uae electricity tariff

8/14/2019 UAE Electricity Tariff

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Information

Tariffs

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Tariff structures

SMP

Demandcharge

Sales

TUoS

ADWEC operations

Generation

Fuel

DUoS

Generation Transmission Distribution Sales Unit costBST

All sector costs pass through to the distribution

companies. ADWEC charges them for the output of the

generation companies, using the Bulk Supply Tariff

(BST). The BST consists of a demand charge and a

system marginal price (SMP).

TRANSCO charges for transmitting electricity via

Transmission Use of System (TUoS) charges. The

distribution companies incur Distribution Use of System

(DUoS) costs and sales (supply) costs.

The distribution companies recover all the sectors

costs either from consumer tariffs or government

subsidy. The diagram shows how the sectors costs

would feed through to the unit-cost without subsidy.

All charges require approval from the Bureau. As the

independent regulator, the Bureau incentivises efficiency

to control costs and improve services.

Tariff components

=

=

=

=

=

Direct payment to distribution companies.

Allows Government to decide tariffsGovernment subsidyGS

Distribution company charge for meter

reading and billingCost from serving customerSale

Distribution company charge distribution

network activitiesDistribution use of systemDUoS

TRANSCO charge for transmission

network activitiesTransmission use of systemTUoS

ADWEC charge for generation costs to

distribution companiesBulk supply tariffBST

=

=

=

=

=

Direct payment to distribution companies.

Allows Government to decide tariffsGovernment subsidyGS

Distribution company charge for meter

reading and billingCost from serving customerSale

Distribution company charge distribution

network activitiesDistribution use of systemDUoS

TRANSCO charge for transmission

network activitiesTransmission use of systemTUoS

ADWEC charge for generation costs to

distribution companiesBulk supply tariffBST

The table summarises the components that decide the

unit price of the standard electricity tariff. The unit-cost

consists of the first four elements. The final part,

government subsidy, makes up the difference between

the actual unit-cost and the tariff paid by the customer.

The BST has two components:

demand charge a peak-driven charge SMP variable charge that changes with time.

BST demand charge incidence of peak demand

1980

1985

1990

1995

2000

2005

2010

01-Jul 01-Aug 01-Sep Date of peak demand

The BST demand charge applies to each unit of

connected load (level of demand) at the time of three

separate system peaks. This reflects that generation is

installed to meet peak demand.

Expansion of the Abu Dhabi economy means that the

level of these peaks continues to grow.


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BST system marginal price

0

1

2

3

4

5

6

7

8

AM PM AM PM AM PM AM PM AM PM AM PM AM PM AM PM AM PM AM PM AM PM AM PM

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

fils/kWh

The SMPs reflect that electricity is more expensive at

when demand is higher, such as the summer and

between noon and midnight. The graph shows the

profile of SMP charges in 2009. Customers that pay the

SMP have a strong incentive to move demand away

from the times when the SMP is higher to times when it

is cheaper.

Standard tariffs

Standard tariff=GS-Sale+DUoS+TUoS+BST Standard tariff=GS-Sale+DUoS+TUoS+BST

5UAE-national domestic (other areas)

3Farms

15Industrial15Commercial

15Ex-pat domestic

3UAE-national domestic (remote areas)

Tariff (fils/kWh)Customer group

5UAE-national domestic (other areas)

3Farms

15Industrial15Commercial

15Ex-pat domestic

3UAE-national domestic (remote areas)

Tariff (fils/kWh)Customer group

The formula summarises the calculation of the standard

tariff. The tariff is a flat rate it does not vary with time,

season or consumption. It incorporates the subsidy paid

by the Government of Abu Dhabi.

The government varies the subsidy across customer

groups. This determines the standard tariffs (see table).

Non-standard tariffs

Customer with high-voltage distribution connection

Bespoke tariff=Sale+DUoS+TUoS+BST Bespoke tariff=Sale+DUoS+TUoS+BST

Customer connected directly to transmission system

Bespoke tariff=Sale+TUoS+BST Bespoke tariff=Sale+TUoS+BST

The distribution companies licences enable them to

offer special supply terms to large customers those

with consumption over 1 MW. For accurate billing, the

distribution company must make sure such a customer

has time of-day metering.

There is no government subsidy for non-standard tariffs

a customer pays the full economic cost. Despite this,non-standard tariffs can be more economic for some

customers.

Customers connected to the high-voltage distribution

network can avoid a proportion of DUoS charges.

