Building the UAE’s New Energy Economy

Your excellency, we're honored to have you with us for our inaugural event here at Abu Dhabi Finance Week and thank you again for joining in on the conversation. Your excellency, I think this is a great opportunity for you to make some opening remarks if you wish and share some thoughts on how Abu Dhabi Finance Week is impacting the UAE broadly. Well, first of all, welcome all and it's a great pleasure to host you uh back here in Abu Dhabi at a very interesting week. Um I think I think uh year on year uh Abu Dhabi Finance Week attracted more partners, interested companies and I would say all of the stakeholders interested in shaping the world future not only in Abu Dhabi and UAE but also worldwide. We are becoming a hub and we look forward to thinking together and hopefully doing projects and concluding projects together here in Abu Dhabi, UAE and worldwide.

You're excellency. One of the things that you and I have spoken about in the past is how Abu Dhabi is really positioning itself as the capital of capital in the Middle East. So what would you say is the UAE's biggest competitive advantage as the energy energy system continues to transform? Well, some people when they think of of us, they think of a large scale infrastructure investors. But at the same time, we are also one of the countries from energy point of view that the world is is demanding on in term of resources whether it's in the hydrocarbon and recently our investments in renewable energy.

uh renewable energy is one of the areas that we believed in our leadership believed in earlier than anyone else. We converted that belief to attracting the best players. We have shaped our strategy, energy strategy around the hope that renewable energy will be competitive and today we are reaping the benefits of of that of that uh aspiration that goal that our leadership uh believed in I would say when we created a company like master back in 2006.

Let's talk about AI as well. Obviously a central theme not just in the UAE now but worldwide. We're seeing major investments into AI infrastructure in the UAE right now, including data centers and of course high performance computing as well. So, how does AI fit into your vision for the new energy economy? And at the same time, the UAE also hoping to add something like 5.

6 gawatt of new capacity by 2030. What portion of that is going to be solar versus nuclear versus other sources? I would like to address our interest in AI in two folds. One fold is the technology element. Second fold is having the large scale data centers that hopefully is going to serve the world.

So the first part it's not new that our interest in in technology and in chips I would say that resulted today in this in this leap. We are through global foundaries. We have invested years and years in developing chips and supporting uh many companies in being in every device that you see um whether it's an iPhone or a car or so from that perspective that technology interest we believe that AI is going to be the new wave and again driven by a leadership vision Everyone started to focus on the technology elements and now the whole world is realizing that yes AI is true AI is evolving and AI is going to shape up the future. So from that who can be competitive in AI data centers um uh I mean uh point of view those large scale data centers would would require an uninterrupted roundthe-clock reliable source of energy that guess what they wanted to be sustainable and as well uh competitive pricewise and they want it to be as well a something that is uh clean and UAE have put a strategy toward net zero. That strategy is aiming to convince the investors that investing enough in large scale solar, we could one day make solar round the clock.

Competitive to natural gas, competitive to any other. not only competitive, I would say they could be cheaper because in the future we may see that the natural gas due to demand and scarcity prices could could rise. Today roundthe-c clock solar is I could say proven very competitive where it exists and we are blessed from a location point of view with enough resources here in the in the UAE and the Gulf states and Abu Dhabi and Abu Dhabi is 88% of the land. So budabi is primarily the land available in UAE when you think about it from that sense and I think that's the competitive advantage that we have here in UAE. uh we have uh done a large scale deployment of that theory of roundthe-clock competitive pricing the the five the 5 gawatt project uh that will deliver a roundthe-clock 1 gawatt of solar that is going to power the data center.

So the conventional thinking is that the rise of AI means we're going to see higher demand for electricity and energy broadly. How else do you see the energy mix changing as a result of this new paradigm with artificial intelligence?

Again, what would AI do to our consumption, our management of energy in a city, in a building I think we're just at the beginning of the tip of the iceberg on what AI can do. We are I can tell you that we as human were not that efficient and we have learned with the capabilities of AI that we have today that we can save up to 30%. I'm not talking in a small scale. I'm talking it's it's scalable to a city to a country. Are we doing it?

