(MENAFN - Oxford Business Group) Ras Al Khaimah (RAK) is rising to the challenge of meeting the emirate's energy needs, planning to increase electricity generation capacity and diversifying sources of power and fuel.
Securing reliable sources of energy for potential investors is one of the government's greatest obstacles to maintaining current growth levels. With various industries performing impressively in recent years combined with a rapidly growing population, the emirate's need for power generation is only expected to grow.
RAK has long relied on electricity from the grid operated by the United Arab Emirates' (UAE) Federal Electric and Water Authority (FEWA), but is increasingly looking to develop its own generating capacity as the demand placed on the authority's network rises.
Part of the emirate's efforts to overcome the energy shortage includes Ras Al Khaimah Minerals and Metals Investments (RMMI), an arm of the Ras Al Khaimah Investment Authority (RAKIA). While buying into metals mines in Asia and Africa, RMMI is also investing in coal production.
RMMI Managing Director Madhu Koneru said the massive energy demand in RAK and in the rest of the UAE could at least partly be met through coal, along with other alternative energy sources, such as solar power.
"The strategy is to gain a foothold directly at the source of the commodities in resource-rich regions, directly hedging against future infrastructure costs," Koneru told the local press on October 28.
In mid-October, the industrial districts of Al Hama and Al Ghail, where much of the emirate's heavy production facilities are concentrated, received a boost when the Emirates General Petroleum Corporation (Emarat) opened a gas gathering, receiving and distribution centre.
The new station, linked to the Emarat gas pipelines network that runs throughout the Northern Emirates, allows gas produced in RAK to be pumped into the network and delivered to local customers.
The RAK government has also announced plans for the construction of four power stations over the next three years, with a combined capacity of 740MW and a price tag of at least 240m, though the cost for one of the plants has yet to be determined.
Announcing the decision on July 15, Khater Massaad, an advisor to Crown Prince and Deputy Ruler of RAK Sheikh Saqr bin Mohammed Al Qasimi, said the plants would help meet the emirate's short-term energy needs.
But until this new generation capacity starts to come on line, power shortages will continue to hinder RAK's economy as well as restrict expansion.
In mid-October, officials at RAK's new Port Al Jeer, which will handle the import and export of livestock and food materials, said they were having to rely on generators to provide power to the port, only days before it was scheduled to start operations.
Mohammad Abdullah Al Mehrizi, general manager for RAK's Customs and Ports Department, said that while all the electricity infrastructure was in place, no power transmissions were being made at the time.
"The port is a very essential component of development and foreign trade," he told the local press on October 16. "We are resorting to the use of generators as the last resort; we are desperate to open."
Large scale projects in the tourism construction materials industries, intended to broaden the base of the economy, could also be hampered by power shortages, while the necessity of having to provide electricity privately, through the use of generators, would be a financial drain.
The tourism industry is projected to become one of RAK's largest consumers of electricity in the years to come. According to estimates by the emirate's tourism authority, 2.5m annual overseas visitors - roughly ten times the local population - will visit RAK by 2012. With plans to triple the sector's room capacity from 1800 to 5500, demand for power is expected to surge.
Some companies are moving to guarantee their own energy supplies. In late June, the Ras Al Khaimah Cement Company announced it was carrying out a feasibility study into switching from gas to coal as the main fuel source for its facilities, following the lead of other firms in the sector.