Last year, the world’s largest oil exporter, Saudi Arabia, sold about $190 billion of petroleum. In the same period, China earned about $240 billion from clean-tech exports. As the World Future Energy Summit in Abu Dhabi opens on Tuesday, the horizon beckons: make future energy innovation the mainstay of the economy.
Views on future oil and gas demand vary widely. But taking an optimistic view such as that of Opec, and allowing for gains in market share by Opec+ countries, their sales are not likely to grow by much more than 1 per cent per year to 2050. Even if prices remain roughly flat rather than falling, this is nowhere near enough to meet the economic aspirations of the UAE, Saudi Arabia and their neighbours.
Several Middle Eastern countries have already become world-leaders for the size and low cost of their solar power centres. Battery installations are quickly following. Hydrogen production is another world-scale ambition in Saudi Arabia and Oman. These advances offer a much lower-carbon footprint and cheaper domestic energy system, and confound the doubters by showing that it can be at least as reliable as traditional fossil-fuelled electricity.
The crucial next step is to build on this to create innovative, large-scale new energy businesses focused on exports. Manufacturing solar panels or batteries in competition with the Chinese juggernaut is expected to prove very tough, and countries such as Vietnam and India already form a second tier of providers.
Middle Eastern countries do start with some advantages: abundant capital, in many of them; exceptional renewable and fossil energy resources, with geological potential for carbon capture and natural hydrogen; an openness to innovation and risk-taking.
The UAE, Saudi Arabia, Oman and Qatar have another crucial strength: their national clean-energy champions, respectively Masdar, Acwa Power, OQ Alternative Energy and Nebras Power. They have built up extensive portfolios of renewable and battery assets across the Middle East, Africa, Central Asia, India, Europe and elsewhere. These expose them to international competition, and provide a testing ground for new technologies and business models.
Some other areas need more work. Institutions such as Khalifa University, American University of Sharjah, and NYU Abu Dhabi are increasingly providing invaluable advances in energy technologies and climate research. But the Gulf needs to be more of an intellectual dynamo. It is a great time to lure researchers hit by politicisation in the US or inadequate funding in Europe.
Capital for true innovation is becoming more available. But it needs to be on a much larger scale, and willing to take big, risky bets, beyond software and consumer services. Outside the handful of state-owned Gulf giants, the regional economy needs to create several companies that satisfy four criteria: market values in the tens of billions of dollars; an employee count of about 10,000 or more; extensive linkages throughout the domestic economy; and most revenue coming from exports, preferably beyond the region.
With those fundamentals in mind, what are some outstanding areas where WFES can catalyse progress? There are many exciting and capable companies in the line-up, so this is not meant to endorse or overlook any in particular.
Balancing the electricity grid is getting more complex. Hot-button issues are the growing input of variable renewable power – wind and solar, the emergence of new large and lumpy loads such as electric vehicle charging, the addition of distributed solar on homes and businesses. In many countries, grids have to be expanded, but competing land-uses and difficult approval processes get in the way. Omnipower, for example, hopes to solve this by upgrading existing alternating current routes to direct current, tripling their capacity.
On the other hand, better batteries, and finer monitoring and control enabled by AI and the Internet of Things, give the grid manager far greater ability to ensure reliability and save costs and emissions. One of the panels I am leading, on Wednesday, will explore this.
Our past and continuing legacy of emissions make it essential to remove carbon from the atmosphere. This in turn requires companies to be fairly paid for doing so. Innovative approaches include turning carbon dioxide into solid minerals underground, as start-up 44.01 is doing in Fujairah. NEG8 Carbon from Ireland has a system for direct capture of carbon dioxide from air using off-grid renewable energy, and suited to arid climates.
The Zero-Emissions Traders Alliance promotes mechanisms for paying for carbon capture, atmospheric carbon removal, biological carbon sequestration and other such approaches. Among others, I will be talking to Jan Haizmann from Zeta, and Vahid Fotuhi from Blue Forest, who uses mangrove forests to trap carbon.
The Gulf’s hot climate, and a legacy of often poorly suited building designs, require new thinking about energy efficiency, particularly for cooling. Companies offering improved insulation include Nanoplume, which produces bio-based aerogel. Made of Air from Germany gets extra points for making insulation from biochar, which traps carbon as it is formed.
The hunt for critical minerals to make these new energy systems is an ever-shifting kaleidoscope, as needs for new materials are discovered, or made obsolete by technology advances, or highlighted by geopolitical disturbances. The Gulf could be an ideal place for processing or recycling some of these minerals in a low-carbon manner. Altilium extracts overlooked materials from mining wastes, while Litus obtains lithium from brines and oilfield waters.
Finally, there are some technologies that could be truly transformative. CubicPV’s perovskite solar panels can be dramatically more efficient than traditional models. Electric Aviation Group from the UK could enable zero-emission flight. Helical Fusion from Japan is one of several start-ups around the world aiming to deliver limitless zero-carbon power in the same reactions that fire the sun.
In a world beset by angst about climate, and where the environmental struggle is often overshadowed by political turmoil, economic fears and negative propaganda, these are just a few of the innovators offering hope. WFES is a good reminder to think globally, look to the future, and build the Gulf’s new economy on the foundation of energy innovation.
