The UAE power sector is best understood as a federal 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 federal 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 important federal layer by governing the connection of distributed production units to the distribution network (ie, decentralised/self-generation units feeding into distribution grids) across the UAE, including economic, 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 enterprise, 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 Electricity and Water Authority (DEWA), a listed but majority 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 procurement routes like Law No 6 of 2011 and the Independent Power Producer (IPP) single-buyer model.

Sharjah and the Northern Emirates (Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah) remain utility-led. Sharjah Electricity, Water and Gas Authority (SEWA), a state-owned enterprise established by Emiri Decree No 1 of 1995, serves Sharjah. Etihad Water and Electricity (EtihadWE), a state-owned enterprise established by Federal Decree Law No 31 of 2020, and the Federal Regulatory Bureau, set up under the Federal Ministry of Energy and Infrastructure, are responsible for the Northern Emirates.

This allocation of responsibilities remains important in practice because a project that is viable in one emirate may have a different procurement route, regulator, connection approval and tariff treatment in another. For this reason, when considering a development opportunity in the UAE, developers should map the relevant emirate utility, the competent authority, the grid owner and any federal law that applies to the power solution to be deployed, particularly where the project involves distributed renewable generation.

The Federal Ministry of Energy and Infrastructure is the principal federal policy body for the energy sector, while the Federal Regulatory Bureau for Electricity and Water sits under the Ministry and has functions relating to electricity and water trade and sector co-ordination.

As noted in 1.1 Law Governing the Structure and Ownership of the Power Industry:

• in Abu Dhabi, the Department of Energy is the principal sector regulator, with statutory functions covering policy, licensing, monitoring, technical standards and tariff-related proposals. EWEC is the sole procurer and supplier of water and electricity in Abu Dhabi and carries out planning, forecasting, purchasing and system dispatch functions. TAQA-related network entities, including TAQA Transmission and TAQA Distribution, are central to the regulated network segment. TAQA, through its generation business, assumes a 60% “local shareholder” ownership interest on thermal IPPs and independent water producer (IWP) projects, while Masdar, a local entity owned by TAQA, Mubadala and ADNOC, assumes a 60% ownership interest on renewable energy IPPs and, more recently, BESS-related projects;
• in Dubai, DEWA is Dubai’s exclusive power and water provider and remains the principal electricity entity for generation, network operation and end-user supply, with private-sector generation structured through Dubai’s specific IPP and licensing framework;
• EtihadWE is the sole procurer responsible for electricity and water services in the Northern Emirates; and
• SEWA is the principal utility for water, electricity and piped gas in Sharjah.

General Position

Foreign investors have a long history of participating in power projects in the UAE, particularly in utility-scale generation, but participation is normally channelled through the relevant emirate procurement, licensing and utility-connection framework rather than through an open market right to develop power infrastructure.

The UAE has historically operated a “negative list” of sectors closed to majority foreign ownership under the Foreign Direct Investment Law (Federal Decree Law No 19 of 2018), and “water and electricity services” have consistently been treated as a restricted/strategic sector on that list.

In Abu Dhabi, foreign sponsors most commonly participate through project companies, which are 40% owned by such foreign sponsors with, as noted above, the balance of the ownership held by TAQA or Masdar, depending upon the nature of the project and technology. These project companies are granted generation or production (as the case may be) licences under the Department of Energy framework.

In Dubai, foreign participation in generation is typically structured through DEWA-led IPP procurement and the Dubai private-sector participation regime for electricity and water production. UAE company law reforms permit full foreign ownership in many mainland business activities, but strategic-sector, licensing and project-specific approval requirements are most appropriately reviewed for any power-sector investment on a case-by-case basis.

Protections and Incentives

Foreign investors in power projects benefit from the same general guarantees that apply to all market participants including protection of private property, freedom to repatriate profits and capital, access to the courts, the UAE’s extensive bilateral investment treaty (BIT) network, and the availability of international arbitration with reliable award enforcement.

Foreign investors may agree to arbitration in project and finance documents, and UAE Federal Law No 6 of 2018 governs arbitrations seated in the UAE and certain international commercial arbitrations where the parties choose that law. The UAE is also a signatory to the New York Convention, which facilitates enforcement of arbitral awards. When applicable, investors can also consider protections under investor-state dispute settlement systems through UAE’s BITs and UAE’s accession to the ICSID regime.

For utility-scale procured projects, investors usually focus on including key protections at the contractual level in the relevant parts of the Power Purchase Agreement (PPA) or offtake arrangements (generally entered into with sole procurers like EWEC and DEWA) such as compensation for change-in-law treatment, termination in various situations, lender step-in rights or, in some cases, government-backed credit support to projects. It is also worth noting that the project model in the UAE jurisdictions is well-established (in the case of Abu Dhabi, for example, the fundamentals of the model have been in place for almost 30 years) and the underlying risk allocation is considered “bankable” by both local and international lenders.

The principal commercial attraction is the UAE’s continuing requirement for capital, technology and delivery capability to implement clean-energy, nuclear, grid and storage objectives under national and emirate-level energy strategies. Key incentives include:

• free zones, which offer 100% foreign ownership plus a 0% corporate tax rate on “qualifying income” for a Qualifying Free Zone Person (against the 9% mainland rate above UAE Dirhams (AED) 375,000) and faster set-up;
• residency incentives, including long-term “golden visas”, relaxed visa rules and land-ownership rights to attract skilled investors; and
• treaty and enforcement protections set out above.

Restrictions and Consents

There are no expressly stated minimum requirements that prospective purchasers of assets or businesses in the power sector must satisfy, but in practice, sales of power assets, project-company shares and other regulated businesses are governed by a combination of sector licences (which require regulatory consent to transfer), transfer restrictions in project documents and land arrangements, and competition law.

As in other jurisdictions, project and finance documents typically play a key role in how assets and stakes in project companies may be dealt with, and a review of the contractual mechanisms in these documents should be the first port of call for an entity seeking to acquire power assets or a stake in an electricity project company.

