Abu Dhabi plans dedicated power tariff for AI data centres

• Surging demand from hyperscalers
• Desire to be ‘fair to all customers’
• Big users could still choose energy mix

Abu Dhabi is planning a dedicated electricity tariff for data centres to support AI infrastructure expansion while shielding other customers from higher bills, an official said. 

Energy suppliers will need to invest in additional generation and grid infrastructure to meet surging demand from large-scale computing facilities, potentially raising costs for households and wider businesses. 

Abu Dhabi’s efforts come as Gulf states, particularly energy-rich Saudi Arabia and Qatar, compete to become regional hubs for energy-intensive AI data centres, offering rapid buildouts, state-backed infrastructure and plentiful low-cost electricity.

Syed Fawad Ali Gilani, planning and energy markets director at the Abu Dhabi Department of Energy, said the emirate wants to offer globally competitive rates to hyperscalers (large cloud service providers such as Microsoft, Amazon and Google), while keeping pricing “cost-reflective”. 

This would mean big users pay in line with the cost of their energy supply, rather than a shifting of costs onto the wider customer base.

“We need to be fair with all customers,” Gilani told AGBI during a panel event at the World Future Energy Summit in Abu Dhabi last week.

Gilani said the goal was to create a standardised approach for the sector, while offering prices that are “comparable to anywhere else in the world”.

He added that operators may still be able to choose their preferred power mix, including how much comes from renewables or conventional supply. 

Data centre operators say they do not just care about price, but also the type of electricity they buy, including how much comes from cleaner sources to meet climate targets. 

“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 said.

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Hyperscalers – so-called because they can quickly scale compute (computing capacity to train and run AI models) by building huge data centres for AI and online services – are driving much of the new demand that is forcing utilities to expand networks and generation more quickly.

This issue has also been in focus in the US, where President Donald Trump said on social media last week that his administration was working with data centre companies to ensure households do not “pick up the tab” for higher electricity bills linked to the AI buildout.

Research by the Lawrence Berkeley National Laboratory said US data centres will consume nearly 10 percent of the entire US power grid by 2030.