The United Arab Emirates (UAE) has taken a significant step towards bolstering its industrial sector by introducing reduced electricity rates for qualified companies. This initiative, spearheaded by the Emirates Water and Electricity Company (Ewec), aims to enhance the competitiveness of UAE industries and attract new investments.
The new pricing structure offers substantial savings for large industrial consumers.
Companies exceeding a monthly consumption threshold of 10,000 megawatt hours can now benefit from tariffs starting at 32 fils per kilowatt hour, with the potential to drop as low as 26 fils per kilowatt hour depending on specific consumption levels. This translates to a significant reduction in electricity costs, which can have a major impact on a company’s bottom line.
“The new reduced tariff for energy consumption in industrial companies is in line with the ‘Make in the Emirates’ initiative,” stated Saeed Mohammed Al Tayer, the Managing Director and CEO of Dewa (Dubai Electricity and Water Authority). This initiative, launched in 2018, aims to transform the UAE into a global industrial hub. By offering competitive energy prices, the government hopes to incentivize existing companies to expand operations and attract new businesses to set up shop in the UAE.
Yousef Ahmed Al Ali, CEO of Ewec, emphasized the positive impact this initiative will have on the industrial sector. “The launch of this initiative reinforces the utility company’s commitment to shaping a future that will see the energy sector drive industrial growth,” he said. Lower electricity costs are expected to free up capital for companies to invest in research and development, upgrade machinery, and potentially create new employment opportunities.
The reduced rates are not a blanket application for all industrial companies.
Specific criteria will determine eligibility for the lower tariffs. Companies exceeding the 10,000 megawatt hour threshold and demonstrating a commitment to sustainable practices are likely to benefit the most. This could include implementing energy-efficient technologies or adopting renewable energy sources.
The UAE’s move to reduce electricity rates for select industries aligns with a broader trend across the region. Governments in the Gulf Cooperation Council (GCC) are increasingly recognizing the importance of a robust industrial sector in diversifying their economies. By offering competitive energy prices, the UAE is positioning itself as a leader in attracting foreign investment and fostering industrial development.
This initiative is expected to be met with a positive response from the industrial sector. The potential cost savings can significantly improve a company’s profitability and enhance its competitiveness in the global marketplace. The UAE’s commitment to affordable energy is a clear signal of its ambition to become a prominent player in the global industrial landscape.
