Energy efficiency in the UAE

Aiming for sustainability

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Executive summary

Energy efficiency is a growing challenge in the United Arab Emirates (UAE), due to population growth, economic activity, and high consumption rates that are unsustainable in the long term. To address this challenge, the Energy Working Group of the UAE-UK Business Council recently held a forum — part of Abu Dhabi’s annual Sustainability Week — to discuss potential solutions. The discussion focused on three specific aspects of energy efficiency: smart cities, such as the use of technology in urban planning to reduce energy consumption; building efficiency, including the use of innovative new materials, technologies, and designs to optimize energy usage in buildings; and water desalination, using a combination of hard and soft measures to reduce water demand and the attendant energy required to desalinate, and increase production through more sustainable sources.

Although several of the UAE’s constituent emirates have already launched initiatives in these areas, the scope of the challenge requires a more integrated approach that links all elements into a coherent energy-efficiency strategy. This strategy should include a tailored regulatory framework; a communications and information initiative to persuade residents, builders, and other stakeholders to reduce their energy consumption; and a research and development (R&D) component to make sure the UAE is capitalizing on emerging technology to boost efficiency.

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Four strategic priorities

Although each of these areas has unique aspects, the authorities in the UAE can generate greater progress toward energy efficiency by focusing on four strategic priorities.

Develop and implement an integrated energy efficiency strategy

As noted above, several emirates have already launched individual measures to improve their performance. However, the UAE needs an overarching strategy that joins individual sectors and their respective value chains around a single set of goals and objectives.

Develop a regulatory framework that addresses demand/market challenges

Once the strategy is in place, the UAE needs to ensure that regulations provide the enforcement mechanism to intervene in the different energy sectors — through both penalties and incentives — in order to change behaviors and maximize benefits.

Launch communication and information campaigns to demonstrate the benefits of energy efficiency — and the consequences of a failure to act

One of the most important aspects of sustainability is obtaining support from all stakeholders, in particular consumers. The public needs to understand how it benefits and how it can be engaged in achieving sustainability.

Identify and promote region-specific R&D and technology

Targeted R&D and technology can create an innovative ecosystem that can help meet energy efficiency goals while also boosting the overall economy.

The UAE needs an overarching strategy that joins individual sectors and their respective value chains around a single set of goals and objectives.

Conclusion

For decades, the abundance of easily accessible hydrocarbon resources meant that energy efficiency was not a pressing topic in the UAE. However, steady population and economic growth have changed attitudes. Today, sustainability is a critical issue that is becoming more urgent each year. The time is ripe for the government of the UAE to intervene and create a more sustainable future for the country. By leveraging other countries’ experience, and focusing on the priorities discussed in this paper, the UAE can ensure that it meets the needs of its citizens, while also safeguarding the environment for upcoming generations.

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Per-Ola Karlsson

Per-Ola Karlsson

Partner, Strategy& Middle East

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