Renewable energy should account for 7% of Abu Dhabi’s power generation capacity by 2020, the emirate’s government pledged in 2009 at the opening of the World Future Energy Summit, which was held in Abu Dhabi City. Most of this will come from solar power plants, which can capitalise on the emirate’s year-round sunshine. Abu Dhabi is already home to Shams 1, one of the world’s largest concentrated solar power plants.
The development of renewable energy, as well as other green technologies, is being led by Masdar, Abu Dhabi’s renewable energy and clean technology company. It is a fully owned subsidiary of the Mubadala Development company, a state-owned investment firm tasked with catalysing economic diversification in the emirate. Masdar is guided by the Abu Dhabi Economic Vision 2030, the emirate’s strategic roadmap for economic development.
Founded in 2006, the firm is a commercially driven enterprise with a business model that merges research, investment, renewable energy development and real estate. As part of its holistic approach to renewables, the Masdar Institute of Science and Technology – a graduate-level research university specialising in alternative energy and sustainability – drives innovations throughout the company. The university, located in Masdar City, is strategically positioned at the centre of the city’s “cleantech cluster”. The Masdar Institute serves as an incubator and partner for innovative businesses focusing on advancing technologies in the fields of renewable energy and sustainability (see Education chapter).
Masdar City, along with the university, provides an environment for businesses to test technology, share knowledge and accelerate commercial opportunities. Masdar also operates two clean tech funds – totalling $540m under management – and invests into promising companies around the world. The funds are focused on technologies and companies in clean energy, environmental resource management, energy and material efficiency, and environmental services. In addition, Masdar has a growing international presence as a renewable energy investor. To date, Masdar has nearly 1.5 GW of wind and solar projects installed or under development worldwide. “Masdar has a mission to invest, incubate and advance the establishment of a clean energy industry in Abu Dhabi and around the world,” Ahmad Belhoul, CEO of Masdar, told OBG. “Masdar will be focusing on the domestic market first. Abu Dhabi has a goal of 7% of its power generation capacity coming from renewables and achieving this is a goal that Masdar is participating in. Regionally, Masdar is still very engaged in promoting the role of renewables in the MENA region in countries such as Morocco, Egypt and Jordan. When there are good opportunities internationally, Masdar is also keen to get involved.”
Shams 1 Solar Project
Within Abu Dhabi, Masdar launched one of the world’s most significant renewable energy projects in early 2013 with the Dh2.2bn ($598.84m) Shams 1 solar power plant at Madinat Zayed in Al Gharbia. Shams 1 is one of the world’s largest concentrated solar power plants, with an installed capacity of 100 MW and an expected annual electricity generation of 210 GWh – enough to fully meet demand from 20,000 homes. Shams covers an area of 2.5 sq km and has a solar field with 768 parabolic troughs collectors. The use of parabolic mirrors, which are specially designed to pick up solar radiation, is complemented by a central tube that receives and concentrates heat from the sun’s direct rays. Heat transfer fluid, which absorbs the heat in the central tube, is then used to produce steam to drive a turbine, as in a conventional thermal power plant. According to Masdar, by substituting fossil fuel-driven power generation for a renewable, clean source, Shams 1 displaces 175,000 tonnes of CO 2 a year, the equivalent to planting 1.5m trees or removing 15,000 cars from the roads.
The plant was developed and is run by the Shams Power Company, a joint venture between Masdar (60%), France’s Total (20%) and Abengoa Solar of Spain (20%) on a 25-year build-own-operate deal. While Abu Dhabi’s year-round sunshine is a boon for the solar industry, environmental factors must also be accounted for when setting up solar projects – particularly sand and dust, which can reduce their capacity to absorb solar radiation. In 2012 the Masdar Institute launched the Research Centre for Renewable Energy Mapping and Assessment to analyse solar and wind energy potential. The institute found that the level of airborne dust in the UAE means the country’s direct normal irradiance is lower than Spain’s and some southern states in the US. However, Masdar is also in the process of developing technology that will clean and protect solar panels from dust and sand to optimise performance.
