Abu Dhabi, capital of oil producer UAE, mulls clean energy

ABU DHABI, United Arab Emirates — On the outskirts of this Persian Gulf boomtown, past an oil refinery and a water-desalination plant, foundations are being poured for an ambitious project that will house a research facility and perhaps even a power plant, all intended to take this oil-producing giant into the next energy wave.

Oil, however, will have nothing to do with it. The sun, the wind and hydrogen will.

Abu Dhabi, the capital of the United Arab Emirates, the fourth-largest OPEC oil producer with about 10 percent of the known reserves, is seeking to become a center for the development and implementation of clean-energy technology.

Last year, the emirate launched the Masdar Initiative (masdar is Arabic for source), which has signed up major oil and technology companies, universities around the world, and UAE ministries to help develop and commercialize renewable-energy technologies backed by hundreds of millions of dollars of Abu Dhabi's money.

At first, the Masdar effort drew skepticism and a few snickers. The United Arab Emirates has been singled out as one of the world's highest per capita emitters of carbon monoxide and other greenhouse gases.

The UAE has especially high energy demand to maintain a luxurious life of air-conditioning, chilled swimming pools, and even an indoor ski slope in the emirate of Dubai, a neighbor of Abu Dhabi. UAE officials say that the Masdar project is one way to reduce demand for fossil fuels internally.

The UAE is only the most serious among Persian Gulf oil-producing countries whose thirst for electrical power has spawned efforts to find other sources of energy to save high-value fossil fuels for export. Most Persian Gulf states get their water from desalinating gulf waters, an energy-intensive process. With their populations growing rapidly, domestic consumption of oil is commanding a greater share of production.

Late last year, Saudi Arabia and other gulf states began a research program looking into nuclear power; Iran, which has faced off with the United States and other international powers, insists that its nuclear program is intended to serve mounting energy demands domestically.

Some other Arab countries have dabbled with renewable energy. The Bahrain World Trade Center project in Bahrain includes wind turbines that, developers say, will meet up to 35 percent of the project's power needs. In North Africa and in countries such as Jordan, residents have been encouraged to adopt solar heating to save energy costs.

The Masdar Initiative, however, is the most far-reaching program.

"They've seen the writing on the wall: Where will all these places be, post-oil?" said Virginia Sonntag-O'Brien, managing director of BASE, a center in Basel, Switzerland, that promotes investment in energy efficiency and renewable energy. "It's their message that they are an oil-producing nation taking the energy and climate issue seriously and developing their own economy which is important."

Alternative energy has attracted increasing interest over the past year. American industrial leaders have called for more aggressive action to be taken against the phenomenon of global warming, and the Bush administration has focused greater attention on renewable energy. In Silicon Valley, the excitement over clean-energy technology startups recalls the flurry of new Internet companies in the 1990s.

From its gleaming high-rise towers to its $3 billion marble-encrusted Emirates Palace Hotel, Abu Dhabi has long prided itself on being an example of what oil money, put to good use, can do. Oil helped turn Abu Dhabi from a desert fishing village into an influential Arab capital. It helped build a citizens' trust fund that is estimated to be worth up to $300 billion, whose investments are estimated to bring the emirate almost twice the income that its oil sales do.

Abu Dhabi now hopes to show that petrodollars can develop innovation in clean energy. Masdar has drawn up a $250 million Clean Technology Fund, and begun construction of a special economic zone for the advanced energy industry. Last month, Abu Dhabi announced plans to build a 500-megawatt solar power plant in the area — one of the most ambitious of its kind in the world.

The plant will be the Persian Gulf's first, to be built in partnership with the Abu Dhabi Power and Water Authority, generating enough power for up to 10,000 homes. It should be operational by 2009, either as a stand-alone or as part of a desalination project.

Shortly after it announced those plans, Masdar announced an even more ambitious plan to develop a graduate-level research center in combination with MIT that will be focused on renewable-energy technologies. Scientists who join the program will be able to attend MIT courses in Boston and will be assisted in developing research and courses at Abu Dhabi.

In a decade, Masdar's executives and MIT's administrators predict, Abu Dhabi is likely to have expertise in solar energy, photovoltaics, energy storage, carbon sequestration and hydrogen fuel.

Most important, they say, it hopes to prepare itself for a world that is not as reliant on fossil fuels as it is today. Abu Dhabi's expertise, they say, is in energy, not just in oil.