Transactions affecting licensed power-sector entities or activities are also subject to regulatory scrutiny. In Abu Dhabi, they are assessed against the Department of Energy’s licensing and compliance framework and may require approval, non-objection or licence updates depending on the exact nature of the entity, asset and licence terms. Similarly, in Dubai, transfers of stake in licensed electricity or water production projects are assessed under the applicable DEWA and RSB framework. Where the transaction involves a public utility asset, the consent analysis is more intensive to ensure that any concerns about operational continuity, grid security, licence compliance and public-service obligations are appropriately addressed.

Foreign entities looking to acquire power industry assets or businesses must also respect the ownership ceiling applicable to the utilities/strategic sector, subject to any free-zone exceptions. Foreign-ownership exemptions can be granted, but typically come with conditions such as a minimum share-capital contribution, technology transfer and requirements to provide employment/training opportunities for UAE nationals.

Competition Law

Federal Decree Law No 36 of 2023 regulates restrictive agreements and the abuse of dominance and economic concentrations. The law contains exclusions for certain government-owned entities under Article 4, which may apply to core statutory utility functions but does not automatically exempt all power-sector transactions. Cabinet Resolution No 3 of 2025 introduced implementing ratios for the new competition regime, including a 40% dominant-position threshold and economic-concentration notification thresholds based on AED300 million annual UAE sales in the relevant market or a 40% share of total transactions in the relevant market. Power-sector acquisitions, sponsor consolidations and joint ventures should therefore be screened early for competition-law applicability, threshold analysis, possible exclusions and any requirement to notify the Federal Ministry of Economy and Tourism or relevant authority.

Practical Process

A transaction may require sector-regulator approval or non-objection, offtaker or utility consent, lender consent, land authority approvals, corporate-registration updates and a competition filing if the statutory thresholds are met and no exclusion applies. For licensed activities, the purchaser’s technical, financial and managerial capability may be checked against the relevant licence and regulator requirements. For Abu Dhabi self-supply and development licences, Department of Energy materials expressly refer to legal, managerial, financial and technical competencies as part of the assessment.

The timetable for a sale or change of control could therefore be built around consent sequencing. Competition analysis, regulator engagement, lender consent and offtaker approvals need to begin early in the process because a condition in one workstream may affect the deliverability of another, particularly where a transaction changes the technical operator, financing structure or ultimate shareholder profile.

The UAE does not have a single national electricity system operator equivalent to fully integrated national power markets, but emirate-level authorities operate according to federal policies and other dedicated bodies have a role in facilitating cross-border electricity and water trade. Federal policy is set through Cabinet-level strategies and the Federal Ministry of Energy and Infrastructure, while the Federal Regulatory Bureau for Electricity and Water co-ordinates cross-border electricity/water trade both between the emirates and other Gulf Cooperation Council (GCC) states.

To support inter-emirate and regional system integration, the Emirates National Grid and the GCC Interconnection Authority provide links between the UAE’s emirate grids and neighbouring GCC states to improve reserve sharing and system resilience and to facilitate commercial transfers between power authorities. The GCC Interconnection Authority also provides a framework for scheduled energy transfers, operational reserves and settlement of unscheduled exchanges.

At the emirate level, Abu Dhabi’s Department of Energy is the central regulator and strategic planning body for the energy sector. Its statutory responsibilities include proposing strategic and executive plans, regulating the sector through policies, codes and standards, licensing sector participants, which includes licensing the procurement, generation/production, transmission and distribution functions within the sector, proposing tariffs and monitoring compliance. EWEC performs the key practical supply-adequacy function because it plans, forecasts, purchases and dispatches bulk water and electricity supply for distribution companies and relevant authorities. This structure makes Abu Dhabi the jurisdiction in which planning, procurement and economic regulation are most visibly separated between regulator, single buyer and network operators.

In Dubai, DEWA and the Dubai Supreme Council of Energy perform the equivalent practical planning role. DEWA plans, owns and operates the integrated electricity utility system, while Dubai’s statutory framework allows private-sector participation in electricity and water production through specific regulated routes.

As noted above, supply adequacy and network development are managed and planned through the relevant emirate utility, regulator and procurement structure.

This also affects how capacity risk is allocated. In the UAE, new capacity is usually developed through forward utility planning, procurement and regulated network development, rather than by individual market participants in response to wholesale power price signals. That makes early alignment with the relevant utility’s demand forecasts and grid plans central to project strategy.

Additional demand-side measures are becoming more important to planning. Abu Dhabi’s Demand Side Management and Energy Rationalization Strategy 2030 targets a 22% reduction in electricity consumption and a 32% reduction in water consumption by 2030 against a 2013 baseline, and the UAE National Water and Energy Demand Management Programme targets a 40% reduction in energy demand by 2050. These programmes do not replace supply-side procurement, but they increasingly influence load forecasts, network investment and the treatment of large users.

The most important recent federal development is Federal Decree Law No 11 of 2024 on the Reduction of Climate Change Effects, which was issued in 2024 and became effective in 2025. The law applies to all emitting entities in the UAE, including those based in free zones, and requires them to contribute to reducing emissions in order to achieve climate neutrality through measures such as energy efficiency, clean energy, carbon capture, carbon offsetting and integrated waste management. It is particularly relevant to power-sector participants because generation assets, grid infrastructure and large industrial emitters are now required to measure the emissions from their operations and may be subject to further obligations to comply with the UAE’s net-zero policies as the implementing regulations and further legislation are developed. As a general principle, the IPP model provides that any adverse cost or schedule consequences of changes in law after the date on which the tariffs are fixed is borne by the public sector (typically in the form of the procurer or offtaker), rather than the project company.

A second important development is the continued implementation of Federal Decree Law No 17 of 2022 and Cabinet Resolution No 103 of 2022 on distributed renewable energy connections and penalties. These instruments established a national framework for connecting distributed renewable energy production units to distribution networks and impose administrative penalties for non-compliance, including violations of connection requirements, exceeding authorised export levels and conduct affecting network safety and efficiency. The updated competition framework under Federal Decree Law No 36 of 2023, supplemented by Cabinet Resolution No 3 of 2025, is also relevant to power-sector acquisitions and joint ventures because it establishes economic-concentration notification thresholds based on annual sales in the UAE relevant market (AED300 million) or market share (40%).

