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A framework to match our energy ideals

The best ideas and biggest investments in energy are only as good as the policy framework that directs change.


Sultan Al Jaber

The investment made by Abu Dhabi's leadership in advancing and implementing clean energy solutions is already beginning to contribute to the emirate's economic diversification, as well as the global community's response to rising energy requirements and climate change.

The capital's commitment to clean energy technologies has created a new economic sector and is diversifying our energy portfolio. This important investment will maintain Abu Dhabi's leading share in future energy markets and ensure our economic growth. Internationally, Abu Dhabi's promise to drive the growth of clean energy is helping to achieve global renewable energy targets through investments that should yield healthy returns to our economy.

The annual World Future Energy Summit (WFES), hosted by Masdar last month, has become an exceptional global platform for developing partnerships that will advance the clean energy sector, both locally and internationally. It has also attracted some of the world's most influential leaders, including presidents, CEOs and notably, the Secretary General of the United Nations, Ban Ki-moon.

The insight gained from engaging with experts at such collaborative platforms helps us to continuously streamline our approach of becoming leaders in the clean energy sector and to diversify our energy mix. Throughout the various speeches and panel discussions held during the summit, one message emerged above all others: the need for policy and a regulatory framework.

In Abu Dhabi, and the UAE in general, a more comprehensive policy for the promotion of renewable energy will assist us in achieving our objectives more efficiently. Importantly, it will help us turn today's challenges into tomorrow's opportunities. With the UAE's rapid economic growth, our electricity usage has experienced an annual growth rate of 9 per cent from 1990 to 2006. The country's energy demand is expected to double by 2020. Parts of the Emirates have already experienced difficulties in meeting power demand in the summer, when air conditioning loads peak and energy consumption is at its highest.

Solar power is an attractive option, and is relatively quick to implement. Certain technologies, such as concentrated solar thermal (CSP) with integrated storage, can provide energy during peak hours. This would provide a continuous and reliable power supply when it is most needed.

Currently, we meet our peak demand largely by burning diesel and other liquid fuels. Apart from being too expensive, this process uses up fuels that we could otherwise export, and adds to air pollution. Expanding our energy portfolio to include renewable and other clean energy sources will allow us to protect our hydrocarbon reserves.

By setting a renewable energy target, our leadership has provided us with the right vision and a clear goal. The next step is to put in place a policy framework so that we can meet this target. Such a policy should encourage early investment. We need to start immediately. A clear and consistent regulatory framework that makes investment attractive in today's economic conditions will attract both local and international investment. We want to attract capital, technology and expertise to this country. Companies invest in attractive markets that have clear policy signals.

Additionally, the policy must be economically efficient and should promote a mix of energy technologies. While solar power will be encouraged, we should also have different levels of support for the various types of technologies, including clean fossil fuels, peaceful nuclear energy and renewable energy. By establishing policies that promote competition within each technology sector, rather than across the energy mix, we can expect to see the most commercially viable, scalable and efficient technologies emerge. This approach can significantly accelerate technological and economic improvements of the different energy sources as they compete for available incentives and R&D funds.

In parallel, we should also focus our policy development on energy efficiency to promote saving and reduce demand. Policy specific to energy efficiency should be cross-sectoral and include industry, lighting, transport and appliances. Energy conservation is the most effective approach to reducing demand and addressing climate change.

A study commissioned recently in Abu Dhabi revealed that the Government could save the cost of two power stations if it undertakes a full-scale effort to encourage the use of energy-saving appliances and sets standards to reduce electricity and water usage.

Finally, the policy and regulatory framework must be right for the UAE's market and conditions. While we can learn from best practices around the world, our renewable energy policy should be tailored to the UAE. For instance, financial incentives will need to take into account our low electricity tariffs.

Such a policy approach would help us meet our own energy challenges. It would also attract international investment and cutting edge technology into our country. And it would send a clear signal to the private sector that our leadership's vision of making renewable energy an important part of our energy mix, is real, and above all, achievable.


Sultan Al Jaber is the chief executive of Masdar

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