One of Masdar’s flagship projects, Shams 1 will directly contribute towards Abu Dhabi’s target of achieving seven per cent renewable energy power generation capacity by the year 2020.

The joint venture between Masdar (60 per cent), Total (20 per cent) and Abengoa Solar (20 per cent) will develop, build, operate and maintain the plant which will be located in Madinat Zayed, approximately 120km southwest of Abu Dhabi in the United Arab Emirates.

Shams 1 will be the largest concentrated solar power plant in the world, extending over an area of 2.5km², with a capacity of approximately 100MW and a solar field consisting of 768 parabolic trough collectors to be supplied by Abengoa Solar. Construction is set to begin during 3Q2010 and is expected to take approximately two years.

Shams 1 is registered as a project under the United Nations’ Clean Development Mechanism (CDM) and is eligible for carbon credits. It is be the first CSP plant registered under the CDM and the second project registered for Masdar. The plant will displace approximately 175,000t of CO₂ per year, equivalent to planting 1.5m trees or removing 15,000 cars from Abu Dhabi’s roads.

He was speaking at a MEED conference and later told reporters that Abu Dhabi’s current generating capacity was 13,000MW. Al-Nuaimi also said that the emirate is expected to complete the 1600MW Shuweihat 3 independent power project (IPP) by 2013 and that total investment for the privatisation of power plants in Abu Dhabi stands at around AED65bn (US$17.70bn). ADWEA is seeking US$1.4-1.6bn to fund the Shuweihat S3 project and according to HSBC Holdings Cplc is in talks to borrow 80 per cent of the cost of the plant for 23 years and could complete the financing deal by 1Q11.

In related news, Hyundai Engineering & Construction together with Samsung C&T have won a US$5.59bn order to build nuclear plants in Abu Dhabi as part of the larger US$40bn contract won by a KEPCO-led consortium in December 2009 to build and operate four nuclear power plants in the UAE.

“We have started the process of pre-qualification and we are targeting sending the request for proposals early next month,” said Abu Dhabi Water & Electricity Authority (Adwea) director of privatisation Abdulla Saif Al Nuaimi. “We expect to finalise selection of the developer by November, (make the) financial close by April 2011 and commissioning in 2013,” he added.

The selected developer would take a 40 per cent stake in the plant with Adwea taking the balance. Financing would be a combination of debt and equity.

The restructuring aims to “further align the group’s organization with its strategy; better position the group to capitalize on the nuclear renaissance and the development of renewable energies; and improve the group’s commercial effectiveness by easing the creation of integrated offers required by the market,” according to Areva.

Furthermore, a consortium consisting of Alstom and Schneider is expected to buy the transmission and distribution division later this year for EUR409bn (US$6.17bn). Last week Areva signed an agreement setting out the financial and legal terms and conditions for the sale, subject to approval from the antitrust authorities.

The reorganisation follows in the wake of the company losing a multibillion euro contract to build nuclear reactors in Abu Dhabi to Korean competitors, partly because it insufficiently tailored its offer to local requirements. The loss of the award has prompted politicians and industry executives to call for better coordination among France’s nuclear and energy majors to preserve their international leadership position. According to Reuters, President Nicolas Sarkozy commissioned François Roussely, the former head of EDF, to produce an analysis on the future of the French nuclear industry. The report is due by the end of April.

Masdar is also looking to develop what will be one of the world’s most ambitious large-scale carbon capture and sequestration (CCS) projects, that will also serve to help maintain Abu Dhabi’s oil output via the use of enhanced oil recovery (EOR). The first phase is expected to begin by end 2014 and is being designed with the aim of capturing around 5Mta of CO₂, rising to 20Mta by 2020.

The company has also launched a venture capital arm and owns an 20 per cent stake in the ambitious 1000MW London Array off-shore wind project, as well as a 40 per cent stake in Torresol Energy, a leading concentrating solar power (CSP) company and Masdar PV, a leading thin-film and photovoltaic manufacturer.

Masdar city is currently under construction and when complete is expected to be home to 50,000 residents. It is being designed with the aim of being zero-carbon and being powered entirely by renewable energy, such the SHAMS 1, 1000MW CSP plant, which will begin construction in the first half of this year and is scheduled for completion in 2012. As a result of its commitment to renewable energy, the newly formed International Renewable Energy Agency (IRENA) has chosen Masdar City as the site of its future headquarters. The Abu Dhabi government has provided US$15bn for the first of seven phases of development.