The UAE continues to announce policies and projects aimed at diversifying electricity supply, increasing clean energy and improving grid resilience. The updated UAE Federal Energy Strategy 2050 targets a tripling of renewable-energy contribution to the grid by 2030, a 30% share of installed clean-energy capacity in the total energy mix and a 32% clean-energy generation contribution by 2030. Individual emirates also have their own clean-energy strategies.

Several landmark projects in several of the emirates are helping to achieve this goal. Abu Dhabi’s round-the-clock project – a large-scale solar photovoltaic (PV) and battery energy storage project – is particularly significant because it combines 5.2 GW of solar PV capacity with 19 GWh of battery storage, making it the first asset of its kind to provide a steady baseload of 1 GW of clean power 24 hours per day. The round-the-clock project reflects a mindset shift from viewing battery energy storage systems (BESS) as a peripheral technology to treating them as essential procurement to support grid reliability. EWEC and Masdar have also announced a strategic framework (in May 2026) to accelerate more than 30 GW of solar PV capacity and over 8 GW of battery storage in EWEC’s pipeline – EWEC expects solar PV assets that it is procuring to exceed 30 GW by 2035 – in support of Abu Dhabi’s own target to meet 60% of its total energy demand from renewable and clean sources by 2035.

Dubai continues to expand its world-leading Mohammed bin Rashid Al Maktoum Solar Park and to pursue its clean-energy strategy through DEWA-led procurement and distributed solar initiatives. These initiatives are cornerstones of Dubai’s Clean Energy Strategy 2050, which targets 36% of its energy demand being supplied from clean sources by 2030 (recently revised upward from 25%), increasing to 100% by 2050. The Mohammed bin Rashid Al Maktoum Solar Park is expected to exceed 8,000 MW capacity by 2030 and represents an investment of approximately AED50 billion.

These clean-energy policies are driving the procurement of new renewable and BESS assets, project design, grid reinforcement, storage requirements, decarbonisation expectations and the way large electricity users present their demand to utilities.

The UAE power sector is distinctive because national energy policy is ambitious, but implementation remains highly emirate-specific. Abu Dhabi and Dubai have developed formal utility-scale procurement models for IPP and renewable projects, while Sharjah and the Northern Emirates remain more integrated and utility-led, with limited “IPP-style” exceptions. The UAE also combines large-scale gas-fired generation with rapid deployment of solar and battery storage, which makes system planning more complex but also gives utilities multiple tools to use to pursue decarbonisation initiatives and improve reliability. This system, while complex, balances core energy policy goals: procuring energy that is secure, affordable and, increasingly, low-carbon.

The inclusion of nuclear power in the UAE is distinctive – the UAE was the first Arab nation in the world to build and operate a commercial nuclear power plant. The Barakah Nuclear Energy Plant in Abu Dhabi’s Al Dhafra region comprises four 1.4 GW reactors, totalling 5.6 GW, and is capable of producing around 40 TWh of electricity annually. When all four units came online, Barakah was reported to provide approximately 25% of the UAE’s electricity needs, though the actual generation share in 2024 may have been 20% as overall electricity demand continued to grow.

A further distinctive feature is the development of clean-energy attribute products alongside physical electricity procurement. Abu Dhabi’s Clean Energy Certificates scheme allows renewable and nuclear electricity attributes to be tracked, issued and traded through the International Renewable Energy Certificates (I-REC) framework, with the Department of Energy acting as issuer and EWEC acting as the single registrant for clean electricity injected into the grid from licensed generation entities. This is important for corporate customers because it provides a recognised route to claim low-carbon electricity use without creating a right to buy electricity directly from a generator.

A feature that distinguishes the UAE from most power markets is that electricity and water are often procured, planned and dispatched together. The single-buyer utilities (EWEC in Abu Dhabi, DEWA in Dubai) are water-and-electricity entities and generation is historically delivered through the combined Independent Water and Power Producer (IWPP) projects model. This tight coupling means decarbonisation targets extend to “nearly emissions-free water production by 2030”.

A further distinctive feature of Abu Dhabi’s model is the speed with which the sector can adjust procurement to meet strategic demand growth. EWEC’s central role in demand forecasting, capacity planning, procurement and system dispatch allows Abu Dhabi to pursue large-scale clean energy procurement while also securing dispatchable capacity where required for reliability. This has become important in the context of AI and digital infrastructure demand. For example, the 1 GW Al Dhafra Gas Turbine Power Plant is being developed at an accelerated pace under a 24-year PPA with EWEC to supply power to data-centre projects and support the UAE National Strategy for Artificial Intelligence 2031. Separately, EWEC’s Al Nouf IPP is planned as a carbon-capture-ready CCGT project of up to 3.3 GW, providing transitional capacity and system flexibility while renewable and clean-energy capacity is integrated into the grid. These examples demonstrate the flexibility of Abu Dhabi’s single-buyer model to adapt to technology choice and procurement structure in order to preserve security of supply while continuing the longer-term transition to a lower-carbon power system.

The UAE does not have a liberalised wholesale electricity market with merchant trading, nodal pricing or retail competition. Utility-scale generators normally sell to a government-owned or government-related offtaker under long-term power purchase or energy purchase arrangements, rather than selling directly into a spot market. To illustrate, in Abu Dhabi, EWEC will purchase capacity and/or energy for a tariff typically set following a competitive tender process. This is akin to a purchase of energy on wholesale terms. Subject to the below regarding industrial consumers, the energy is then typically distributed to end-users by TAQA Distribution for a pre-set, published tariff, with the price difference retained within the Abu Dhabi sector.

Consumers with large electricity demands such as data centres and industrial consumers (eg, ADNOC) secure their power supplies through long-term PPAs from single offtakers like EWEC and DEWA rather than through direct access to a wholesale generation market.

