VZCZCXRO2889
PP RUEHDH RUEHDIR
DE RUEHDE #0449/01 2911049
ZNY CCCCC ZZH
P R 181049Z OCT 09
FM AMCONSUL DUBAI
TO RUEHC/SECSTATE WASHDC PRIORITY 6686
INFO RUEHAD/AMEMBASSY ABU DHABI 3690
RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUEHDE/AMCONSUL DUBAI 9978

C O N F I D E N T I A L SECTION 01 OF 02 DUBAI 000449 
 
NOFORN 
SIPDIS 
 
DEPARTMENT FOR NEA/FO; NEA/ARP/BMCGOVERN 
 
E.O. 12958: DECL:  10/18/2019 
TAGS: ECON ENRG PREL AE
SUBJECT: UAE: SHARJAH'S POWER PROBLEMS 
 
DUBAI 00000449  001.2 OF 002 
 
 
CLASSIFIED BY: Justin Siberell, Consul General, Consulate 
General Dubai, UAE. 
REASON: 1.4 (b), (d) 
¶1. (C) Summary: Sharjah, the UAE's third most populous Emirate, 
has been suffering since early August ongoing power outages 
ranging from several hours to several days at a time.  The 
Sharjah Electricity and Water Authority (SEWA) attributes the 
outages to high summer demand, but gas shortages and an 
inability to purchase sufficient quantities of diesel are also 
key factors in the crisis.  Some Sharjah residents claim to be 
considering moves to neighboring Dubai, and the outages have 
prompted some small-scale labor protests.  In part to stem 
demand, SEWA raised its rates nearly 50 percent in early 
October, though even with this increase rates remain well below 
a true market price.  A personal appeal from the Ruler of 
Sharjah to the UAE President for assistance reportedly succeeded 
in encouraging cashed-strapped distributors to resume supplying 
diesel to Sharjah.  The outages have raised once again the lack 
of a functioning national electrical grid in the UAE and the 
continued reliance of the UAE's smaller emirates upon the 
generosity of Abu Dhabi to fund basic services.  End Summary. 
 
 
 
¶2. (C) Sharjah, like Dubai, has its own power grid independent 
of Abu Dhabi.  Sharjah's power plants operate natural gas/diesel 
generators.  There is an overreliance on diesel, however, 
because Sharjah lacks sufficient access to gas.  Sharjah's 
"installed capacity," the potential output when all generators 
are operating at peak performance, is 2500 megawatts.  Although 
average demand, is 1800 megawatts, blackouts occur because SEWA 
lacks sufficient reserve capacity to absorb routine generator 
maintenance. 
 
 
 
¶3. (C) Sharjah Electricity and Water Authority relies on General 
Electric power generators to provide power to its 750,000 
customers.  Poloff met with John Lancia, GE's Director for 
Public Policy and Strategic Planning, in late September to get 
his views on the root causes of the severe blackouts.  Lancia 
believes a lack of funding for new power projects predating the 
current economic crisis is contributing to the current power 
failures.  He said even if a decision were taken immediately to 
address SEWA's inability to provide power consistently during 
the hottest months, it would take at least 18 months for new 
infrastructure to come online to help alleviate the demand 
pressure. 
 
 
 
¶4. (C) Dr. Youssef Al Assaf, Dean of Engineering at the American 
University of Sharjah, told Poloff that he spoke with a manager 
at SEWA early October and apparently the main cause for the 
shortage was a combination of SEWA's delayed payments to its 
diesel distributors and the impact of the financial crisis. 
SEWA had been accumulating debts through delayed payments to 
diesel distributors over the past several years.  Prior to the 
financial crisis, the distributors did not have a problem with 
delayed payments as they were confident that the Sharjah 
Government would eventually pay in full.  However, distributors 
found themselves in a situation where they required immediate 
funding for their suppliers once the financial crisis hit.  A 
chain reaction occurred wherein distributors were not able to 
supply the diesel to SEWA, which cut SEWA's supply short of the 
demand during the summer's peak.  Al Assaf speculates that the 
power has been restored because President of the UAE Khalifa bin 
Zayed stepped in to help after a visit from the Ruler of Sharjah 
Sultan bin Mohammed.  SEWA also increased its rates by 50 
percent for both residential and industrial customers.  SEWA 
hopes the increase will go some way towards stemming 
unrestrained demand and enable back payment of diesel 
distributors.  Despite the increases, the price for power in 
Sharjah - as throughout the UAE - remains well below market 
price. 
 
 
 
---------------- 
 
A National Grid? 
 
---------------- 
 
 
 
¶5. (C) Sharjah's power problems have also raised discussion 
about the need for a nation-wide power grid in the UAE to 
distribute power as required during peak season.  This would be 
welcomed by the UAE's smaller Emirates, but is not favored by 
Dubai, where an independent grid has been viewed traditionally 
as a key element enabling Dubai's ambitious development agenda. 
 
DUBAI 00000449  002.2 OF 002 
 
 
In an October meeting, Saeed al Tayer, Director of Dubai's 
Electricity and Water Authority (DEWA) told Consul General that 
a national grid for the UAE would have only limited benefit. 
This is because the "peak season" occurs everywhere throughout 
the UAE at the same time, thus providing no real opportunity for 
shedding loads in cooler regions to supplement demand elsewhere. 
 Saeed attributed Sharjah's power supply problems to an 
inability to bear the added cost of substituting diesel for 
natural gas as Sharjah's gas supplies have dwindled.  (Note: The 
infrastructure for a national electricity grid has been 
completed, but power is not yet being distributed.  End Note.) 
 
 
 
------------------------ 
 
Laborers Protest Outages 
 
------------------------ 
 
 
 
¶6. (U) In early September, around 200 construction workers went 
on strike to protest the ongoing blackouts and brownouts in 
Sharjah.  The laborers complained that they had been without 
electricity, including air conditioning, in their living 
accommodations for five days.  One of the workers told a 
reporter, "we are poor people, we work in the scorching sun on 
building while fasting and at night we go and sleep in the dark 
without electricity."  Blackouts during Ramadan were 
particularly harsh, some laborers noted, as the lack of 
electricity prevented them from cooking food to break the fast. 
 
 
 
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COMMENT 
 
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¶6. (C/NF) With temperatures starting to cool off, some of the 
pressure may be taken off of SEWA, but the underlying roots of 
this summer's blackouts will remain unresolved.  Summer demand 
is twice that of the winter months and SEWA seems to prefer to 
meet the demand of the cooler months rather than leave pricy 
generators idle half the year.  Given that funding for such 
projects remains elusive, we should expect to see similar 
outages in Sharjah next summer as well.  End Comment. 
SIBERELL