The UAE’s focus on renewables comes at a time of increasing demand for energy
Energy experts are hailing the UAE for its leading role in promoting renewable energy across the Arab region.
From establishing Masdar some 11 years ago in Abu Dhabi, to building wind and solar farms in the UAE as well as other Arab countries, the UAE is looked at as a pioneer in renewables.
The UAE’s focus on renewable energy comes at a time of increasing demand for energy as the population grows, as oil prices have dropped to half of their value from just three years ago, and amid increasing global urgency to reduce carbon emissions.
“The outlook in the renewable and alternative sources of energy is extremely positive in the UAE,” said Nizar Jichi, Partner, Audit, Oil and Gas at KPMG, one of the largest professional services networks in the world.
“This positive outlook is evident from the vision of the UAE Government, wherein as per the UAE Energy plan 2050, UAE aims to reduce dioxide emissions by 70 per cent, increase clean energy use by 50 percent and improve energy efficiency by 40 percent by 2050,” he told Gulf News.
Several projects have been planned, tendered, awarded, implemented or have already started operating in UAE. More are in the pipeline.
“The UAE is leading the GCC countries in the diversification of the economy and also in pursuing ground-breaking renewable energy and energy efficiency programmes,” said Mamdouh Salameh, an international oil economist and a visiting professor of energy economics at the Europe Business School in London (ESCP).
“In 2015, the UAE ratified the Kyoto Protocol to the UN Convention on Climate Change, becoming one of the first major oil-producing countries to do so. Moreover, the Abu Dhabi government has also established one of the world’s most comprehensive clean energy initiatives.”
The drive to diversification is partly due to falling oil prices, which have caused major budgetary deficits for a number of oil producing countries.
“Diversification for UAE and other GCC countries is not a luxury but a necessity. It is high time that these countries rid themselves from almost total dependence on oil revenues and the impact of oil price volatility on their economies,” Salameh told Gulf News.
UAE is among the main oil producers in Opec, along with Saudi Arabia, Kuwait and Qatar. The six Arab Gulf states, along with both Iraq and Iran are believed to be sitting on nearly 50 percent of the world’s oil reserves, according to the US Energy Information Administration.
Salameh observed that “a major aspect of diversification is intensive investment in solar and nuclear energy for electricity generation and also for replacing oil with solar power in water desalination plants throughout the Gulf region.”
Such measures have economic and environmental benefits in “prolonging the longevity of the oil wealth and also being friendly to the environment,” he said.
Masdar, a subsidiary of Mubadala, which is the investment arm of the Abu-Dhabi government, has been a “catalyst” for the adoption of renewable energy and clean technologies, particularly in the Arab world.
“Since 2006, Masdar has invested in renewable energy projects with a combined value of $8.5 billion [Dh31.2 billion],” said Bader Al Lamki, Executive Director for Clean Energy, Masdar, Abu Dhabi Future Energy Company.
In a written responses to Gulf News, Al Lamki said: “We are active in utility-scale renewable energy development, off-grid clean energy projects, and sustainable urban development through our flagship project Masdar City.”
Masdar’s renewable energy projects had extended to include UAE, Jordan, Mauritania, Egypt, Morocco, the UK, Serbia and Spain. The electricity generating capacity of these projects, which are either fully operational or under development, is 2.8 gigawatts (GW) gross.
Masdar is the main company in carrying out many projects that come within the efforts of achieving the UAE’ energy plan for 2050.
According to the plan, the target has been set at 44 per cent from renewable energy, 38 per cent from gas, 12 per cent from clean fossil and 6 per cent from nuclear energy, Jichi said.
“The UAE Government has made an accomplishment in drafting the first unified energy strategy for the UAE covering production and consumption. The integration of renewable, nuclear and clean fossil energy is planned to be funded with investment of Dh600 billion over the next 33 years, equating to an annual spend of more than Dh17 billion,” he said.
Renewable energy received more attention after the sharp fall in oil prices in the past three years, when the prices went as low $28 per barrel.
Experts say producing energy from renewable sources is expected to help clean the environment, meet increasing demands as well as allow governments to save part of the oil and gas resources for export.
“Lower oil prices do not seem to have any major impact on the renewable energy, as the region specially UAE, continues to be focused towards expanding and diversifying the energy supply mix in line with its Energy Strategy mix by 2050,” said Jichi.
“This is evident from the fact that Dewa, which had initially targeted to generate 1 gigawatt of power, now plans for this facility to produce 5 GW of clean power annually by 2030,” he said.
In Dubai, the target of the clean energy strategy aims to increase the share of clean energy in the energy mix to reach 75 per cent by 2030.
Apart from the government initiatives, the private sector in UAE is participating.
Majid Al Futtaim Properties, owner and operator of several shopping malls in the UAE has announced recently that it signed an agreement with an energy company to supply four of its malls with solar energy. Under the deal, hundreds of solar panels will be installed on its buildings, including car parks.
The Dubai Municipality has also been introducing solar energy in many public places. Four parks in Dubai are fully using solar energy, and thousands of solar bulbs have been installed in parks and other facilities.