For generators, the commercial focus is on the tariff or payment structure under the power purchase agreement (which is typically set as part of a competitive tendering process), the indexation and change-in-law regime, availability or performance deductions, dispatch risk and the treatment of curtailment. For customers, the focus is on the relevant utility tariff, connection capacity and any special sustainability or reliability requirements. Pricing is therefore primarily a product of these contractually agreed tariffs rather than day-ahead pricing or real-time market clearing.

Imports and exports are permitted in principle through interconnection arrangements, but they are not a central feature of ordinary commercial electricity supply to UAE end-users. The UAE is connected internally through the Emirates National Grid, which links the principal UAE electricity authorities, and regionally through the GCC Interconnection Authority, which connects GCC member-state grids and facilitates scheduled energy transfers, reserve sharing and settlement of unscheduled exchanges.

Although imports and exports are technically possible through the UAE’s interconnected grids, inter-emirate electricity trading is not generally permitted and emirate-level regimes remain structured around their own utility or single-buyer models. For example, power and water projects in Dubai may not sell or supply electricity or water to any entity inside or outside Dubai other than DEWA. This means that a Dubai IPP cannot ordinarily sell its output directly to EWEC or to an emirate. In Abu Dhabi, EWEC’s role as sole procurer and supplier, together with the Department of Energy licensing framework, means that any export structure would need to be assessed against the project licence, PPA, grid connection arrangements and approvals from the relevant utility and regulator. Inter-emirate exports should therefore be viewed as bespoke, utility- or government-led arrangements and remain an exception.

Cross-border flows are most relevant to system security, emergency support, regional optimisation and future GCC electricity-market development. Trade takes place under the GCC Interconnection Authority Power Exchange and Trade Agreement and the GCC Electricity Market Platform, through which the GCC Interconnection Authority organises tenders for interconnection transmission capacity, supports bilateral contracts, and settles both scheduled and unscheduled energy exchanges.

As there is no regional spot price or nodal market, pricing is bilateral and contract-based. The GCC Interconnection Authority operates a bilateral trading system giving each country visibility over available capacity in other member states and allowing them to place bids on yearly, monthly or daily options, with the platform supporting bilateral contracts and settlement.

For a private project, an interconnection should not be treated as equivalent to an export route. The GCC framework supports electricity exchange and regional security of supply, but a UAE project company will still need to comply with its domestic licence, grid connection arrangements, offtake restrictions and any approvals required by the relevant utility or government authority. Trading through interconnection remains, in practice, under government purview.

The UAE’s national electricity supply mix has historically been dominated by natural gas-fired generation, which continues to provide the majority of the UAE’s electricity. The traditional sources of gas feedstock are from local ADNOC wells and Qatar via the Dolphin gas pipeline.

Despite the focus on increasing renewables capacity in recent years, the most recent International Energy Agency data available estimated that natural gas generation accounted for approximately 71% of the UAE’s electricity supply. This reflects the continuing role of dispatchable gas-fired generation in meeting peak demand while large-scale BESS deployment remains nascent and solar generation remains intermittent.

The electricity mix is, however, diversifying quickly. Nuclear electricity from the Barakah plant now accounts for a significant portion of the UAE’s electricity demand (20% as of 2024), with renewables, predominantly solar PV generation, making up the remaining 8–9%.

Renewables are expected to make up an increasingly large portion of the UAE’s energy mix as major solar projects and BESS facilities continue to be developed. However, the UAE market is also seeing a “comeback” of thermal power (which is expected to continue in the short to medium term) while these renewables projects are being deployed to meet the large, and immediate, demand for reliable and dispatchable energy from AI and other digital infrastructure.

In the UAE market issues are addressed through the federal competition regime, aimed at prohibiting the abuse of a dominant position. However, this does not apply to the electricity market as the regime expressly carves out the state-owned utilities that dominate UAE power.

Market concentration in core electricity supply is largely a consequence of statutory and licensed utility functions, single-buyer procurement and emirate-specific public utility mandates.

General UAE competition law may nevertheless apply to mergers, acquisitions and joint ventures involving power-sector entities unless a statutory exclusion applies. Federal Decree Law No 36 of 2023 regulates anti-competitive agreements, abuse of dominant position and economic concentrations. Cabinet Resolution No 3 of 2025 sets relevant ratios, including a 40% dominant-position threshold and economic-concentration notification thresholds based on AED300 million annual UAE sales in the relevant market or a 40% share of total relevant-market transactions. Cabinet Resolution No 59 of 2026 (in force from 30 July 2026) issued the executive regulations in respect of Federal Decree Law No 36 of 2023, which includes the procedural rules for economic concentration applications, filing responsibility and formal examinations, among other provisions on economic tests. In practice, competition analysis may be more likely in sponsor acquisitions, operation and maintenance services, energy-services companies, equipment supply, portfolio consolidations and joint ventures than in core statutory utility functions.

Oversight of competition compliance lies with the Competition Department of the Federal Ministry of Economy and Tourism and extensive co-ordination is envisaged with federal authorities who regulate economic sectors.

The regime is enforced through mandatory pre-closing merger review and through investigation of abusive conduct, backed by a tiered penalty framework under the Competition Law, including fines of up to 10% of relevant annual sales. In practice, the state-ownership exclusion in Article 4 means the concentrated, state-owned structure of UAE electricity supply could sit largely outside these limits.

The UAE power sector is not a competitive wholesale market but a single-buyer model dominated by state utilities. Therefore, sector-specific market surveillance of the kind found in liberalised electricity markets does not exist. Instead, anti-competitive behaviour across the economy, including in the power sector to the extent private undertakings are involved, is monitored by the general federal competition authority.

Please also see responses to 2.1 The Wholesale Electricity Market and 2.4 Market Concentration Limits.

The construction and operation of generation facilities is governed by a combination of emirate-specific and federal laws relating to electricity, climate transition, environmental protection, land, construction permitting requirements and project documents.

