Clean energy will become a profitable future reality
Emirates Business 24/7
In its initial stages, Masdar emerged as a dream but over the past
few months it has started to become a reality, creating the largest
specialised centre for research and application of alternative energy.
The
clean city, which is one element of Masdar’s initiative for future
energy, is the first of its kind in the world, represents an integrated
melting pot, which will open doors to investors who desire to explore
opportunities in the new industry and to achieve annual returns
reaching up to 14 per cent. Or it is for those who want to live in a
clean environment free of harmful emissions?
This is Masdar’s vision of future energy as expressed by CEO of Abu
Dhabi Future Energy Company Dr Sultan Ahmed Al Jaber.
Is Masdar’s future energy plan based only on one project?
No.
Masdar is not just about clean city. The clean city initiative is one
element in our comprehensive plan that seeks to turn Abu Dhabi into a
world pioneering centre for future energy. The city will be the melting
pot or home for companies working in that field. It will host
world-class firms and research laboratories based on a 100 per cent
freehold system. We are creating a new society for clean industry,
environment, acquisitions, investments, education and research.
Apart
from oil, we have sun as an alternative natural resource and we have
used solar panels to turn its rays into energy. The project’s cost
might be high but the high returns of oil can cover the costs.
Is this initiative similar to others we have seen in the UAE and the region, for instance Dubai Techno Park?
There
is no initiative in the world that matches Masdar’s; even organisations
that have produced solar energy did it on a comparatively small scale.
Don’t you think launching this clean energy plan in the UAE, which has the world’s fifth largest oil reserve, is strange?
It
is not strange, but special. And what you see as contradiction confirms
the UAE’s keenness to preserve the environment and prepare the measures
needed to achieve greener future. It also shows how important the
leadership considers clean energy.
Masdar
has not been born out of fear of drop in oil production. Rather the aim
was to curb oil’s negative impact on the environment. And, as I said,
the aim is to make Abu Dhabi a world pioneer in the field of future
energy. We think about the future and seek to develop alternative
energies. And this ambitious initiative, which is backed by the
government, aims not only to produce solar energy but also to encourage
big manufacturers to develop this technology at the local
level. Masdar’s initiative is in itself a new economic sector that
evolves around alternative energies and will have a positive influence
on the UAE economy. The UAE produces about 2.5 million barrels per day,
while it has a current production capacity of 2.7 million barrels a
day. And it is expected the capacity will go up to 3.5 million barrels
per day in the next few years.
We
have in the past seen initiatives to create technological or media
melting pots, but some believe these plans changed directions mid-way.
Do you fear a similar change happening to your initiative?
I
do not want to comment on others’ initiatives, but what we have seen of
other plans in and outside the country, such as Dubai Media City and
Dubai Internet City, were not created to be melting pots.
A
melting pot, as I understand, is a place that has all the elements
needed to set up a specific industry, which means it has the
capability, research and development centres, offices for companies to
work in, finance services that can embrace new ideas and supporting
bank services. This is what we call a melting pot.
Add
to this, of course, accommodation for staff. And I do not see this
happening in this part of the world. What we are trying to create is to
a large extent similar to Silicon Valley, which contains all the
elements I have mentioned. It will take care of creative production,
supported by a number of universities that would follow up its work and
provide it with academic expertise.
It
will also be backed by investment funds that are interested in
developing the ideas that it puts on the table. The truth is that if
you want to have experts in information technology you will look
towards Silicon Valley rather than Dubai Internet City.
Therefore,
what we are trying to do is to find the proper platform for academics,
researchers, service providers, embracing institutions or pioneers of
new ideas who want their plans to see the light of day.
We want to integrate them with society, partners, students and banks.
We
have heard that Masdar has a huge budget worth billions of dirhams. Can
you tell us about the feasibility study of Masdar initiative?
I
will not tell you right now because often initiatives acquire
importance through the volume of finance earmarked for them, regardless
of their feasibility. Many firms announce huge amounts to gather
attention.
Are you confident solar energy will be a stable source of energy, especially since you plan to produce it on a wide scale?
Solar energy has existed for some time now and is highly reliable.
And
we have not invented it. But we try to develop and increase reliance on
it as an alternative energy. This requires production on a wide scale.
And it is not possible to have reliable solar energy without large
scale production and a huge capital. This is true in all new
industries. You need mass production and a huge capital to bring the
industry to maturity and enable it to become marketable and a
commercial success .
To what extent did vision play a role in the “a clean city free of emissions” plan?
At
one stage the initiative was just a dream but it has become a reality.
We are working on several fronts to help curb emissions as we are aware
of the amount of carbon emissions caused by nationals and residents.
According to last year’s UNDP report, UAE per capita carbon emissions,
which cause global warming, amounted to 34.1 tonnes in 2004, which is
the third highest in the world after Qatar and Kuwait.
In
the United States, it was 20.6 tonnes. Masdar initative is investing in
companies working in the field of sustainable energy and technology
through a $250 million (Dh917.6m) fund to finance environment friendly
technologies.
The fund is
jointly financed by the initiative, Credit Suisse Bank and Consensus
Business Group of Britain. We have almost finalised the deal with the
bank and the group.
What about the city itself?
The
city will cost several billions of dollars and will accommodate 50,000
people in the work place. None of the city’s residents will be able to
own houses, which will be rented out. The streets will have personal
automatic and electricity-powered means of transport, which will be
integrated with a light railway system.
The
shaded pedestrian paths and narrow streets will provide a comfortable
atmosphere to walk to office or home despite the long and hot summers
here. The cost of the city will be higher than previous estimates,
which were $5 billion, and the Abu Dhabi Government will finance part
of the project, while partners will cover the rest.
The
city will accommodate between 14,000 and 15,000 residents while the
work space will have 50,000. Fosters + Partners Ltd, a United
Kingdom-based company, which is famous for designing the Reichstag in
Berlin and Wembley Stadium in London, will design the city. Phase One
is expected to be completed in 2009 and the city will ready in 2016.
The
design, which was inspired by the old cities of the Arab World, shows
narrow streets and small building but no cars. Solar panels will work
as shades to protect pedestrians from the sun. Solar and wind energy
will be used to supply electricity to the city and water desalination
plans.
How much solar energy do you plan to produce?
We
will start with 100 megawatt, which will be increased later. And when
we have made the city self sufficient, we will market the excess amount
to the government or private sector inside the country or outside.
What incentives are you providing to attract companies?
Returns
in this sector are good and there is a real opportunity the returns
will increase in the future. Investors should expect returns reaching
some 14 per cent a year. We are creating a whole new industry.
