UK looks to UAE for $320bn energy funding

The UK will draw heavily on UAE investment to help drive its GBP£200bn (US$321bn) renewable energy plans, according to the UK’s minister of state for energy and climate change, Greg Barker.

Speaking on the eve of the World Future Energy Summit in Abu Dhabi, Barker said the UAE and other Gulf countries would contribute “a very substantial number” of investments as Britain aims to reduce its greenhouse gas emissions by 34 percent by 2020.

The transformation of the British energy sector will cost GBP£200bn over the next decade, with parliament expected to pass an energy bill this week to encourage investment.

Much of the renewable energy will come from wind farms, an area Abu Dhabi has already bought into. Government-owned investment vehicle Masdar owns a stake in the London Array, the world’s largest offshore wind farm, which after 17 months of construction is starting to generate electricity.

“The London Array is just the beginning,” said Barker. “I’m really delighted at the way in which the investment relationship between a number of actors from Abu Dhabi and the UK is developing.”

The new energy bill, which will be scrutinised by MPs on Tuesday, will set generous electricity prices for clean energy, allowing providers to increase consumer bills and guaranteeing investors a minimum return for their power projects.

Another Abu Dhabi company, TAQA, also recently invested in the UK, adding to its oil production base in the North Sea by signing a deal worth US$1bn with BP.

Barker added: “Abu Dhabi has recognised that they are an energy economy, that they are not just a fossil fuel producer. They have a much more 21st century take on the global energy economy, and are determined to be a participant in every sector of that.”