United Arab Emirates - Renewable EnergyUAE - Renewable Energy

Overview

The United Arab Emirates (UAE) has one of the highest solar exposure rates in the world, giving it tremendous potential for renewable energy development.  With sizable domestic oil and gas reserves, the nation traditionally relied on conventional energy inputs.  However, a push toward economic diversification, to avoid sharp commodity downturns associated with an oil-based economy, has led to new incentives and the advent of the latest in renewable energy technologies.  In addition, rapid industrialization, growing population, and increasing demand from water desalination facilities have led to increasing energy demands and a call to diversify inputs. 

As a result, the UAE has been at the forefront of renewable energy development in the MENA region.  This is reflected by the following milestones: the establishment of the Abu Dhabi Future Energy Company, Masdar, and the region’s first carbon-neutral zero waste city, Masdar City, in 2006; the hosting of the annual World Future Energy Summit in Abu Dhabi since 2008; the establishment of the Emirates Nuclear Energy Corporation (ENEC) in 2009; the International Renewable Energy (IRENA)’s designation of Abu Dhabi as its headquarters in 2009 and relocating to Masdar City campus in 2015; and the development, and equity funding of strategic mega solar projects globally. 

According to Business Monitor International’s Q1 2019 report, solar power remains the main driver of renewable energy in the UAE, with solar generation rising from 1.25 terawatt-hour (TWh) in 2018 to 4.76 TWh in 2019 and 13.66 TWh in 2028.  Moreover, the renewables sector is projected to increase its share of overall power generation in the UAE from 0.9 percent in 2018 to 3.4 percent in 2019 and 6.9 percent in 2028[1].  This upward trajectory is demonstrated by a number of ongoing projects and initiatives in Dubai and Abu Dhabi. 

In January 2017, the UAE launched its ambitious “Energy Strategy 2050”, the first unified energy strategy in the country to become law in order to balance between production and consumption of energy[2].  The UAE 2050 energy strategy would diversify the country’s energy mix and include 12 percent clean coal, 38 percent gas, 6 percent nuclear energy, and 44 percent clean energy (solar power, wind power, and biofuels).  The strategy aims to increase the share of clean energy in the country’s electricity generation capacity to 50 percent by 2050 (44 percent renewable and 6 percent nuclear).  This goes hand in hand with the UAE’s Vision 2021 strategic plan to generate 27 percent of its energy requirements from clean sources, including nuclear power[3]. 

In Dubai, the Supreme Council of Energy announced an implementation plan for the Dubai Clean Energy Strategy 2050, a year after the launch of the national strategy by H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai.  The strategy sets clean energy targets at 7 percent of Dubai’s total power output by 2020, 25 percent by 2030 and 75 percent by 2050[4]. 

The Mohammed bin Rashid Al Maktoum (MBR) Solar Park was announced in January 2012 in line with the vision and directives of H.H. Sheikh Mohammed bin Rashid Al Maktoum to enhance the sustainable development of Dubai.  It also supports the Dubai Clean Energy Strategy 2050 to make Dubai a global center of clean energy and green economy.  The Dubai Electricity and Water Authority (DEWA) is managing the MBR Solar Park, which is the world’s largest renewable energy project on a single plot with a planned production capacity of 5,000 megawatts (MW) upon completion in 2030. (Note: Due to the size of the solar park, DEWA has divided its construction into several phases). 

In March 2018, the fourth phase of Dubai’s MBR Solar Park, broke ground in Seih Al-Dahl.  In March 2019, DEWA completed financing for its 950 MW fourth-phase from around a dozen local and international banks.  This phase is the largest single-site investment project in the world, covering an area of 44 square kilometers, and will feature the world’s tallest solar tower measuring 850 feet, as well the world’s largest thermal energy storage capacity on its completion.  It uses both concentrated solar power (CSP) and photovoltaic (PV) solar technologies based on the independent power producer (IPP) model with investments up to AED 15.78 billion ($4.3 billion).  It will generate 700 MW of CSP of which 600 MW from a parabolic basin complex and 100 MW from a solar tower, and 250 MW from PV solar panels.  This phase will provide clean energy for 320,000 residences in Dubai, reducing 1.6 million tons of carbon emissions annually[5].  The first and second phases of the MBR Solar Park, which produce 13 MW and 200 MW respectively, were commissioned and are generating clean power.  The 800 MW third phase will be operational by 2020, and the first stage of the fourth phase will be commissioned in the fourth quarter of 2020. 

