In the past few years, the UAE has begun to make notable changes in its approach to energy efficiency.
The country’s authorities have been aware that consumption patterns cannot be allowed to continue. Overall energy usage has been growing by 4 per cent a year, with projections calling for that to increase to 5 per cent a year through 2020. Electricity consumption has more than doubled over the past decade, faster than the population has grown.
Water consumption in the UAE is about 740 cubic metres per capita per annum, about 50 per cent higher than the global average.
In response to these unsustainable consumption increases, the UAE government has begun crafting policies to make the region far more efficient in its use of resources.
For example, Abu Dhabi and Dubai have both deployed advanced electric metering systems, which involve using technology and Big Data in urban planning as part of a “smart cities” approach. These systems include tools and rate structures that encourage customers to reduce consumption or shift it to off-peak hours.
Another area of focus is building efficiency, or the use of innovative designs, materials and technologies to reduce the environmental impact of buildings. The UAE now has green regulations and building codes that call for sustainable resources and materials – and less waste. More advanced procurement procedures are starting to factor in total life-cycle cost, rather than just initial construction.
In water usage, policymakers are developing water treatment technologies that can meet future demand and consume less energy – such as desalination through reverse osmosis. Increased water tariffs, stricter rules regarding irrigation, and the use of permeable landscaping materials have also reduced the demand for water in the emirates.
Politicians are aware that they can build on these individual successes by bringing them together in a more comprehensive fashion. The strategic aspect of energy sustainability was a key topic during the workshop convened by the Energy Working Group of the UAE-UK Business Council during Abu Dhabi Sustainability week in March. Specifically, policymakers can enhance the impact of these measures by following four strategic priorities.
The first priority is to develop and implement a single, integrated energy efficiency strategy for the UAE. This strategy aligns all economic sectors, and their value chains, around a single set of sustainability goals and objectives. It ensures that individual efforts reinforce each other and avoid creating conflicts among priorities.
The second priority is to have the right regulatory framework. Once the strategy is in place, the UAE will derive additional benefit by enforcing it through regulations, including a balance of “soft” and “hard” measures. Soft measures include incentives to persuade residents and businesses to reduce their energy consumption. Hard measures mandate reductions through penalties and caps. Regulations can also tap the power of market forces to reduce consumption, such as water tariffs that require high-consuming organisations to pay more.
The third priority is communication and information campaigns to build awareness. One of the most important aspects of sustainability is obtaining support from all stakeholders – and particularly residents and builders. This enables the public to understand the scope of the country’s energy situation and the consequences of a failure to act.
Communication efforts will have the most impact if they make these points emphatically. These efforts can educate citizens and businesses about how specific measures for households and enterprises can address the sustainability problem – and how the entire country will ultimately benefit from individual actions that accumulate over time.
The fourth priority is the promotion of region-specific research and development technology (R&D). A targeted R&D agenda focusing on sustainability can tap into emerging technology to help the UAE meet its energy efficiency goals. The key to encouraging such an agenda is a set of incentives for R&D into sustainable technology. R&D in this area will deliver ancillary benefits as well, such as building a more innovative ecosystem in the country, creating jobs and boosting the overall economy.
With the right supporting elements in place, this kind of comprehensive energy efficiency strategy could lead to substantial reductions in consumption. It could be implemented swiftly and at relatively little expense. Moreover, the UAE can apply the lessons learnt from governments in other countries that are further along in their efforts to reduce consumption and boost efficiency.
Such a strategic approach is important because the UAE has decided upon a fundamental transformation in its energy planning.
Policymakers have taken important steps thus far, putting in place significant elements of the larger strategy. They can now weave those individual efforts together into a response that is coherent and strategic, one that can lead to greater gains over time. As a result, the UAE will be able to meet the needs of today’s citizens more effectively, and it will build a sustainable future for subsequent generations.
Per-Ola Karlsson, Christopher Decker and Jad Moussalli are partner, principal and senior associate with Strategy& (formerly Booz & Company).
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