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Is Abu Dhabi Losing Interest in Renewable Energy?

Abu Dhabi is the fifth-largest oil producer in the Organization of Petroleum Exporting Countries, and the largest and richest Emirate in the UAE, holding almost all of the country’s oil reserves. It has many renewable energy projects under construction and many more in the pipeline in an attempt to free up more of its oil and gas reserves for export. The plan that they declared at the World Future Energy Summit three years ago was to generate 7 percent of domestic power from renewable sources by 2020 and continues to be the target, however Sultan Al Jaber, CEO of Masdar, the emirates alternative energy company, has recently said that the plan has been delayed by 10 years, without explanation.

On top of that is the news of further delays to other Masdar projects. Their 100 megawatt Shams1 concentrated solar plant will now be commissioned in the fourth quarter of this year, rather than the originally stated third quarter. The construction of Masdar City, the ambitious plan to develop a residential and business district that produces no carbon emissions, has been delayed by two years. Masdar has also halted proceedings on their planned headquarters that would have been the world’s first building to produce more energy than it consumes, and last year the company cut nine percent of its workforce after an annual business review.

Could all these instances suggest that Masdar has in fact overstretched itself and needs to hold back its ambitious plans for a while to overcome a cash flow shortage? Or is Abu Dhabi merely reigning back its promising alternative energy company so that it can continue to invest the capital in other, less environmentally friendly areas? They have no shortage of fuel, and so no pressing need to develop alternative energy sources for that reason. The huge expenditures necessary to develop solar and wind power plants would be much more effectively used for improving the country’s infrastructure or invested in the development of other revenue generating projects.

As always the environment plays second fiddle to the economy.

By. James Burgess of Oilprice.com



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