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Wide Gulf between rhetoric and reality over fossil fuels and renewables' future

Peter Hannam

Ali Alzaabi could have followed the well-trodden path of other young mechanical engineers in the United Arab Emirates and joined the oil and gas industry.

Instead, he chose solar energy.

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"We're in a transition – it's whether you adapt to it or stay in the old way," Ali told Fairfax Media during a visit to the 13-megawatt solar photovoltaic plant located among the sun-bleached sands 50 kilometres south of Dubai. "I think this is a place where a person's [career] is going to be built."

As coal-rich Australia's federal and state governments bicker over whether even the 2020 renewable energy target can be met, UAE and other Gulf states would appear to be getting on with diversifying their energy output.

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That tilt makes prospects for Ali look bright. Already the size of 33 soccer pitches, the Mohammed bin Rashid Al Maktoum Solar Park where he works is to expand capacity by another 1000 megawatts by 2020 in two phases – the second of which set of a world record low price of 2.99 US cents ($A0.04) per kilowatt-hour last May.

That record has since been broken twice, including four months later when developers of a 350 MW solar plant in neighbouring emirate Abu Dhabi bid just US2.42¢ per KW-hour to win.

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Those investments make up part of a huge 600 billion dirham ($216 billion) plan to shift half the Emirates' energy consumption to renewables – plus several nuclear reactors . That prompted a local newspaper this week to headline the move: "UAE turns green with new power plan 2050".

A commitment by oil-rich Gulf states to clean energy got a further boost during this week's World Future Energy Summit in Abu Dhabi, with Saudi Energy Minister Khalid al-Falih declaring the kingdom will introduce 10 gigawatts of renewables by 2023, spending $US30-50 billion to do so.

"Today we are extending our reach to become the centre of gravity for all forms of energy," Sultan Al Jaber, Abu Dhabi's minister of state and chief of its oil corporation, told the summit.

Abu Dhabi is also pouring money into research, such as advanced materials and energy efficiency at its Masdar Institute, and hosts the International Renewable Energy Agency (IRENA) with its 150-plus member nations.

But Australia – and other nations – would be wise to reserve judgement on just how far this self-declared "heart of the hydrocarbon industry" is really tackling climate challenges.

A reminder of the urgency of the task ahead came this week with confirmation by global weather agencies that 2016 was the hottest year for the planet on record for a third consecutive year.

The year also included a record temperature for Asia, with a searing 54 degrees reached at Mitribah, Kuwait, on July 21. The following day, Basra in Iraq, went close with 53.9 degrees while Delhoran in Iran touched 53 for a new national high.

Drilling down

Doubts about the Emirates' commitment to cutting carbon emissions extend well beyond their apparent penchant for racing cars at Abu Dhabi's grand prix circuit late into most nights, and local hotels' willingness to heat their outdoor swimming pools to 29 degrees or warmer during the winter.

It was also no accident that the many purveyors of solar and wind technologies at the summit's accompanying "Abu Dhabi's Sustainability Week 2017" expo had to vie with local and foreign oil giants, such as Exxon and Occidental.

Thumbing through the Oil & Gas Directory available at the exhibition reveals a telephone book packed with thousands of suppliers that as yet dwarfs the nascent renewables industry.

Each year, the world spends $US1.8 trillion on energy, Fatih Birol, the head of the International Energy Agency told an IRENA event earlier in the week.

"I'm sorry to say it, only 16 per cent goes to renewable and energy efficiency," Birol said. "The rest is mainly oil and gas."

And neither the UAE nor Saudi Arabia plan to have it any other way. Despite largesse towards renewables, both nations have every intention to exploit all their fossil fuel reserves.

"Renewables and hydrocarbons enjoy a truly symbiotic relationship that is reshaping the economics of energy," Sultan, the Abu Dhabi oil corporation chief, said. "The more solar we deploy, the more available hydrocarbons we will have to drive higher-value products and help meet global energy requirements."

Saudi's oil chief, Khalid al-Falih, said his kingdom does not recognise the concept that its oil resources might become stranded assets, nor should it leave fossil fuels in the ground. 

"I don't believe we need to do that," the minister, who also serves as OPEC secretary-general, told the summit. "By constraining [fossil fuel] production, you are truly going to have a less sustainable world economy."

The UAE pumps about 3 million barrels of oil per day and 10 billion cubic feet of gas, while Saudi Arabia's oil output alone exceeds 10 million barrels.

Liberating the mercury

The dilemma, though, is that by "liberating" all the hydrocarbons, fossil fuel producers will likely lift global temperatures far beyond the 1.5-2 degree warming the Saudis, UAE and almost 200 other nations committed to at the Paris climate summit in 2015.

According to a "toolkit for renewable energy deployment" prepared for G20 nations by IRENA, to keep warming to less than 2 degrees by 2050, 35 per cent of all oil, 50 per cent of natural gas and 85 per cent of coal reserves must remain in the ground.

By contrast, doubling the current share of renewables in the energy mix by 2030 from about 18 per cent now would "set the world on a path" to limiting warming to 2 degrees, compared with pre-industrial levels, IRENA said.

Those latter goals strike a chord with Peter Thomson, President of the United Nations General Assembly, who also jetted in for the gab fest.

"The world's heading to a precipice of unsustainability," said Thomson, a Fijian diplomat who once sought refuge in Australia after being booted out during one of the Pacific island state's coups. "You can't continue to consuming the way we consume."

"Should you be owning a car, should you still be eating beef ... these are moral decisions we have to make now," Thomson said, shortly before an anxious aide burst in.

"The Saudis who have the room have arrived," he said, bringing the interview to an abrupt end.

Follow Peter Hannam on Twitter and Facebook.

The author was a guest at IRENA's seventh annual assembly and the World Future Energy Summit in Abu Dhabi.

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