UAE sees Renewable Energy as the Future
This news article was posted on Friday 18 April 2008
The United Arab Emirates will guarantee high prices for low-carbon electricity to make sure investments succeed in hydrogen and solar power under the $15 billion Masdar Initiative, said Masdar's Chief Executive.
The UAE recently guaranteed higher prices for a huge proposed solar power plant which will generate electricity from the heat of the sun.
It would "absolutely" do the same for a hydrogen plant once Masdar had presented a business case, Sultan al-Jaber told Reuters in an interview on Thursday.
"Show the government the value proposition, get on with it, do it, develop that business case -- why would they say no?" said the head of the wholly government-funded Masdar Initiative.
The UAE says it wants to start preparing for an era of falling oil reserves by investing in alternative sources of energy such as renewables.
The Masdar Initiative is focused around a brand new, zero carbon-emitting "green" city to be completed by 2015 which it says will be the hub of clean technology businesses, research and deployment as well as home to 40,000-50,000 people and a workplace for an additional 40,000 commuters.
The proposed hydrogen plant will split natural gas into hydrogen and the greenhouse gas carbon dioxide (CO2).
It would trap the CO2 and inject it into oilfields, pushing out the remaining oil in a process known as enhanced oil recovery, and sell the hydrogen as a clean fuel which power plants could burn to produce electricity.
Masdar and Hydrogen Energy, a joint venture between the oil firm BP and mining company Rio Tinto, will invest in the project, which carries a $2 billion capital cost.
The project will also need money to pay for the running cost of transporting and storing the CO2 underground, and that is where the need for a policy which guarantees a higher power price for hydrogen comes in.
GREEN LIGHT
Masdar would present the case to the government at the start of 2009, expecting a green light in the middle of the year and operation by mid-2013, a year later than Hydrogen Energy forecast last week.
Jaber criticised Hydrogen Energy's concern about whether UAE policy support would be forthcoming.
"This is why we're taking the driver's seat on this project. If we let BP lead it this won't go anywhere. If we sit here and complain that we don't have the policy that supports it this project will never kick off, we'll wait another 5-10 years.
"Once the government realises how important and strategic this initiative is they will put the legislation and support required to make this project happen. It usually doesn't take much time."
Another scheme under the Masdar Initiative has been part investment in a $250 million clean technology fund. That fund is fully invested and Masdar is now "putting together" another, possibly two or three times larger, Jaber said.
A proposed 100 MW solar thermal plant, enough to power more than 20,000 homes, received government backing for a power price premium "a few weeks ago" and will be bigger than anything in big solar investors Spain and Germany, Jaber said.
(Editing by James Jukwey)
Story by Gerard Wynn
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