The recent key forums, Africa Energy Forum and the Invest in Africa Energy Forum in Paris and Barcelona greatly highlighted amongst other key topics; the fact that transitioning to renewable energy is a complex process that comes with several significant challenges and as exciting as it is to consider the range of renewable energy sources from solar to wind to biomass solutions there are there are some important hurdles that countries and the private sector face in seeking to progress their renewable energy aims and capacity. These range from technological limitations, infrastructure investment difficulties in sourcing for funding, policy and regulatory barriers, economic factors, geopolitical issues, environmental and land use concerns, public acceptance and awareness and cybersecurity risks where increasingly digitised energy banks are more vulnerable to disruptive cyberattacks. How then does a government's support enable the progress required for the private sector in the development of renewable energy projects? What are the right initiatives to foster business growth and success?
In answering this question, of significance in any analysis are the efforts of the UAE as an excellent example of progressive, and supportive efforts and initiatives that bolster the private sector and the government's positions. The UAE was ranked Third in the world in the production of concentrated solar power (CSP) in 2013 and with three of the planet's largest solar sites, the UAE is the sixth highest per capita consumer of solar energy in the world, behind only Australia, The Netherlands, Japan, Israel, and Chile. Under the Renewable Energy Prospectus 2023 it states that in 2012, “27.2 gigawatts (GW) was the total electricity generated in the UAE; however, the demand is ever increasing for electricity as well as for water and due to the growing population, expanding the economy and climatic considerations. To meet this rising demand in a sustainable manner, the UAE is focusing on renewable energy sources, which will minimize the environmental impacts relative to traditional sources.”
The UAE thus launched the Green Economy Initiative in 2012, under the slogan ‘A Green Economy for Sustainable Development.‘ This initiative aimed to make the UAE one of the global pioneers in the green economy with the various products and technologies associated with it coupled with its core focus on creating a long-term sustainable environment for achieving its visions. The UAE aims to reach 44% of energy consumption with Renewables by 2050. This is a huge percentage certainly achievable by the strategies in place. (Energy Strategy 2050). The identified target of 32% of clean sources in the power mix in 2030 is for renewables and nuclear. The updated Energy Strategy 2050 (2023) further aims to triple the capacity of renewables.
Thus, in view of the above, the renewable energy sector in the UAE in line with its clear and stated aims, offers significant opportunities for small and medium-sized enterprises (SMEs). The key aspects of which include, firstly the right governmental support. The UAE government has launched several initiatives to support the growth of renewable energy, including the UAE Energy Strategy 2050, which aims to increase the share of clean energy in the total energy mix to 50% by 2050. This creates a conducive environment for SMEs to enter the market. To date the number of small & medium enterprises in the UAE was 557,000 with SME's contributing as much as 63.5 per cent to the non-oil GDP. It is further forecasted that there will be 1 million SMEs in the UAE by the year 2030.
Secondly the existence of various funding opportunities available for SMEs in the renewable energy sector helps. Masdar, for example as a leading renewable energy company in the UAE, focuses on small and medium-sized applications and provides support in challenging conditions and geographies. Innovation and R&D also play a very pivotal role as the UAE immensely encourages innovation and research in renewable energy technologies. SMEs can therefore benefit from partnerships with research institutions and access to state-of-the-art facilities to enable a swift progression in their projects and businesses. There is also great market demand that drives the growth in renewable energy sector. The growing demand for renewable energy solutions in the UAE provides a robust market for SMEs. The country's commitment to sustainability and reducing carbon emissions drives the need for innovative renewable energy solutions. Underpinning all the above is the existing Regulatory Framework as the UAE has established a supportive regulatory framework that facilitates the development and deployment of renewable energy projects. This includes streamlined processes for project approvals and incentives for renewable energy investments. Lastly networking and collaboration provided the platform where SMEs can benefit from networking opportunities and collaborations with larger companies and government entities. Key forums such as the World Future Energy Summit provide excellent opportunities for SMEs to showcase their innovations and connect with potential partners and investors and all these efforts, initiatives and the promotion of the right collaborative environment ensures that the UAE's renewable energy sector is a promising business landscape for SMEs, with ample opportunities for growth and innovation and community impact in the short and long term.
The planned build of the world's largest Concentrated Solar Power (CPS) project on a single site in Dubai with a capacity of 1,000 MW promises to be a landmark development in the sector globally and the in its commitment to renewable energy the UAE has positioned itself incredibly well and stands as one of the leading countries in its commitment and support not just to its own citizens but to developing countries investing more than USD$ 1 billion in energy projects around the world, including wind, solar and electric power and pledging $4.5 billion to finance and help African nations accelerate clean-energy projects. In this pledge Abu Dhabi's clean-energy producer Masdar, Abu Dhabi Fund for Development, Etihad Credit Insurance, the nation's export credit agency, and AMEA Power the Dubai-based renewable-energy company, will provide the funds working with Africa50 in the development of specific projects. We thus wait to see the impact that this will have on the continent and its trickle-down effect to the private sector in recreating the right sustainable and progressive in country support and legal frameworks that would mirror that in place here in the UAE.
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