable industrial development. As industries continue to evolve, incorporating energy-efficient practices will not only reduce costs but also contribute to the nation’s sustainability goals.
Conclusion: A Step Toward a Sustainable Industrial Future
The UAE’s energy consumption tariff initiative is a forward-thinking move that underscores the country’s commitment to fostering a thriving industrial sector. By offering significant financial benefits to industrial establishments, the initiative supports the country’s ambitious goals for growth, sustainability, and global competitiveness.
As the program expands to include 150 businesses by 2026, it is clear that the UAE’s industrial sector is entering a new era of innovation and efficiency. With the support of initiatives like this, the future of the UAE’s industrial landscape looks brighter than ever.
