Swimming in cash from its hydrocarbon industrial base, Abu Dhabi in the Gulf State of the United Arab Emirates has pledged $15 billion to become a magnet for a renewable energy economy as part of its Masdar Initiative.
In addition to wind and hydrogen projects, as well as a research institute in a yet-to-be built carbon-neutral city, the leveraged money will be used to support a solar cluster including hundreds of megawatts of installed PV, an integrated crystalline-based value chain production.
To hear Steven Geiger tell it, his adopted home of Abu Dhabi, one of seven emirates in the Gulf state of the United Arab Emirates, is not as much a state as it is a business. „Abu Dhabi,“ says the expert in making foreign investments for the energy sector in emerging markets, „has one of the most substantial balance sheets in the world today.“
This bottom-lined statement, based on the wealth Abu Dhabi has accumulated over the years from its hydrocarbon industry of oil and gas production-based economy, was confirmed on Jan. 21. That‘s when Crown Prince General Sheikh Mohammed bin Zayed Al-Nahyan, next in line to the presidency, made a surprising announcement at the emirate‘s World Future Energy Summit. In what some might have thought was a misspoken amount, Al-Nahyan said Abu Dhabi was putting up an initial investment of an incredible $15 billion in equity seed money toward developing renewable energy projects.
Channeled through the Masdar Initiative, this is a follow-up to a two-year-old scheme to foster such partnerships through Abu Dhabi‘s Clean Tech Fund (see PI 6/2006, p. 6), a venture-capital account managed by Credit Suisse which has now distributed most of its $250 million funding to renewable energy industries around the world. This includes solar investments in Texas, US-based thin-film manufacturer HelioVolt Corp., and in German CIS producer Sulfurcell Solartechnik GmbH, as well as slurry-recovery expert SiC Processing AG.
But with this most recent funding announcement, Masdar – Arabic for „the source“– seems to be concentrating on the homefront. „There‘s no contradiction in plowing back oil profits into the next generation of energy technologies,“ says Geiger. „It‘s just a natural extension of what Abu Dhabi does best. “
That means making energy and money. Believed to be the single-largest investment in renewable energy ever, this multi-billion dollar fund, under the direction of the Abu Dhabi Future Energy Development Company, will be leveraged into a „grand portfolio.“
And when it comes to solar in an area blessed with up to 360 sunny days a year, that portfolio is grand indeed. One of the eight clusters being set up in the industrial zone of Taweelah, about 30 km outside of Abu Dhabi city, will be for solar. In addition to a 100 MW solar thermal parabolic trough installation planned for deployment in 2010, Masdar will soon break ground on the first phase of a 3,000-ton polysilicon plant as the top end of an integrated ingot/wafering, cell, and module production company. At the module end, capacity is expected to be 400 MW when production starts in 2010. Plans call for doubling capacity to 6,000 tons of polysilicon production and 800 MW of modules – possibly with the Masdar branding – by 2012. While Geiger declined to disclose the partner or the technology choices along the chain, he says the venture‘s integrated structure is intended to give it a „competitive advantage“ over what he expects will be a consolidated industry with dwindling profit margins.
A contract is also expected very soon for thin-film PV production, slated to start in the first quarter of 2009. This will include 140 MW of capacity in Abu Dhabi and 70 MW in Germany. Although Geiger declined to comment, this is likely related to Masdar‘s Clean Tech Fund investment in Sulfurcell. While not wanting to „throw the gigawatt term around too loosely“ concerning a planned second thin-film phase, Geiger says Masdar „clearly wants to play at scale in this industry.“
Out of the desert
But the shining star of Masdar is certain to be its very own carbon-neutral metropolis. What Silicon Valley did for the semiconductor industry, Masdar wants to do for the renewable energy sector, attracting experts and businesses from around the world – and the venture capital to support it – by designing and building a hub for R&D 10 km from Abu Dhabi City. Work on the 7 km² Masdar City will start on Feb. 9 with a groundbreaking ceremony at the Masdar Institute of Technology, a partnership with the Massachusetts Institute of Technology (MIT) for researching renewable technologies. The new city, which should be at its full size by 2016, is expected to be home to 1,500 businesses and 50,000 residents when finished.
But not only will the new municipality be carbon neutral, so will its construction, with much of the energy for this coming from PV, a minimum of 200 MW, says Geiger. The first 5 to 10 MW will most likely be selected from among more than 30 companies that have recently each submitted 1 kW of modules, including a full range of PV technologies, for benchmark testing by TÜV under Abu Dhabi conditions (which can include the occasional sandstorm). Geiger says the first ground-mounted, grid-connected installation should be in place by the end of the summer. Every several months, a further 5 to 10 MW will be put out on bid until the at least 200 MW is in place. The PV installations will either stay on the ground or be remounted on buildings as the new facilities are constructed.
Will Abu Dhabi‘s Masdar City be a successful magnet in attracting the human talent to do this early-stage R&D on future energy technologies? Geiger seems confident, especially given its proximity to a new beach development. „You can do your renewable energy work during week,“ he notes, „and still go to the beach for the weekend.“
http://www.masdaruae.com/
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