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• The zero-carbon, zero-waste initiative of the Emirates,
• Here comes the sun – a solar boom in Abu Dhabi,
• And one more day to grab you half price Options Hotline membership…

Joel Bowman, reporting from the United Arab Emirates…

Here in the Middle East, where there is plenty of gooey oil underfoot, it’s
hardly surprising that alternative energy initiatives have experienced some
trouble gaining traction.

Since Chevron (then Socal) first tapped oil in Bahrain back in 1932, the
Middle East has been a conventional energy behemoth. The OPEC’s five largest
oil producers (Saudi, Kuwait, UAE, Iran and Iraq) crank out their oil at the
cheapest rate in the world; about $5 per barrel. And don’t think they haven’t
been cashing in on their prize asset.

A report released by the International Monetary Fund (IMF) states that, “Oil
and gas revenue account on average for about 75 percent of total (GCC)
government revenue and such exports comprise 65 percent of total exports.”

Understandably, therefore, there has been little impetus for the sandy Middle
East countries to invest in, say, wind power or hydro-electricity. For any
Sheik lining his pockets with revenues from record high oil prices, such
alternatives must seem a lousy substitute… something akin to Hugh Heffner
going home with television’s Ugly Betty rather than one of his many
playmates.

To be sure, we’re a long way away from the day when offshore wind turbines
take pride of place in the Strait of Hormuz, the world’s “oil windpipe.” But
alternative energy is no longer the shame of the prom that she once was. Even
here, in the oil-drenched Middle East, companies are starting to find
themselves attracted to the possibilities that lean-green energies present.

In the column below, we take a look at a few initiatives that have the United
Arab Emirates abuzz with new energy excitement…

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Ugly Betty of Arabia
By Joel Bowman

In the world of fashion, long legs and high cheekbones win models the top
contracts. In the world of energy, the longest legs and the highest
cheekbones belong, undoubtedly, to oil and gas. They are, if you like, the
Elle and Giselle of energy’s international catwalk.

Given the Middle East’s long and prosperous relationship with these energy
supermodels, one could be forgiven for thinking that an Ugly Betty like
renewable energy may not lure many dates here. Surprisingly, this is not the
case.

Driving alongside Knowledge Village here in Dubai, you might notice a bit of
a glare coming through your windshield. No, it’s not a desert mirage. It’s
the reflection from a 40-meter wide solar panel.

The panel, donated to the TELCOM building by Swedish photovoltaic outfit,
Switchboard, is capable of delivering a none-too-modest 10 megawatts per
year. It’s just one of the many impressive initiatives springing up around
the country as the oil rich nation looks to ensure its profitable future
beyond the age of oil. Already there are solar traffic lights, parking meters
and offshore buoys, and many hotels nationwide now have solar heated water.
But this is just the beginning.

Record high oil prices have provided a glut of petrodollar liquidity here in
the UAE. The national oil and gas reserves are ranked fourth and fifth in the
world respectively. But the recipients of this windfall know the age of oil
won’t last forever. By diversifying their economy to include renewable energy
investments, the UAE is effectively hedging their oil-heavy hand.

Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of
the UAE and Ruler of Dubai, has declared his commitment to the development
and promotion of renewable energy initiatives. He hopes that, by 2014, Dubai
will source around 14% of its peek electricity consumption from renewables.

But even more impressive than the initiatives here in Dubai is what’s going
on just up the road, in Dubai’s sister city. Abu Dhabi, the nation’s capital,
is responsible for 95% of the nation’s total oil production. It is also the
home of the largest alternative energy initiative in the Middle East.

Abu Dhabi was recently voted Sustainable City of the Year at London’s Global
Renewable Energy Awards. This accolade came in hot step after the
UAE government initiative, Masdar, received the first World Clean Energy
Award from the Transatlantic21 Association in Basel, Switzerland.

The Masdar Initiative (Masdar meaning “the source” in Arabic) is a
government-sponsored project that aims to provide a global cooperative
platform for the research and development of sustainable energy technologies.

Set up in May of last year, the pioneering project has modeled itself roughly
on California’s Silicon Valley as a venue where competing renewable energy
companies can exchange ideas and further the advancement of their cutting
edge technologies.

“For us this represents a unique opportunity, knowing our position in the
energy market, knowing our energy expertise and the substantial financial
resources we have today,” says Sultan al- Jaber, chief executive officer at
Abu Dhabi Future Energy Company (ADFEC), set up to drive the Masdar
Initiative. “The question is not to replace the oil and gas sectors, it’s
basically to extend the life of the oil and gas sectors and find alternatives
for the future.”

As part of its commitment to furthering development for alternative energy,
the Masdar initiative has set up the Masdar Clean Tech Fund. ADFEC along with
the Consensus Business Group, Credit Suisse and Siemens have kicked in a
total of US$250 million to get the ball rolling. The fund provides an
investment vehicle that will build a portfolio of clean technology funds,
direct/co-investments and joint venture initiatives.

A quick scan through the fund’s portfolio reveals a range of investments
aimed at providing energy security as well as sustainable human development
through the use of renewable energies.

Given that we “locals” bask under an average of 325 days of sun per year, it
is hardly surprising that solar energy takes a large slice of the Clean Tech
Fund’s pie.

One example of such a company is HelioVolt, a Texas company specializing in
manufacturing thin-film photovoltaics (”PV”) solar power conversion modules.
According to their website, HelioVolt, “Derives its technological edge from
superior understanding of the Copper-Indum-Selenide material system, and from
the revolutionary FASST process.”

FASST is a unique new method pioneered by HelioVolt to manufacture the
photovoltaics layer at high rates and thus low costs. It is predicted to be
less than half the cost of any other method.

The portfolio also boasts names such as Solyndra, a Californian photovoltaics
company, and Sulfurcell Solartechnik GmbH, a German company also operating in
the solar realm.

On the practical front, Masdar has joined forces with Foster and Partners in
planning the first “zero-carbon, zero-waste” city. The six-million square
meter sustainable development will be a car free zone and source its energy
from, you guessed it, a massive solar farm.

With the Masdar initiative leading the way, the future for renewable energies
looks bright here in the Middle East.

“In the UAE today, we do not suffer from a lack of energy security, but we
never want to suffer from it,” Sultan Al Jaber recently told the Emirates
Evening Post. “We are thinking ahead of ourselves.”

Standing alongside Elle and Giselle, Ugly Betty may still appear pretty
ugly…but if she can get a start here in the land of the longest legs, she
should be able to score a date almost anywhere. 

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Rude Endnote: We’ll be heading to Abu Dhabi this weekend to take a closer
look at all the renewable energy action. If you have any questions, comments
or suggestions, please address them to your sun-loving editor at the address
below.

Cheers,

Joel Bowman
Rude Awakening