Bader Al Lamki, director of clean energy at Masdar, told local press in March 2013 that the solar plant is an important statement of intent from Abu Dhabi, which is looking to develop a long-term sustainable energy supply in the knowledge that its hydrocarbon resources, while substantial, are finite. The company asserts that there is a strong commercial case for renewables development and that Shams 1 is only a start.
“There is a snowball effect, and with each renewable project that gets funded, it helps to facilitate the funding for subsequent projects,” Belhoul told OBG. “Shams was a particular project and illustrates the possibility for successful implementation of renewables in this region with the needed innovation, even with its harsh climate. The mindset is changing and the financial sector is increasing its buy-in, a sign of its growing comfort with funding renewable projects. The regulatory system is also moving to accommodate more renewables, specifically with the new Energy Authority.”
Other Solar Projects
Masdar developed a 10-MW photovoltaic (PV) solar station to help power Masdar City – a low-carbon, sustainable urban development in Abu Dhabi. PVs use semiconductors to convert the sun’s rays into electricity and are commonly used in European solar plants. The Masdar City solar PV plant produces around 17,500 MWh of power a year, offsetting 15,000 tonnes of carbon emissions, according to Masdar. It also has 87,780 multicrystalline and thin film modules supplied by China’s Suntech and US-based First Solar.
Within the emirate, Masdar also has a range of small-scale renewables projects. One is an installation of 11 rooftop PV systems on government buildings in Abu Dhabi City, with a capacity during peak demand of 2.3 MW. This installation is an example of the government leading by example, as it has with raising electricity and water tariffs, but it also has the practical benefit of reducing diesel fuel consumption by 1.22m litres, cutting CO 2 emissions by 3220 tonnes, according to Masdar.
While solar power is seen as promising in Abu Dhabi, wind power projects have yet to gain traction, whereas elsewhere in the world, particularly Europe, wind contributes a more substantial proportion of power capacity than solar. Due to climatic conditions, Europe is less suited to large-scale solar development than the Gulf This is not just a case of a lack of wind, but the fact that the best locations for wind farms are often mountainous or remote, making construction of infrastructure more costly than it is worth.
Masdar is developing wind farms abroad. Late 2015 should see the opening of the 117-MW Tafila Wind Farm in Jordan, in which Masdar has a 31% stake. Masdar is one of three major investors in the Middle East’s first utility-scale wind power project in Jordan, which will increase the country’s power generation capacity by 3%. In October 2014 Masdar signed a joint development agreement with Oman’s Rural Areas Electricity Company to build the first large-scale wind farm in the GCC, a 50-MW station on which construction should start in early 2015. Masdar also has a 20% stake in the London Array, a 630-MW wind farm in the Thames Estuary east of the British capital.
Into The Future
While there have been some reports suggesting that Masdar’s ambitions have been curtailed by the global economic crisis, this is a claim that Belhoul rejects. Indeed, the progress of the firm’s investments abroad and at home indicates that it is in fact gaining momentum. The emirate of Abu Dhabi can maintain its current oil extraction rates for decades, but their eventual tapering is inevitable.
Masdar is an initiative that recognises this, and it aims to prepare the emirate for that long-term reality. As a result, its capital investments in sustainability should start paying off in the future.
“Oil prices go up and down, but Masdar invests for the long term,” Belhoul told OBG. “Historically, every low point in the price of oil is met with a rebound, so renewables maintain their appeal over time. In fact, the volatility of oil prices is one of the main reasons motivating policymakers to add more renewable energy sources into the overall mix. The fuel cost of solar and wind is zero, and this stability in the cost of power generation can only be provided by renewable energy.
“Importantly, as technology continues to advance, renewable energy will only be increasingly cost-competitive,” Belhoul continued. “Also, even oil-rich places like Abu Dhabi stand to benefit from renewable technologies because having renewable energy ultimately frees up more hydrocarbon resources for export.”
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