In January 2009, on the eve of the second World Future Energy Summit, Abu Dhabi’s government announced that by 2020 at least 7% of the emirate’s power generation capacity would come from renewable sources. In the half decade since then, Abu Dhabi has become one of the Gulf’s most prominent players in the areas of energy sustainability and renewables research and implementation. With Masdar at the helm, the emirate’s renewables industry is considered to be one of the region’s most advanced. “Through Masdar, the UAE is redefining the role it plays in providing the world with energy,” Sultan Ahmed Al Jaber, UAE Minister of State and CEO of Masdar, told local press in March 2013. “From precious hydrocarbon exports to sophisticated renewable energy systems, we are balancing the energy mix and diversifying our economy – moving toward a more sustainable future. Today, the UAE is the only OPEC nation delivering both hydrocarbons and renewable energy to the international market.”
In the five years since the government set the 7% renewable energy target, a considerable amount of progress has been made. At the seventh World Future Energy Summit, which was held in Abu Dhabi in late January 2014, Masdar highlighted its recent achievements. In 2013 alone the firm installed more than 750 MW of renewable capacity in total, which included a variety of solar and wind projects in the UAE, UK, Seychelles and Mauritania. In March 2013 the firm also oversaw the launch of the world’s largest operating solar thermal power plant, in Abu Dhabi’s western region of Al Gharbia. In mid-2013 the world’s largest offshore wind farm – 20% of which is owned by Masdar – began operations off the coast of the UK. Additionally, in November 2013 the company announced that it would collaborate with the Abu Dhabi National Oil Company (ADNOC) on the Gulf’s first commercial-scale carbon capture project. Another sign of emirate’s newfound importance in the renewable energy industry was the 2013 ratification of a statute that made Abu Dhabi the permanent home of the International Renewable Energy Agency (IRENA), an intergovernmental organisation that was formally established in 2011. As of late 2013 the agency counted 120 countries as full members, with a total of 160 nations agreeing to participate in the organisation in some form or another. The decision to base the institution in Abu Dhabi is widely considered to be a signal of the emirate’s rapidly growing reputation as a regional centre for renewable energy research and development (R&D). “The ratification is another indicator of Abu Dhabi’s emergence as a key player in global efforts to ensure a sustainable energy future,” said Adnan Z Amin, the director-general of IRENA.
A New Area Of Focus
Abu Dhabi’s foray into renewable energy began in 2006, when Masdar was established as a wholly owned subsidiary of the Mubadala Development Company, a government-owned investment firm. Masdar, which has a mandate to “advance renewable energy and sustainable technologies through education; R&D; investment; commercialisation; and adaptation”, is made up of three integrated business units. Masdar Capital is the organisation’s investment arm, while Masdar Clean Energy is charged with developing and managing large-scale renewable energy projects. Masdar City, meanwhile, is a special economic zone near Abu Dhabi City that is being developed as a pilot project for testing new “green” technologies and other sustainable urban systems. Additionally, the firm is closely associated with the Masdar Institute of Science and Technology, an independent, research-focused university. These various units have continued to carry out business in line with the Abu Dhabi Economic Vision 2030, the emirate’s overarching long-term economic development strategy.
In terms of domestic electricity production, Masdar Clean Energy’s Shams 1 project, which opened in March 2013, is the country’s largest renewable energy project to date. The project, which has been in development since the late 2000s and under construction since 2010, covers a 2.5-sq-km site in Madinat Zayed, some 120 km south-west of the capital, and is made up of 258,000 mirrors mounted on 768 tracks, which allow the mirrors to follow the sun over the course of the day. The mirrors, in turn, focus sunlight on pipes that, when heated, generate high-pressure steam to drive turbines, thereby generating electricity. The $600m initiative was a joint venture between Masdar (60%), French oil major Total (20%) and Abengoa Solar (20%), a Spanish firm. With total capacity of 100 MW and direct links to the UAE’s power grid, Shams 1 is expected to provide clean energy to power 20,000 homes throughout the country, displacing an estimated 175,000 tonnes of carbon dioxide on an annual basis.
The London Array wind project, meanwhile, was established in 2001 in the Outer Thames estuary off the coast of Kent, to the south-east of London. The $2.93bn initiative was financed by Denmark’s DONG Energy (50%), the German firm E.ON (30%) and Masdar (20%). Composed of 175 Siemens wind turbines situated 20 km off the coast of the UK, the array has a total output of 630 MW, which means that it is capable of powering 500,000 homes. Construction work on the project was completed in 2012, and it has been operational since mid-2013. In October 2013 Masdar sourced $417.28m in financing for its share of the project from a variety of banks, including Japan’s Bank of Tokyo-Mitsubishi and Sumitomo Mitsui Banking Corporation and Germany’s Siemens Bank and KfW-IPEX Bank.
In late 2013 Masdar announced a joint venture with ADNOC, the emirate’s national oil company, to build the first commercial-grade carbon capture, utilisation and storage (CCUS) facility in the Middle East. The project will capture excess carbon emissions from manufacturing activities at plants operated by Emirates Steel and transport the carbon to ADNOC-controlled oil fields, where it will be used for enhanced oil recovery activities. In mid-November 2013 Masdar and ADNOC awarded a Dh450m ($122.5m) engineering, procurement and construction contract to the Dubai-based Dodsal Group, which was charged with building a facility to compress the captured carbon dioxide and a 50-km pipeline between the steel plant and the oil fields. According to Masdar, the project will result in the use of up to 800,000 tonnes of carbon dioxide on an annual basis. The facility is expected to be operational by 2016.
In addition to the large-scale Shams 1, London Array and CCUS projects, Masdar is involved in a variety of other initiatives that are either smaller in scale or in the early stages of development. The Noor 1 project, for example, is a 100-MW photovoltaic solar facility that is set to be built in Abu Dhabi in the near future, though it is currently awaiting approval from the government. A number of other Gulf countries have followed the UAE’s lead and launched renewable energy programmes of their own. Saudi Arabia aims to generate 54,000 MW of renewable energy by 2030, the great majority of which is expected to come from solar. Similarly, Oman and Qatar have announced plans to launch solar and other sustainable energy projects. As of the end of 2013, however, most of these projects were only in the conceptual or early construction phases.
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