Abu Dhabi's Ambitious Eco-City - Masdar

The Economist
December 4, 2008

Environment: Abu Dhabi has embarked upon an ambitious plan to build a
zero-emission clean-tech centre in the desert. Will it work?

THE world’s grubbiest people, measured by emissions of greenhouse gases per
head, are the citizens of the United Arab Emirates. The country’s huge oil
wealth allows many of them to drive big, fuel-guzzling cars and live in huge,
power-guzzling homes. What is more, the country’s hot and muggy climate means
that almost all the buildings are air-conditioned, and almost all the water is
obtained from energy-intensive desalination plants. The result is an offence to
the atmosphere.

What is more, Abu Dhabi, the biggest of the country’s seven princely
city-states, has a huge vested interest in the continued domination of the world
economy by fossil fuels. It sits atop some 8% of the world’s proven reserves of
oil. At current rates of extraction, the oil will last for another 92 years. So
it is with some scepticism that the world has greeted Abu Dhabi’s plans to
reinvent itself as a crucible of greenery.

In 2006 Abu Dhabi’s development agency unveiled the Masdar Initiative, to
pursue “solutions to some of mankind’s most pressing issues: energy security,
climate change and truly sustainable human development”. The initiative consists
of a research institute to develop environmental technologies, an investment arm
to commercialise and deploy them, and an eco-city to house these two outfits and
to serve as a test-bed for their ideas. All this, it is hoped, will turn Abu
Dhabi into the Silicon Valley of clean technology, where green-minded academics,
entrepreneurs and financiers will rub shoulders.

Thinking big

The project is nothing if not ambitious. Masdar’s managers say they will create
an academic institution on a par with the Massachusetts Institute of Technology
(MIT), a global manufacturing hub for technologies such as solar power and
desalination, and a city of 40,000 people with no greenhouse-gas emissions and
no waste—all while turning a profit. The government of Abu Dhabi is putting up
$15 billion in seed capital, but the investment arm and Masdar city are intended
to be run on a commercial basis, in conjunction with other companies.

In the past, some of Abu Dhabi’s grandiose schemes have come to nought—most
notably a plan to build a global financial hub from scratch a decade ago. More
recently, developers have suggested that they might scale back other splashy
projects, such as a huge new cultural quarter. But Masdar is proceeding apace.
Abu Dhabi’s crown prince, Sheikh Mohammed al-Nahyan, was excited about the idea
from the start and is taking a personal interest in its progress, says Sultan
al-Jaber, Masdar’s boss.

Masdar Institute of Science and Technology (MIST) will admit its first students
next year; the first phase of Masdar city is under construction and Masdar has
built up a big portfolio of renewable-energy investments, including a stake in
an offshore wind farm in Britain and three solar-thermal power plants in Spain.
It has also placed an order for machinery for two solar-panel plants: one that
is already under construction in Germany, and another that is to be built in Abu
Dhabi itself.

Outsiders seem keen to get involved. MIT is helping MIST with the recruitment
and training of its faculty. Credit Suisse, a Swiss bank, has invested $100m in
the initiative’s clean-tech fund—the same amount as Masdar itself. Foster +
Partners, a British architecture firm, has come up with the master-plan for
Masdar city. BP, a big oil firm, and Rio Tinto, a mining giant, will collaborate
on a carbon-capture and storage scheme. Masdar is working with such partners not
because it lacks capital, says Mr al-Jaber, but because it wants to take
advantage of foreign expertise and have its ideas independently scrutinised.
It is Masdar city that has attracted the most scrutiny. To reduce its emissions,
especially in such an unwelcoming environment, the city will employ all sorts of
innovative and outlandish technology. All the buildings, naturally, will be
supremely energy-efficient. Water will be recycled, to reduce the need for
desalination. There will be dew-catchers, rainwater harvesting and electronic
sensors to raise the alarm in case of leaky pipes. There will be green spaces,
but with drought-resistant plants rather than the thirsty lawns and flowers that
are the norm in Abu Dhabi.

No cars will be allowed. Instead, people will have to walk, or take “personal
rapid transit”—small pods that will zoom around the city on tracks, akin to
metro cars for individuals. Goods will be moved in the same way. The city will
be walled, to keep out the hot desert wind. The lack of cars will allow for
narrow, shaded streets that will also funnel breezes from one side of the city
to the other.

Roofs, canopies and a large patch of land on the edge of the city will be given
over to solar panels. The city is already testing 41 types of panel from 33
different manufacturers, to see which work best in the sunny, hot and dusty
desert conditions. There will also be the odd wind turbine, solar water-heaters
and small waste-to-energy facilities (the city’s planners do not like to call
them incinerators).