In late 2017, Abu Dhabi Distribution Company (ADDC), the public entity responsible for distributing water and electricity in Abu Dhabi, launched a program to allow residents and businesses to add solar panels on rooftops to reduce their electricity bills.  Similar to Dubai’s rooftop initiative, Abu Dhabi will use a net metering scheme which will allow customers to generate solar power for their own electricity use with any excess fed back into the grid in exchange for credits on the subsequent power bill. 

In February 2017, the Abu Dhabi Water and Electricity Authority (ADWEA), currently known by the Department Abu Dhabi of Energy (DoE) which was established in 2018, signed a power purchase agreement with Japan’s Marubeni Corporation and China’s JinkoSolar Holding to build and operate the world’s largest PV solar plant located in Sweihan, with an expected capacity of 1.17 gigawatt (GW).  This project, which is named “Noor Abu Dhabi,” is expected to be completed and commence operations by mid-2019.  In February 2018, the $872 million solar project was named as the Large-Scale Solar Project of the Year by the Middle East Solar Industry Association (MESIA). 

In February 2017, U.S. electric car maker Tesla opened a showroom in Dubai.  The firm’s CEO Elon Musk noted, “The company planned to invest millions in the UAE on infrastructure including recharging stations”.  As of 2019, there are 103 Tesla destination charging stations and only 3 supercharger stations available in the UAE with plans to bring hundreds more online at Abu Dhabi National Oil Company (ADNOC) and Emirates National Oil Company (ENOC) service stations over the next several years.  DEWA has recently completed the second phase of its ‘Green Charger’ initiative, which included the installation of an additional 100 EV Green Charger stations across Dubai, for a total of 200 EV stations. 

In July 2016, the achievement of Solar Impulse 2 (the only airplane of perpetual endurance able to fly day and night on solar power) was a symbol of Masdar-led innovation and the first solar plane to fly around the world.  Such a leading outlook in developing renewable energy will help the UAE become a leader in developing environmental policy and in job creation.  The UAE plans to create more than 90,000 jobs in renewable energy by 2030. 

In early 2015, DEWA created the Shams Dubai initiative.  This program allows DEWA customers to install solar panels on their property and utilize the produced solar energy to reduce their monthly electricity bills.  The electricity is used on site and the surplus is exported to DEWA’s network.  The solar-powered project for 5,000 Emirati homes in Dubai will be completed by the end of 2019[6].  The initiative intends to have solar panels on all rooftops across Dubai by 2030[7]. 

As of March 2019, DEWA has installed and connected 1,276 solar panels on the roofs of residential, commercial and industrial buildings in Dubai, with a total capacity of about 81 MW under this initiative[8].  The first rooftop solar system installed under the Shams Dubai program was a 30-kilowatt (KW) system at Al Maktoum International Airport.  Several projects have been completed since including the installment of numerous systems at Dubai Municipality buildings.  DEWA has also connected several solar projects on its own premises, such as a 1.5 MW system at Jebel Ali Power Station.  The utility has partnered with 19 government organizations sponsoring a total of 37 projects under the Shams Dubai initiative, including schools, mosques, and villas under the umbrella of the Mohammed bin Rashid Al Maktoum Housing Establishment.

Leading Sub-Sectors

In January 2017, the UAE announced plans to invest $163 billion in projects in a bid to generate almost half the country's power needs from renewable sources, including solar, nuclear, waste-to-energy and geothermal by 2050.

Solar
Large Scale Photovoltaic Projects
The UAE has established itself as a key solar market over the past several years and will continue to add MW to the grid in the coming years, in particular with the start of construction of the third and fourth phases of MBR Solar Park in Dubai and the Sweihan solar power plant in Abu Dhabi. 

Abu Dhabi’s Shams 1 opened in March 2013 as the world’s largest consolidated solar power (CSP) facility.  It is a 100-megawatt facility with over 258,000 mirrors covering an area of 2.5 square kilometers.  The project was developed by the Shams Power Company, a Masdar subsidiary, largely based on ADWEA’s independent power project model for conventional power.   Masdar has a 60 percent stake in the plant while French company Total and Spanish firm Abengoa each have 20 percent equity.  No official decision has been announced regarding the proposed construction of Shams 2 or Shams 3. 

Rooftop Projects
Based on MESIA Solar Outlook Report 2018, the rooftop solar initiative kicked off in the UAE in 2017 with approximately 4 MW connected at the start of the year, with a total of 20 MW peak installed by December 2017.  Analysts suggest the rooftop market in the UAE will continue to grow in the coming years.  The main drivers for this segment are government entities and commercial and industrial segments.  Residential rooftop installation rates remain negligible in the UAE with modest interest from individuals. 

