The Emirates Water and Electricity Company (EtihadWE), a UAE state-owned water and power holding company, has signed a Reservation Agreement with Siemens Energy to secure gas and steam turbines for the 2.6GW Al Zawra Combined Cycle Gas Turbine (CCGT) power plant to be built in Ajman. The agreement was signed on September 12 during a visit to Berlin, Germany.
The Al Zawra CCGT plant is a large-scale combined-cycle power project to be newly built in Ajman to meet rising electricity demand in the UAE’s northern emirates. This reservation agreement is a pre-booking arrangement to secure gas and steam turbines from Siemens Energy for the plant, a method of locking in the supply of critical equipment ahead of signing the main contract, such as the EPC contract.
The power generation capacity is reported at 2.6GW (gigawatts). The client is EtihadWE, and the turbine supplier is Siemens Energy. The specific contract value and turbine model have not been disclosed.
The UAE faces urgent needs to expand its power grid amid population growth and rising industrial demand, and has been successively ordering large-scale gas combined-cycle plants in the northern emirates, including Ajman. This reservation agreement is seen as a strategy by the client to secure critical equipment early amid concerns over a global shortage of turbine supply.
As data center expansion and surging electricity demand have created a global shortage of gas turbines, an increasing number of clients are signing reservation agreements with turbine manufacturers before finalizing EPC contracts in order to lock in delivery slots. This trend is being observed not only in the Middle East but also in the United States, Europe, and elsewhere, contributing to multi-year order backlogs at turbine manufacturers such as Siemens Energy, GE Vernova, and Mitsubishi Power. For EPC contractors and equipment suppliers, turbine lead time has emerged as a key variable determining overall project schedules, and securing turbines is increasingly being factored into creditworthiness assessments at the project financing stage. This case in the UAE illustrates how Middle Eastern state-owned power companies are proactively responding to this global supply chain competition.
A primary point to watch is when and with which consortium EtihadWE will sign the EPC contract for the Al Zawra plant. Whether the actual groundbreaking date and target commercial operation date will be disclosed following the reservation agreement is also of interest. In addition, it remains to be seen whether similar turbine reservation agreements will follow in other emirates within the UAE, and whether competing manufacturers such as GE Vernova and Mitsubishi Power will pursue additional orders in the Middle East market alongside Siemens Energy.