Energy will continue to be a central part of the UAE's economy and driver of development: Al Mazrouei

Abu Dhabi, April 17, 2013 (WAM) - Energy is and will continue to be a central part of the UAE's economy and the driver of our development, Suhail bin Mohammed Al Mazrouei, UAE Minister of Energy, affirmed yesterday. ''But the role of energy in our development is changing, in ways that present important new opportunities for the UAE. They also make a federal energy policy more important than ever,'' the minister told the second day of Dubai Global Energy Forum held under the theme ''Clean Energy for Sustainable Development.'' The national energy policy, he said aims at achieving three goals: 1. First, we must secure our role as a reliable, long term hydrocarbon producer, ensuring the prosperity of our nation for future generations. 2. Second, we want to seize the opportunities presented by clean energy technologies to create economic growth and jobs in the UAE. 3. Finally, we want to integrate our energy policy with protection of our scarce water resources, to ensure the long-term sustainability of our country. ''Work is now underway on 5.6 gigawatts of safe, secure nuclear power. We are developing this power source as part of a world-class collaboration to avoid risks of nuclear proliferation and ensure safety. By 2020 we expect nuclear power to account for as much as 25% of our electricity,'' the minister said of nuclear power. The UAE is also a major regional leader in renewable energy. ''Our projects and targets in Abu Dhabi and Dubai have inspired other GCC countries to embrace renewable energy as part of sustainable development. Through organisations like Masdar and IRENA, we are building a global hub for the clean energy sector. As renewable energy prices continue to fall - for instance, solar PV prices have fallen by over 80% in five years - the industry will expand rapidly.'' Following is the full text of the Minister's address: Excellencies, ladies and gentlemen, It is a great pleasure to join you here in my new capacity as Minister of Energy. Energy is and will continue to be a central part of the UAE's economy and the driver of our development. But the role of energy in our development is changing, in ways that present important new opportunities for the UAE. They also make a federal energy policy more important than ever. Today I want to talk about the role of a national energy policy in achieving three goals: 1. First, we must secure our role as a reliable, long term hydrocarbon producer, ensuring the prosperity of our nation for future generations. 2. Second, we want to seize the opportunities presented by clean energy technologies to create economic growth and jobs in the UAE. 3. Finally, we want to integrate our energy policy with protection of our scarce water resources, to ensure the long-term sustainability of our country. Let me turn first to our role as an oil and gas producer. High oil prices and changing gas prices mean we must have one over-riding priority: energy efficiency. Our domestic consumption of oil and gas is rising fast. This growing consumption represents a high opportunity cost: whatever we consume at home, we cannot sell overseas. With today's high prices, this is a significant missed opportunity for our country. Moreover, we are already a net importer of natural gas. Demand growth means we will have to compete with countries like Japan and China for LNG, or greatly increase our spending on local field development. Even with shale gas in North America, most experts doubt that it could arrive in the Middle East for less than US$5 per MMBtu, almost four times more than we pay now. Therefore, in order to protect our hydrocarbon base, we need to ensure that we are as efficient as possible in what we consume at home. We have seen important steps in this direction, especially here in Dubai with its target of 30% demand reduction by 2030. But we can act more effectively and economically if we work at a national level. For instance, federal building codes, stronger federal appliance standards, federal vehicle fuel standards, and strategic management of water and desalination investment can deliver all Emirates steep reductions in their energy bills. I note too that today we inject about half of our own natural gas production into oil fields. If we can capture and use carbon dioxide for the same purpose, it may be possible to free up some of this natural gas. This approach could be cheaper than importing or developing new gas. It also allows the UAE to develop a new industry around decarbonising the oil/gas and industrial sectors. We must also think competitively about how we use hydrocarbons. Energy intensity will be one of the most important focus areas for our economy. According to the World Resources Institute, the UAE uses 481 tonnes of oil equivalent to produce USD1 million of GDP. By contrast, Norway only requires 172 tonnes of oil equivalent. This means they are producing many of the same products and growth with much less energy, even though they are also blessed with energy. I note Japan has even lower energy intensity: they are able to produce US$1 million of GDP with only 154 tonnes of oil equivalent. Therefore, our efficiency efforts must not only focus on reducing consumption in absolute terms, but also on making us competitive with other countries. We need to use less energy to grow our economy. Let me turn to new clean energy sources. The UAE has made huge achievements in a very short period of time. Work is now underway on 5.6 gigawatts of safe, secure nuclear power. We are developing this power source as part of a world-class collaboration to avoid risks of nuclear proliferation and ensure safety. By 2020 we expect nuclear power to account for as much as 25% of our electricity. We are also a major regional leader in renewable energy. Our projects and targets in Abu Dhabi and Dubai have inspired other GCC countries to embrace renewable energy as part of sustainable development. Through organisations like Masdar and IRENA, we are building a global hub for the clean energy sector. As renewable energy prices continue to fall - for instance, solar PV prices have fallen by over 80% in five years - the industry will expand rapidly. Here again there is great scope for a national policy to make our actions more effective. For instance, some of the cheapest renewable energy resources in the UAE are waste-to-energy in Sharjah and wind in Fujairah. A national policy would allow us to more effectively target and finance such options. More integrated electricity systems would likewise help us to manage variable supply from renewable energy and use the energy most efficiently. These are industries in which the UAE is building up significant domestic capacity and in which high quality jobs are being created for UAE nationals. We are helped in this regard by the public private partnership model. This has already been successfully applied in the Abu Dhabi power market and now Dubai as well. The 60-40 split allows us to bring in international expertise, while maintaining control and leveraging our credit rating. Again, the opportunity lies in rolling out this model on a federal level. Finally, energy is intimately tied up with other issues for our society. I have already referred to the opportunity to combine energy production with improved waste management. Even more important will be to ensure a coherent system for managing our precious water resources. The UAE is currently one of the top three producers of desalinated water in the world. This represents a significant demand on our energy resources. It moreover means we need to think about water efficiency in meeting our future requirements, especially since efficiency is our cheapest supply option. This will mean deploying new desalination technologies such as reverse osmosis, as well as cutting consumption through better building and appliance standards, and more public awareness and education about the value of water. Again, this is far better done at the national level. Through the wisdom of our leadership and the efforts of our people we have benefited enormously from our energy resources. Now, we have the opportunity to build on that experience and drive an even brighter future for our country. I look forward to working closely with leaders like the Dubai Supreme Council of Energy to start building this national policy dialogue. – Emirates News Agency, WAM