The session entitled: “What Next After Copenhagen?” began with a keynote speech from Dr Rashid Ahmed Bin Fahad, Minister of Environment and Water, UAE. Interestingly, he started by admitting that the outcome of the summit was disappointing and failed to meet the high ceiling of demands and expectations it began with. He elaborated by saying that during the course of negotiations, the extent of demands dropped rapidly as people struggled to reach any agreement. Furthermore, Dr Fahad commented that politicians conducted the debate largely on political and economic grounds, not on a scientific basis. He then outlined the nature of the current agreement, highlighting its recognition that strong action must be taken to limit global warming to 2°C and that countries must proceed on the basis of common but differentiated responsibilities. He was quite scathing about its limitations, listing the lack of new obligations, monitoring mechanisms and the fact that the summit’s single biggest achievement, the announcement of new funding for developing nations to adapt and mitigate against climate change, did not include any mention as to where the funding would come from.

Dr Fahad went on to comment that the refusal for countries such as the US and China to commit to a realistic timeframe for cuts in emissions and independent monitoring “raises questions.” He also said that we can’t talk about limiting global warming to two degrees while the rates of CO₂ emissions rise year after year and that “wasting time does not serve the interests of anyone.”

The second speaker was Dr Rajendra Kumar Pachauri, Director General of The Energy and Resources Institute (TERI). He began by immediately praising Dr Fahad for his enlightened view, which he considered all the more significant, coming from a minister of an oil-exporting nation. Dr Pachuari then made the point that regardless of what we do, climate change will continue over the next two to three decades, forcing some of the poorest countries in the world to adapt, some of which “are already living in a state of fear.” He went on to warn that 75m-250m people will be affected by water scarcity and that agricultural output will be reduced by 50 per cent in some regions. As far as North America was concerned, Dr Pachuari warned of the impact to the continent’s Arctic regions and the risk of heat waves and reduced water supply in the South.

Dr Pauchuari also gave the audience some interesting figures to digest. In his view, “if climate change is to be limited to 2-2.4°C, then it is absolutely imperative that CO₂ emissions peak in 2025…” and that “2050 targets are hollow, as we aren’t going to be there!” He then made the case that the nation state will not be able to do much without a surge in grassroots support and that bringing industry and business onboard is essential.

Up next was Norway’s minister for foreign affairs, Jonas Gahr Støre. After briefly describing his country’s dual role as a major exporter of fossil fuels and a pioneer in terms of renewables, he explained that Norway has a front row seat when it comes to climate change, situated as it is near the Arctic. He illustrated his point by showing two contrasting photos of a glacier taken in 1928 and 2008 and followed by announcing that Norway has recently published an updated copy of a report entitled “Melting Snow and Ice”. Regarding the negotiations that took place at Copenhagen, he explained that there was a need for a change of mindset, particularly as the world is becoming increasingly multipolar, making such talks more complex. Mr Støre then pointed to the agreement between Norway and Brazil to reduce deforestation in the Amazon, made possible only by mutual trust. He argued that the pledges made by most countries are not enough and that they must be verifiable. He also highlighted the fact that the deadline for such pledges was the end of January. Mr Støre then said that Norway has unilaterally increased its commitment to reducing its CO₂ emissions by 39 per cent by 2020, rising to 40 per cent if other major countries increase their commitment and pledged to become carbon neutral by 2050, or 2030 in the later scenario.

Senator Timothy Worth, President of the UN Foundation, said that in his opinion, Copenhagen was the first time the discussion was based on an agreed set of climate data. He argued that huge discoveries of shale gas in the US and China had the potential “to change the equation”, in terms of permitting more low carbon electricity generation. Senator Worth then explained that at the summit, President Obama had made clear his personal commitment to the struggle against climate change and that it had been shabbily reported by both the US and global media. He then made the point that the President has enormous power over CO₂ emissions in the US by virtue of the Clear Air Act and that he faces an uphill struggle in terms of legislation. This in the senator’s view is due to a large alliance of “climate change deniers, energy and transport companies” and a tough political system that can be hard for members of parliamentary democracies to grasp. He then hammered his point home by saying that “A real battle is going on with naysayers attempting to purchase politicians.” However, Senator Worth then reassured the audience by explaining that President Obama has significant tools for the job and support on this issue from most state and local governments.

