The mounting pressure of global climate change is causing governments, investors and companies to rethink their approach to mitigating climate risk.
This is being discussed at Cop26 in Glasgow as governments and energy companies are finding solutions to combat climate change.
It comes as no surprise that the public and private sectors will need to collaborate to increase clean energy adoption and reduce their environmental impact.
The UAE’s ambitious programme of initiatives to take climate action includes substantial investments to increase sources of clean energy. However, providing a reliable accreditation system for tracing the use of clean energy caters to the growing appetite among businesses, industrial players and households alike to contribute to the fight against climate change.
As the first Middle East and North Africa nation to adopt net-zero by 2050, the UAE is aligned with the most progressive global efforts to decarbonise, reduce greenhouse gas (GHG) emissions and limit rising temperatures. Collectively, the nation’s efforts have the potential to shrink its carbon footprint by 70 per cent, saving Dh700 billion ($190.5bn) by 2050.
With Abu Dhabi’s largest portfolio of energy and utilities investments, ADQ's portfolio companies are national champions in this effort.
The Emirates Nuclear Energy Corporation represents all aspects of the UAE Peaceful Nuclear Energy Programme. The Barakah Plant is one of the largest nuclear energy plants globally and is already the largest single source of clean electricity in the UAE and the Arab World. When fully operational, the plant will produce 5.6 gigawatts of carbon-free electricity for more than 60 years.
Additionally, the 2GW Al Dhafra Solar Photovolatic project, which is currently under construction, will have the capacity to power approximately 160,000 households across the UAE. The project is being developed with a consortium led by Abu Dhabi National Energy Company (Taqa), and in collaboration with Masdar, France’s EDF Renewables and China’s JinkoPower.
These are just a couple of large-scale, high-impact investments that provide essential infrastructure and help drive economic development for generations to come.
As more entities commit to and progress on sustainability goals, it becomes more essential for them to certify the sources of their renewable and clean energy.
Consequently, there is growing appetite for Clean Energy Certificates (CECs) that allow businesses, industrial players and households to track and certify their renewable and clean energy production from source to consumption.
CECs are issued when one megawatt-hour of electricity is generated and delivered to the national grid from a clean energy source.
Combining these benefits with advanced technology, most notably blockchain, presents a new way forward to ensure that any amount of electricity used has originated from renewable or clean energy sources. The secure and unchanging nature of blockchain can mean transparency, traceability and authenticity for companies procuring energy and trading CECs. The broader properties of distributed ledger technology keep transaction records secure, time-stamped and accessible for relevant energy market stakeholders.
With CECs, companies in industries across the energy, industrial, healthcare, commercial and retail sectors can quickly and clearly present the origins of power consumed, limiting the potential of companies greenwashing their operations ensuring reliable claims about their energy usage.
In addition to CECs’ benefits to the environment, they also promote a liquid market for a tradable commodity. Last month, our portfolio company, Emirates Water and Electricity Company successfully completed Abu Dhabi’s first auction of CECs, following the launch of the regulatory policy for CECs by the Abu Dhabi Department of Energy earlier in the year. This was the first time anywhere in the world that CECs for power generated from nuclear energy were available for purchase.
Importantly, CECs will empower Abu Dhabi-based entities to compete globally with counterparts using internationally recognised certificates that confirm their green credentials. This is noteworthy as its applications for industrial companies is widespread – and aligned with the UAE’s commitment to more than double the industrial sector’s contribution to GDP to Dh300bn by 2031.
We have established a solid foundation of generating clean sources of energy and now must work in collaboration with policymakers, regulators, industrial leaders, and technology providers to accelerate the implementation of digital clean energy certificates. A strong collective effort will ease the journey to environmentally sustainable operations, elevating the UAE’s position as a leading green economy.
Hamad Al Hammadi is head of energy and utilities at ADQ, one of the region’s largest holding companies