Taweelah: what scale did to the price of seawater

In August 2018 Saudi Arabia’s Rabigh 3 drew a low bid of SR1.99, about US$0.53 a cubic metre, a record at the time. Abu Dhabi awarded Taweelah five months later, at a tariff MEED put at US$0.49,⁶ though neither EWEC nor the developer published a number.²

Nothing in the sea had changed, but the machine room, the procurement and the finance stack had. Plants were being decoupled from power stations and procured as standalone projects. In Abu Dhabi, MEED linked the move to the Barakah nuclear plant, which would add to the emirate’s independent power capacity.⁷

Taweelah is an independent water project. A single buyer runs a competitive tender against a long-term purchase agreement, and the winning consortium finances, builds, owns and operates the plant.^2 7 ACWA Power holds 40 per cent, alongside TAQA and Mubadala. SEPCO III and Abengoa Agua built it for about US$907 million.⁴

Scale was one lever: Taweelah spreads its fixed costs across 909,218 cubic metres a day.¹ The other was energy. MEED attributed the low tariff at Taweelah to low-priced renewables,⁸ and the plant carries a photovoltaic field of more than 70 MWp.¹

It was built and it performs. The first group entered commercial operation in mid-2022 and the second in April 2023, with full operation certified in March 2024.⁵ The plant passed 30 consecutive days of final performance tests. It desalinated 204 million imperial gallons in a day, about 2 per cent above planned capacity.¹

The price signal travelled. An industry review notes that tariffs for seawater reverse osmosis fell from above US$1.00 a cubic metre under thermal distillation to below US$0.40 under competitive independent water procurement.⁹

The record everyone quotes was never built at that price. DEWA reported a water levelised tariff of US$0.277 a cubic metre in September 2020 as a world record.¹⁰ By July 2022 Utico had not reached financial close.¹¹ DEWA later retendered the project and in 2023 named ACWA Power preferred bidder for a larger 180 MIGD plant at US$0.36536 a cubic metre.¹²

Later bids came in above the record. Mirfa 2 and Shuweihat 4, bid in 2022, came in at US$0.483 and US$0.564, and the lowest bid for Abu Dhabi’s Saadiyat plant was US$0.731 in 2024. Part of the Saadiyat premium reflects a new electrical facility in its scope.¹³ Bahrain’s first independent water project drew an offer of US$0.73 a cubic metre from the frontrunner in 2026.¹⁴ MEED noted in 2022 that if interest rates rose, tariffs were likely to come under upward pressure.⁸

Taweelah itself ran late. The 2019 announcement expected completion in October 2022.² Full commercial operation came in March 2024, a slip of about 17 months.⁵ Its capacity is also quoted three ways: 909,200 in the original release, 909,201 on the developer’s own page and 909,218 from the contractor at completion.^2 4 1

Scale also concentrates risk: a plant producing about 909,000 cubic metres a day concentrates supply in a system where the UAE’s strategic storage would cover about two days of demand at current consumption.¹⁵ The 2019 deal announcement promised record energy use of less than 3 kWh a cubic metre, and the contractor reports consumption below expectations, but no measured figure has been published.^3 1

A bid tariff struck in one interest-rate environment is not a forecast of the next one,⁸ and treating a record as a benchmark is how a procurement ends up unfinanceable.

The lesson for governments is practical. Check that the lowest bidder can raise the money, and write the financial-close deadline into the award.¹¹