Wednesday 20 June 2018

Investment in renewables to triple

Abu Dhabi, January 20, 2011

Investment in renewable energy is set to triple between 2008 and 2035, mainly driven by the demand for power generation, an expert said.

However, the current glut of cheap gas and government fuel subsidies for generating power poses a threat, said Dr Fatih Birol, chief economist of International Energy Agency (IEA), during a keynote address at the World Future Energy Summit (WFES 2011) Finance and Investment Forum in Abu Dhabi.

Global investment in renewable energy increased to $243 billion in 2010, up five-fold from 2009 according to Bloomberg New Energy Finance.

Several highly respected figures from governments and capital markets debated the challenges facing future investment in the renewable energy sector during the forum.

Dr Birol said: “The main challenge from the economic crisis is over but full recovery is threatened by the lack of equilibrium between the cost and supply of oil. High oil prices are a key risk to the fragile economic recovery among developed nations.”

“Government subsidies of energy fuels leads to inefficiencies and waste through artificially high use,” D Birol said. “Coupled with the current gas glut this poses a real threat to future investment in renewables.

“Having said this, energy policy reforms being formulated and implemented by the UAE government need to be commended,” he said.

“One of the key drivers to seeing growth in renewable energy will be government support and the sector needs $ 6 trillion investment from China, EU and UK through to 2035.”

Dr Birol added that costs for renewable energy development are falling due to huge demand from China. “China’s drive for low-carbon energy is helping with economies of scale and we may see China dominating clean energy technology which will have a huge impact on western economies, especially in the automotive sector.”

Lord Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment, London School of Economics, UK, and author of the acclaimed 2006 Stern Review Report on the Economics of Climate Change, placed three factors on the agenda for investment in renewable energy: the scale of opportunity needs to be understood; policy development needs to be unhindered; and the pace of change needs to increase.

“In order that climate change targets can be achieved, we face the need for a new industrial revolution,” said Lord Stern.”That industrial revolution needs policy change as a driver to reach the scale of change required. With fundamentally strong policy, we can also increase the pace of that change.”

Morgan Bazilian, Special Advisor on Energy, United Nations Industrial Development Organisation (UNIDO), Austria, commented on Lord Stern’s assertion that a next industrial revolution was needed by holding up the UAE’s Mubadala as a ‘shining example’ of intelligent industrial development.

Rob Bradley, special policy advisor to the UAE Ministry of Finance, said investing in joint venture partners and international companies helped to build knowledge and capacity for indigenous management and expertise.

“The UAE and wider region are attractive markets for investment in renewable energy as sources such as solar, wind and wave are plentiful. There is a tremendous political will in the UAE to develop the knowledge economy and technology investment in renewable energy. And while climate policy is often seen (elsewhere) as an adjunct to broader energy policies, it is something that is high on the UAE’s agenda and the government is supportive of a second term for the Kyoto Protocol.” – TradeArabia News Service

Tags: abu dhabi | forum | WFES | Renewables |

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