The United Arab Emirates is one of the world’s richest countries, blessed with extraordinary access to the kind of fossil fuels that the globe depends on. The rush to develop the oceans of oil and gas this smallish desert country sits on has transformed it from an isolated sultanate to a major player in an increasingly integrated world on the hunt for greater and more reliable access to energy.
The challenges of sudden wealth and success are not to be dismissed, and UAE officialdom is working to find ways to leverage its comparatively recent role as one of the planet’s economic leaders into longer-term leadership. The country has sought to invest more and more abroad, with many of its investments focused on the energy sector, a natural focus for a country where the wealth flows from the world’s hunger for energy commodities.
Breaking Energy conducted an interview with Dr. Thani Al Zeyoudi, who is Department Head at the Directorate of Energy and Climate Change at the UAE’s Ministry of Foreign Affairs following the country’s involvement at the Rio plus 20 conference earlier this year. He gave us fascinating insight into the country’s involvement in the world’s increasingly diverse energy future.
Q: The UAE sits in the middle of a region famous for its huge fossil fuel resources. Why is it interested in renewable energy?
From an early stage, our government realized that the UAE must not rely on hydrocarbons alone. Yes, our country possesses significant oil and natural gas reserves. But at the same time, we recognize that we don’t have an endless supply. So we want to help to drive the technology the world will need to meet energy demand for generations to come, leveraging our hydrocarbon foundation to support renewable energy innovation and deployment.
Internationally, we’re a leading investor in renewable energy around the world. The UAE government sponsors the world’s largest wind farm, the London Array, and a breakthrough solar plant in Spain that can provide power even at night. And through a venture capital fund, we’ve also invested over $500 million in cutting-edge start-ups firms, much of that in the US.
Perhaps most importantly, we are the host and largest contributor to the International Renewable Energy Agency, which is headquartered in Abu Dhabi. IRENA’s mandate is to provide the world with the best data and counsel on renewable energy technology, policy, and financing. One of its flagship projects is the Global Renewable Energy Atlas, which will assess and map the world’s renewable energy resources and provide the data free online. The UAE’s Masdar Institute is a major technical contributor to the project, introducing methodologies that can account for the heavy impact of dust and humidity on solar resources, which is critical for countries like ours.
We are also actively promoting renewable energy at home. Abu Dhabi will have 7% renewable energy by 2020, and Dubai 5% by 2030, through solar, wind, and waste-to-energy projects. And these targets are backed by reliable government support, proving the renewable technologies and bringing down their costs by growing the market.
Ultimately, we believe the future energy portfolio will include all fuel types. And the countries that want to maintain their leadership in the energy sector will need to embrace all forms of energy.
Q: What did the UAE delegation going to Rio+20 summit hope to achieve? What did they achieve and what is the roadmap for the country’s involvement in international climate change mitigation efforts going forward?
In Rio, we wanted to show that a young country like the UAE can effectively build toward a strong, stable, green economy through good policy and international cooperation. Our nation is only about 40 years-old and growing extremely quickly, but we’ve already made significant gains toward environmental, societal and economically sustainability. We look to events like Rio+20 to connect with us the right people and ideas to maintain this momentum.
While we’re encouraged that the Rio negotiations reached a final agreement, we would have liked to see more ambitious goals and commitments. We would have especially liked to see adoption of the targets set by the United Nations Secretary General’s Sustainable Energy for All initiative, which calls for universal energy access and a doubling of global renewable energy by 2030. And at Rio, in support of SE4A, the UAE announced $350 million of new, not repackaged, concessional finance for renewable energy projects in developing countries. This funding will be disbursed starting in 2013.
We are pleased that the international community agreed to articulate Sustainable Development Goals, or SDGs, to guide government planning, development assistance, and UN programming for decades to come. The UAE is a firm believer in the Millennium Development Goals, which have brought international attention to issues like health, education, and gender equality, and we recognize that metrics like these can be very influential in shaping action on sustainable development. To that end, UAE negotiators worked closely with a small coalition of progressive countries to author the summit’s text on SDGs, and we’ll be actively involved this year in identifying the right areas and measurements for them. Access to energy and water, for example, would be excellent complements to the MDGs.
Now, we’re busy preparing for the upcoming international climate change talks in our neighboring country of Qatar, the first ever held in the Middle East. The UAE has taken a new approach for a hydrocarbon-exporting country over the last several years, working with non-traditional partners to facilitate all countries’ commitments to reducing and managing climate change.
We think this year’s talks will be a watershed moment for the Middle East. As of this year, every Gulf country has set a renewable energy target, and every one of them is a member of the International Renewable Energy Agency. Gulf countries are even joining the UAE in talking about the need for carbon mitigation. There is a major change happening in the region, and we hope that becomes apparent in Doha.
Q: Are there opportunities for foreign renewable energy companies and investors in the UAE?
Our country is fast becoming a hub for international clean energy investment. The UAE has pursued a policy of openness since its inception and, as with our hydrocarbon sector, we’re committed to partnering with the world’s leading companies. The renewable energy targets in Abu Dhabi and Dubai alone will account for 2500 MW of clean energy projects, open to overseas participation.
One of the best examples of our approach is Masdar City, which we expect to become one of the most sustainable cities in the entire world. Masdar City is also a clean tech cluster, with preferential conditions for the renewable energy and clean tech industry. Siemens is establishing its Middle East headquarters at Masdar City. GE is building its first “ecomagination” center there. And Schneider Electric will operate a “living laboratory” innovation center at Masdar City.
We’re also very proud of the Masdar Institute, developed with the Massachusetts Institute of Technology. The graduate-level university is an R&D incubator for the cluster, focused on the science and engineering of advanced alternative energy, environmental technologies and sustainability. We’ve also partnered with Switzerland’s renowned École Polythenique Fédérale de Lausanne to launch a clean tech cluster in Ras Al-Khaimah, working with international and local industry to test and develop sustainable products and management approaches.
Q: Are UAE companies working to invest in or partake in renewable energy projects abroad? Particularly in the US?
Absolutely. We believe the exchange of knowledge among like-minded countries is the catalyst for economic growth and renewable energy deployment.
The US is a particularly attractive destination for venture capital, because it’s the source of so much innovation in the renewable energy sector. Through Masdar, we are heavily invested in dozens of US firms that are making breakthroughs in the quality, cost, and applicability of renewable energy technology, all of which we hope can be rolled out globally.
We are also investing in real-world projects that we think clearly demonstrate the potential of renewable energy. We’re a partner in the London Array, the world’s biggest offshore wind farm. Phase One will bring 650 MW of wind capacity online, enough to power about half-a-million homes and avoid almost 1 million tons of CO2 each year. Through our Torresol Energy partnership in Spain, we’ve achieved groundbreaking solar thermal storage capability, using molten salt. We can now produce power for up to 15 hours without any sunlight, a first for a commercial-scale plant. And this year one of our sovereign wealth funds, TAQA, allocated a major portion of resources specifically for investment in the international clean tech sector.
Development assistance is another key aspect of our investment strategy. As active contributors to the UN’s Sustainable Energy for All initiative, the UAE has proudly made commitments to increase the world’s supply of clean, affordable energy. On a grant basis, we are building solar and wind projects in countries like Afghanistan, Tonga, and the Seychelles. And at Rio we launched the $350 million concessional finance fund for additional renewable energy projects in developing countries. We firmly believe that these projects can prove the competitiveness and value of renewable energy and, in turn, grow the worldwide market. Development no longer needs to be tied to old energy models.
In short, through our international investments and partnerships we’re trying to bring game-changing innovations to life and fundamentally reshape the energy market.