In Abu Dhabi, the key public-law sources include Law No 11 of 2018 establishing the Department of Energy and the Abu Dhabi water and electricity sector framework, under which the Department regulates activities including electricity generation, storage, transmission, distribution, supply, sale and purchase.

In Dubai, laws of relevance may include the DEWA framework, the Dubai Supreme Council of Energy framework, Law No 6 of 2011 on private-sector participation in electricity and water production, and Executive Council Resolution No 46 of 2014 for solar generators connected to the distribution system.

Federal Law No 24 of 1999 Concerning the Protection and Development of the Environment is also relevant because projects and establishments requiring a licence typically need to conduct an environmental impact assessment (EIA) before commencing activities. Environmental permitting is also administered at emirate level. A project may not commence activity before obtaining the relevant environmental approval. In practice, this workstream is handled by the competent environmental authority in the relevant emirate (for example, Environment Agency – Abu Dhabi in Abu Dhabi, Dubai Municipality in Dubai, Environment and Protected Areas Authority in Sharjah, Environment Protection and Development Authority in Ras Al Khaimah, Environmental Protection Authority in Fujairah, Department of Municipality and Planning in Ajman and Umm Al Quwain Municipality in Umm Al Quwain) and typically includes environmental assessment, permitting, inspection and operational compliance requirements. These environmental approvals run in parallel with sector licensing, land, grid connection, construction and civil defence approvals.

Nuclear power plants are governed by a distinct federal framework including Federal Decree Law No 6 of 2009 Concerning the Peaceful Uses of Nuclear Energy, which established the Federal Authority for Nuclear Regulation (FANR). The law prohibits conducting any “Regulated Activity” (including site selection, site preparation, construction, commissioning, operation, closure and decommissioning of a nuclear facility) without a FANR licence. A construction licence does not authorise operation, and the operator must apply separately for an operating licence describing the final design, safety analysis, operating organisation, training and emergency plans.

For utility-scale projects, the approval process is usually initiated through procurement by the relevant utility or single buyer.

In Abu Dhabi, EWEC typically procures capacity through competitive processes, the selected bidder forms or uses a project company, and the project then proceeds through offtake documentation, Department of Energy licensing, land arrangements, environmental approvals, construction permits, grid connection and commissioning.

In Dubai, DEWA-led procurement performs a similar function for IPP projects under Dubai’s private-sector participation framework. The approval package commonly includes prequalification, bid award, project-company establishment, PPA or equivalent offtake documentation, licence applications, land lease or usufruct, EIA where required, construction and civil-defence permits, grid connection, testing and commercial-operation certification.

Public hearings are not a general requirement for utility-scale power projects. Major projects are developed through tenders and input may be sought, in practice, from targeted audiences like institutional stakeholders, industry and financiers, among others. Social, environmental and planning impacts are addressed primarily through the competent authorities’ permitting and assessment processes, rather than through a general public-hearing process.

An EIA and environmental permit are required under Federal Law No 24 of 1999, and are administered in Abu Dhabi by the Environment Agency – Abu Dhabi and by the Dubai Municipality in Dubai. An Operational Environmental Management Plan/permit governs operations and must be renewed periodically.

Details related to approvals for nuclear power plants are provided in our response to 3.1 Constructing and Operating Generation Facilities.

As the authorisations required are distributed across various government authorities, there does not appear to be a single regulator with authority to grant all approvals required in relation to the construction and operation of power projects.

From a project-management perspective, it is important to note that these approvals may be interdependent. A grid connection condition might affect plant design, an environmental approval may affect construction methodology, a land condition may affect route access, and a lender requirement may affect the timing of notice to proceed. A credible development timetable needs to account for long-lead approvals, not just construction mobilisation.

Typical terms and conditions include:

• for a sector generation licence, a prohibition on selling output to anyone but the sole procurer, compliance with the transmission/grid code, insurance, if any, and performance under the PPA and connection agreement, among others;
• for environmental permits, adherence to approved EIA and design measures, emission limits, ongoing monitoring and reporting, waste and hazardous material handling, among others; greenhouse gas measurement and reduction obligations may now also apply under Federal Decree Law No 11 of 2024; and
• for a nuclear licence, each licence determines conditions, measures and requirements, which may include authorised activities, radiation protection, security, safeguards and non-proliferation, environmental monitoring and emergency preparedness, among others.

Amendments normally require an application to the authority, utility or counterparty that imposed the condition. In a project-financed plant, any proposed relaxation affecting output, tariff, availability, environmental compliance, security or termination rights may also affect offtake documents, financing documents and applicable regulatory approvals.

Post-approval changes should be assessed across all relevant approval and project-document workstreams.  A change in plant configuration, fuel arrangements, emissions profile, grid connection design, metering arrangements, export capacity or operating regime may require amendments or confirmations under the sector licence, environmental approval, grid connection agreement, PPA, construction approvals or financing documents.

A private generation proponent has no independent power of eminent domain, condemnation or expropriation. The UAE Constitution allows for the power to expropriate but it may be exercised only by the state for public benefit. Since the UAE power sector is state-owned and generation serves a public benefit, there is an argument to be made that the relevant government/utility can invoke expropriation to acquire land to grant to a project company through the relevant utility.

The project developer may obtain surface rights from the state/utility by grant or long-term lease, and the “compensation” is the consideration (in the form of rent/lease terms) agreed with, or set by, the state/utility. For example, in Dubai, DEWA may grant leases or other proprietary rights over its land to project companies for up to 99 years. In Abu Dhabi, project companies are similarly provided with the site by the state within the offtake structure. The land is typically allocated as part of the government-directed procurement rather than bought on the open market.

The terms (including any rent, or a nominal/peppercorn arrangement) are a matter of the project agreements between the utility and the project company, negotiated within the PPA framework.

There appears to be no single UAE-wide statutory decommissioning funding regime for all generation facilities, although it is worth noting that a number of the UAE’s early plants developed under the I(W)PP model, which was instituted at the turn of the century in the case of Abu Dhabi, are now reaching the end of their useful lives and this is becoming an increasingly important and relevant topic.

