Oil And Gas - Bridge for renewable solutions

Since November, when global nations agreed to accelerate emissions-cutting plans at a United Nations summit, UAE has said it will fund development of thousands of megawatts of solar-energy projects in countries across the world, has committed $400 million to enable developing nations’ transition to clean energy and pledged to help supply green electricity to 100 million Africans by 2035.The Gulf state, alongside the U.S., also has promised to raise $4 billion to invest in technologies that would transform agriculture and food production to limit climate change.

The renewables arm of Emirati sovereign-wealth fund Mubadala Investment Co. has deployed more than $20 billion in clean energy projects since it began investing in renewables in 2006, outstripping other state investors or public pension funds.

By the end of this decade, U.A.E., the world’s seventh-biggest oil producer, focuses on investing and developing projects generating up to 100 gigawatts of clean energy at home and abroad, four times its current deployment and commitments.

Sultan al-Jaber, the country’s climate envoy and minister of industry and advanced technology, said that change could only be tackled alongside hydrocarbon-producers who help manage the global transition to clean energy.

"We can’t continue to view oil and gas as a challenge," said Sultan al-Jaber, the country’s climate envoy and minister of industry and advanced technology, who is also the CEO of the national oil firm ADNOC and Chairman of Masdar, in an interview. "Oil and gas should be seen as the bridge as part of the solution."

"Any oil-producing country that begins to step up and indicate their acceptance of the reality of the need to build up for a transition is a critical message to the rest of the world," U.S. Climate Envoy John Kerry, who since taking on his role in 2020, has visited

the U.A.E. twice to muster support among Gulf states for accelerating cuts in emissions targets said last month at the World Economic Forum in Switzerland.

Even as it focuses on renewables, the U.A.E. also remains a major investor in traditional oil and gas. Over the six years from 2016 until last year, Mubadala invested $9.5 billion in 16 oil-and-gas related businesses, or so-called black investments, the most of any state-owned investor other than the Qatar Investment Authority, according to Global SWF.

Robin Mills, chief executive of Dubai-based consulting firm Qamar Energy and a former manager in the Emirati oil industry believes that still U.A.E. investment in renewables reflects both a push to win friends diplomatically by helping them with their climate goals, and recognition that there is an opportunity to make money from a growing sector.A solar plant in Masdar City outside Abu Dhabi, U.A.E. in 2015. Emirati officials hope the bet on clean energy will increase its diplomatic clout.

Many of the countries where Masdar is developing or funding renewables projects aren’t being considered by Western developers, who are themselves relative novices in building large-scale renewables projects, he said.Earlier this month, Masdar signed an agreement with Azerbaijan to develop 4,000 megawatts of onshore wind, solar and green hydrogen capacity across several projects, with the right to develop a further 6,000 megawatts.

In May, Jaber visited India where the Emirati agreed to support that country’s ambition to achieve 450 gigawatts of renewable-installed capacity by 2030. In April, Masdar said it would explore renewable opportunities with Kyrgyzstan’s government, following agreements in recent years with Iraq, Morocco, Armenia and Kazakhstan.In Indonesia, Masdar in a joint venture with a local company has begun construction of a 145-megawatt solar plant that will float on a reservoir to provide electricity to power 50,000 homes.

In November, the U.S. and U.A.E. helped broker an initial agreement for Jordan to supply Israel with electricity produced from solar-power at a planned Jordanian site, funded and developed by Masdar. In return, Israel will examine the feasibility of supplying water to Jordan via a desalination plant.

The country also now operates one of the largest single-site solar plants in the world, with 3.2 million solar panels, and has plans for even bigger facilities, though renewables are currently a fraction of total energy supply.