UAE to invest $35 billion in alternative energy
Dubai - The United Arab Emirates is expected to invest $35 billion in non-hydrocarbon energy by 2020, and leading the way in its alternative energy endeavours is Abu Dhabi’s Masdar City, a 6-sq.-kilometre development fully powered with renewable energy.
Described as a high-tech urban ecosystem, Masdar City is 17 km from downtown Abu Dhabi and is a low-carbon, low-waste sustainable urban development, 60% of which is planned to be residential. According to its developers, Masdar City is a “green print” for how cities of the future can accommodate urbanisation while remaining resource efficient or, as some experts have put it, preparing the UAE after oil.
Masdar City is being built by Masdar, a subsidiary of government-owned Mubadala Development Company, which has headquarters in Abu Dhabi, with substantial investment from the Abu Dhabi government.
The scope of Masdar’s activities include renewable power generation, carbon abatement and sequestration, sustainable urban planning and development, demand reduction technologies and systems as well as investments in renewable energy and clean technology.
The company has ambitious plans of “leveraging its resources from the hydrocarbon industry into this new sector”, according to Nawal al-Hosany, head of sustainability at Masdar. The firm has joined a number of clean energy projects abroad, Hosany said, investing some of the massive financial reserves the UAE built up over the years.
“The UAE became the only OPEC country that not only exports oil but also exports renewable energy around the world,” Hosany said.
One of Masdar’s most ambitious projects in terms of renewable energy is the Shams 1 solar power plant, west of Abu Dhabi and estimated to cost $600 million. With a 100-megawatt (MW) capacity, Shams 1 is the world’s largest solar power plant in operation.
In terms of its global investments, Masdar owns a 20% stake in the London Array wind power project, which has a capacity to generate 630 MW, enough to power nearly 500,000 homes in Britain. Masdar is also a partner in Spain’s Gemasolar thermosolar project, the world’s first solar power station that generates electricity at night.
The UAE’s drive in developing alternative energy projects comes during a time of self-reflection in the Gulf state about what happens when crude oil is no longer a viable resource.
This reality has not gone unnoticed by the UAE government, with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan recently warning that the country’s last tanker load will be exported in 50 years.
The Gulf state set in motion plans to diversify its economy years ago and it is one of the most diversified in that regard among Gulf Cooperation Council (GCC) countries, according to experts. Hydrocarbon revenues account for only 25% of the country’s gross domestic product (GDP).
“We understood that for us to maintain our leadership in the [energy] sector, we have to get into renewable, and we have done that,” Masdar Chief Executive Officer Ahmad Belhoul said.
The UAE has channelled $840 million into renewable energy projects in 25 countries, according to its Foreign Ministry.
“We look at this from a development perspective, not just commercial,” said Thani al-Zeyoudi, the head of energy and climate change at the UAE Foreign Ministry and its permanent representative to the International Renewable Energy Agency (IRENA), an Abu Dhabi-based intergovernmental organisation that works to promote the adoption and sustainable use of renewable energy.
In October, figures released by IRENA proposed that countries in the GCC could earn hundreds of billions of dollars if they meet their renewables energy targets by 2030.
The agency justified its findings with the rationale that meeting the targets would save 4 billion barrels of oil, which could be exported, rather than used domestically.
The report said that at crude prices of about $50 a barrel, this would equal $200 billion in additional revenue for Gulf countries.