ESG Mena continues its on-the-ground coverage at the World Energy Congress (WEC), sharing exclusive insights & event deep dives.
“There’s a belief that…there is not a transparent desire to embrace the transition,” CNN’s former Emerging Markets Editor, John Defterios, told panellists in a session on the Middle East and Gulf states at the WEC today.
The panel focused on the steps being taken by countries in the region to reposition their role in energy, with a number of high-profile panellists who discussed both the global narrative on regional energy transition efforts and actions to move the needle.
Weighing the global and regional narratives
Indeed, the Middle East is home to many of the world’s largest oil producers, and when it comes to energy transition conversations globally, the dominant narrative is that the region isn’t pulling its weight.
This ramped up in the lead-up to COP and wasn’t helped by a number of revelations that emerged during the summit.
Indeed, during today’s session, Defterios referred to the criticism launched at COP28 President HE Dr. Sultan Al Jaber in the months before the climate summit, likening it to “machine gun fire.”
These criticisms were rooted in the fact that, alongside being the president of the climate summit, HE Dr. Al Jaber also leads Abu Dhabi National Oil Company (ADNOC) and simultaneously chairs Abu Dhabi Future Energy Company (Masdar).
The exec said that this duality meant that he was “uniquely placed” to bring the fossil fuel industry in line with climate goals. However, many labelled the controversial choice a “conflict of interest.”
And while the climate summit may have resulted in the UAE Consensus, an agreement to transition away from fossil fuels, many remain unconvinced of not only the UAE’s efforts but also those of countries in the wider region.
“Look at the strides the UAE is making, Saudi Arabia, Kuwait, all of them in renewables, it doesn’t get talked about other than from people in the region,” said Amrita Sen, Founder and Director of Research at Energy Aspects.
Sara Akbar, Chair and Chief Executive Officer of Oilserv Kuwait, echoed this: “We are taking charge,” adding: “We are at the forefront, and we will keep pushing through. And why is that? Because in principle, we look at ourselves as the people who secure energy for the world.”
Oil and gas here to stay?
Alongside the theme of energy security, which was threaded throughout the session, many of the panellists also repeated the same message: fossil fuels aren’t going anywhere any time soon. However, the science outlines that a rapid phase-out of fossil fuels is required to limit the worst impacts of climate change.
“People are really diverting from the real issue. We need to find solutions; we don’t need to eliminate the source of energy that is building economies, that is feeding all the globe,” said HE Sharif Al Olama, Undersecretary, Ministry of Energy and Infrastructure, UAE.
Adding: “I’m a firm believer that gas is not going to go anywhere in the next few decades. Gas is going to be a transition fuel, and it will be needed in the energy mix.”
Akbar shared the same sentiment, calling oil and gas the “only reliable” energy sources.
“This is how the region sees its position, securing energy for the world being renewable, being oil and gas. The focus is … we will provide oil and gas, but we are making sure we are controlling emissions. We are completely going to zero-emission, and we decarbonise… we remove all the carbon,” said Akbar.
However, she said that the technologies to do so are not yet economical, scaleable or viable for businesses.
“We really need to invest in a lot of technology in order to be at that stage. Yes, we do have some, but we are not there yet.”
Indeed, there’s no escaping the fact that CCS is costly, energy-intensive, and unproven at scale. As of 2023, commercial CCS projects captured less than 0.2% of the emissions reduction required to close the emissions gap by 2030, and forecasts are that trillions in investment will be required over the next few decades.
Addressing the quadrilemma
However, the energy transition cannot wait. Last year was the hottest on record, breaking every climate indicator, and resulting in devastating impacts. Alongside this, in recent years, the number of people across the world without access to electricity has actually increased.
Against this backdrop, acceleration toward a sustainable, just and equitable energy transition is more crucial than ever.
Indeed, ACWA Power CEO Marco Arcelli stressed this, noting that conversations on the ‘energy trilemma’ must now transition to centre on the ‘energy quadrilemma,’ bringing in speed alongside sustainability, affordability and security.
