September 08, 2008

Energy shortfall could hit UAE economy by 2012 – Report

According to research by UAE based infrastructure specialists Septech Emirates, a 35% energy shortfall is expected to hit the UAE's economy, which is currently enjoying a massive economic boom. The power generation capacity of the present facilities in the Middle East, North Africa and South Asia region is inadequate and investments of at least USD 155 billion will be required over the next decade to meet growing consumption.

Mr Ashruf Kamel VP of corporate development at Septech Emirates said that "Water and power shortages of approximately 35% are expected in Kuwait, Qatar and Saudi Arabia by 2010, while the UAE and Bahrain will face similar problems by 2012 and 2013 respectively. This figure was reached after taking into account the current power capacity across the region and adding the projected 24% growth in capacity, which is under construction."

Mr Kamel added that "There is a growing concern among the Menasa governments on how to combat the shortfalls projected in both water and power to support the developments."

Dr Sultan Al Jaber CEO of Masdar said that "We are making bold but strategic investments, applying scale and capital to drive down the cost of renewable energy, accelerating innovation, sponsoring research and building human capital."

Meanwhile, with oil production expected to dwindle over the years, the search for alternative energy sources is becoming essential. Shell is looking for project financing in Menasa to meet the energy challenge and to safeguard profitability in the face of rising engineering, procurement and construction costs, securing finance for high risk large scale projects, future trends for oil and gas investment and successful project finance structuring. The UAE recently set up a wind power plant on Sir Baniyas Island, the first wind project in the GCC. Abu Dhabi's USD 15 billion future energy initiative Masdar City is the world's first carbon neutral, waste free, car free city that will depend completely on renewable energy and reused water. These projects are only the beginning for future energy solutions.

With Abu Dhabi aiming to become the leader, the other UAE emirates and Gulf countries must follow suit. UAE has the capacity to generate an estimated 1,000 MW of electricity every year from wind energy, if utilized properly.