OBG talks to Ahmad bin Shafar, CEO, Empower

Ahmad bin Shafar, CEO, Empower

Interview: Ahmad bin Shafar

What can be done to establish a larger presence for cleaner energy technologies in Dubai?

AHMAD BIN SHAFAR: Energy is vital to sustaining life in this region, as indeed it is everywhere. On the one hand, the region produces the largest amount of energy from fossil fuels; and on the other hand, governments in the Middle East are keen to ensure that energy usage be made more efficient. All energy and utility service providers in Dubai are operating under the state’s broader energy policy, articulated and monitored by such high-level statutory bodies as the Supreme Council for Energy. The government of Dubai is therefore very particular about ensuring the energy sector’s ability to meet consumption demands by exploring alternative sources of energy, reducing its carbon footprint and optimising energy usage. Indeed, Dubai’s energy management practices have been accepted as a role model across the member states of the GCC. As a preferred location for multi-national energy companies wishing to establish their regional presence, Dubai will be able to leave an indelible mark with regards to research and development in the field of clean energy.

To what extent can companies cooperate to reduce the carbon footprint of the GCC?

SHAFAR: There are numerous international companies currently operating in the UAE across various sectors, offering environmentally friendly services and products. They function in accordance with both international and local guidelines on green living and sustainability. However, deeper involvement by the government, for example through regulatory bodies, will increase the extent of cooperation between these companies in order to ensure that the region’s vision on sustainability is also implemented. One of the obstacles in this direction could be the variations that currently exist – for instance in terms of the sustainability of their guidelines and practices – among the member states of the GCC.

What challenges does the cooling sector encounter when attempting to increase collaboration with real estate developers in the UAE?

SHAFAR: District cooling (DC) can enhance the value of a development or property, in addition to saving space, complying with government regulations on sustainability, reducing maintenance issues and attracting higher net worth customers. Cooling technology and all its variants form an essential part of any real estate development in the country as well as in the wider region. The technology and business models that are commonly associated with district cooling have more of a long-term focus, making them appropriate to large-scale developments.

As a result, real estate developers with a long-term focus will mostly prefer to use DC for their developments. There are currently a number of large-scale developments in the emirate. These are being carried out both by governments and private developers, who are increasingly looking to DC as a viable alternative. However, developers will need to have clear backing if they are to opt for such services in their developments. The fact that to a great extent the government and related authorities have initiated and supported the DC industry in the UAE means that it is facing far fewer challenges in collaborating with real estate developers than elsewhere.

The DC industry is capital-intensive, requiring a comparatively large amount of financing if it is to successfully develop the necessary infrastructure, such as plants and networks. Such an investment will have to be made either by the DC provider or the developer. However, developers and consumers have, generally speaking, been exempted from infrastructure investment. Instead, they contribute to it from a portion of their regular cooling bills. Empower has adopted two payment models, charging the developer on the one hand, while in turn the developer charges end users indirectly using various methods, or else charges end users directly using sub-metres.

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The Report: Dubai 2014

Energy chapter from The Report: Dubai 2014

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