Nov 16, 2020

ACWA Power consortium wins Red Sea Project utilities deal

SaudiArabia
Utilities
megaprojects
Dominic Ellis
3 min
It marks a significant step forward for the mega-project, which aims to become the region’s first tourism destination powered solely by renewable energy
It marks a significant step forward for the mega-project, which aims to become the region’s first tourism destination powered solely by renewable ener...

The Red Sea Development Company (TRSDC) has awarded its highest-value contract to date to a consortium led by ACWA Power to design, build, operate and transfer The Red Sea Project’s utilities infrastructure.

The contract, procured as an independent public-private partnership (PPP), will cover the design, construction and operation of the systems providing utilities, accompanied by associated networks and infrastructure. 

The ACWA Power consortium is financed by Saudi and international banks, including the UK’s Standard Chartered Bank and China’s Silk Road Fund, and covers the design, construction and operation of the systems providing utilities, along with associated networks and infrastructure. 

It marks a significant step forward for the mega-project, which aims to become the region’s first tourism destination powered solely by renewable energy. 

“This is a pivotal moment for us as we seek to build a new kind of tourism destination in Saudi Arabia, aligned with Vision 2030. We’re committed to pushing the boundaries of what it means to be sustainable and investing heavily in renewables is helping us to set new global standards in regenerative tourism,” says John Pagano, CEO of TRSDC.

The statement adds that all of the utilities will be delivered under a single agreement, unique for a contract of this kind, which includes the provision of renewable power, potable water, wastewater treatment, solid waste management and district cooling for the 16 hotels, international airport and infrastructure that make up phase one of The Red Sea Project. 

The Red Sea Project is not investing any of its own capital and is instead committing to purchase its utilities from the consortium for the next 25 years, Pagano confirms.

“This contract also signifies a noteworthy step change for us as the consortium brings foreign investment to the project, demonstrating international support and confidence for the vision that is becoming a reality along the Red Sea coast. At the same time, we are delighted to partner with a consortium leader that has its roots in the Kingdom and shares our ambition to accelerate the energy transition locally,” adds Pagano.

Energy will be generated via solar panels and wind turbines to meet an initial demand of 210MW with the ability to expand in line with the development. 

The PPP agreement expects to generate up to 650,000 MWh of 100% renewable energy to supply the destination and other utility systems, whilst emitting zero CO2. The resulting saving in CO2 emissions to the atmosphere is equivalent to nearly half a million tons each year.

Included in the package is the world’s largest battery storage facility of 1000MWh, which will allow the destination to remain completely off-grid and powered by renewables day and night. 

“With the largest battery storage facility in the world in place, we can guarantee that the development is 100 percent powered by renewable energy 24 hours a day, 365 days a year, an accomplishment which has never been achieved on a project of this scale before. 

"This approach requires entirely new utilities infrastructure, and so a PPP contract makes sense as it ensures high quality, affordable utilities for us and a sound return on the investment for our backers,” says Pagano.

The agreement also covers the construction of three seawater reverse osmosis (SWRO) plants, designed to provide clean drinking water, a solid waste management centre and an innovative sewage treatment plant (STP) that is expected to allow waste to be managed in an environmentally friendly way.

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Ofwat
Utilities
water
prices
Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

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