DUBAI: Even before the Ukraine war broke out, one thing quickly became clear – that the demand for conventional energy was not decreasing. Now, with Brent crude at around $107 a barrel and natural gas at $6.95 per mmBtu, the impending fiscal windfall has prompted Gulf Arab states to accelerate their transition to “green economies” amid rising risks of supply disruptions. gives resources.
From ambitious “circular carbon economy” and net-zero emissions pledges to investments in renewable energy and electric vehicle production, several initiatives over the past year have responded to calls for quick action by these energy-exporting countries to combat climate change. have been started. ,
At the same time, the Gulf region has made remarkable progress in the development of utility-scale solar and wind power, including phase three of the Mohammed bin Rashid solar project in Dubai completed last year and the inauguration of Saudi Arabia’s first wind farm on loam. In Al-Jandal.
“These are moments of success that build momentum through knowledge and experience,” Francesco La Camera, director general of the International Renewable Energy Agency, known as Irena, told Arab News.
“These low-cost renewable projects also open the door to the production of cost-competitive green hydrogen. We believe hydrogen will play an important role in the decarbonization of the energy system.”
IRENA’s “World Energy Transition Outlook” suggests that hydrogen could account for 12 percent of total final energy consumption globally by the middle of the century, well above today’s marginal levels.
La Camera said, “There are already clear signs of intent from the region to capture these market opportunities, which could prove to be a new and important aspect of the transition that the sector can apply its hydrocarbon expertise and experience to.” is.”
Led by COP26, the United Nations Climate Change Conference in Glasgow last November, the UAE pledged to achieve net-zero carbon emissions by 2050 and invest up to $160 billion in clean and renewable energy solutions.
Last month, Saudi Arabia launched the Saudi Green and Middle East Green Initiative, which aims to help the Kingdom reach net-zero greenhouse-gas emissions by 2060 and plant 10 billion trees in the coming decades, rehabilitating 8 million hectares of degraded land. Committed to, and allocation of new protected areas.
More recently, Abu Dhabi National Oil Company and Abu Dhabi National Energy Company announced that they would join the UAE’s state-owned holding company in Mubadala as shareholders in the clean-energy company Masdar.
The partnership is designed to increase Masdar’s renewable energy capacity to 50 GW by 2030 and build a global clean energy powerhouse with a focus on areas such as green hydrogen and renewables.
Similar developments are taking place in Saudi Arabia, including several projects in NEOM – the Kingdom’s smart city on the Red Sea coast – notably the launch of Oxagon, the world’s largest floating industrial complex.
“The Oxagon project is a revolutionary idea to see the way industries operate at the gateway to the most popular shipping channel in the world, powered by 100 percent renewable energy, and requiring a wide degree of symbiosis between different industries,” said Daniel Gribbin, corporate sustainability lead at WSP Middle East, told Arab News.
“The region’s drive for a more sustainable future is no secret. The level of transparency and individualized consumer behavior, along with the vision of regional leaders, has intensified the need to respond and act, so that they can gain a place in the global table.” .
“The demand for sustainability ideas from international investors has also been a driving force to contribute to ESG awareness, valuation and reputation in the regional market.”
According to Naval Al-Hosani, Permanent Representative of the UAE to IRENA, the past year has seen a sea change in the regional approach to climate action.
For example, at COP26, the UAE announced a number of historic pledges and partnerships to enhance ambitions, including the UAE-IRENA Energy Transition Accelerator financing platform, which aims to accelerate the renewable-energy transition in developing countries. 1 billion to be raised.
The UAE, through the Abu Dhabi Fund for Development, has already pledged $400 million in anchor funding for the platform.
“We also announced the Hydrogen Leadership Roadmap, which seeks to establish the country as a competitive global hydrogen exporter,” Al-Hosani told Arab News.
“Given COP27 in Egypt and COP28 in the UAE in 2023, the impetus for climate action will continue to create a ripple effect across the Middle East.”
La Camera describes the energy transition as an unstoppable megatrend, underpinned by innovation and driven by the pursuit of long-term prosperity and climate action.
“GCC countries recognize this opportunity and are acting accordingly,” he told Arab News.
“It is also important to recognize that the Gulf region is positioning itself as a serious player in the global energy transition as its leaders understand its hydrocarbon resource wealth and vast clean energy potential. Provides clean technologies and sustainable energy leadership.
Al-Hosani thinks hydrocarbons will continue to play an integral role in the energy system for decades to come, as managing an equitable and inclusive energy transition will be critical to turning the tide of climate change.
“We must rethink the balancing act of economic growth and sustainable development,” she said.
“But this transition will not happen overnight. We must move towards an energy mix that includes renewable and clean energy sources. While we must move to the energy system of tomorrow, we cannot simply unplug from the energy system of today. It’s not as easy as flicking a switch.”
From desertification to drought, the Middle East is particularly vulnerable to the effects of climate change. And although each country has its own unique reasons for transitioning away from fossil fuels and toward renewable energy, according to La Camera, the Gulf region has much to gain from the transition, even if there are uncertainties about the long-term future of hydrocarbon exports. . ,
“The harnessing of its vast clean energy resources offers diversified growth and the creation of new jobs in the 21st century,” he said. “Furthermore, we must not forget the alarming situation this region could find itself in, if global temperatures continue to rise unabated.”
La Camera said the climate crisis “is likely to cause regional average temperatures to nearly double the global average this century, while increasing pressure on already scarce water supplies. This is a profound and very real threat that the region can solve alone.” Can’t, but it should be part of the solution.”
Gribbin believes that there is no “silver bullet” for the challenge facing humanity. As such, policy makers, companies and individuals must work together to find common solutions.
“Investing in solutions to the challenges we face with climate change is not only good for humanity, but smart business as well,” he said.
“Individual drivers and consumer behavior have changed, and the demand for ‘green’ and sustainable products is only going to increase. As a sector that is highly dependent on imports, especially for food, and which has contributed to the proliferation of hydrocarbons, Contributed, the initial investment is critical in ensuring that we are part of the solution.
Gribbin said, by acting now, the region will ensure that it has a prosperous economy and an environment that can support a high quality of life for generations to come.
Ukraine’s invasion has the potential to accelerate the global trend toward renewable energy, with Europe expected to significantly reduce its reliance on Russian natural-gas supplies. If Gulf countries use their fiscal surpluses to fast-track the development of renewable-energy, hydrogen, ammonia-export and carbon-capture projects, they will be well prepared for a post-oil era.