UAE Law and Practice Contributed by: Brendan Hundt, Dan Feldman, Sam Anastasiou and Saiesh Kamath, King & Spalding LLP
King & Spalding LLP Level 15, Al Sila Tower Abu Dhabi Global Market Square PO Box 130522 Abu Dhabi United Arab Emirates Tel: +971 4377 9985 Email: Bhundt@kslaw.com Web: Kslaw.com
1. Structure and Ownership of the Power Industry 1.1 Law Governing the Structure and Ownership of the Power Industry The UAE power sector is best understood as a fed- eral policy framework implemented through emirate- level utilities and regulators, not as a single liberalised national electricity market. Electricity services are constitutionally reserved to the Federal Government under Article 120 of the UAE Constitution, but in practice each emirate (or the fed- eral utility for the Northern Emirates) operates its own vertically integrated or unbundled utility structure. The Federal Ministry of Energy and Infrastructure sets federal policy and supervises energy-supply security, and a Federal Regulatory Bureau for Electricity and Water under the Ministry co-ordinates cross-border electricity/water trade, promotes competition among generation and desalination companies, and applies government directives across the sector. Federal Decree Law No 17 of 2022 creates an impor- tant federal layer by governing the connection of dis- tributed production units to the distribution network (ie, decentralised/self-generation units feeding into distribution grids) across the UAE, including eco- nomic, free and investment zones, and by defining the competent authority as the Federal Ministry of Energy and Infrastructure or the local authority responsible for regulating electricity production, distribution and supply, as applicable.
Abu Dhabi has the most clearly separated model and the foundational statute is Law No 2 of 1998. The Department of Energy regulates the energy sector (as per Law No 11 of 2018) while Emirates Water and Electricity Company (EWEC), a state-owned enter- prise, is the sole procurer and supplier of water and electricity in the emirate. Power generation and water production are generally delivered by independent water and/or power project companies under the “IWPP model” whereby such companies sign up to power or water purchase agreements with EWEC, while network activities are conducted by regulated transmission and distribution entities (namely, TAQA Transmission and TAQA Distribution, respectively). Dubai is more integrated because the Dubai Electric- ity and Water Authority (DEWA), a listed but major- ity state-owned enterprise established by Decree No 1 of 1992, remains the principal utility for electricity and water services in Dubai. Other key laws include Law No 6 of 2011 (for the single offtaker regime), Law No 19 of 2019 (establishing the Supreme Council of Energy) and Law No 27 of 2021 (conversion of DEWA into a public joint stock company). The Regulatory and Supervision Bureau (RSB), established by Executive Council Resolution No 2 of 2010, governs licensing and standard-setting, while private-sector generation is channelled through specific statutory and procure- ment routes like Law No 6 of 2011 and the Independ- ent Power Producer (IPP) single-buyer model. Sharjah and the Northern Emirates (Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah) remain utili-
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