Unlike nuclear plants (see below), conventional/renewable power plants have no formal decommissioning regime at law, although under the power purchase agreements applicable to such plants, consistent with the “BOO” model that underpins IPPs in the UAE, the responsibility for decommissioning and dismantling plants rests with the project companies. Environmental site-restoration and waste obligations under Federal Law No 24 of 1999 will apply.

For nuclear power plants, decommissioning is a licensed “Regulated Activity” under Federal Decree Law No 6 of 2009, requiring a FANR licence, and is governed by FANR Regulation on the Decommissioning of Facilities (FANR-REG-21), which addresses planning from siting/design through to licence termination, financing, emergency arrangements and radioactive-waste management. FANR-REG-21 also requires the operating licence applicant to give “reasonable assurance” that funds will be available and met through contributions to the Decommissioning Trust Fund (a body to be established by a Cabinet Resolution). Funding is accumulated progressively over the facility’s operating life via annual contributions.

Public transmission infrastructure in the UAE is generally owned and controlled by the relevant state-owned or government-backed network utilities, rather than by private-sector developers. Private-sector participation is usually limited to EPC contracting, equipment supply, engineering, testing, commissioning and, in some cases, operation and maintenance support, and does not normally extend to ownership of the public transmission network. In Abu Dhabi, transmission infrastructure is held through the incumbent transmission network entity, TAQA Transmission; in Dubai, DEWA owns and operates the transmission system; and similar utility-led models apply in Sharjah and the Northern Emirates.

There is no single, unified federal statute governing the ownership, construction and operation of transmission lines and associated facilities in the UAE. The framework is split between federal rules and emirate-level regimes, and transmission and distribution activities generally require licences from the relevant authority. At the federal level, Federal Decree Law No 31 of 2020 regarding Union Water and Electricity Company is relevant to transmission and distribution in the Northern Emirates, while Federal Decree Law No 17 of 2022 regulates connection of distributed renewable energy production units to the grid and defines distribution networks to include lines, cables, substations and similar electrical infrastructure.

In Abu Dhabi, Law No 2 of 1998 concerning the regulation of the water and electricity sector, as amended, was the foundation of Abu Dhabi’s unbundled single-buyer model and originally assigned responsibility for transmission and distribution to separate entities (ADDC and AADC as distribution companies). These entities have since been consolidated under TAQA Distribution. Law No 11 of 2018 gives the Department of Energy its mandate to regulate transmission and distribution activities through licences, codes and technical instruments.

DEWA manages electricity transmission and distribution in Dubai and, as mentioned above, the Dubai Supreme Council of Energy is responsible for regulating that activity while the RSB supervises the actual service providers, facilities and properties. 

In Sharjah, SEWA is responsible for electricity generation, transmission and distribution, and determines electricity prices and connection fees subject to approval by the Ruler of Sharjah. 

In the Northern Emirates, EtihadWE is responsible for electricity generation, transmission and distribution under the federal framework established by Federal Decree Law No 31 of 2020.

Energy storage is not yet governed by a single UAE-wide storage statute, but Abu Dhabi has the clearest express framework. In 2026, the Department of Energy issued a policy on solar PV and BESS for self-supply, which enables the development of PV-plus-BESS, subject to licensing, safety and technical requirements. The Abu Dhabi Electricity Transmission Code also treats battery storage as transmission-connected plant and sets technical requirements for matters such as reactive power capability, frequency response and fault ride-through.

Environmental reviews are required where a transmission line, substation, storage facility or other associated infrastructure may cause environmental harm under Federal Law No 24 of 1999. Environmental protection, pollution control and rational use of natural resources must be considered when projects are planned and executed, and EIA must be undertaken for projects and establishments seeking permits. 

Regulatory Process

There is no single UAE-wide permitting route for transmission lines. In practice, transmission assets are usually developed by, or in close co-ordination with, the incumbent network utility rather than by an unregulated private developer. Projects would be progressed by that emirate’s relevant regulator and the responsible entity (eg, DEWA or TAQA).

Public Participation, Hearings and Environmental Review

UAE transmission-line approvals are not generally structured around mandatory public hearings in the way seen in some other jurisdictions. There is no statutory requirement for public hearings for transmission lines, and public consultation is not a defined requirement for establishing new transmission assets.

As noted in 4.1 Constructing and Operating Transmission Lines and Associated Facilities, environmental reviews are required under Federal Law No 24 of 1999.

The relevant electricity regulators or utilities can grant sector authorisations within their statutory remit, but environmental clearance and construction-related permits are granted separately by the competent environmental and municipal authorities.

Transmission approvals commonly impose conditions on route alignment, safety clearances, environmental mitigation, electromagnetic-field controls, construction methods, outage planning, interfaces with existing utilities, emergency response, inspection, maintenance, reporting and commissioning. There are also typically requirements for clear grid-connection milestones, energisation tests and interface protocols.

There is no independent power of eminent domain for developers of transmission lines  (who are generally private contractors for the public sector entities responsible for transmission) in the UAE. As noted above, compulsory acquisition is permitted by the constitution, but must be grounded in public benefit and fair compensation.

For transmission projects, surface rights are usually obtained through government ownership or allocation of utility corridors, leases or rights granted over government land, municipal road or infrastructure reservations, negotiated land rights, or statutory access powers available to the relevant licensed utility.

UAE practice treats fair compensation as covering the value of the property taken and, where applicable, loss of profit and other damage resulting from the expropriation. For example, in Dubai, the Acquisition Committee assesses compensation, and the owner may object to the amount, although an objection does not necessarily suspend implementation of the acquisition decision.

For lesser interference, such as access, works and maintenance rights, the usual position is for the relevant utility or authority to rely on statutory streetworks powers, land-use approvals, easements, leases, musataha (in rem property right) or negotiated access arrangements, with reinstatement and compensation for damage where the applicable law, licence or access agreement so requires.

