Never has a climate summit so highlighted the role of renewable energy players in the fight against global warming. Sultan al-Jaber, president of COP28, wanted to make this meeting a moment focused as much on business as on climate diplomacy.
“Sun, money and energy expertise.” Asked on Monday December 4 about the assets of the United Arab Emirates, the director of the International Renewable Energy Agency (Irena), Francesco La Camera, does not hesitate for a moment. The proof, the headquarters of the institution, which brings together around sixty countries, is located in Masdar City. This showcase city built on the outskirts of Abu Dhabi bears the name of the company which, in 2006, decided to found in the desert “the first 100% carbon-free city”.
At the time, the kingdom wanted to prove to the world the sincerity of its conversion from black gold to green energy. Seventeen years later, Dubai, the other megalopolis of the Emirates, hosts COP28, the UN climate summit. The boss of Irena has a series of meetings, conferences and interviews. Its field, renewable energies, is in the spotlight: on Sunday, at least 118 countries committed to tripling the sector’s production capacity, following the agency’s recommendations to achieve carbon neutrality by 2050.
“The presidency of the COP listened“, rejoices the Italian. “At the moment, the Emirates are doing their utmost to move in the right direction. But, naturally, the whole region must move even faster”he thinks, straightening up in his chair. “But why do journalists all ask me about the United Arab Emirates’ energy policy?” he asks, curious. Perhaps because nearly 2,500 lobbyists for fossil fuels, the main cause of greenhouse gas emissions responsible for global warming, are roaming the aisles of the COP? Or because its president, Sultan al-Jaber, founded Masdar, but today runs Adnoc, the national oil company? What makes us wonder if this pronounced taste for renewables is not just a mirage.
A “natural” advantage
“Emiratis are proud of what they are capable of achieving technologically, warns Francesco La Camera. It is in the culture of the country to want to be the first, the best. You just have to look around us to notice it.” Expo City, the site hosting the climate summit, is indeed distinguished by its gigantism. At the other end of this city within the city, in the heart of the COP28 “green zone”, the executive director of Masdar, Fawaz al-Muharrami, agrees with our first interlocutor. “We were the first to develop photovoltaics throughout the Middle East and North Africa, back in 2009,” he notes by way of introduction, in the hubbub that escapes from a melee of suits and ties parked in the aisles.
According to the event website, this space open to the public brings together the heavyweights of the sector, invited to “present their innovations” And “share solutions to combat climate change”. Of which act. “In Dubai, the Mohammed bin Rashid al-Maktoum solar park has entered the sixth phase of its development and will soon be the largest photovoltaic project in the world,” praises the Masdar representative.
The company, whose journey he contemplates from the height of his fifteen years of ownership, will then dethrone the project that it presented to a convoy of foreign journalists the previous week: the Al-Dhafra solar power plant, a few dozen kilometers away. south of the Emirati capital. Photovoltaic panels as far as the eye can see, over an area of 21 km2, for a production capacity of 2 gigawatts capable of supplying 160,000 homes, according to its promoters.
The obligation to diversify
LThe region has one of the highest practical photovoltaic energy potentials in the world. Its rate of solar radiation is equivalent to 1.1 barrels of oil per square meter (in PDF). An advantage “natural”our interlocutors concede, while, on the COP28 site, the Emirati organizers highlight this clean and modern technology: an exhibition on the history of the country can be seen in the welcome shade of a forest of solar panels.
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These countries which still largely depend on oil and gas “know perfectly well that they operate in a world which tends to gradually do without hydrocarbons. Their economies are at stake and therefore depend on their diversification”, explains Javier Doblas, energy and sustainability expert at the Boston Consulting Group, based in Dubai.
Immense empty expanses and blazing sun allow national companies to offer the cheapest renewable kilowatt-hour (kWh) in the world, while ensuring investors higher rates of return than elsewhere, thanks to disproportionate installations. “The prospect of benefiting from clean and cheap energy attracts foreign industries, particularly in the most energy-intensive sectors, continues the consultant. This opens new markets for the Middle East and heralds a fundamental transformation of the industrial landscape with repercussions here and elsewhere.”
A very attractive new ecosystem…
As for the renewable energy sector itself, it invites in the Gulf countries “other foreign investors and developers, with whom national groups establish partnerships around major projects [comme Engie ou EDF, pour les exemples français]. This brings technical and financial consultants, banks, sovereign funds…” An entire ecosystem, attracted by countries capable of robust financial arrangements and with favorable business conditions.
“We are working closely with the government to create the regulatory conditions that allow us to develop the sector,” says Faraz al-Muharrami, the boss of Masdar. “This is a region that already attracted entrepreneurs,” recalls Javier Doblas, who notes that “green tech” start-ups are multiplying alongside the historic “fintech”, dedicated to finance and already well established in the world cities of the Middle East.
“What’s the point of being based in Paris or New York, when everything happens in Asia or Africa?” notes Karim Megherbi, energy expert and general manager of Orisun Invest, a platform that connects investors and project developers in renewable energies. “The oil-producing countries of the Gulf, at the crossroads of three continents, se are strongly positioned in Asia, Central Asia, and even Central Europe. We saw this with the establishment of Masdar in Uzbekistan. As soon as there are major calls for tenders like this, they are almost guaranteed to win, because they are the cheapest. On the other hand, competitors find it difficult to compete.”
In September, on the occasion of the African Climate Summit, the United Arab Emirates announced an investment of 4.1 billion euros in clean energy on the continent. In the year leading up to COP28 alone,e Financial Times calculated that UAE domestic companies and investment funds were linked to nearly $200 billion in investments across the world, “mainly in green energies”.
…But still more oil
And it’s only just started. During a conference at COP28, Masdar and the German energy company RWE announced that they would jointly invest 11 billion pounds (12.8 billion euros) in the Dogger Bank offshore wind farm, off the coast of the United Kingdom. United. An offshore wind farm which will, unsurprisingly, “the largest in the world”, according to British Prime Minister Rishi Sunak.
Should we see this as proof of a real economic transition for oil-producing countries? Here again, the figures put the reach of the announcements into perspective. Despite the national narrative, the country’s ambitions are judged “insufficient” by the Climate Action Tracker. Crucial to achieving the goal of carbon neutrality that the United Arab Emirates has set for itself by 2050, the ecological transition allows us to consume less and less fossil energy at home. And thus to have more cheap oil to export abroad, before it is too late.
The United Arab Emirates has planned to increase crude production from around three million barrels per day to five million by 2027. It joins Qatar and Saudi Arabia among the five countries with the highest expected volumes of gas and oil production. The Saudi national company Aramco, the world’s leading producer of black gold, is once again at the top of the largest oil project developers this year, with 17% of expected production, according to figures from the NGO Reclaim Finance obtained by AFP. Adnoc, the state company headed by the president of COP28, Sultan al-Jaber, remains fourth, tied with QatarEnergy (7%). The country and its neighbors have undeniably diversified. But not yet to the point of giving up the fossil resources that enriched them.