Bianca Jagger, Founder and Chair of the Bianca Jagger Foundation, in addition to echoing other comments made by the previous speakers regarding Copenhagen’s disappointments, argued that its failure was due to “a year of attempted bribery and bullying by developed nations to get developing countries to sign a deal that was not in their interests,” and that negotiations took place in an atmosphere of distrust and suspicion. She also made the point that the lackluster emissions reductions target tabled by the US had thrown off negotiations and that more should be done to make negotiations more open to civil society. Ms Jagger also warned that without further negotiations, the promised funding for developing nations was potentially “vapour money”, but also that if China meets its goal of reducing the carbon intensity of its economy by 40-45 per cent, we would be on the way to success.

The first purely private sector speaker of the session, Ditlev Engel, CEO of Vestas, made two clear points. His first was that much can be done with technology that has already been developed and that too often people assume that action can’t be taken because in their mind the technology isn’t ready yet. His second point was that given the impact climate change will have on water supplies, any low carbon solution must also be a low water use solution. Perhaps unsurprisingly, he was then quick to point out that wind power uses only around five litres of water per MWh, compared to 10,000l for coal or 12,500l for nuclear.

Kirsty Hamilton, Associate Fellow of the RE Finance Project was up next and made a pertinent observation that the next 10-15 years of infrastructure and energy investment will start to lock in emissions for 2050, making the issue of climate change much more near term that some might think. She also highlighted the importance of a meeting between the BASIC countries taking place this month.

The final speaker was Richard Jones, Deputy Executive Director of the International Energy Agency (IEA). He commented that although the IEA often to its discomfort is described as the developed countries’ energy watchdog, “watchdogs bark and we’re barking.” He then pointed to the IEA’s reference case scenario, which predicts a huge rise in energy consumption, CO₂ concentrations of 1000ppm and 6°C of global warming. He then highlighted the importance of energy efficiency, which could be responsible for around half of the action required to reduce energy consumption and CO₂ concentrations to 450ppm (2°C). Mr Jones then made the point that although reaching this point would require US$10.5trn in investment, it would produce fuel savings of around US$8.3trn. After explaining that around 2030, 1.3bn people are expected to be living in energy poverty (slightly down from today’s 1.5bn), due to population growth among other factors, he indicated that if current pledges were upheld, CO₂ concentrations would rise to 550pm, resulting in a 3°C increase in global temperatures. Worryingly he then said that this 1°C difference could be the tipping point, due to the potential release of methane hydrates locked under the ice.

Throughout the first day of the summit, the recent Copenhagen meeting was never far from discussion. Although described by the vast majority as a disappointment, some like the UK’s Minister for Energy and Climate Change, Ed Miliband took pains to paint it in a positive light, highlighting the number of countries that had signed up to the (non-legally binding) agreement and pointing out that given the work-load and the time taken up by procedure, it was always going to be extremely difficult to deliver to expectations. He argued that developing nations needed to realise that “they have nothing to fear” and that the message should be one of prosperity. Mr Miliband also argued that any future global agreement would be successful if the world’s CO₂ emissions peaked in 2020 and said that he was in favour of the EU extending its CO₂ reduction target to 30 per cent on 1990 levels by 2020. When queried as to whether or not a 450ppm target made sense given that it has only a 50 per cent chance of limiting global warming to two degrees Celsius by IFandP, Mr Miliband said that “I agree we need to be ambitious” and that if the current plans come to fruition, then we should be close to the target of limiting global warming to two degrees Celsius. Mohamed Nasheed, President of the Maldives, also said that the Copenhagen summit had some positive outcomes, such as the US$100bn fund to be established with the goal of helping developing countries cope with the impacts of climate change. But at the same time, he warned that in its current form, it will not stop catastrophic climate change, which would see the Maldives under water.

Turkey’s prime minister, Mr Recep Tayyip Erdoğan was keen to highlight his country’s goals in the field of renewables, including a target to increase its installed wind power capacity to 20GW by the next decade. Interesting, he also took pains to illustrate Turkey’s growing contribution towards energy security in the form of the Baku–Tbilisi and Samsun-Ceyhan oil pipelines, the Turkey-Greece natural gas interconnector and the Nabucco project. Mr Erdoğan also envisaged a natural gas pipeline between Qatar and Turkey, offering “remarkable opportunities for the Gulf region.”

