A transition to renewable energy is key to global prosperity and climate change mitigation, and oil-rich nations must lead by example, says His Excellency Dr Sultan Ahmed Al Jaber
HE Dr Al Jaber spearheaded the launch and establishment of Masdar in 2006, and continues to drive the company’s strategic direction as it takes on an increasingly prominent role in the global effort to advance renewable energy and clean technology.
In 2009, HE Dr Al Jaber coordinated and led Masdar’s participation in the UAE’s successful bid to host the headquarters of the International Renewable Energy Agency (IRENA) in Abu Dhabi. He served on the United Nations Secretary General’s High Level Group on Sustainable Energy for All and is a member of the Sustainable Development Solutions Network’s Leadership Council announced by the UN in partnership with Professor Jeffrey Sachs, Director of the Earth Institute at Columbia University.
The following is an edited excerpt from an interview that took place with HE Dr Al Jaber last autumn at an International Peace Institute lecture.
Q: Why is a region that is so closely associated with oil and gas now diversifying into renewable energy?
A: As a major oil-producing nation, we have earned a position of leadership in the global energy markets, and with leadership comes responsibility. The UAE today possesses the fifth-largest oil reserves in the world, with 98 billion barrels, and the seventh-largest gas reserves, with around 204 trillion cubic feet. Hence, it is not a question of us being able to meet our immediate energy requirements. It goes beyond that. Our understanding of the energy markets and ability to generate financial investments enables us to provide a major push in the development and deployment of renewable energy, and in turn, contributing to global climate change mitigation and sustainable growth. It also offers an opportunity for the UAE to establish a new economic sector that will contribute to the diversification of our economy and maintain our existing energy leadership well into the future. Investing in and generating renewable energy in the UAE will help broaden our energy sources and increase the security of our supply. Most importantly, these steps will contribute to the UAE’s goal of transitioning into a knowledge-led and sustainable economy.
Q: Do you see a link between security, development and sustainable supplies of energy?
A: Energy is without a doubt inextricably linked with security and peace. Throughout history, conflicts have arisen from the need to secure energy access. The global population is rising, economies are growing, and climate change is a reality. Against this backdrop, oil and gas will continue to play an important role, but we should never forget that these resources are finite. There is an intricate balance that we must strike between our rising economies, our growing societies and our limited resources – a balance that is crucial to achieving a sustainable future. Without access to energy, economic growth and human development cannot thrive, and poverty and conflict cannot be prevented. Adopting an energy-mix approach and incorporating renewable energy is a solution that will improve energy security and contribute to achieving the necessary balance.
Today, renewable energy may not be as mature as we would like it to be. We must establish a road map that will accelerate the technology’s commercialisation and adoption, so it can complement conventional sources of power.
To avoid future conflicts, we must think ahead. This will involve diversifying our energy sources by seriously advancing technology research and development in the energy field. Naturally, there is no ‘one-size-fits-all’ solution. Each country with its own geography and demographics will require its own tailored approach.
Each nation can decide how much oil and gas is needed to meet its individual requirements, as well as how much clean energy can be applied. Moving forward, we have to utilise every source of energy in the most efficient, clean and sustainable manner possible.
Q: The Rio+20 conference of sustainable development was staged in 2012. What were your impressions of the event’s significance?
A: Large intergovernmental events play the role of encouraging governments to think hard about issues and to make greater efforts. In this sense, Rio was a success. It set up a number of initiatives, such as the Sustainable Development Goals, and added support to others, such as Sustainable Energy for All. These are important initiatives and should be implemented.
However, in my view the most important action is actually happening elsewhere. Although we took stock of green growth in Rio, the real story is the accelerating investment in clean energy that is taking place around the world, as well as the leading policies that some governments are already implementing.
This was the most striking aspect of Rio 2012. The first Rio conference in 1992 raised new issues for sustainable development, but the 2012 Earth Summit heard about a rich array of solutions. We still need to do more, but there is an encouragingly growing field of players.
Q: What incentives are there for private companies and governments to invest in renewable energy? And can it be profitable?
A: Existing policies and incentive schemes ensure our projects are profitable. Masdar is generating strong revenues through its projects in Spain through Torresol, and will generate more revenues this year through the London Array – the world’s largest offshore wind farm – and Shams 1, the world’s largest, single-unit, concentrated solar power plant, located in Abu Dhabi’s western region.
There are a variety of incentive schemes and policies being used around the world depending on the country’s regulatory frameworks. The feed-in tariff, for instance, is widely used across Europe and is also being adopted in other parts of the world. However, no one policy will provide a universal incentive scheme for private investment into the renewable energy sector. Each country must customise its approach with a regulatory framework and policy that will enable it to improve its energy and economic security.
Q: Some commentators perceive a crisis situation in the United States due to cheap natural gas. They claim it is undermining renewable energy efforts in that part of the world. What are your thoughts on this?
A: There is no doubt that natural gas from shale is having a major impact in North America. But the overall impact on renewable energy markets is likely overstated. First, it’s important to understand that global gas markets have hardly been impacted. Gas prices remain high in Europe, and exploration there and in markets such as China have yet to yield game-changing reserves. Even in the United States, the current very low prices are for ‘wet gas’, co-produced with oil, and therefore very cheap. Larger reserves will not be at the same rock-bottom prices. Natural gas is a great development, to be sure, but not a panacea. Secondly, renewable energy prices continue to fall at an impressive rate and are still supported by far-sighted policy. In the US, gas has mainly displaced coal. In Europe, support for renewables has slowed in some countries as a result of financial austerity and falling renewable costs, not by gas. We in the UAE have always seen renewable energy as part of a portfolio – in our case, one dominated by natural gas at present. Natural-gas generation can be turned up and down quickly, making it ideal for accommodating variable sources of power like solar or wind. Even in the US, a power system with more gas power will help make more renewable energy technically easier to implement. Certainly, the perception that natural gas is cheap and abundant may reduce public support for renewables in some places. But factoring in the need to address climate change, and falling prices for renewable technologies, I do not see this as a major diversion towards the widespread adoption of clean energy.