“We cannot wait until 2050 for something to happen and materialise,” said Arcelli, explaining that in Saudi Arabia, the plan is to build 20 GW of renewable energy every year.
Here, he highlighted the importance of having a supportive host government that helps in facilitating this pace.
Of course, the funding needs to be available, too, and this currently stands as a huge barrier to progress for some countries in the region.
“What we committed to during the Paris Agreement, in terms of funding, we have fallen short of significantly, and we really need to recover,” said HE Al Olama.
“We need to fast track financing green, renewable energy; we need to restructure the global financial architecture, and we need to find practical solutions for investors to actually invest in renewable energy.”
The UAE is very much leading the region in terms of energy transition finance, and last year, announced plans to invest $54 billion across the next seven years.
But, as was emphasised yesterday, the Middle East is not a level playing field. Indeed, on the panel, Walid Fayad, Minister of Energy and Water – Government of Lebanon, cited the impact of the financial crisis and the country’s lack of access to debt financing.
“We have now, about 1600 or 1500 megawatts of solar installed, if not even more, but all that is equity financing,” said Fayad. “Can you imagine what can be done, if we had access to debt financing.”
The conversation also put the spotlight on the cost of the ongoing war on Gaza. “The way the West is supporting Israel today, you are creating your own enemy, believe me, because you have given them carte blanche to hit anyone they like at any time with billions,” said Akbar.
“This money that goes into buying weapons could go into cleaning the world, it can go to better uses … to create a better world instead of this huge distraction.”
Bringing energy efficiency to the fore
HE Al Olama also brought the importance of energy efficiency into the conversation, which he called “one of the most underestimated aspects” in the transition.
“Everybody’s talking about hydrogen and renewable energy. Nobody’s touching upon energy efficiency,” he added.
Why? According to Sen, it’s because “it’s not sexy.”
But while it may not be “sexy,” HE Al Olama explained its impact could be huge.
Speaking to ESG Mena on the sidelines of WEC, HE Al Olama said the Ministry is signing SPVs with the likes of Siemens, Schneider, and Honeywell to realise these energy efficiency gains.
“The idea over here is we get the private sector to come and invest in these buildings and introduce AI solutions to actually control the energy consumption,” said HE Al Olama, adding: “We’ve seen the private sector guarantee that there will be savings of around 30 per cent.”
Indeed, the country is investing big in the tech on the pathway to becoming an AI powerhouse. However, while many are highlighting its potential to enhance efficiency and combat climate change, it also has an incredible thirst for energy and water, and these big environmental impacts need to be managed and minimised to scale sustainably.
Speaking about how the world balances the technology’s potential with its environmental risks, HE Al Olama told ESG Mena: “That is a challenge, of course. But I think we are looking at the latest technologies that are available out there.”
“You’ve seen some of the announcements by the big microchip producers that actually are capable of storing more information but consuming less power. It’s an ongoing process; you will not find the solution today, but we have to start somewhere, and this is what we’re doing in the UAE.”
Looking at the broader picture of the global energy transition, when asked how countries embrace the ‘revolution of agency’ while remaining united on net zero, HE Al Olama said the world needs to build on the capabilities that are already available.
“We need [help] a lot of the nations develop their own specific strategies, work programmes, and KPIs. These KPIs need to be tracked because we need to deliver,” he said, underlying the “huge” gap in implementation.
HE Al Olama explained that the UAE has developed a platform jointly with Microsoft that captures all the KPIs present in the country on a live, day-to-day basis. The UAE leadership has access to this data and can review the progress of each sector toward the 2050 net zero target.
“The idea of it is to put pressure on the entities to deliver and intervene when needed either by budgets, directives, or by policies.”
“We’re going to be sharing it with WEC, hopefully, building a model that can be elevated and cascaded to all the countries that are members of WEC.”
Stay tuned for more exclusive coverage from ESG Mena at the World Energy Congress.
By Madaline Dunn, Lead Journalist, ESG Mena.