UAE Energy Minister: Lesson Of Oil Price Drop Is Diversification

Oil prices have dropped almost 60 per cent since June 2014, when they stood at $115 per barrel.

The one lesson that the UAE has learnt from the recent drop in oil prices is that its mix of energy resources has to be diversified, the country’s energy minister Suhail Al Mazrouei said on Monday.

Speaking at the ongoing World Future Energy Summit in Abu Dhabi, he also said that renewable energy projects in the country would not be affected by the fluctuations in oil prices.

Oil prices have dropped almost 60 per cent since June 2014, when they stood at $115 per barrel, goaded by increased supply and dropping demand in the market.

“One learning we got and we would like to share is – diversify. Adopt the diversification process, start with some percentages and let them compete in the long run,” Mazroei said.

“No one can tell you what will be the price of renewable five years from now. At the same time no-one can tell what will be the price of gas 10 years from now.

“We should not change course because of the oil price drop, we have to look at long-term investments [in renewables].”

The UAE has already begun its diversification process, specifically in nuclear and solar power generation.

The $20 Barakah nuclear project, which will include four plants, is set to provide approximately 24 to 25 per cent of the country’s electricity needs by 2020, saving up to 12 million tons of greenhouse gas emissions each year.

Meanwhile, the Abu Dhabi government aims to generate seven per cent of its energy from renewable sources by 2020, while Dubai seeks to diversify its electricity generation mix to include five per cent renewable energy by 2030.

Last week, a consortium led by Saudi Arabia-based ACWA Power and Spanish engineering firm TSK won the contract to build a solar power plant for the second phase of Mohammed Bin Rashid Al Maktoum Solar park in Dubai.

The project, which has a net power capacity of 200 MW (260MWp installed), will produce enough electricity to power 30,000 homes every year when complete.