However, the development of regulatory frameworks will increase the megawatts of rooftop PV installations in 2018 and 2019. 
Middle East Solar Industry Association expects to see the following trends for the rooftop segment:  increased competition due to an increased number of entrants in 2017; a shortage of skilled resources; increased local manufacturing and stocking of components; additional regulation from authorities; growth of robotics and attention to operation and maintenance; more litigation against missed targets, and small-scale distributed generation initiatives (such as the Shams Dubai initiative which plans to have solar power on every rooftop in the Emirate by 2030). 

Energy Storage 
Dubai is investigating the potential for a sizable hydro-energy storage site.  In January 2018, DEWA signed a memorandum of understanding with Belgium’s Dredging, Environmental & Marine Engineering Group (DEME) and the GCC Interconnection Authority (GCCIA) to explore this possibility.  This project follows DEWA’s launch of the 250 MW pumped storage innovation in Hatta (east of Dubai) where water will be stored in the Hatta Dam and in an upper reservoir that will be built into the mountain. 

Electrical Vehicles
The UAE is well placed to embrace an influx of electric vehicles.  The geographical structure of the seven emirates results in modest distances between most destinations.  There is also a strong appetite from the government to support reduced emissions and to promote innovation, such as autonomous vehicles.  DEWA has recently announced that it doubled the number of charging stations in Dubai from 100 to 200[9].  The Dubai Autonomous Transportation Strategy intends to transform 25 percent of all transportation to autonomous means by 2030.  In addition, the Dubai Supreme Council of Energy recently launched a number of initiatives to support electric vehicle owners, including free charging, free parking and free registration fees.  The UAE is also a nation of car-lovers who are ready to adopt the latest technologies and purchase new-to-market vehicles. 
Overall, the UAE is the largest and fastest growing solar market in the GCC. The country boasts an attractive investment landscape; Dubai and Abu Dhabi have conducted auctions that awarded more than 2 GW of solar projects in the last couple of years.  The solar PV has been the leading technology, accounting for 83 percent of the 589 MW of installed renewable energy capacity and most of the project pipeline.  The solar technologies could under IRENA projections account for 89 percent of renewable energy jobs in the region by 2030.   

By 2050, the UAE plans to invest $163.3 billion (AED 600 billion) to meet its growing energy demand, generating up to $190.6 billion (AED 700 billion) in savings while ensuring sustainable economic growth, according to official projections.

Nuclear
Nuclear power is another resource that the UAE is looking at to diversify away from oil and gas sources.  The UAE Government has taken deliberate steps, in close consultation with the International Atomic Energy Agency, to develop a civil nuclear power program, and is currently building its first four nuclear reactors at a site called Barakah expecting to produce up to 25 percent of the UAE’s electricity requirements while preventing the release of up to 21 million tons of carbon emissions every year.  By 2030, 12 percent of Dubai’s electricity supply capacity is expected to be nuclear.  The Korea Electric Power Corporation (KEPCO) led a consortium to design the Barakah plant, which includes four APR-1400 reactors to be built at Barakah site with a total of 5.6 GWe[10].

• Federal Authority for Nuclear Regulation (FANR): FANR was established in 2009 as the regulatory body for the nuclear sector in the UAE in accordance with Federal Law by Decree No 6 of 2009, Concerning the Peaceful Uses of Nuclear Energy, which was issued by H.H. Sheikh Khalifa bin Zayed Al Nahyan President of the UAE
• Emirates Nuclear Energy Company (ENEC): ENEC was established in 2009, and is responsible for the design, construction, and ownership of the UAE’s first nuclear energy plant.  Its mission includes coordination with the educational sector in the UAE to develop the UAE human resource capacity needed to operate the nuclear energy program.  ENEC also serves as the investment arm of the Government of Abu Dhabi, making strategic investments in the nuclear sector, both domestically and internationally.  In October 2016, ENEC and the KEPCO signed a joint venture agreement establishing a long-term partnership, including the set-up of Barakah One PJSC, an independent subsidiary owned by both companies to manage the commercial interests of the Barakah project, secure project finance from institutional and commercial leaders and receive funds for the electricity generated at Barakah’s four units. The agreement entitles KEPCO to an 18 percent stake in ENEC’s subsidiary, Nawah
• Nawah Energy Company (Nawah):  Nawah was formally established as a subsidiary of the Emirates Nuclear Energy Corporation (ENEC) in 2016 and mandated to operate and maintain the Barakah Nuclear Energy Plant, Nawah is a multinational, multicultural and Emirati-led company