Dr. Sultan bin Ahmed Al Jaber, the UAE Minister of Industry and Advanced Technology (MoIAT) has stated that the policies that aim to divest from hydrocarbons rapidly without providing adequate viable alternatives are counterproductive.
They will undermine energy security, erode economic stability, and leave less income available to invest in the energy transition, said Dr. Al Jaber, who is also Managing Director and Group CEO of the Abu Dhabi National Oil Company (Adnoc) and the UAE’s special envoy for climate change.
While renewable energy investment globally exceeded $365 billion last year, combined investment in energy storage, carbon capture, and the hydrogen value chain was only $12 billion. The energy transition is estimated to need more than $250 trillion of investment over the next 30 years.
According to Dr. Al Jaber, energy transitions take time. While wind and solar accounted for the vast majority of all new power-generating capacity in 2021, they still comprise only 4 percent of today’s energy mix. Albeit, the record growth in renewables, representing over 80 percent of all new power-generating capacity last year, is the clearest sign yet that the energy transition is gathering pace.
But recent events have shown that unplugging the current energy system before we have built a sufficiently robust alternative puts both economic and climate progress at risk, and calls into question whether we can ensure a just transition that is equitable to all.
A successful energy transition must be built on progress for the economy and the climate together. It must be based on scientific, economic, and engineering facts, appreciate the multiple dilemmas and challenging trade-offs, and accelerate the deployment of practical solutions.
A realistic new strategy that is practical, pro-growth, and pro-climate, is needed the most. The strategy needs to appreciate the complexity of energy and industrial systems, and that the scale of the transition required is colossal, requiring greater alignment and collaboration on everything from capital allocation to product design, public policy and behavioral change.
This means examining the demand side of the energy system first. Wind and solar power are making great advances, but most energy is used in heavy industry, manufacturing, construction, transportation, and agriculture. These harder-to-abate sectors have the biggest effect on climate and thus require more investment, starting now.
These realities are guiding the UAE’s approach to the energy transition, which involves continuing to meet global needs today while investing in the new energy systems of tomorrow. The UAE has three of the world’s largest single-site solar plants, has invested in renewable projects in over 40 developed and developing countries, and plans to increase its renewables portfolio to 100 gigawatts by 2030, Dr. Al Jaber added.