Those connecting with the transmission system avoid all

DUoS charges. Both types of customer will further

reduce BST-related costs if they can manage their

consumption away from the times of peak demand.

Non-standard tariffs require approval from the Bureau.


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Setting non-standard tariffs

Identifying the costs to recover

To reflect costs accurately over the year, a non-

standard tariff seeks to recover the costs incurred by a

customers consumption. The customer then bears the

consequences of actions that raise or reduce their

contribution to sector costs.

The expected annual cost is calculated from a

customers expected total consumption and load-

profile. The BST demand charge, TUoS and, if applicable,

DUoS all reflect a customers share of demand at the

peak. They are priced in AED per kW.

The SMP charges for every unit sold to the customer.The charge varies throughout the year and from AM

to PM.

For customers with non-standard tariffs there are

considerable benefits from reducing demand at the

system peaks. Such action reduces the demand charge

and consumes fewer units at the highest SMPs.

Each customer should have its costs reviewed

periodically. This will make sure the tariff continues to

reflect costs over time.

Longer-term agreements may be considered, with

approval from the Bureau

Structure

Currently, eligible customers may choose their

preferred structure for a non-standard tariff. All tariffs

are estimated on the basis of underlying costs and

ultimately approved by the Bureau. Three options are

available:

time-of-day tariff single-rate averaged tariff BST and network charges tariff

Time-of-day tariff

Applicable tariffs in 2008 (fils/kWh)

Jun-Sep Oct-May

AM 10 10

PM 15 10

A time-of-day tariff has a peak rate, with a lower off-

peak tariff. The rates shown are for a flat-load customer

connected directly to the transmission system.

The higher rate reflects the additional costs of supplying

electricity at peak times. This gives an efficiency

incentive to customers. Moving consumption off peak

will lower the bill for the same volume of electricity.

The sector benefits by avoiding the need to build and

run plants and networks purely to meet the summer

peak.

Single-rate averaged tariff

Year 1:

In the first year, the single-rate average tariff is based on

a forecast of a customers demand and load profile.

From this, calculations are made of the expected BST

costs, transmission costs and, if applicable, primary

DUoS costs. A proportion is added to cover supply

costs (sales).

The per-kWh tariff is derived by dividing the expected

annual cost by the forecast annual demand

Year 2 onwards:

In subsequent years, the tariff can be recalculated. If

such a change is necessary, the recalculation will use the

previous years actual load-profile and the total demand

forecast for the coming year.


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BST and network charges tariff

BST system marginal

price=

Variable

charge

Supply

charge+

DUoS

demand

charge

+

TUoS

demand

charge

+

BST

demand

charge

=Fixed

charge

BST system marginal

price=

Variable

charge

Supply

charge+

DUoS

demand

charge

+

TUoS

demand

charge

+

BST

demand

charge

=Fixed

charge

A customers bill has fixed and variable charges. The

fixed charge recovers, month-by-month, the annualcosts of BST demand and network demand charges. The

variable charge applies to each unit of electricity

consumed by the customer and is charged at the BSTs

corresponding system marginal price. With this tariff,

there is no need to forecast annual consumption and

forecast load profiles.

Process for non-standard connections and tariffs

02 443 9333

02 642 3000

03 762 9949

02 641 4000

[email protected]

[email protected]

[email protected]

Abu DhabiPO Box 32800Director GeneralBureau

Abu DhabiPO Box 219Managing DirectorADDC

Al AinPO Box 1065Managing DirectorAADC

Abu DhabiPO Box 173Managing DirectorTRANSCO

Contact details

02 443 9333

02 642 3000

03 762 9949

02 641 4000

[email protected]

[email protected]

[email protected]

Abu DhabiPO Box 32800Director GeneralBureau

Abu DhabiPO Box 219Managing DirectorADDC

Al AinPO Box 1065Managing DirectorAADC

Abu DhabiPO Box 173Managing DirectorTRANSCO

Contact details

1. Customers seeking a non-standard connection or anon-standard tariff should approach their local

distribution company for a Supply Agreement. Bylicence, only AADC and ADDC sell electricity in

the Emirate.

2. Non-standard connections also require aConnection and Interface Agreement. This is

between the customer and the company with

whom they connect. Normally, this is the

distribution company, but it is TRANSCO for those

connecting directly to the transmission system. The

agreement details ownership and operational

responsibilities, metering arrangements and

compliance with industry codes.

3. All non-standard tariffs are subject to approval bythe Bureau. The Bureau also has powers to

determine any disputes.

uae electricity tariff

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