‘Turn buildings into power stations’

Pardi argues that while the UAE government has created a mandate to reduce its carbon footprint, it will be the demand for stable income by developers that will truly drive cleantech in the region. "Given that the technology exists now, it only seems logical that any new construction will be thought of as an independent power generation station almost as much as it will be thought of as income-producing assets through occupancy.

"Why wouldn't a builder incorporate solar panels, wind turbines and energy-efficiency systems in a project in order to secure a stable stream of potential income?" Such a mindshift change will also create immense opportunities for the MEP sector in terms of the installation and maintenance of such systems.

Currently the UAE produces just 2% of its energy from renewable sources. This is predicted to rise to 7% in 2020, based on Enpark and Masdar initiatives, compared to European renewable energy targets of 20% by 2020, said Seneviratne. "More regulations will help the growth of renewable energy in the UAE," is the fervent argument of Mario Seneviratne, secretary of the World Green Buildings Council.

‘One of the biggest markets'

Pardi says the UAE "is emerging as one of the biggest markets for cleantech, thanks to a massive carbon footprint and skyrocketing energy demand." However, he adds it is unfortunate that GCC initiatives in promoting cleantech have been largely overshadowed by media coverage of the price volatility in the oil and real estate markets.

Pardi says the Middle East holds vast opportunities for investors in cleantech. "There are billions of dollars that have been pledged to ‘greening the gulf' by the UAE, Bahrain and Qatar, among others. But the UAE holds the greatest promise for cleantech investment. Not only is the UAE visionary, proactive and cash-rich, statistically it is the major region in the most need of significant ecological reform."

In March 2008, the World Wildlife Fund (WWF) released data showing that the average person in the UAE puts more demand on the global ecosystem than any other country, giving it the world's largest per-capita ecological footprint. The WWF rankings are measured in global hectares, which is the area of biologically productive land and sea needed to provide the resources consumed by an average person. The UAE's ecological footprint measured 11,9 global hectares per person, compared to a global average of 2,2 hectares a person. The US measured 9,6 hectares per person.

Use of water

One of the largest contributor factors to this ranking is the use of water. Roughly 25% of water in the Gulf region has already been consumed. One-fifth of the water is being used for power generation. This problem is likely to get worse, as energy demand is rising more rapidly in the UAE than in the world at large.

The International Energy Agency estimates world energy demand is estimated to increase by 45% in 2030, but current estimates suggest that the domestic demand for power in the UAE will more than double by 2020. According to The World Energy Council, the Gulf will require 100 GW of additional power to meet demand. Estimated costs range from $900 million for Bahrain, $800 million for Oman, $600 million for Qatar, $15 billion for the Kingdom of Saudi Arabia and up to $10 billion for the UAE.

Pardi says an added benefit of this approach is built-in redundancy. "The GCC has the advantage of basically starting from scratch when it comes to urban planning versus much of the rest of the world, which is grappling with space issues and contending with inferior infrastructure. Those problems make it much more difficult to execute a redundant system quickly.

"Such an enviable position once again supports the concept that the GCC can surpass every expectation of implementing a cleantech revolution. As many of us look past the current economic crisis and to the future of cleantech, one must remember that the history of the Middle East is actually based on the entrepreneurial spirit that created trade. Over the last decade, the UAE has been a leader in various industries: leisure, real estate, and finance, to name a few. I have no doubt the UAE will led in the development and implementation of cleantech.

Robert Pardi heads Evolvence Capital's cleantech investment initiatives. His experience includes a stint as portfolio manager for the Abu Dhabi Investment Authority.

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