Funding Fuel Alternatives

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While hydrocarbons will continue to be used for the foreseeable future, Abu Dhabi is looking to develop new technologies and commercially viable and sustainable energy solutions.

Demand for energy both in Abu Dhabi and abroad is growing at a tremendous rate. According to a report by Emirates Bank, electricity demand in the UAE is growing 10% per year due to energy intensive industrial developments and an ever-increasing population. Abu Dhabi, cited in a 2004 report by the UN Development Programme as having the world's third-highest greenhouse gas emissions per capita, behind Qatar and Kuwait, is keen to improve its environmental ranking while providing the necessary energy for the emirate's economic growth.

During the opening ceremony of the World Future Energy summit, held in the emirate on January 21 to 23, Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, announced that the emirate's government would dedicate $15bn to a spread of 'green' energy endeavours, including the first phase of a project to develop the world's largest hydrogen power plant.

The proposed 500 MW hydrogen plant will be a joint venture between Masdar, the emirate's programme to develop and promote clean energy and sustainable design, and British Petroleum (BP) and Rio Tinto, a mining and exploration group based in the UK and Australia. Masdar will hold a 60% stake in the development and BP and Rio Tinto will hold equal shares of 20%. Expected to have a total cost of $2bn, the engineering and design for the plant are scheduled to be completed by the end of this year.

Funds will also be allocated for the development of Masdar City, marketed as the world's first zero-carbon, zero-waste city. Powered solely by sources of renewable energy, the 6 sq km city aims to house 50,000 residents and over 1000 businesses focused on sustainability and alternative energy. The city is scheduled to be completed in 2013, with construction to begin next month. It is being designed with input from the environmental group World Wildlife Fund.

Abu Dhabi's Tourism Development & Investment Company (TDIC) is working in partnership with Masdar to create alternative energy solutions to power new developments on Sir Bani Yas, an island located in the Western Region of the emirate. The island is home to the largest wind turbine in the Middle East, which came on line earlier this week. The 65 metre high turbine, manufactured by Vestas Denmark, has a production capacity of 850 KW per hour, and helps to power facilities on the island in conjunction with the national electrical grid.

Sir Bani Yas is at the centre of a new eight-island 'eco-resort' being developed by TDIC called the Desert Islands. Speaking to local press, Sheikh Sultan bin Tahnoon Al Nahyan, chairman of the Abu Dhabi Tourism Authority and TDIC, said the developers plan to utilise solar and wind solutions throughout the complex.

With measures like these, the government hopes to position the Masdar initiative as a key component of its economic growth and diversification. According to a group statement, "As a long-term strategic and financial initiative, Masdar aims to create an entirely new economic sector in Abu Dhabi, turning it into an exporter of technology."

It could well be a profitable one - a recent study conducted by the UN reported that investments in the alternative energy business reached $70.9bn in 2006. However, the profitability - and the relevance - of Abu Dhabi's environmental programmes have been questioned by those who point out that the technology needed for large-scale clean energy projects and sustainable development is still experimental and may not be commercially feasible.

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