New Report by Stimson Center and TRENDS Research & Advisory Provides Lessons for the Global South from the UAE’s Renewable Energy Leadership
Washington, DC (October 22, 2018) — The Stimson Center, a Washington DC-based nonpartisan policy research center, has collaborated with TRENDS Research & Advisory, an independent non-profit think-tank based in Abu Dhabi, on a new report titled “UAE Energy Diplomacy: Exporting Renewable Energy to the Global South” that explores the UAE’s experiences in sustainable development and clean energy, and identifies clear lessons for other developing countries around the world to learn from and emulate, as well as specific and concrete opportunities for South-South cooperation on energy issues. The US release of the report took place today at an event at the Stimson Center in Washington, DC.
The report is especially timely given the recent dire UN climate report predicting environmental disasters by 2040 if the world doesn’t take urgent and unprecedented action. Global energy demand is surging. Handled poorly, this demand will accelerate climate change and threaten the water security, food security, and well-being of billions of people around the world. There is a real need for countries with experience handling the transition to clean and sustainable energy sources to share their expertise with developing countries. With proper support, countries in the Global South—many of which are still in the early stages of building out their energy sector — have an opportunity to take a different path.
The report includes an early road map for global policymakers and industry to initiate smart pilot ventures in the Global South– which will contribute most of the projected carbon emissions in the coming decades under a business-as-usual scenario– to initiate smart pilot ventures.
Dr. Ahmed Thani Al Hamli, TRENDS Research & Advisory President & Founder, said: ”In 2021, the UAE will be celebrating achievements of 50 years as an independent nation. The phenomenal growth and development has required the strategic use of extensive energy resources. The UAE is of the view that national and global growth cannot come at the expense of the environment through non-sustainable energy sources. This makes innovation in sustainable energy a national priority. As this report shows, the UAE’s extensive experience in sustainable energy provides opportunities to further support the world’s quest for clean, renewable energy for sustainable development.
”The UAE will remain committed to clean energy at home and will use its knowledge and skills to support the world through clean energy diplomacy. It has emerged as a global leader in renewable energy innovation. Its record-setting prices for utility-scale solar power have attracted international admiration after Abu Dhabi and Dubai achieved solar prices below $.03 per kilowatt-hour. ” Al Hamli added.
Lincoln Bloomfield, Chairman Emeritus of Stimson Center and Non-Resident Fellow with TRENDS, said: “With this report, the TRENDS-Stimson collaboration has reached a new level of impact. The study embodies both TRENDS’ and Stimson’s specialty in seeking innovative approaches to global problems, in this case a ‘trans-regional’ solution connecting UAE’s leading expertise with the needs of a major economic and environmental ecosystem in Southeast Asia.”
Brian Finlay, President and CEO of the Stimson Center, said: “If staged wisely, UAE innovation in renewables has the potential to both fundamentally reorder global energy markets while promoting sustainable development across the Global South. This report provides an early roadmap upon which policymakers and industry may choose to initiate smart pilot ventures—notably in the burgeoning energy markets of Southeast Asia.”
As the UAE modifies its foreign aid approach to include capacity building on renewable energy sector development in the Global South, the report outlines how its domestic experience could serve as an effective case study for policy guidance in other countries.
The report identifies six key factors that have supported a robust and engaged renewable energy sector in the UAE, specifically solar. Many of these lessons learned are transferable to developing countries which lack the UAE’s financial resources but have high potential for renewable energy development, including across Africa, Asia, and Latin America.
- Start small and scale up targets for renewable energy deployment based on pilot project experience.
- Utilize a multi-phase, scalable project development structure to build investor interest.
- Construct an open and relatively transparent auction process for project tenders.
- Allow utilities to play a proactive role in taking on some project risk in order to ensure long-term success.
- Provide clear targets for renewable energy but avoid being over-prescriptive on how to reach them.
- Allocate affordable and available land for project development.
The report also highlights a number of other key findings:
- Over the past decade, the UAE has evolved as a global leader in renewable energy innovation. The UAE’s early support for the Paris Climate Change Agreement, the UN Sustainable Development Goals, and the UN Environment Programme Finance Initiative (UNEPFI), as well as its early investment in Masdar as a champion for renewable energy, support for the International Renewable Energy Agency (IRENA), and creation of the Abu Dhabi Fund for Development (ADFD) were all key steps in building early UAE diplomatic leadership on sustainable development.
- The record-setting prices for utility scale solar energy (below $.03 per kilowatt-hour) have created solid competition for fossil fuels and made the UAE an ambassador for renewable energy projects, on par with the EU, the U.S. and China. But compared to those countries, the UAE achieved its success with far fewer resources at its disposal. This success positions the UAE well to significantly expand efforts to promote sustainable development in the Global South and lead on renewable energy innovation.
- Policy engagement and pilot investment projects from renewable energy powerhouses like the UAE could reduce global carbon emissions and unlock billions of dollars of investment opportunities.
- Southeast Asia should be a priority target for UAE clean energy diplomacy. The IEA estimates that Southeast Asia’s energy demand will rise approximately 67% through 2040, requiring an estimated 565 GW of installed capacity.86 Investment opportunities that parallel this demand are significant, with an estimated $2.7 trillion of investment needed through 2040 This will require significant support from international financial institutions and widespread mobilization of the private sector.
- There are three arenas where the UAE can strategically expand its clean energy diplomacy in order to help mitigate carbon emissions in developing countries: capacity building, strategically targeted foreign aid, and increased commercial ties in the renewable energy sector in developing countries. At the heart of these recommendations is an opportunity to build soft power and reap commercial benefits by helping countries throughout the Global South implement renewable energy projects.