At Dubai conference, experts see a green economy driven by technology, finance

06-05-2014, Vienna, Austria

Dubai is not the unlikeliest of venues for a major international conference on the future of the “green economy”, but it perhaps comes close. Arriving from the air, oil drilling platforms punctuate the darkness of the Persian Gulf like tiny floating candles. The darkness ends at the shores of the United Arab Emirates, where the busiest airport on Earth greets arrivals to one of its most unique metropolises. Dubai is one of the UAE’s two flagship cities, along with the capital, Abu Dhabi, and with over two million inhabitants the country’s largest.

Dubai is not the unlikeliest of venues for a major international conference on the future of the “green economy”, but it perhaps comes close. Arriving from the air, oil drilling platforms punctuate the darkness of the Persian Gulf like tiny floating candles. The darkness ends at the shores of the United Arab Emirates, where the busiest airport on Earth greets arrivals to one of its most unique metropolises. Dubai is one of the UAE’s two flagship cities, along with the capital, Abu Dhabi, and with over two million inhabitants the country’s largest. It is also a city of superlatives – aside from the world’s busiest airport Dubai is home to the world’s tallest building and largest shopping center. It is also facing challenges quite unlike those of any other city.

The region was built on hydrocarbons, and today the UAE sits on the seventh largest reserves in the world. Yet only two percent of Dubai’s GDP comes from oil and gas – an amount that is expected to fall even more over the coming two decades. At the same time, Dubai’s – and the UAE’s – energy needs are vast: Despite having the 7th largest natural gas reserves, the UAE has been a net importer of natural gas since 2008 to power its massive desalination and electricity generation needs. Yet half of its electricity is used for air-conditioning, and an ageing and inefficient electricity grid is struggling to handle loads.

Thus was the emphasis at the World Green Economy Summit in Dubai this April not only on renewable energy – a key element in the UAE’s strategy of production diversification – but also on energy efficiency, and “smart” city solutions. REEEP’s Florian Bauer and John Tkacik were on hand to discuss the latest developments in these two fields, and on the challenges facing societies looking to combine ecological, social and economic sustainability in the quest for the “green economy.”

The Smart Cities, Smart Infrastructure panel was – appropriately, for Dubai – to a great degreefocused on smart grid solutions and their application in growing modern cities. Marco Janssen and Amair Saleem of the Dubai Electricity and Water Authority and Roads and Transport Authority, respectively, discussed local efforts to win hearts and minds and change consumer behavior, whether it turning off air-conditioning units while out or taking advantage of public transportation, for the better – no easy task in a country with such relatively low energy prices. Orig Kavazovic of Opower discussed his company’s experiences in using data from smart devices in helping engage consumers in such changes.

Data is, of course, critical to nearly every facet of the green economy. Or rather, as Florian Bauer pointed out, knowledge. How to turn data into knowledge is the challenge for practitioners at all levels of the sustainability issue: the key is opening it up, and giving it context.

Data “must be meaningful” to consumers for it to be useful, said Vijay Kumar of Pacific Controls. Consumers may be driven by price signals in their decision-making, but they are also driven by other types of information. At a local school, for instance, an analysis of electricity usage discovered one wing of the school was suffering from inefficient ventilation. Upon further analysis, it was found that students in that wing were performing below average, and after fixing the problem, improved dramatically. It is this type of context – and knowledge – that is impossible if data is kept in silos, as it so often is. By opening-up data to other organizations and citizens, providers of data open up almost limitless potential for how that data can be used. A perfect example is REEEP’s own work in Linked Open Data for sustainable urban transport. By breaking down silos and making data on transport, infrastructure and economic development readily available, the program seeks to better inform decision-making, improve efficiency in systems, and catalyze the creation of innovative new solutions for public transport. Open data is the key for both the evidence-based decision making and technical solutions that are necessary to build the next generation of smart city.

The discussion on energy efficiency hinged less on technology – despite its importance – than on the dual issues of incentives and financing.

Often dubbed “the fifth fuel”, the importance of efficiency to global sustainability efforts cannot be overstated: in the 2012 World Energy Outlook, the IEA estimated that the world could save energy equivalent to 18% of 2010 global energy consumption by 2035 merely through the widespread adoption of existing technologies and practices. In the building sector alone the impacts would be enormous – currently energy services in buildings account for around a third of worldwide energy demand and CO2 emissions. As much as 29 percent of those emissions could be eliminated with investments that pay for themselves through reduced energy costs.

As Francisco Silverio Marques of MAF Dalkia pointed out, the opportunity is there, it is just a matter of aligning the incentives correctly. One way of doing this is by guaranteeing long-term energy savings and following through with the long term monitoring and evaluation necessary to reliably prove those savings. To provide such guarantees we need energy services companies, or ESCOs, companies that concentrate on big-picture, integrated energy usage in factories, buildings and across supply chains. ESCOs often integrate financial services as well, allowing them to create innovative financing models for systems in which the incentives for efficiency gains would otherwise be unclear.

Stephane le Gentil, CEO of the “super-ESCO” Etihad ESCO, talked about his experience managing Dubai’s efficiency efforts, some of the most ambitious in the world. It is for him an issue of strategy: “the technology is available; the finance is available” – how to bridge the gaps? Etihad has of course the advantage of Dubai’s top-down decision making structures, yet the recipe is similar globally: bundling long-term energy and financial services into simple comprehensive products, whether building or factory retrofits, new certification maintenance or reporting. “Energy efficiency is a long slog, a discipline,” said triathlete, marathoner, and CEO of ETAP lighting systems Michael Nuyttens. “You need commitment.” Governments need to ensure commitment is there, and that entities such as ESCOs are able to operationalize that commitment over the long-term, if the green economy is to come to fruition.

REEEP Team
John Tkacik's picture

John Tkacik

Director of Energy Analytics