The UAE may surpass its target of tripling renewable energy capacity by 2030 due to low clean energy prices and as more solar capacity is installed to produce green hydrogen, the country's energy minister said on Sunday.
Renewable energy is the cheapest and reduces the levelised cost of electricity – the average cost of generating power over the lifetime of a power plant – Suhail Al Mazrouei said during a panel session at the World Economic Forum’s special meeting in Riyadh.
“We can say with certainty that our plans will be reached and maybe we'll reach even higher than tripling the capacity [because] it does make sense. It's the cheapest,” Mr Al Mazrouei said.
“In addition to that, what we're doing for hydrogen is also going to increase significantly the installed capacity for solar,” he added.
The Emirates, the Arab world’s second-largest economy, aims to reach hydrogen production of 1.4 million tonnes annually by 2031, and 15 million tonnes annually by 2050.
The country is planning to develop at least two hydrogen production hubs, or oases, by 2031.
Gulf countries have been heavily investing in renewable energy while simultaneously lowering emissions from their oil and gas operations as part of their plans to achieve net-zero emissions by 2050 or beyond.
Meanwhile, Qatar’s Energy Minister Saad Al Kaabi said oil and gas producers are “doing their best” on methane abatement and spending billions on carbon capture and storage, but that the industry is not being given enough credit for those initiatives.
“Everybody's doing it in a very responsible way to make sure that we can develop and have growth … and I think we're not being given enough credit for doing all that,” Mr Al Kaabi said in a separate panel on Sunday.
Carbon capture, utilisation, and storage (CCUS) involves trapping carbon dioxide emissions from industrial activities such as steel and cement production, as well as from fossil fuel combustion in power generation.
The global CCUS market, which was valued at $1.9 billion in 2020, is projected to reach $7 billion by 2030, growing nearly 13.8 per cent per annum, according to Allied Market Research.
Mr Al Kaabi said crude oil demand will be driven by petrochemicals, while the growing requirement for power generation will rely on natural gas, which is seen as a transition fuel.
"Oil and gas are going to be needed for a very long time. You can debate [on] when is peak [demand for] oil [or] when is [peak demand] for gas but that's irrelevant in my view," he said.
His comments were echoed by Saudi Arabia’s energy minister, who was also a part of the panel.
“We also need to be cognisant of the fact that oil and gas is moving. We will move or continue the move from oil to chemicals … because even in the process of electrification, people would need plastics,” Prince Abdulaziz bin Salman said.
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England 458
South Africa 361 & 119 (36.4 overs)
England won by 211 runs and lead series 1-0
Player of the match: Moeen Ali (England)
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Investment: $5.2 million
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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