No. Would the AI help us save that 30% or more? Yes, it will. So, our interest in the AI, yes, it will demand more electricity. But if you think about it, if you look at the country demand, a world demand, if we can save 30% of that, we can maintain a reasonable growth, but at the same time enable a technology that is going to trans transform how we consume energy.

And that energy management is going to be those data centers managing all of this data. It will manage the energy for us. And I can tell you from an experience that we did here in UAE, 30% is a very reasonable target to be achieved. Now you go with your 5 giga or 10 giga or 15 giga. You look at the whole country consumption take 30% of that and take it in any country take it in the United States take it in China take it in any country that's the possible available capacity that if we consume energy right we can say not to mention that it's not an it's not or anymore I would say now when it comes to energy Because there is a demand in the conventional credit and the growth on the on the on the demand of a city or a country.

There is also this additional demand from AI and some people are afraid that there will be a competition where no energy sources will be enough and I think no one will build more than what we will need. All of those large scale projects are based on offtake. The competition is going to be from those those uh unicorn companies, those big companies which are which are attracting investors in a data set centers. Our role as a regulators is to balance those two and ensure that we are growing in the space of AI u capacity availability but at the same time we are securing the requirement of the grid the requirements of the people

at the adapter conference earlier this year Dr. Sultan Aljaba, CEO of the Abu Dhabi National Oil Company, spoke about how we are now in the energy addition era. It's not so much about the transition anymore. It's about the era of energy addition. So, what does that mean for the UAE?

And can you reliably meet the demands of AI and the energy requirements of the future while also meeting these ambitious net zero targets? Well, that is 100% true and we believe in it in UAE. We will need any available source of energy, but we just need to be conscious of how we use it. Any source of energy can be clean if we focus. It's not targeting a type of fuel rather than targeting a clean energy.

So you can make clean energy. I think now we are at a stage of I would say a shock for come some countries and a surprise for others and some have been prepared for it and this shock for some countries those who doesn't thought of alternative that is sustainable you can provide it all finite resources by definition they are finite so you need to think what am I going to do in 30 40 50 years and we should not worry about when are we going to peing in term of demand of fossil fuel. I think the overall demand on energy is going to increase. Now fossil fuel at all of its availability is going to be a percentage. Let's not worry about that percentage.

Let's worry about how we make it sustainable. how we make it cleaner, how we make it available for growth. Those who doesn't invest in AI in my view they will be behind. They cannot be competitive if they are not investing enough in the technology that is going to provide more efficiency and those more efficient they will be more price competitive and if you are not price competitive guess what you're not going to be competitive in the market and then you are going to lose financially so those are the balances that we are trying to to do here in the UAE availing enough resources electricity wise, utilizing all of the available sources of energy wisely and ensuring that our target is achieved.

And of course, we're talking today at the new energy finance forum as well. So when you look at this through the lens of uh the private sector, do you think enough private capital is flowing into some of the region's transition projects?

Yes, I'm I'm not worried about financing at this stage. I think it's doable reason good news round the clock is cheaper in many instance if you are importing LNG it's definitely cheaper if it's available to you now are we doing enough in Abu Dhabi to prove it yes but we're not doing that only now companies like Mazdar Tihadi and others are winning projects I mean outside the country where they are demonstrating to the world that we are not only competitive in achieving the best prices in our country but also achieving best prices worldwide. We won some of the competitive beds where we have broken the record for wind for solar and those largecale projects can be around the clock. Sometimes the country doesn't need around the clock but can be around the clock and I can tell you it can be competitive as well to the alternative sources. Now it's not a competition as we said because you need this and you need that and you need to look at a an energy mix that is well balanced with your available resources to you.

financing as far as I'm concerned is not an issue. The offtaker are there either a government is going to be offtaking this electricity or a reliable uh data center and the competition is going to be on efficiency on price. One thing that you have been really vocal about in the last few years in in the many conversations that you and I have had is about the level of investment going into the industry not just in new areas of energy but also in traditional areas as well like oil for example. I spoke with Qatar's energy minister on Saturday and he also sounded the alarm here saying the AI era is going to result in a lack of investment underinvestment across the sector. Is that a concern you share?