Transmission entities are effective monopolies within each relevant service territory. These exclusive or effectively exclusive functions arise from legislation, licences, government ownership and the physical nature of network infrastructure. Competitors are not permitted to build parallel transmission systems and offer competing transmission services to customers. The exclusive rights for the relevant utilities are conferred by legislation or by order of the relevant regulatory body.

The practical rationale is system security: transmission networks require central planning, dispatch co-ordination, technical standards, efficient investment recovery and consistent treatment of outage and connection risk.

Transmission charges are not established through open market negotiation. They are set or approved under the relevant emirate utility and regulatory framework.

In Abu Dhabi, the Department of Energy has authority to propose fees, tariffs and prices within its competencies and submit them for Executive Council approval. These charges are generally reflected in the PPA signed between EWEC and the project developer.

In Dubai, transmission costs are part of DEWA’s integrated tariff and utility framework rather than a separate competitive-access transmission tariff. For generators, transmission-related obligations are usually addressed through connection agreements, grid codes and project documents, including connection costs, metering, testing, outage co-ordination, technical compliance and any reinforcement requirements. Distributed renewable generators are treated through distribution-network connection rules rather than through a general transmission-tariff access regime.

For investors, the absence of a negotiated transmission tariff does not mean that network cost is irrelevant. Connection costs, reinforcement obligations, metering requirements, outage procedures and compliance testing can materially affect project economics and should be priced into the bid model.

The UAE does not operate a general open-access transmission regime comparable to liberalised electricity markets where any generator or customer can require wheeling over the transmission grid. Transmission remains part of a single-buyer, state-controlled utility structure, and the transmission and distribution networks are owned and controlled by state-owned utilities that enjoy monopoly positions in their respective areas.

In Abu Dhabi, a generator selling to EWEC obtains connection rights as part of the procured project framework and related licence and connection arrangements. Although generators do not have general open-access transmission rights, EWEC-procured projects are typically protected under the PPA and related project documents against key risks associated with the incumbent transmission system, including grid connection delay or transmission unavailability where those matters are outside the project company’s control. The protection may take the form of deemed availability, deemed generation, tariff relief or delay compensation. In other emirates, equivalent network-interface risk allocation depends on the relevant procurement model and project documents.

In Dubai, generation projects connect through DEWA’s network arrangements and project-specific approvals. DEWA-procured projects appear to be afforded protections under the PPA similar to those under EWEC-procured projects.

Distributed renewable generation connects to distribution networks under specific distributed-generation rules, including Federal Decree Law No 17 of 2022 and emirate implementing arrangements, rather than through open-access transmission rights.

Distribution facilities are governed by emirate utility laws, electricity regulations, construction permitting rules, safety standards, environmental requirements and customer-service rules discussed above.

Federal Decree Law No 17 of 2022 is particularly important because it regulates the connection of distributed renewable energy production units to distribution networks across the UAE, including economic, free and investment zones. The law requires the relationship between the producer and service provider to be governed by a connection agreement that regulates operation and connection conditions.

In Dubai, Executive Council Resolution No 46 of 2014 and the Shams Dubai connection conditions provide the practical framework for solar generators connected to DEWA’s distribution system. Storage and microgrids should be analysed through the same lens: the question is not only whether the technology is technically feasible, but whether the relevant licence, connection and safety framework permits the proposed configuration.

There is not yet a single UAE-wide statute dedicated to battery storage or microgrids, as private grids are largely prohibited unless they are expressly approved by the relevant emirate authorities.

The approval process is emirate-specific and depends on whether the works are being carried out by the incumbent distribution utility, such as TAQA Distribution (formerly ADDC/AADC) in Abu Dhabi, DEWA in Dubai, SEWA in Sharjah or EtihadWE in the Northern Emirates, or by a customer, developer or embedded-generation proponent connecting facilities to the distribution network. For utility-led distribution assets, the process is usually handled within the incumbent utility’s licensed network-planning and capital-works framework, with separate municipal, road-opening, land, environmental, civil defence and no-objection approvals (NOCs) obtained as required.

For customer or developer works, the usual process is load-demand approval, design and single-line-diagram approval, equipment compliance, external NOCs, construction, inspection, testing, meter installation and energisation.

Distributed renewable generation connected to a distribution network is separately regulated under Federal Decree Law No 17 of 2022, which applies to producers, service providers and electrical-installation contractors and requires connection arrangements with the relevant service provider.

Public participation is not generally a formal feature of UAE distribution-utility approvals, and there is no general requirement for public hearings before distribution lines, substations or customer distribution facilities are approved.

Environmental or planning authorities may consult other governmental stakeholders or require project-specific engagement in sensitive cases, but this is not equivalent to a general statutory public-hearing process.

The electricity regulator or utility generally has authority to grant sector-specific licences, technical approvals, connection approvals and energisation approvals within its statutory remit. It does not, however, replace the separate authority of municipalities, environmental regulators, civil defence authorities and road or infrastructure authorities, each of which grants its own approvals rather than merely making recommendations to the electricity regulator.

There are no typical statutory timelines for distribution-facility approvals, and major utility projects can take several months or longer depending on land, routing, environmental assessment, procurement and construction complexity.

Approvals for electric distribution facilities in the UAE are usually conditional on compliance with the approved design, applicable utility standards, metering arrangements, connection requirements, inspection requirements and any environmental or municipal NOCs.

In Dubai, DEWA connection approvals typically require load schedules, single-line diagrams, low-voltage (LV) distribution and metering drawings, site layouts showing substations or electrical rooms, wiring layouts, applicable substation details, signed terms and conditions for electricity and water supply, and site photographs at LV inspection stage. DEWA approvals usually proceed on the basis that installations must pass LV and, where applicable, high-voltage (HV) inspection before energisation, and that supply is released only after the required payment, metering and security-deposit steps are completed. Electrical installations and equipment must also be inspected, tested and finally approved by DEWA before connection to the electricity supply.

In Abu Dhabi, typical approval conditions include compliance with Department of Energy technical regulations, use of approved contractors and equipment, submission of electrical installation certificates, inspection and testing, safe earthing and protection arrangements, and approval by the distribution company for specific non-standard arrangements. Electricity Supply Regulations also impose service-quality and safety obligations on distribution companies, including requirements for notice of planned interruptions and measures to reduce the risk of prolonged interruptions where customers are supplied through third-party electrical equipment.

