UAE price controls: how Abu Dhabi regulates electricity and water
A recorded case study from MCC Economics on how Abu Dhabi has structured price controls for electricity and water, from the weighted average cost of capital and Maximum Allowed Revenue to ring-fencing, recycled water and demand-side management incentives.
Price Controls 180 is delivered by practitioners who advise utilities and government bodies in the United Arab Emirates on price controls and financial modelling.
Course lead
PJ McCloskey
Director, MCC Economics
PJ has worked on price controls from the regulator's side and for regulated companies, including RIIO-2 work with Ofgem and the Utility Regulator for Northern Ireland.
ACMA chartered management accountant
MSc Finance (Distinction), Birkbeck
Specialist in cost of capital and financial modelling
I heartily recommend PJ to anyone seeking input on the financial parameters that underpin different regulatory models.
James Veaney, Deputy Director, Electricity Sector Price Controls, Ofgem
Quick Answer
Price Controls 180 is a recorded case study of price controls in the United Arab Emirates, focused on Abu Dhabi's electricity and water sectors. It traces how its frameworks evolved to RC1 and RC2, and explains how the weighted average cost of capital, Maximum Allowed Revenue, ring-fencing, recycled water regulation and demand-side management incentives work together.
Key takeaways
Abu Dhabi's price controls for electricity and water have evolved through a series of frameworks, from PC1 to RC2.
The weighted average cost of capital and Maximum Allowed Revenue are applied across separate, ring-fenced utility streams.
Recycled water is regulated as its own service, and incentives are linked to demand-side management.
Cost transparency and performance benchmarks are used to support public investment and affordability.
What will you be able to do after the course?
You will be able to explain how Abu Dhabi's price controls work and the policy logic behind them. The course is built around three outcomes.
Trace the history. How Abu Dhabi's frameworks evolved to RC1 and RC2.
Apply the tools. How the cost of capital, allowed revenue and ring-fencing are applied across utility streams, including recycled water.
Understand the policy logic. How regulation supports public investment and affordability, and how cost transparency and performance benchmarks are enforced.
What does the course cover?
The lecture sets out the regulatory context in the United Arab Emirates and then follows Abu Dhabi's price controls in sequence.
Introduction
Background: the regulatory context in the United Arab Emirates
Chronology of price controls, from PC1 to RC2
How the price controls work today: the cost of capital, Maximum Allowed Revenue, ring-fencing, recycled water and demand-side management incentives
What do the key terms mean?
These are the terms the course uses most, in plain English.
Term
Meaning
Maximum Allowed Revenue (MAR)
The most revenue a regulated utility may recover under its price control.
Weighted average cost of capital (WACC)
The blended return that lenders and shareholders require, used to set the return part of allowed revenue.
Ring-fencing
Keeping the costs and revenues of each regulated activity separate, so one stream does not subsidise another.
Recycled water
Treated wastewater supplied for reuse, for example for irrigation, which can be regulated as its own service.
Demand-side management
Measures that reduce or shift customers' use of electricity or water, which incentives can reward.
RC1 and RC2
Successive price control frameworks in Abu Dhabi, following the earlier controls from PC1 onwards.
Cost transparency
Requiring utilities to report costs in a consistent, auditable way so the regulator can compare and challenge them.
Who is the course for?
It suits anyone who works with, or studies, utility regulation in the Gulf.
Regulatory professionals working in or with Gulf markets
Utilities and government stakeholders in pricing and investment planning
Infrastructure advisors, economists and engineers
Researchers and students of emerging market regulation
Which courses should you take first?
Price Controls 180 applies the core courses to a real Gulf framework, alongside the case studies from Oman.
MCC Economics advises utilities and government bodies in the United Arab Emirates, across Abu Dhabi and Dubai, as well as regulators in the United Kingdom. The firm was founded in London in 2017. Its regulatory economics work covers energy, water, aviation and infrastructure. You can read the team's background on the people page.
MCC Economics has helped us better understand the most important issues for our stakeholders, including: charges, shareholder returns, debt payments and inflation impacts.
Leila N. Nasr, Section Head, Department of Energy, Abu Dhabi
Questions buyers ask before registering
Who teaches Price Controls 180?
See the instructor profiles near the top of this page for the current teaching team and their experience.
Is there a live session?
No. Price Controls 180 is recorded course material only, so there is no meeting to attend. You get access to the materials once you register.
What do I receive when I register?
A lecture video, presentation slides, a quiz and a transcript.
Which part of the United Arab Emirates does the course focus on?
Abu Dhabi, and how it has structured price controls for electricity and water services.
What are RC1 and RC2?
They are successive Abu Dhabi price control frameworks. The course traces how its controls evolved from the earliest, PC1, through to RC2.
Should I take the earlier courses first?
It is not required, but Price Controls 120 and Price Controls 130 explain allowed revenue and the cost of capital, which this case study applies.
Can my team take the course together?
Contact MCC Economics through the consultation page to discuss access for a team or training tailored to your organisation.