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Abu Dhabi rides 'cleantech' wave with $15B pledge

Posted: 21 Feb 2008 ?? ?Print Version ?Bookmark and Share

Keywords:cleantech? Abu Dhabi pledge? venture capital investment? Energy Summit?

The government of the gulf emirate Abu Dhabi has pledged an investment of $15 billion for sustainable energy and clean technology development, as part of its aspiration to become a world leader in the field.

Abu Dhabi's program is set to target solar, wind and hydrogen power, alongside carbon-footprint management and reduction. Education, R&D and manufacturing will all be targeted in an emphasis on sustainable development for the country.

Buzzworld du jour
So-called "cleantech" has become the latest hot investment sector and buzzword du jour for an investment community that is becoming tired of underperforming semiconductor and IT sectors. According to a survey from the National Venture Capital Association (NVCA), venture capital dollars for clean technology are projected to grow in 2008, but semiconductor funding will decline.

On Feb. 18, a coalition of more than forty U.S. and European institutional investors announced a commitment to invest $10 billion in clean technology over the next two years.

Clean technology is also becoming more important for players in the semiconductor capital equipment arena. In September 2006, Applied Materials Inc. announced that it intended to provide manufacturing tools, technology and process innovations borrowed from the flat-panel and semiconductor industries that would enable customers to increase colar cell conversion efficiency and yields. In what is claimed to be the world's largest single government commitment to development of sustainable energy technology, the $15 billion will be channeled into a range of investments, projects and education initiatives through the government's Masdar Initiative, a company established to explore, develop and commercialize future energy sources.

Masdarwhich in Arabic means "the source"intends to leverage the Abu Dhabi government's initial $15 billion investment with joint ventures and other investment partners to create a portfolio many times larger. It will comprise projects in Abu Dhabi, the Middle East and North Africa region, and beyond.

World Future Energy Summit
The announcement of Abu Dhabi's plan came from General Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and deputy supreme commander of the United Arab Emirates armed forces. He spoke at January's World Future Energy Summit in Abu Dhabi. The summit attracted 3,000 delegates and more than 200 companies took space at the related exhibition. The organizers are planning a follow-up event to take place on Jan. 19 to 21, 2009.

The Crown Prince also announced that the Abu Dhabi government plans to give awards worth $2.2 million annually for excellence in the innovation, development and implementation of sustainable energy solutions. "Scientists are now saying that the problem of climate change is so grave and so urgent that we have less than 10 years to slow, stop and, indeed, reverse greenhouse gas emissions," he said. "That is why common actions in each and every country are urgently required to protect the common inheritance that has been given to us by our creator."

The summit's major partners included BP, Shell, Standard Chartered, Merrill Lynch, Barclays Capital, Aldar, Total, Dolphin Energy, International Power, Occidental and Oerlikon. Among senior politicians calling for more action to promote sustainable energy technologies were Iceland President Olafur Ragnar Grimsson, Djibouti President Ismail Omer Guelleh and U.S. Energy Secretary Samuel Bodman, who said that more than $22 trillion of new investment would be needed to meet extra global demand for energy between now and 2030.

Another highlight of the summit was the announcement by the head of BP Alternative Energy, Vivienne Cox, that Hydrogen Energy, BP's joint venture with Rio Tinto, had begun work on a $45 million front-end engineering and design project for a low-carbon, industrial-scale, hydrogen-based electricity generation plant in Abu Dhabi. A decision is expected early next year, which, if positive, would lead to the 420MW plant coming on stream in 2012. Cox said the $2-billion plant would use natural gas as a feedstock and that the carbon dioxide produced would be made available for re-injection for enhanced oil recovery (EOR). A significant benefit would be that the captured CO2 could replace some of the natural gas currently used for EOR, freeing it up for the local market.

A tree-like building
The event in Abu Dhabi featured the architect William McDonough, who presented a vision of a building that "can do everything a tree can do except replicate; a building that receives its energy from the sun, that grows food, that builds soil, that provides a habitat for hundreds of species, that changes colors with the seasons, that creates micro-climates, that would purify water." British architect Lord Norman Foster also delivered a lecture. His firm Foster+Partners has been hired by Masdar to design and plan what is claimed to be the world's first zero-carbon, zero-waste city. The city is set to house 50,000 people and a university and will be located near Abu Dhabi International Airport.

- Amir Ben-Artzi
EE Times Europe




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