For distributed renewable generation, Federal Decree Law No 17 of 2022 relies on a connection-agreement model, under which the rules and conditions for operating and connecting the distributed production unit are agreed with the service provider and regulated by the competent authority.

Environmental approvals commonly impose separate conditions, including implementation of mitigation measures, environmental management and monitoring programmes, compliance with emissions, noise and pollution limits, site access for inspectors, reporting, renewal obligations and compliance with the approved EIA or environmental clearance.

There are no mandated procedures for relaxing distribution-approval conditions. Applicants must apply to the authority that imposed the relevant condition.

A distribution project proponent does not have an automatic or standalone eminent domain right in the UAE. Any compulsory acquisition must be authorised by law, serve a public benefit, and be subject to fair compensation.

In practice, distribution assets are usually developed by, or in close co-ordination with, the relevant incumbent utility: TAQA Distribution in Abu Dhabi, DEWA in Dubai, SEWA in Sharjah and EtihadWE in the Northern Emirates. Surface rights are typically secured through government land allocations, public utility corridors, road reserves, leases, easements, musataha, statutory streetworks powers, or negotiated access arrangements.

Streetworks powers are not the same as a general right to expropriate land. They are access and works powers, subject to conditions such as prior steps before entry, safety obligations, reinstatement of land and buildings, repair of damage, record-keeping and minimising interference with other infrastructure.

Compensation depends on the right taken. For full acquisition, compensation is generally based on fair compensation, and in Dubai the amount is determined by reference to the market value of the property on the date of acquisition.

For temporary access, trenching, cable laying or maintenance, compensation is usually limited to reinstatement, repair of damage and any amounts required under the relevant NOC, access agreement, wayleave, easement or statutory regime.

Formal expropriation is therefore usually a last resort. Most distribution projects proceed through planned corridors, government land, road reserves, municipal approvals and utility NOCs rather than compulsory acquisition of private land.

Electricity distribution in the UAE is organised on a territorial monopoly model, with the relevant state-owned utility providing distribution services within its emirate or federal service area. The UAE does not generally permit competing distribution companies to build parallel public distribution networks and offer retail distribution service in the same territory. Distribution exclusivity is not obtained through competitive concessions in the ordinary sense. It is conferred by federal or emirate legislation, government restructuring decisions, utility establishment instruments and regulator-issued licences or price-control determinations.

Distribution Charges and Terms of Service

The UAE does not have a single national tariff-setting regime for electricity distribution. Charges and terms are set under emirate-level or federal utility frameworks, reflecting the monopoly or exclusive public-utility model in each service area.

Abu Dhabi charges are split between intra-sector charges and customer tariffs. Intra-sector charges include the bulk supply tariff, under which EWEC sells bulk power and water to TAQA. The TUoS charge allows TAQA to recover its maximum allowed revenue and signal efficient use of the transmission system. End-user tariffs are decided by the government, while the Department of Energy advises on tariff and subsidy levels and tariff structures that encourage efficient consumption.

Abu Dhabi customer service terms are regulated through licences, Department of Energy regulations and consumer-protection instruments. The Department of Energy monitors TAQA Distribution’s compliance with customer-service obligations under Law No 2 of 1998, Law No 11 of 2018, operating licences and Department of Energy regulations. The Department of Energy Consumer Protection Policy regulates supply agreements, service fees, monthly billing, disconnection, complaints, debt management and protections for vulnerable customers.

DEWA applies published slab tariffs and a fuel surcharge pursuant to Dubai Supreme Council of Energy decisions. The slab tariff increases progressively with monthly consumption, and the fuel surcharge varies according to changes in fuel prices supplied to DEWA generation plants. DEWA’s July 2026 electricity fuel surcharge is 6 fils/kWh (AED0.060 per kWh), and value-added tax at 5% applies to tariffs.

In Sharjah, SEWA publishes electricity tariffs through its energy calculator. The tariff is consumption-based, with slabs of 0–2,000 kWh at 23 fils/kWh (AED0.23 per kWh), 2,001–4,000 kWh at 28 fils/kWh (AED0.28 per kWh), 4,001–6,000 kWh at 32 fils/kWh (AED0.32 per kWh) and above 6,000 kWh at 38 fils/kWh (AED0.38 per kWh), plus an electricity surcharge of 6 fils/kWh (AED0.060 per kWh).

In the Northern Emirates, EtihadWE publishes tariff structures which are said to be structured around affordability, efficiency and sustainability, with separate customer categories including citizens, expatriate residential customers, commercial, industrial, government, agricultural and temporary connections.

Regulatory Principles and Methodology

Abu Dhabi uses the most formal economic-regulation model. It is not a simple annual cost-of-service rate case; rather, it uses incentive-based revenue-cap regulation, with defined cost pass-throughs for items such as electricity purchases and transmission charges.

Dubai, Sharjah and the Northern Emirates may not publish the same level of detailed revenue-requirement methodology. Their charges are implemented mainly through published tariff categories, consumption slabs, surcharges and service charges approved by the relevant government or utility authority.

UAE materials do not generally use US-style language such as “just and reasonable rates”. Similar concepts appear through references to reasonable rates, affordability, efficient service, consumer protection and tariff signals encouraging efficient consumption.

Appeals and Complaints

There does not appear to be a general public appeal mechanism to allow customers to challenge the regulator’s tariff-setting decision itself. In Abu Dhabi, regulatory disputes between regulated persons and the regulator may be referred to arbitration under Law No 2 of 1998, with awards final and binding.

Customers can, however, challenge billing, service quality and application of terms through complaint channels. In Abu Dhabi, customers must first complain to the service provider and may escalate to the Department of Energy through Abu Dhabi’s digital government services platform, TAMM, if dissatisfied or if no response is received. DEWA, SEWA and EtihadWE also provide online complaint channels.