The UAE is a reliable supplier of some of the world’s least carbon-intensive oil and gas, as the Emirates achieves record growth in renewables, said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, managing director and group chief executive of Abu Dhabi National Oil Company (Adnoc) and the UAE’s special envoy for climate change.
Renewables represented more than 80 per cent of all new power-generating capacity last year and it is the clearest sign yet that the energy transition is gathering pace, Dr Al Jaber wrote in an article published in Project Syndicate, state news agency Wam reported.
“Recent events have shown that unplugging the current energy system before we have built a sufficiently robust alternative puts both economic and climate progress at risk — and calls into question whether we can ensure a just transition that is equitable to all," Dr Al Jaber wrote.
A successful energy transition must be built on progress for the economy and the climate together, and "must be based on scientific, economic and engineering facts, appreciate the multiple dilemmas and challenging trade-offs and accelerate the deployment of practical solutions", he said.
"And for that, we need an inclusive approach that leverages the experience of all sectors of society and, critically, does not exclude the energy sector."
The world was already facing a profound energy-supply crunch as economies began to bounce back from the Covid-19 pandemic. The Russia-Ukraine conflict then made a tight market even tighter and forced countries to reassess their urgent near-term strategic energy needs, the Wam report said, quoting excerpts from Dr Al Jaber's article.
“So, the message for governments should be clear: policies aimed at divesting from hydrocarbons too soon, without adequate viable alternatives, are self-defeating. They will undermine energy security, erode economic stability, and leave less income available to invest in the energy transition.”
In his article, Dr Al Jaber also emphasised the need for a realistic new strategy that is practical, pro-growth and pro-climate.
“The strategy needs to appreciate the complexity of energy and industrial systems, and that the scale of the transition required is colossal, requiring greater alignment and collaboration on everything from capital allocation to product design, public policy, and behavioural change,” he said.
He said the demand side of the energy system must be closely examined before adopting any strategy for energy transition.
While renewable energy investment globally exceeded $365 billion last year, combined investment in energy storage, carbon capture and the hydrogen value chain was only $12bn.
"That is not nearly enough," Dr Al Jaber wrote.
"The energy transition is estimated to need more than $250 trillion of investment over the next 30 years. Obviously, no single country, much less a single company, can foot this bill.
“But financing isn’t the only issue. Energy transitions take time.”
While wind and solar accounted for the vast majority of all new power-generating capacity in 2021, they still comprise only 4 per cent of today’s energy mix. As the world’s energy needs grow ever larger, maintaining global energy security will require oil and gas to remain a significant part of the mix for decades to come, the article said.
“That is why we must do more now to reduce the impact of oil and gas on the climate,” Dr Al Jaber said. "Producers, governments and the private sector must work together to make sure that each new unit of output is less carbon-intensive than the last."
A meaningful energy transition move would require supportive fiscal policies through tax incentives, operational efficiency via technology, greater commitment to reduce methane and flaring and significantly greater investment in carbon-capture technology, he said.
“These realities are guiding the UAE approach to the energy transition, which involves continuing to meet global needs today while investing in the new energy systems of tomorrow,” he said.
The UAE has three of the world’s largest single-site solar plants, has invested in renewable projects in more than 40 developed and developing countries and plans to increase its renewables portfolio to 100 gigawatts by 2030.
“We have also invested in nuclear power and are laying the foundations of the hydrogen value chain, which is key to achieving net-zero emissions,” Dr Al Jaber said.