New Delhi: The United Arab Emirates (UAE), with an installed capacity of 29 gigawatts (GW), is now looking to broaden its energy base with the world’s largest solar park coming up south of the city of Dubai at an investment of AED50 billion. In an interview during the 16th International Energy Forum Ministerial (IEF-16) last week, Fatima Al-Foora Al Shamsi, assistant undersecretary for electricity and future energy affairs, in UAE’s energy and industry ministry spoke about weaning the Gulf nation’s economy off hydrocarbons, electricity tariffs from solar being cheaper than gas-fuelled projects and hydrogen being the fuel of the future. Edited excerpts:
UAE has been trying to set up a new energy architecture. What does it involve?
UAE has announced a strategy where all sectors have to develop their plans for the future up to 2050. And we are also in the process of developing Vision 2071. So, for the energy sector, it was the first future strategy endorsed by the government in the beginning of 2017, where we are balancing actually 50% for fossil fuels and 50% for clean energy sources such as solar, nuclear and a little portion of wind.
With the largest global clean energy plan in play in India, do you see Indian firms’ role in your country’s new energy strategy?
We are targeting a major part of this mix to be of renewable—mainly solar—and our system for development of the power plants will mainly follow the IPP (independent power producers) model. So, the model is open for different developers to participate.
Will the conventional sources in your energy mix be primarily gas-based?
There will be gas. We will have 50% as conventional fuels of which 38% will be gas, which will mean additional capacity of gas-fuelled plants plus clean coal projects which we are starting now. While we have developed a strategy that has been endorsed, we have a system of revision every three years. And now we are looking for different options to enter the mix. And hydrogen is one of the areas that is not yet in the mix. But, this is an area where I can see oil and gas companies internationally going ahead. And, this is an area we are studying within the UAE energy strategy for the future.
What is your installed solar power capacity?
We have commissioned solar plants totalling 500 megawatts (MW). We have more than 1GW under construction. The target for Mohammed bin Rashid Al Maktoum Solar Park is to achieve 5GW by 2030, which is going on. We are also finalizing the new Abu Dhabi solar project. That will definitely have future projects and that’s coming up.
What is the status of Mohammed bin Rashid Al Maktoum Solar Park, which will be the largest global solar project?
We have more than 200MW in operation and nearly 1,000MW under construction. While we will have 5GW by 2030, we will have 1.2GW by 2020.
What is the tariff that you are comfortable with?
We have one of the best tariffs. In fact, in one of our recent tenders for PV (photo-voltaic) projects achieved 2.42 US cents per kilowatt hour (kWh), which is cheaper than the production using the special rate of gas that we have.
With a major oil producing economy such as yours making this shift towards green energy, what does it signal to the others?
Yes, but that kind of model won’t depend only on technology costs. It also depends on your independent power producers’ program—which has the government guarantees, which has the experience of a developer with a country. For us, we started in 1997. We have a very long history of commitment to IPPs. I believe that is a combination of technology improvement and costs, plus the country ratings or the utility ratings in an international index such as Moody’s, plus what you are offering as a guarantee from the government to the developers.
Do you see Masdar (Abu Dhabi Future Energy Company) partnering with an Indian firm to set up clean energy projects?
I think Masdar, Mubadala (Mubadala Development Company PJSC—UAE’s sovereign wealth fund) will be open for commercial discussions. I don’t think that its impossible. Its a business and they are doing it.