Special Reports
Abu Dhabi Explores Energy Alternatives

By Hassan M. Fatah
New York Times
March 18, 2007

Abu Dhabi, United Arab Emirates, March 14 — On the outskirts of this Persian
Gulf boomtown, past an oil refinery and a water desalination plant, the
foundations are being poured for an ambitious project that will house a research
facility and perhaps even a power plant, all intended to take this oil-producing
giant into the next energy wave.

Oil, however, will have nothing to do with it. The sun, the wind and hydrogen will.

Abu Dhabi, the capital of the United Arab Emirates, the fourth largest OPEC oil
producer with about 10 percent of the known reserves, is seeking to become a
center for the development and implementation of clean-energy technology.
Last year, the emirate launched the Masdar Initiative (masdar is Arabic for
source), which has signed up major oil and technology companies, universities
around the world and U.A.E. ministries to help develop and commercialize
renewable-energy technologies backed by hundreds of millions of dollars of Abu
Dhabi’s money.

At first, the Masdar effort drew skepticism and a few snickers. The United Arab
Emirates has been singled out as one of the world’s highest per capita emitters
of carbon dioxide and other greenhouse gases.

The U.A.E. has especially high energy demand to maintain a luxurious life of
air-conditioning, chilled swimming pools and even an indoor ski slope in the
emirate of Dubai, a neighbor of Abu Dhabi. U.A.E. officials say the Masdar
project is one way to reduce demand for fossil fuels internally.

The U.A.E. is only the most serious among Persian Gulf oil-producing countries
whose thirst for electrical power has spawned efforts to find other sources of
energy to save high value fossil fuels for export. Most Persian Gulf states get
their water from desalinating gulf waters, an energy-intensive process. With
their populations growing rapidly, domestic consumption of oil is commanding a
greater share of production. Late last year Saudi Arabia and other gulf states
began a research program looking into nuclear power; Iran, which has faced off
with the United States and other international powers, insists that its nuclear
program is intended to serve mounting energy demands domestically.

Some other Arab countries have dabbled with renewable energy. The Bahrain World
Trade Center project in Bahrain includes wind turbines that, developers say,
will meet up to 35 percent of the project’s power needs. In North Africa and in
countries like Jordan, residents have been encouraged to adopt solar heating to
save energy costs.

The Masdar Initiative, however, is the most far-reaching program.
“They’ve seen the writing on the wall: where will all these places be,
post-oil?” said Virginia Sonntag-O’Brien, managing director of BASE, a center in
Basel, Switzerland, that promotes investment in energy efficiency and renewable
energy. “It’s their message that they are an oil-producing nation taking the
energy and climate issue seriously and developing their own economy, which is

Alternative energy has attracted increasing interest over the past year as
American industrial leaders have called for more aggressive action to be taken
against the phenomenon of global warming and the Bush administration has focused
greater attention on renewable energy. In Silicon Valley, the excitement over
clean-energy technology startups recalls the flurry of new Internet companies in
the 1990s.

From its gleaming high-rise towers to its $3 billion marble-encrusted Emirates
Palace Hotel, Abu Dhabi has long prided itself on being an example of what oil
money, put to good use, can do. Oil helped turn Abu Dhabi from desert fishing
village into an influential Arab capital. It helped build a citizens’ trust fund
that is estimated to be worth up to $300 billion, whose investments are
estimated to bring the emirate almost twice income as its oil sales do.

Now, Abu Dhabi hopes to show that petrodollars can develop innovation in clean
energy. Masdar has drawn up a $250 million Clean Technology Fund, and begun
construction of a special economic zone for the advanced energy industry. Last
month, Abu Dhabi announced plans to build a 500-megawatt solar power plant in
the area — one of the most ambitious of its kind in the world.

The plant will be the Persian Gulf’s first, to be built in partnership with the
Abu Dhabi Power and Water Authority, generating enough power for up to 10,000
homes. It should be operational by 2009, either as a stand-alone or as part of a
desalination project.

Shortly after it announced those plans, Masdar announced an even more ambitious
project to develop a graduate-level research center in combination with M.I.T.
that will be focused on renewable-energy technologies. Scientists who join the
program will be able to attend M.I.T. courses in Boston and will be assisted in
developing research and courses at Abu Dhabi. M.I.T. administrators liken the
effort to one that the university spearheaded in Bangalore during the 1960s that
helped create the high-tech corridor there.

“This is the first oil-producing state that has accepted and agreed with the
concept that oil may not be the only source of energy in the future,” said Fred
Moavenzadeh, director of the Technology Development Program at M.I.T. “That is a
significant realization.”

In a decade, Masdar’s executives and M.I.T.’s administrators predict, Abu Dhabi
is likely to have expertise in solar energy, photovoltaics, energy storage,
carbon sequestration and hydrogen fuel.

Most important, they say, it hopes to prepare itself for a world that is not as
reliant on fossil fuels as it is today. Abu Dhabi’s expertise, they say, is in
energy, not just in oil.

“We realize that the world energy markets are diversifying, so we need to
diversify too,” said Sultan A. al-Jaber, chief executive of the Abu Dhabi Future
Energy Company, the government arm that manages the Masdar Initiative. “We see
the growth of renewable energy as an opportunity, not as a problem.”

Experts warn that the big investments have yet to occur, but note that the
progress has underscored Masdar’s seriousness.

“For a player in that world to recognize that there’s this other component to
the energy business is itself a recognition that the world is changing,” said
Marc Stuart, director of new business development at EcoSecurities, a company
that structures and guides projects to reduce greenhouse gas emissions through
the Kyoto Protocol, the international agreement that seeks to curb global
warming, and also trades in credits earned by companies that make deep cuts.

“It is a very significant move because the Middle East is one of the areas where
renewable energy has never made any strides.”


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