UAE downpour warning of a hotter and wetter world

The UAE’s record rainfall is a sign that climate change strikes in different ways in different places, but with damaging consequences everywhere. Extreme weather is only going to get worse, says Dr Nawal Al Hosany, UAE’s Permanent Representative to the International Renewable Energy Agency. The damage includes flooded roads, power cuts, leaking buildings, flight disruption, financial losses to businesses, and, sadly, several deaths in the UAE and Oman. Higher sea temperatures bring more extreme precipitation and bleach corals, while record glacier melt around the world contributed 1.7 millimetres of sea-level rise last year. The GCC and neighbours can work together to tackle vulnerability to the three water threats of climate change: flooding, rising seas and drought.

The region needs to plan ahead for climate-proofing, and UAE Artificial Intelligence Minister Omar Al Olama suggests that AI could help ease some climate risks. New research on the Ice Age suggests the ice sheets had a larger role on cooling than previously thought, somewhat reducing the likelihood of the more extreme global warming scenarios today. But the average outlook is already frightening enough.

Oil prices unmoved by Iran-Israel conflict

Dramatic as they were, Iran’s attack on Israel and Israel’s strike on a base near Isfahan did not move oil markets in the short term. Iran also took hold of an Israeli-linked cargo ship in the Arabian Sea. Outside the Middle East, the US reimposed sanctions on Venezuela, which could trim some 200,000 barrels a day from its potential output next year. Nevertheless, prices fell sharply on Wednesday, with Brent closing at $87.29 a barrel, and stayed mostly flat over the following two days, posting a weekly decline. Consultancy Rystad suggests there is a $4 a barrel geopolitical risk premium in current prices.

The National Iranian Oil Company has been ordered to hand over its £100 million ($124.56 million) London office, near the Houses of Parliament, to settle part of a $2.6 billion arbitration judgment won by Sharjah-based Crescent Gas Corporation.

Turkish President Recep Tayyip Erdogan made his first official visit in more than a decade to Iraq on Monday. Key areas of discussion with Prime Minister Mohammed Shia Al Sudani include water supplies from the Tigris and Euphrates rivers, the resumption of oil supplies through the Iraq-Turkey pipeline following an arbitration judgment against Ankara last March, and investment in the $17 billion Development Road, a trade route from the Gulf through Iraq and Turkey to Europe.

Electricity cuts have resumed in Egypt as the government attempts to save money. They are likely to worsen in summer. A loss of tourism and Suez Canal revenue because of regional conflicts and declining output at the key Zohr gasfield have worsened Cairo’s problems. Egypt will return to importing liquefied natural gas (LNG) this summer, while Oman, the Middle East’s second-largest LNG exporter, has signed a 10-year deal to supply Shell with 1.6 million tonnes of the fuel annually. For crisis-hit Lebanon, it is “almost impossible” to obtain international funds for energy projects, including the several gigawatts of solar power it needs to alleviate its electricity shortages.

Taqa may swoop on Spain’s Naturgy

Abu Dhabi utility Taqa is considering buying Naturgy, a Spanish gas and power company, having approached three of its leading shareholders. Naturgy’s shares are down 15 per cent this year, but jumped 6 per cent on the news, taking its market capitalisation to €22.4 billion ($23.99 billion). And AD Ports has agreed with Adnoc Distribution to sell marine lubricants globally from its ports network.

Saudi Aramco is also on the acquisition track: it is considering buying 10 per cent of China’s Hengli Petrochemical, which owns and operates a 400,000 barrel a day refinery and petrochemical complex in Liaoning province. This would continue a track of similar deals with Jiangsu Eastern Shenghong, and one with Rongsheng Petrochemical for $3.4 billion which closed in July, as the Saudi state oil giant seeks to cement its downstream position in the world’s biggest oil importing nation. Chief executive Amin Nasser told the World Energy Congress in Rotterdam on Monday that calls to shut down investment in hydrocarbons could lead to “chaos” in the energy industry.

Taqa’s compatriot Masdar is also exploring an entry to China. The Asian country accounted for 298 of the 473 gigawatts of renewable energy installed worldwide last year. “Any serious investor who is ignoring China is committing a very serious mistake,” says chief operating officer Abdulaziz Alobaidli. The clean energy company intends to raise $750 million to $1 billion from a green bond this year to fund its global renewable energy projects. This includes Central Asia, where the company is active in Uzbekistan and Azerbaijan.

Sultan Haitham’s UAE visit brings $32 billion mega-project

During his state visit to the UAE, Sultan Haitham of Oman concluded agreements including co-operation in renewable energy. An energy and industrial “mega-project” will include solar and wind production and green metal production, and will include Taqa, Masdar, Emirates Global Aluminium, Emirates Steel Arkan, OQ Alternative Energy and Oman Electricity Transmission Company.

Alterra, a $30 billion climate fund launched during Cop28, will partner with the Global Climate Finance Centre, a private sector-focused think tank. The UAE is interested in investing in green hydrogen in Colombia, following signing of a Comprehensive Economic Partnership Agreement with the South American country on Friday.

The Dubai Humanitarian Aid and Development conference, that began on Tuesday, is in its 20th year, with climate change a key topic of discussion. And Dr Sultan Al Jaber, President of Cop28 and the UAE Minister of Industry and Advanced Technology, has been given the Global Energy Transition Impact Award by the World Energy Council for his leadership of the event.

Renewable energy risks cannibalising itself in Europe

Renewable energy may be a victim of its own success, as it lowers electricity prices across Europe, EU energy commissioner Kadri Simson told the International Renewable Energy Agency in Abu Dhabi last Wednesday. Wholesale electricity prices in Europe often fall to zero because of an oversupply of wind or solar power. More electricity storage and interconnections will be required. The UK needs to quadruple investment in electricity generation and infrastructure to meet its net-zero targets, says the Resolution Foundation, a think tank. This is challenged by higher interest rates. Its last coal-fired power plant is expected to close around September, to be replaced by a green hydrogen facility. But the Conservative government under Prime Minister Rishi Sunak gives the impression of not caring any more about being “green”.

Solar in space could lift off

Space-based solar power may be within reach – “very doable” by 2050, says the chief executive of the UK Space Agency, Paul Bate. Arrays of orbiting solar panels would receive the full force of the Sun’s rays, not be interrupted by clouds or nightfall, and could beam it to many places on Earth. And from the sky to the ground, walking could generate electricity – via Pavegen, a UK-based company which was exhibiting at the World Future Energy Summit in Abu Dhabi last week. Its tiles have electromagnetic generators beneath them that produce electricity from pedestrians’ steps.

Sales growth in electric vehicles may slow this year, expects the International Energy Agency, and the transition may not be consistent. However, in the first quarter, sales worldwide were up 25 per cent, similar to the rise in the same period last year.

Electric car maker Tesla has asked its shareholders to approve the $56 billion compensation package for chief executive Elon Musk. The pay package was rejected by a Delaware court in January. With its first revenue decline in four years, and cutting more than 10 per cent of its workforce, the company appears confused between its plans for an affordable $25,000 vehicle versus Mr Musk’s focus on an technologically-stretching robotaxi.