Yes, definitely. I've been talking about this for more than 10 years and I am worried about the level of investments for us to achieve all of that. But am I worried here in the UAE? I'm not. Uh in the UAE, we have a wise leadership that have realized that investing in our resources early enough will make us reap the benefits down the road.

We as a reliable uh supplier of hydrocarbon, we need to be continuing that investments and we will use those resources and I'm sure we will use them soon uh because the the world demand is uh is uh on on energy period whether it's this source or this source is increasing. So if you don't have available renewable sources, you are going to use the alternative available source that is that is available to you and uh natural gas is is one of those sources. We are intending not only to satisfy our local demand but we are also as you know growing our export of LNG um and I agree with his excellency the minister of Qatar that the demand is going to be much much more uh than the project that we are seeing but uh if there is a demand you're in the finance world you will avail I'm sure the investments for for those projects to happen. And I think that's that's the kind of discussion that we need to to have between investors, long-term investors, and the offtakers of the uh of the of these resources.

Of course, the UAE is a key player in OPEC as well. What we've seen, and I think it's interesting to follow the news through the course of the year, Brent down about 50% from its postco peak. Now, does the price of oil still matter materially to the UAE's long-term strategy?

Yes, I would say hydrocarbon is important worldwide. It's important to the energy uh equation. It's important. It's important for our customers that rely on us to supply them. So, yes, it is important.

It will remain important. And as as his excellency Dr. Sultan mentioned at Adipek we're not at the era of of or we are at the era of and so we need this and this and that and we need to ensure that everyone is doing his part whether he is among the producers or among the consuming nature in balancing and that's the advice I give to all of my peers do you have a clear vision for your 10 15 20 years energy uh availability and some they rely on others to shape up for them. Now even nuclear is the demand on nuclear is going to be uh higher. The demand on uh even cleaner coal could be could be also in demand not here but in in many countries which has coal and needs to to to to clean it up.

And guess what? The AI should help us in this whole value chain. So AI will help us produce sensibly, reduce the emissions technology wise and improve the efficiency. We are consuming more than what we need as human beings today.

Can I ask you as well just with regards to the impact of AI on the supply demand trajectory for oil? the IEA of course seeing a supply surplus emerging and then demand peaking in the 2030s. Do you agree with that trajectory or does that change now as a result of what we're seeing on the AI infrastructure spend side and the level of demand that we're seeing for AI compute?

It depends on on this is not an easy question and you could you could vote this side or that side. I think it depends on real largecale projects that we see that put us on the trajectory to achieving those huge numbers that we hear about from those uh companies. They need that they need that power to harness the data. They need that power to develop LLM and to develop this technology toward the next stage. And I think some countries and I can assure you UAE among them are keen focused on availing that power to to be among those leaders in this in this front.

Those who doesn't have a competitive energy, they will either need to subsidize significantly which is not a long-term plan or the train will they will miss the train. And it is a race but it's a race for the good of humanity in my view because it will improve efficiency. It will improve how do we behave and it will put us in the right trajectory efficiency wise to reduce our current uh inefficient energy system. We have losses. I mean if you look at the value chain of electricity today, we have losses from the generation side.

Many of those turbines if you are in the gas or if you are uh in even in the solar some of those older technologies. So the technology revolution is happening fast and we need to adjust we need to replace those investment that are required to just fix the grid which can be justified financially but not done is enormous. So if we fix the whole ecosystem I can assure you there is a potential of 30% minimum and in some countries 40%. How much losses we have if you just collect those losses they will satisfy the requirement of AI at least for some time.

Wow. So what's being done to improve the efficiency then because that's obviously a key concern. Well, in UAE, we are working very hard and on opening uh opportunities for the developers uh those companies that are using AI by the way to improve the efficiency. We have run a program for the federal buildings, schools, hospitals, others. And we're on a bed energy management using AI.

And guess what? The numbers that I was talking about four years was achieved 30% or 28 to 30% both water and electricity can be saved in those buildings using AI tools and energy management and efficient metering. So it is doable and we're only talking within the parameters of the building. If you include with that the transmission distribution the distribution transmission and upstream generation that percentage is going to be up to be higher. So one area of looking at availing capacity for AI is building new.

