Making sense of Masdar

Is it really possible to build a carbon-neutral city?

A concept image of the Masdar/IRENA headquarters.
A concept image of the Masdar/IRENA headquarters.
Masdar belives that energy spent per capita will be nine times less than in the United States.
Masdar belives that energy spent per capita will be nine times less than in the United States.
A recent photo of the work at the Masdar site shows that the construction phase is under way.
A recent photo of the work at the Masdar site shows that the construction phase is under way.
Frost & Sullivan expert Roberta Gamble
Frost & Sullivan expert Roberta Gamble

Is it really possible to build a carbon-neutral city? Construction at Masdar City is continuing apace

As the Middle East economies approach maturity, the demand for energy is growing faster than anywhere else in the world. And despite being blessed with hefty hydrocarbons deposits, it’s clear there will be restrictions to traditional power generation in the future, in terms of both cost and carbon emissions. Ironically, it is the region’s mineral deposits that are providing the bedrock for a shift in energy feedstocks. Investment in renewable energy is not cheap, but it is for the long term.

With that in mind, the Masdar concept was launched in 2006, with the aim of covering the full lifecycle of technology from research all the way to commercial deployment. Three years on, and the results are already impressive. But photographs of current progress on the site fail to tell half the story.

In the creation of a completely carbon-neutral city, attention to detail is paramount. Progress at the outset was slow, simply because none of the technology was available on the market. “Masdar City has a very simple code – the best possible environment, with the best possible quality of life for our residents, combined with the aim of being zero-carbon, zero-waste, non-fossil fuel, all totally powered by renewable energy,” says Nawal Al Hosany, associate director – sustainability at Masdar’s Property Development Unit. “It’s a challenge, but an interesting one. Such challenges create innovation, however. We never accept a business-as-usual solution, because it’s simply not going to work in that kind of environment.”

In effect, Masdar has been quietly changing the way that some technology providers have been doing business, and a partnership with the company is now starting to be seen as the ‘green’ seal of approval, simply due to the exacting nature of Masdar’s demands. But has the investment been worth it? “From the long-term perspective, I wouldn’t describe the cost as being expensive, and actually the prices of materials are coming down at the moment,” continues Al Hosany. “Even in a normal market economy, after a couple of years it makes sense. But in an oil economy, it is making sense already.”

The Abu Dhabi government has been a prime mover in the plan to bring Masdar to fruition. As a partnership between the government and the private sector, the city is being developed in line with the emirate’s attempts to diversify into not just an industrial economy but a knowledge-based one as well. Part of that investment is already paying off through the opening of the Masdar Institute of Science and Technology (MIST), which accepted its first intake of students in September.

While development continues apace just outside the UAE capital, Masdar has also been keen to add investment to overseas companies to assist with the development of sustainable technologies. The benefit of such investment not only means that the entity can take a lead in the roll-out of new products, but it also means that the rest of the world can benefit as well.

The major investment vehicle in terms of renewable energy has been the Masdar Clean Tech Fund, a US $250 million venture capital fund that was launched in association with Credit Suisse, Consensus Business Group and Siemens in November 2006. Around $190 million has already been spent in direct investments in clean tech companies, with the remainder earmarked for leading funds that focus on cutting-edge clean technology. The second Masdar Clean Tech Fund is expected soon.

The drive for greener technologies will not stop when the city is up and running, either. A Cleantech cluster will provide number of benefits for relevant firms, including the availability of capital resources, access to venture capital firms, and access to MIST’s growing pool of experts.

A mixture of renewable energies will go to make up the Masdar portfolio. Not surprisingly, given the Middle East’s high exposure to solar radiation, photovoltaic (PV) energy comes top of the list, providing an estimated 42% of the total. Concentrating solar power (CSP), largely from the SHAMS 1 purpose-built plant in Madinat Zayed will account for another 35%, with ETC and waste-to-energy (WTE) contributing 15% and 8% respectively. On top of that, the development also plans to add geothermal power into its overall mix, with the first test drillings to be undertaken near the Masdar site before the end of 2009.

All this will mean that the entity will hope to use less than 30 KWh per capita per day in terms of energy usage, around nine times less than the comparable figure in the US.

On the water side, Masdar plans to recycle 90% of grey water and reduce water leakages to 3%. Water use in the home will be minimised via the use of hi-tech appliances and irrigation will cultivate largely native plants. Cooling will be conducted using both modern and traditional methods, with an emphasis on Arabic designs that offer narrow streets and natural shading.

So as the various Masdar entities approach completion – although with six projected phases, this will take time – excitement seems to be building. And with a projected population of 90,000 (40,000 residents and 50,000 business commuters), there is still plenty of work to do.

“People ask why we are investing so much money, but we’re creating jobs, and we are building human and local capital,” says Al Hosany. “It’s very simple – it’s the future.”

The analyst view

Roberta Gamble, director, Energy & Power Systems, Frost & Sullivan, discusses the view of Masdar from abroad.

As someone based in the US, what’s the overseas perspective of Masdar?

Even though we’ve been researching a lot of solar and wind projects globally, from the US, we don’t hear about Masdar as much as I think we should. Masdar is gaining international recognition, but it’s an amazing project that needs to be advertised further. It has implications for more than just the Middle East. It’s also applicable to Asia, India and the rest of Africa.

Closer to home, do you think the US can implement a similar project?

I think we’re still a way away. A development like Masdar has to have government support and a government mandate; green energy in general requires government assistance. We did a study of states in the US, and 80% of the non-hydro green power generated in the summer comes from states that have renewable portfolio standards. This is where it is mandated rather than just incentivised. Now you could argue that these were the states that were more likely to have mandates in the first place, but I do think it’s important that governments get involved.

What is so different about the Masdar concept?

The great thing about Masdar City is that it’s the full solution – it’s totally sustainable – which is way ahead of other projects in, say, the US or Europe. Those regions have been looking at pieces of the puzzle - whether it’s lowering the carbon footprint, being sustainable, reducing waste, or reducing dependency on fossil fuels – but I don’t think we’re really seeing it all come together in one solution sanctioned by the government. I really do think it’s the future.

How do you think the concept of renewable energy will play out in the Gulf?

What I have heard from the gas, oil and renewable energy industries is that they need all the BTUs and all the megawatts they can get. When a country or company wants to become more green, usually the first step is energy efficiency. Waste is expensive. But right now, less than 1% of the installed capacity of electricity in the MENA region is from renewables. Even if you have a target of 2% by 2015, that’s still a massive amount of extra capacity you’re going to have to install. So it will happen, but it will also take time.


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