Masdar vision weathers global storm

Abu Dhabi continues to diversify away from reliance on fossil fuels

After a rough year in which global financing for renewables dried up and interest in the sector sank across the world, Masdar, the Abu Dhabi Government's clean energy firm, shows no signs of abandoning its aim to transform a significant slice of Abu Dhabi's economy. Sultan al Jaber, the firm's chief executive, has said Masdar remains committed to all of its investments, which it sees in long-term, strategic terms as a means to diversify the economy away from fossil fuel exports.

Abu Dhabi, Dr al Jaber told a recent conference in the capital, saw the development and export of clean-energy technology as a complement to its existing energy-based economy. "We believe this is a natural step, a logical extension for Abu Dhabi to venture into," he said. "Global energy markets are evolving." The firm celebrated a number of achievements last year as it employed a wide-ranging, capital-intensive investment strategy. It switched on its first solar panels, agreed to fund 20 per cent of the ?2.2 billion (Dh11.6bn) London Array, the world's largest wind farm, and scored a major coup when the International Renewable Energy Agency (Irena) voted to base its headquarters at Masdar City.

Masdar also began manufacturing its first solar panels at a plant in Germany and welcomed its first class of students to the Masdar Institute of Science and Technology. At the same time, 2009 was also a year of tough challenges, as Masdar delayed a construction contract for a key solar power project and abandoned ambitious completion dates for Masdar City. Nevertheless, Dr al Jaber has emphasised repeatedly that all of the company's investments are still going forward. "I can comfortably tell you that none of our announcements is being sidelined or put on hold," he told Reuters late last month.

The firm's broad investment strategy grew out of a perception that the renewable energy sector lacked the participation of big investors to drive it forward, he said: "We found out that renewable energy did not advance the way it was supposed to - it was way too fragmented." The result of that conclusion was a company with many interests. In addition to building Masdar City and leading the development of large-scale clean-energy projects in the UAE, Masdar has invested in projects abroad and wants to help firms across the region to reap financial benefits for reducing carbon emissions.

But the firm's key focus is still Masdar City, the zero-carbon, zero-waste development at the edge of the capital. The campus for the institute will be completed this year, and the first phase of the city - which includes the institute, the Masdar headquarters and the surrounding neighbourhood - will be completed by 2013. Originally, the whole city of 50,000 residents was to be completed by 2016, but Masdar now shies away from a firm target and says the city will take time to grow organically.

In exploring the best energy sources to power its development, Masdar launched several groundbreaking projects. In September, it announced it would drill at least two 4km wells under the city in search of geothermal heat sources to produce electricity and power cooling systems. The firm awarded a $1.6 million contract to Reykjavik Geothermal of Iceland. Two months later, Masdar signed a deal with Instituto de Sistemas Fotovoltaicos de Concentracion, a Spanish research institute, to test a number of concentrated photovoltaic technologies at the Masdar City site. The firm hopes to meet about half of the city's energy needs through solar photovoltaics, and about a quarter from solar thermal plants.

"We are embracing a knowledge-based economy," Dr al Jaber said. "That will transform the economy from a technology importer into a technology exporter."