How the UAE-Israel peace accord can lead to greater co-operation in the energy sector
Israel has ambitious energy generation targets and the UAE can help the country achieve them
A historical decision by the UAE on Thursday to establish diplomatic relations with Israel opens many possible avenues of co-operation.
Specifically mentioned in the scope of a coming bilateral agreement were energy and the environment. Despite obvious differences, these two hot, arid and technologically advanced countries have several common interests.
Israel has never been a major energy player. On the contrary, until the past decade, its lack of hydrocarbons had been a persistent Achilles heel, leading it to import oil from the former Soviet Union and Iraq’s Kurdistan region and to rely on coal for electricity generation.
Consequently, it has become a regional renewable energy leader. It has had a representative accredited to the International Renewable Energy Agency, which has its headquarters in Abu Dhabi, for several years.
As of last year, the country had more than 1.4 gigawatts of solar power capacity, just behind the UAE and Egypt. Solar water heaters for homes are also widely used.
It harbours intentions to increase its solar power capacity to 15 gigawatts by 2030 at a cost of $22 billion (Dh80.8bn). UAE companies such as Masdar and smaller private companies have already proved themselves highly competitive around the region, and could repeat their success in the Negev (Naqab) desert and on the roofs of Israeli homes.
The Palestinian Territories have similar potential but have had very limited investment, with the largest solar plant at just 7.5 megawatts opening near Jericho (Ariha) last year.
Larger projects have been hampered by lack of land allocation but solar energy could bring down bills in the West Bank and ease power cuts in Gaza.
The UAE and Israel are heavily dependent on desalination for their water supply, which provides up to 80 per cent of Israel’s domestic water needs. It pioneered the frugal system of drip irrigation in 1965.
Lacking the UAE’s cheap gas, the country invested heavily in improving the energy efficiency of its reverse-osmosis desalination facilities.
In the middle of a drought that has struck the East Mediterranean region since 1998, it lowered water consumption by 18 per cent through a water-saving campaign and treated brackish water for use in agriculture. Like the UAE, it recovers waste-water for crops and landscaping.
A number of innovative Israeli companies are developing new energy technology, including solar thermal plants that provide heat for industry, improved lithium-ion batteries, hydrogen storage, smart grids, artificial intelligence that enables energy efficiency and solar generation balancing, electric aircraft, biofuels and floating solar power.
Abu Dhabi’s Ghadan 21 programme, Masdar City and Dubai’s innovation hub have all focused on green energy.
Other obvious areas of common interest would include efficient air conditioning, electric vehicles, hydrogen production from solar power, renewable desalination, and hydroponic agriculture.
The UAE can now be the gateway for the introduction of such technology across the wider region – an important source of economic growth and diversification.
But traditional energy should not be forgotten. In contrast to its long history without hydrocarbons, Israel has recently emerged as a significant gas player.
The giant deepwater offshore finds at Tamar (2009) and Leviathan (2010), along with smaller discoveries, have begun driving out coal from its domestic market and feeding exports to Jordan and, starting this January, Egypt.
Chevron’s purchase of smaller US company Noble Energy, the leading player on the Israeli offshore gas scene, brings a large company’s clout to the job of developing and exporting the area’s resources more widely.
Mubadala, Abu Dhabi’s strategic investment company, holds a 10 per cent stake in Egypt’s giant Zohr field, another key piece of the regional gas picture.
Gaza Marine, a significant gasfield off the Gaza Strip, has lain fallow since its discovery in 2000. But talks continue between Israel's government and the Palestinian Authority, amid hopes that the gas could be used at the power plant in Gaza and, perhaps later, the power station at Jenin in the West Bank, which is still under construction.
A deepening political angle relates to Turkey’s attempts to expand its offshore territory through a deal with the Tripoli-based government in western Libya, and unilateral gas exploration in areas disputed with neighbouring countries.
The extension of the Turkish claim lies solidly athwart the route of a planned deep-sea gas pipeline from Israel and Cyprus to Greece and Italy – though economic, rather than political, factors are the main barrier to the pipeline’s realisation.
Earlier this month, Greece and Egypt demarcated their maritime border, drawing complaints from Ankara.
Tension has risen as Greek vessels monitor a seismic survey being conducted by the Turkish survey ship Oruç Reis, escorted by warships.
In January, Israel, Egypt, Greece, Jordan, Palestine, Cyprus and Italy – but conspicuously, not Turkey – formed the East Med Gas Forum.
The Greek foreign minister visited Israel last Thursday. In May, his country joined Cyprus, Egypt, France and the UAE in condemning Turkey’s activities in Cyprus’s offshore waters.
The political heat generated is out of proportion with the actual rewards to be reaped from East Mediterranean gas.
But confusion over the position of the US, internal conflicts within the EU’s policy and a weakening of the traditional centres of Arab power in the face of other regional and extra-regional actors, make co-operation within the Middle East more important.
Enormous challenges loom in the shape of continuing conflict, climate change and threats to future oil revenue.
Constructive solutions in energy, water and the environment are an essential component of any response.
Robin Mills is chief executive of Qamar Energy and author of The Myth of the Oil Crisis
Updated: August 17, 2020 09:47 AM