As renewable energy creeps to the top of the UAE political agenda, Tracey Scott talks to one local entrepreneur about his green vision and how he plans to support the capital's eco-friendly pledge.
Over the past few years, the UAE has emerged as a global centre for renewable energy development. In 2006 Masdar surfaced, promising a renewable and clean technology lifecycle, followed by an announcement in 2007 that the government of Abu Dhabi is to build a US$350m solar power plant in the capital. Then in 2009, Masdar City, the world's first carbon-neutral city, was chosen as the International Renewable Energy Agency's first headquarters (IRENA).
But while a number of projects have attracted much debate over their sustainability and credibility, it is clear that the UAE and those within it, have pressed ahead with plans, winning support and admiration from across the world.
Khalid Al Midfa, Gulf International Trading Group chief executive and chairman, is a case in point. He was busy fine-tuning his own renewable business plan before the environment shot to the top of the UAE political agenda.
"I'm honest, frank and like to do what I love to do, not for the commercial benefit. So, in 2003, I decided that I wanted to develop something that was unique," Al Midfa says.
"Listening to my elders tell me about their heritage and how they sustained themselves without electricity, the history classes at school and our culture and traditions, then blending all of that together I came up with a dream. That dream was to build a 100 per cent energy efficient, sustainable house. So I started doing my research. I was thinking about the installation, how to generate the electricity, I studied the hydrogen uses, the latest technology, and I started to build contacts around the world," he explains.
But rather than build a house, Al Midfa followed in his grandfather's footsteps - HE Ibrahim Bin Muhamed Al Midfaa, the man who created the UAE's only round wind tower designed and constructed to cool buildings with natural energy - and brought a new concept to the market.
In 2007, Al Midfa launched Sharjah-based Gulf International Trading Group, the channel partner for the distribution and marketing of green building materials. GITG was the first step towards searching and identifying the latest technologies to support the increased demand for clean energy solutions in the GCC.
Then in June this year, Al Midfa stepped up his efforts to promote renewable energy by launching Gulf Group Limited, incorporated in Masdar City as a turn-key solution provider.
"We have created elite alliances in the sector and we have been working on a major project over the past two months, but we cannot announce that at the moment. Our immediate plans will be announced at the World Future Energy Summit in Abu Dhabi in January," Al Midfa explains.
"GGL will execute projects in Abu Dhabi and in the MENA region from concept stage to construction," says Al Midfa, including assisting Masdar City on its solar roof-topping project. He says: "Masdar is a huge project, it is a vision of the leaders of this nation. It is going forward, and the latest announcement of Shams 1 threw out all the suspicions that were going on prior to its completion.
"Masdar is way ahead in making the UAE a pioneer leader in the renewable and sustainable urban development."
For example, Al Midfa says the UAE has achieved "big mileage" in the renewable energy space and as a reflection of the government's efforts, "Abu Dhabi has been elected to host the HQ of IRENA, it is like having The International Atomic Energy Agency (IAEA) in Vienna, Austria," he says. "It not only shows the dedication, the emotion and determination of the government, but it shows the seriousness of the political agenda in backing-up the investments in renewable energy and sustainable urban development."
For GGL, Al Midfa has big plans. "We are ready to invest along with our elite international partners to set up an attractive package allowing the direct implementation of one or several photovoltaic projects, as a private initiative (design, build, finance, own and operate - DBFOO) or as a contractor for third parties in solar farms once a feed-in tariff is established in the UAE. We can operate a 250mw solar farm and sell electricity for 20 years and give it back to the government.
"In line with Abu Dhabi 2030 strategic planning we are going ahead with our utmost sincere effort to be a part of this vision."
A feed-in tariff, however, is some way off. While Al Midfa believes that the UAE has the political impetus and the funds to lead the way in the renewable energy arena, its rules and regulations are somewhat lacking.
"Abu Dhabi is going on major exercises to implement rules and regulations that are very much needed to move forward in the renewable energy, such as the feed-in tariff. The feed-in tariff is coming but in England it took around 14 years to announce so we ask people to be a little bit patient, we are doing it."
Greater regulation will also encourage private-sector participation, Al Midfa says. Following Masdar's joint research initiative with London's Department of Energy and Climate Change earlier this year, experts estimated the potential investment opportunity for the private sector at £2bn (AED11.4bn).
"I hope that in the very near future, the private sector will contribute by investing in the sale of renewable energy sources to the public. That will only be fulfilled once the rules and regulations are in place." In the meantime, Al Midfa says GITG has the appetite to invest, "we are ready, willing and able to invest here and now," he explains.
However, going green has not been an easy journey for Al Midfa. "Bringing the renewable energy concept into the market at that time was like bringing a spaceman to the market," says Al Midfa. "In the beginning, people said we are crazy to do such a thing, now everyone is praising us and trying to copy us."
Copycat firms are one thing Al Midfa is slightly cautious of. "Renewable energy is a very innovative sector, and the sky has no limits. But renewable energy is not a fashion or a trend. This has to be underlined for all those people going into this business. If you don't come with a knowledge-based back-up then you are sadly harming the reputation of the sector. We are talking about generating power so it is not a simple product you are selling. It is a serious business and you have to be dedicated and devoted to working towards this objective."
Of course it is worth mentioning that the UAE has the seventh highest oil reserves in the world, and is planning on increasing its oil-production capacity from its current 2.7 million barrels of oil per day to 3.5 million bpd by 2018. But Abu Dhabi's sustainability strategy does stack up - developing alternative energies rather than wasting its oil and gas reserves.
"Diversifying the sources of energy is very wise strategic planning, especially with an oil rich country," Al Midfa says. "Why? Because now we are wasting it when we can save it in our national reserves and sell it into the market. A good example of that is in the late financial recession, when Japan and America were selling from their reserves of fossil fuel. This is what kept nations stable in the financial recession.
"So instead of burning it and wasting it, save it. We want to save it for future generations and times of need, such as the financial recession, which was unexpected," Al Midfa explains.
While critics would suggest that until green energy is profitable, the industry will rely on government incentives to keep it alive, Al Midfa believes otherwise. Yes Abu Dhabi is early on into is renewable energy cycle, but Al Midfa says: "The UAE is taking the lead regionally, if not globally, in implementing projects and becoming a host for all kinds of technology that is innovative in the renewable energy sector. It really has that spark, especially with having the IRENA HQ based in Abu Dhabi."
By Tracey Scott
© Commerce 2010