Another is using what you have being efficient. You can definitely spare 20 to 30% if you are efficient and using AI and the next wave of of AI is going to move us to the next level of saving.

And of course, as the technology improves as well, it's reasonable to expect that there'll be advancements in efficiency, too. So, your excellency, a couple more questions before we let you go. When you cast your mind ahead, when you look out to 2050, what does success look like for the UAE's new energy economy? And when you look at the pace of this change that we're seeing in technology, it's pretty clear that the future is uncertain, right? So, what are you forecasting?

What does the future actually look like to your mind as it stands now? Well, you can't guarantee the future, but zero planning or just wishing that the future is going to be great without proper plan that you adjust as you move on is a a failure. And what we always good at is long-term planning. So, we plan for 2071. That's when UAE is going to be 100 years old.

And now we're 50 54. So we are planning. So our our aim of what we know is toward that year. How can we achieve that year with the objective that we uh that I mentioned earlier? Whenever there is a wave of technology that is going to change the world, we don't want to be the one who missed the train.

We would like to be the one who's driving the train. So that's how you see UAE and the AI. We are among very few countries which are investing, impacting and hosting those game changers. And that's how we think that with that vision, we will be the first to receive the those next wave of AI that is going to change how our country is evolving as an economy and it will help us be a leader in efficiency and then we can innovate moving forward and adjust our view of the future. The future will change.

No one can predict in 50 years what's going to happen. But keeping your hand on the pulse of what is changing, engaging with the best technology providers, investing with them, not only uh uh believing or following their news that will give you a better access to knowledge. Can I ask you about the regional competition as well quickly because at the same time the UAE is attempting to be a leader in this space but so is Saudi Arabia and maybe to a lesser extent so is Qatar. How are you reading the regional race at the moment or as others have called it the marathon right now.

I mean those are all good if we are all competing to become among the best nations providing our economies with the best we can do. I think that's a well-justified competition and that competition exists among every nation. We're friends, we're brothers, we are uh we invest together sometimes, we compete sometimes, but the objective of every country is to focus on how they can be an example, how can they lead? And if we are all among those who are competing, this is good news for the region. The region has so I mean had so many pains and and uh and issues in the past and now to have those countries in the GCC competing, investing and attracting talent and capital, this is a very good news.

And we're not only competing for the sake of building our economies, we are also helping other nations. Um I travel the world to trying to offer every opportunity of saving we do we go and implement projects in the world offering those technologies offering those partnerships. It's not us. Some people are are saying is it only you? No, we have a cluster of partners like you.

We go together. So, no one alone is strong. You need to create partnerships. The more diversified your partnerships, the more balanced those partnerships, the more impactful you will have in solving the energy uh crisis, solving the technology crisis, availing uh enough resources and this is something that we feel good about because it it makes us among the best and we compete that's fine. We compete with our brothers, that's fine.

Even within UAE, we we compete for the best. And that competition gives us an edge, makes us strong, and makes us agile, makes us uh willing to change and adjust because it's a race.

Your excellency, we've spoken about so much. We've spoken about the energy addition and transition. We've spoken about the need to diversify the energy mix. You've spoken about the demand for artificial intelligence into the future and how this is changing the calculus for everything that you're doing inside the ministry. My final question is this.

What concerns you the most right now about this trajectory? And is there anything that's keeping you awake at night when you think about trying to solve the challenge and this nexus between energy and AI?

Well, what makes me worried is we're not doing enough. not not as a country but as the whole world in reducing the inefficient and uh inefficient uneconomical uh energy consumption. So it's really sad to see countries are not doing anything to improve their energy landscape not to work on on increasing the efficiency reducing the losses and those are money that are burned every day for the world economy. If those money are captured we can do lots of things. So that's what what keeps me worried.

I would like my country to be the best in what they do. I would like to put a very clear strategy to achieving that target and I believe that AI is going to enable us to do that better.

Your Excellency, it is a true privilege to have you join us here at the New Energy Finance Forum. Thank you so much for joining in today and thank you for the conversation. Ladies and gentlemen, a round of applause for his excellency.

Thank you.