Current Policy Projections
CAT estimates that the UAE’s greenhouse gas emissions would reach 280 to 300 MtCO2e excl. LULUCF in 2030, which is approx. a 45% to 57% increase compared to 2010 levels. With currently implemented measures, the UAE would get close to achieving the emissions level resulting from the 24% clean energy target in the NDC1.
Increasing energy efficiency became a key national strategy to reduce local energy consumption, after the UAE became a net importer of natural gas in 2008. With electricity and desalinated water generation dependent on natural gas, the rapidly growing population tipped the balance, with domestic gas consumption exceeding production that year (Ministry of Energy, 2012). In addition, the traditionally subsidised energy and water prices led to a culture of wasteful energy usage, which would further render the UAE economy increasingly reliant on gas imports in the future.
1 | The share of clean energy in the current policy projections is not clearly defined, because the impact of the fossil fuel subsidy phase out on the share is not known. Therefore, we cannot compare the shares of renewables in the NDC to the current policy scenario.
In 2017, the UAE also announced the Energy Strategy for 2050, a plan which aims at diversifying the energy matrix and improving energy efficiency (WAM, 2017). The strategy foresees shares of 44% renewable energy, 38% gas, 12% “clean coal” and 6% nuclear in the electricity mix in 2050. According to projections from the Department of Energy and the Dubai Electricity and Water Authority, the contribution of renewables in primary energy will increase. They however also expect a continued increase of gas consumption (Trichakis et al., 2018).
The UAE is building its first coal-fired power plant, the 2.4 GW ultra-supercritical Hassyan power plant, in Dubai (Power Technology, 2017). It is also considering the development of another 1.8 GW coal plant (IEA Clean Coal Centre, 2019). The development of coal in the UAE is inconsistent with the Paris Agreement. To keep the window open for a 1.5°C-consistent GHG emission pathway, no new coal-fired power plants should be built (Kuramochi et al., 2017). In Paris Agreement compatible pathways for the Middle East and Africa region, coal power generation would need to be reduced by 80% in 2030 compared to 2010 levels, leading to a phase-out by 2034 (Yanguas Parra et al., 2019).
In a further effort to diversify the electricity mix, 5.6 GW nuclear power capacity will come online by around 2021 and several GW of solar power will be installed by 2030 (Masdar Institute/IRENA, 2015). A South Korean consortium has been awarded the contract to build the nuclear power plants and there is a framework in place for competitive tendering of solar power plants in the UAE (Masdar Institute/IRENA, 2015).
In June 2019 the 1.2 GW Noor solar PV plant came online in Abu Dhabi. At the time of completion it was the world’s largest single-site solar power plant (Gulf News, 2019a). A further 2 GW solar power tender opened in July 2019 in Abu Dhabi, with expected completion in 2022 (Hall, 2019).
The Emirate of Dubai has also launched its own large-scale solar PV project: the Mohammed bin Rashid Al Maktoum Solar Park launched in 2012 should reach 5 GW of solar PV and CSP by 2030. The fifth tender round of this solar park, completed in October 2019, raised the total tendered capacity to nearly 2.9 GW (Gulf Today, 2019).
In addition to these solar power projects, a contract for the UAE’s first pumped storage hydroelectric plant, with an expected capacity of 250 MW, was awarded in August 2019 (Gulf News, 2019b).
The Energy Strategy for 2050 does not adequately explain its target of improving energy efficiency by 40% (e.g. how efficiency is defined and what the reference is). Considering only the targets for the electricity mix, we find that the Energy Strategy does not lead to additional emissions reductions in comparison to currently implemented policies. The reason for this is that the scenario which forms the basis for our current policy projections assumes a high share of (low-carbon) nuclear electricity by 2030 (19%). The Energy Strategy results in a lower share of nuclear energy (3% in 2030 assuming a linear development towards the 2050 target), and higher shares of oil and coal (assuming no CCS). For further information, please see the Assumptions section.
In August 2015, the UAE decided to deregulate energy prices by phasing out subsidies for gasoline and diesel. The subsidies had become a burden to national budgets and the UAE made use of low global energy prices to minimise the immediate impact on consumers (Bloomberg, 2015; Ministry of Energy, 2015b).
Our projections, including estimates of the impact based on Merrill, Bassi, Bridle, & Christensen (2015), show that the phase-out of fossil fuel subsidies is an important element for decreasing emissions in the short term. The President of the UAE announced in August 2017 that fuel prices would be subject to VAT as of 1 January 2018 through Federal Decree Law No. 8 (Ministry of Finance, 2017), introduced to compensate for the fiscal deficits caused by years of low oil prices (Financial Times, 2018). Petrol and diesel prices are subject to a 5% VAT rate, whereas crude oil and natural gas are still tax exempt. However, in the medium term, the UAE must implement additional measures to ensure a more rapid shift to low-carbon alternatives. To put the world onto a 1.5°C-consistent GHG emissions pathway, the last fossil fuel passenger car globally should be sold by 2035-2050 worldwide (Kuramochi et al., 2017).
A vehicle fuel economy standard based on the Corporate Average Fuel Economy (CAFE) standard has been proposed. A technical study mentioned in the Fourth National Communication estimates the mitigation potential of the standard to be up to 5.4 MtCO2 in 2025 and 14.5 MtCO2 in 2035 (Government of the United Arab Emirates, 2019b). Vehicle fuel economy labels have been in place in since 2017 (ESMA, 2017).
The UAE is also currently developing its national train network, with a total of 1200 km of planned railways. 264 km of railways for freight services have been operational since 2016 and a further 600 km are currently under construction (Government of the United Arab Emirates, 2019a).
In light of the increased intent in recent years to reduce the UAE’s reliance on gas imports, green building codes became mandatory in 2011 in Abu Dhabi under the Estidama Program and in 2014 in Dubai (Emirates GBC, 2014)2. Dubai has its own energy service company, Etihad ESCO, which aims to make Dubai’s built environment a leading example of energy efficiency for the region and the world. It does this by executing building retrofits, increasing the penetration of district cooling and facilitating access to project finance (Etihad ESCO, 2014; MOCCAE, 2017). To keep the window open for a 1.5°C-consistent GHG emission pathway, all new buildings should be fossil-free and near-zero energy by 2020 worldwide, and renovation rates should be increased from less than 1% in 2015 to 5% by 2020 worldwide (Kuramochi et al., 2017).
Energy efficiency standards and labels for air conditioners and other electrical equipment have been introduced in the UAE, and inefficient light bulbs have been banned from import since 2014 (Ministry of Energy, 2015a).
2 | There exists still no federal policy but only Emirate-level policies which vary throughout the UAE. The Ministry of Energy is leading the country’s first effort to develop a national strategy.
The UAE has a target to divert 75% of its waste from landfills by 2021 under the Vision 2021 strategy (Government of the United Arab Emirates, 2019c). According to the Fourth National Communication, there is a potential of up to 900 MW of Waste-to-Energy projects, of which 180 MW are currently under construction (Government of the United Arab Emirates, 2019b, 2019c).