Although the debate, by-and-large, stuck to the script, there were occasional moments of tension and plain speaking. A prime example of the latter was a comment from Abdullah Bin Hamad Al-Attiyah, Qatar’s Minister of Energy and Industry. He said that one of the reasons why Copenhagen failed was that it tried to turn fossil fuel producing nations into scapegoats, which in his mind was particularly rich given that several nations had been scathing of fossil fuels, until such resources had been discovered in their territory. When the chair asked Ambassador Wang Xue Xian, how the divide between China and the US could be bridged given the former’s rising power and stated his belief “that success isn’t possible without them”, it sounded like a coded request for an explanation of China’s performance at Copenhagen. The ambassador responded by robustly defending China’s record, pointing out its commitment to increase energy efficiency by four per cent a year and saying that “as far as China is concerned, we know our responsibility and we are doing everything we can to do it.”

One of the more interesting questions posed to several energy ministers was what they thought both their country’s and the global energy mix would be like in 2050. Hasan Younes, Egypt’s Minister of Electricity and Energy painted a broad vision, suggesting that by that point, nuclear fusion and hydrogen would both be playing a significant role. Meanwhile, South Korea’s Young Hak Kim commented that he expected fossil fuels to be “depleted” by then, with the result that renewable energy would account for 50 per cent of electricity production by 2050, although his country was planning for a higher figure of 75 per cent. He also said that he expected the price of electricity to be high, creating a wide gap in living standards.

The impact of government policy and regulation on the renewable sector was the subject of considerable commentary, with Deutsche Bank’s Tom Curtis explaining that investors need TLC: transparency, longevity and certainity. Both he and Katrina Landis, Group Vice President of BP Alternative Energy, made much of Germany’s approach to regulation, including its use of “step-down” feed-in-tarriffs to promote innovation and to prevent emergent green industries from becoming permanently dependent on subsidies. Meanwhile, Italy and Greece were held up as examples of where inconsistent regulation had scared off investors.

Wolfgang Dehen, CEO of Siemens AG Energy Sector, pointed to the large number of positive developments made in recent months, such as the launch of the Desertec initiative, the goal of building 32GW of wind power capacity off the UK coast, tidal plants in Korea, the launch of the International Renewable Energy Agency, the rise of the smart grid along with a number of CCS pilot plants and said that: “we are seeing an accelerated transformation of the energy system”.

Mete Maltepe of GE Energy commented that his company was expecting energy demand in the US and Europe to increase by 30 per cent over the next 10 years, with Asia seeing double this rate of growth. He also said that wind was GE’s fastest growing segment, recording 20 per cent growth per annum. When asked by IFandP, as to what would be more politically difficult between introducing a wind-enabling smart grid across the whole of US or Europe, Mr Maltepe said that it would probably be the US. This answer does serve to highlight the fractious nature of US politics in general, with the country’s polarised landscape and its myriad checks and balances making it difficult to introduce sweeping changes, no matter how potentially beneficial.

About WFES

The World Future Energy Summit, now in its third year, is held from 18-21 January 2010, hosted by MASDAR, at the Abu Dhabi National Exhibition Centre under the patronage of HH General Sheikh Mohammed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. World leaders, policy makers, experts and investors from 100 countries will meet in Abu Dhabi to identify real solutions for today’s climate change and energy challenges. Over 600 exhibitors from 50 countries will be exhibiting at the World Future Energy and Environment Exhibition on a total space of 40,000m² offering an unrivalled business and networking opportunities to over 20,000 attendees expected to visit the summit and the exhibition. Deutsche Bank Climate Change Advisors is the principal sponsor of WFES 2010. Emirates Aluminium is Associate Sponsor, and additional sponsors include BP Alternative Energy, Standard Chartered, Siemens, Schneider Electric, Exxon Mobil, ABB, Abu Dhabi Water and Electricity Authority, Oxy, the Abu Dhabi Department of Municipality Affairs and Terna. For more information on the programme or to register, visit www.worldfutureenergysummit.com