The plans leave space to adopt new technologies when they reach maturity. A spot
has been saved for algae ponds that might some day produce biofuel, for example.
For the time being they will be used for research. The whole city is being built
on a raised platform, to give easier access to the pipes and wiring that would
normally be buried underground and to allow the transport pods to zip around
unfettered. That will also make it easier to install revolutionary new kit in
future. Indeed, the source of roughly a fifth of the city’s power supply has not
yet been decided, on the assumption that there will be better options available
by the time the project is due to be completed, in 2016.

Following the footprints

All this, it is hoped, will allow the city to produce more energy than it
consumes and ensure that less than 2% of the waste it generates ends up in
landfills. Carbon sequestered in the city’s vegetation, along with exports of
surplus green energy, should be enough to offset the emissions associated with
construction, says Khaled Awad, who is managing the site. Contractors say they
are keeping careful track of their carbon footprints and mutter about the
difficulties of finding concrete and steel with a high recycled component. A
bewildering array of recycling bins stands prominently in the waiting area of
the site office.

A vision of the clean-tech futureBut the city’s zero-carbon claim is a bit of a
fudge. For one thing, the city will not produce enough energy to power itself at
night, due to its reliance on solar panels. Instead, it will import gas-fired
power from Abu Dhabi’s grid, at least until energy-storage technology improves.
It will make up for this in its carbon accounting by exporting excess solar
power to the grid during the day. In addition, to keep energy use down, the city
will not allow any energy-intensive industries within its boundaries, even
though spurring local manufacturing is a big part of the Masdar initiative.

Furthermore, in itself, Masdar will do little to improve Abu Dhabi’s carbon
footprint. Cheap oil, natural gas and power will continue to spur
emissions-intensive industry and conspicuous consumption. Next to Masdar city, a
Formula One racetrack and a Ferrari-themed amusement park are being built. In
fact, Mubadala, the development agency behind Masdar, owns a 5% stake in Ferrari
and sponsors its Formula One team. Just a few miles up the road, it is building
the world’s biggest aluminium smelter, complete with its own gas-fired power
plant. A nearby mall is even planning to install an indoor ski slope, like the
one in nearby Dubai.

But Masdar’s creators, to be fair, seem to see it more as a development project
than as an environmental one. They do not pretend that Abu Dhabi is about to
wean itself off oil and gas. But its rulers, they say, want to diversify its
economy, in preparation for the day it runs out of oil—or of customers for it.
Since local workers and officials have already built up some expertise in
energy, it makes sense to capitalise on that.

What is more, Abu Dhabi, with its intense, year-round sunlight and desperate
thirst for water, is ideally suited to develop technologies such as solar power
and desalination. And thanks to all that oil, there is no shortage of capital.
Masdar plans to help finance promising technologies at all stages of
development. It will set up its own incubator to nourish local start-ups, in
addition to the clean-tech fund and other strategic investments in mature firms.
Human capital, however, is another story. Mr al-Jaber says that Masdar has
studied successful technology clusters around the world in an effort to recreate
the same conditions in Abu Dhabi. He is particularly keen to mimic the welcoming
regulatory environment and efficient infrastructure of places such as Singapore
and Ireland. Foreign firms setting up shop in Masdar city will, he points out,
be able to work without local partners if they want, and to move capital freely
in and out of the country. There will be strong protection of intellectual
property and little in the way of paperwork. Most alluringly, they will not pay
any taxes.

MIST, meanwhile, seeks to entice great minds with the promise of minimal
teaching requirements—just one course at a time—and plenty of opportunities to
pursue original research. The “open laboratory” of Masdar city is another draw,
says Marwan Khraisheh, who runs the institute. It has succeeded in recruiting
faculty or students from grand American universities such as Cornell, MIT and

Masdar itself, meanwhile, has recruited such figures as Rajendra Pachauri, the
head of the United Nations’ climate panel, and John Browne, a former boss of BP,
to help select the winner of a prize for innovation in energy. Britain’s Prince
Charles is a patron. In the project’s headquarters, renewable-energy executives
hoping to sell their wares fill the waiting room, while thrusting young staffers
of many nationalities rush to and fro. Jonathon Porritt, a celebrated British
environmentalist, ambles past.

Of course, Abu Dhabi is still not Silicon Valley. MIST is tiny, and will not
admit its first doctoral student until 2011. The city has a miserable climate
and little in the way of entertainment apart from malls and restaurants. But it
is more cosmopolitan and less conservative than many imagine. Most foreigners
arriving in Abu Dhabi for the first time find it “better than they expect”, says
Mr Khraisheh. Perhaps the same will be true of Masdar, too.


Promoting Green Building Design, Construction and Operation, Sustainable Living,
Clean Technology, Renewable Energy Resources and Energy Independence