Dr Nawal Al-Hosany is permanent representative of the UAE to the International Renewable Energy Agency
December 27, 2021
At the start of 2021, I said that renewable energy had a big year ahead. Now, as we reach the end of the year, this has turned out to be something of an understatement – although, it is easy to be wise after the event.
As we stand on the precipice of 2022, and face down the possibility that we rather might be about to enter ‘2020 two’, we must double down on the commitments, pledges and actions taken in this extraordinary year to ensure that we pragmatically transition to a world powered by renewable and clean energy solutions.
The last 12 months have tested the reserves of human innovation and tried the resilience of the renewables sector in equal measure. Both have come up trumps. And both – humanity and renewable energy – must move forward, hand in hand, drawing strength and support from each other to forge a more sustainable future for all.
From the US rejoining the Paris Agreement to a burst of net-zero strategies from the Gulf states, through to the UNFCC’s selection of the Emirates to host Cop28 in 2023, it has been a year that has delivered on some key promises. At the same time, it has also seen leaders, governments and industries demonstrate a critical awareness that so much more still needs to be done if we are to “keep 1.5 alive” – that is, preserve the goal of no more than a 1.5ºC temperature rise, as the slogan of Cop26 in Glasgow said.
We should enter the new year not with fear or trepidation, but with confidence and optimism. A brief review of what we achieved in the face of unprecedented adversity should show why.
Despite the seismic impact of the pandemic, our world got greener and more efficient, as renewable energy stepped up to the plate. Industry got cleaner. Technology got smarter. Climate action became more urgent.
Across, 2021 we’ve seen electricity generated from solar panels, wind turbines and other renewable sources accelerating faster than ever, across the world. The latest findings from the International Renewable Energy Agency (Irena) show that 2021 could set a new all-time record for the number of new global renewable energy installations.
In fact, current projections show that newly installed renewable energy capacity is set to reach almost 300 gigawatts this year – up from 260 in 2020, which set the record at the time.
Last year, more than 80 per cent of all new electricity capacity was renewable, with solar and wind accounting for 91 per cent of new renewables. In the next five years, we are looking at 95 percent of all new electricity capacity coming from renewable solutions.
The UAE is set to host Cop28 in 2023. Photo: Abu Dhabi Media Office
Last year, more than 80 per cent of all new electricity capacity was renewable
These numbers are revealing. After almost two years of adjusting to the new demands placed on society by the pandemic, it has both exposed the deeply entrenched vulnerabilities of the current energy system, and served as a wake-up call to any leader who has been sleepwalking their way into this climate crisis.
Now, as governments face the complicated balancing act of controlling the health emergency while introducing major stimulus packages, we must have an eye on the future. We must align the short-term interests of overcoming a fresh wave of Covid-19 with the long-term goals of the Paris Agreement.
This is progress and reason to be cautiously optimistic that the transition we desperately need is underway. I say “cautiously” because we know two things for certain.
First, deployment of renewable solutions across key industrial sectors must accelerate if we are to achieve net-zero emissions by the middle of the century. Second, the global energy transition must be inclusive and equitable.
This second point is a message that cannot be emphasised enough. One of the real highlights of Cop26 this year was seeing leaders like Barbados’s Prime Minister, Mia Mottley, shift the climate action spotlight onto small island and developing states.
Her message that “no one is safe until everyone is safe”, though rooted in the global response to the pandemic, is one that should have applied to the climate crisis long before the virus emerged. It is for this reason that initiatives like the Energy Transition Accelerator Financing Platform are critical. Launched by the UAE and Irena at Cop26, the platform aims to secure up to $1 billion in funding to accelerate the transition to renewable energy in developing countries by financing 1.5 gigawatts of new renewable energy by 2030. The power of partnerships must be harnessed. Because no one is safe until everyone is safe.
So, what should we expect to see in 2022? In three words: partnerships, technology and finance.
Whether it’s green hydrogen technologies under the UAE Green Hydrogen Leadership Roadmap, pioneering partnerships in the joint US-UAE AIM for Climate (AIM4C) initiative, or investing in the talent, the youth and – as my previous writings in these pages have emphasised – the women who will lead the way to realising the UAE’s Net Zero by 2050 Strategic Initiative, balancing these priorities will be critical to navigating towards a greener 2022 successfully.
Daniella Weiss and Nachala Described as 'the grandmother of the settler movement', she has encouraged the expansion of settlements for decades. The 79 year old leads radical settler movement Nachala, whose aim is for Israel to annex Gaza and the occupied West Bank, where it helps settlers built outposts.
Harel Libi & Libi Construction and Infrastructure Libi has been involved in threatening and perpetuating acts of aggression and violence against Palestinians. His firm has provided logistical and financial support for the establishment of illegal outposts.
Zohar Sabah Runs a settler outpost named Zohar’s Farm and has previously faced charges of violence against Palestinians. He was indicted by Israel’s State Attorney’s Office in September for allegedly participating in a violent attack against Palestinians and activists in the West Bank village of Muarrajat.
Coco’s Farm and Neria’s Farm These are illegal outposts in the West Bank, which are at the vanguard of the settler movement. According to the UK, they are associated with people who have been involved in enabling, inciting, promoting or providing support for activities that amount to “serious abuse”.
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.”
The specs
Engine: Dual 180kW and 300kW front and rear motors
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Three ways to get a gratitude glow
By committing to at least one of these daily, you can bring more gratitude into your life, says Ong.
During your morning skincare routine, name five things you are thankful for about yourself.
As you finish your skincare routine, look yourself in the eye and speak an affirmation, such as: “I am grateful for every part of me, including my ability to take care of my skin.”
In the evening, take some deep breaths, notice how your skin feels, and listen for what your skin is grateful for.
Know before you go
Jebel Akhdar is a two-hour drive from Muscat airport or a six-hour drive from Dubai. It’s impossible to visit by car unless you have a 4x4. Phone ahead to the hotel to arrange a transfer.
If you’re driving, make sure your insurance covers Oman.
By air: Budget airlines Air Arabia, Flydubai and SalamAir offer direct routes to Muscat from the UAE.
Tourists from the Emirates (UAE nationals not included) must apply for an Omani visa online before arrival at evisa.rop.gov.om. The process typically takes several days.
Flash floods are probable due to the terrain and a lack of drainage. Always check the weather before venturing into any canyons or other remote areas and identify a plan of escape that includes high ground, shelter and parking where your car won’t be overtaken by sudden downpours.
