Abu Dhabi is developing a dedicated electricity tariff for data centres to bolster its artificial intelligence infrastructure, a strategic move aimed at attracting global hyperscalers while protecting other consumers from increased energy costs. The initiative, announced by an official from the Abu Dhabi Department of Energy, positions the emirate to compete in the high-stakes regional race to become a hub for energy-intensive AI facilities.
As Gulf nations like Saudi Arabia and Qatar vie for AI dominance, Abu Dhabi’s plan addresses a critical challenge: the surging power demand from large-scale computing facilities which necessitates significant investment in new generation and grid infrastructure.
A Strategic Move to Attract Hyperscalers
The new tariff is designed to offer globally competitive rates to hyperscalers—large cloud service providers such as Microsoft, Amazon, and Google. These companies are driving much of the new demand for computing capacity to train and run advanced AI models.
Syed Fawad Ali Gilani, planning and energy markets director at the Abu Dhabi Department of Energy, stated that the goal is to create a standardised and attractive pricing structure for the sector. He emphasized the emirate’s ambition to offer prices that are “comparable to anywhere else in the world.”
Balancing Cost and Fairness
A key principle of the new tariff is to be “cost-reflective.” This means that large-scale users will pay in line with the actual cost of their energy supply and the necessary infrastructure upgrades they trigger. This approach prevents the financial burden from being shifted onto households and other businesses.
“We need to be fair with all customers,” Gilani explained during a panel at the World Future Energy Summit in Abu Dhabi.
The issue of fairly allocating electricity costs for the AI boom is a global concern, with similar discussions taking place in the US to ensure households do not bear the costs of the industry’s rapid expansion.
Customisable Energy for a Greener Future
Beyond competitive pricing, Abu Dhabi’s plan acknowledges the evolving needs of modern data centre operators. Gilani highlighted that these companies are increasingly focused on the source of their energy as they work to meet climate targets.
The framework will allow operators to choose their preferred power mix, including the percentage of energy that comes from renewable sources versus conventional supply.
“It’s not just for the electrons, it’s the right kind of electrons, depending on what energy mix they want to have in place,” Gilani added.
About the Abu Dhabi Department of Energy
The Abu Dhabi Department of Energy (DoE) is the governing body responsible for ensuring the excellence and sustainability of the energy sector in the emirate. It is tasked with developing policies, regulations, and strategies to support Abu Dhabi’s economic growth, energy security, and environmental sustainability goals.
Source: AGBI
