Policy on local energy market will spur UAE’s sustainable plan

Suhail bin Mohammed Faraj Faris Al Mazrouei, Minister of Energy and Infrastructure, on Tuesday revealed the details of the policy regulating the market of energy services providers in the UAE that was approved earlier by the Cabinet.

Developed by the Ministry of Energy and Infrastructure (MoEI), the policy provides guidelines for the contractual framework amongst energy stakeholders and the various contracting mechanisms to consolidate the mechanisms of doing business, financing, and partnerships between the public and private sectors. This will encourage energy service providers and private sector companies to invest in government projects, with the goal of reducing energy and water consumption, carbon footprint, and operational costs in buildings.

Al Mazrouei said, “While drafting the policy, we were keen to integrate the objectives of the National Water and Energy Demand Management Programme 2050 - a main enabler of achieving the UAE Energy Strategy 2050 and the UAE Water Security Strategy 2036. The policy has set objectives for the next five years, including reducing water use by 23 per cent, cutting down operational costs by 20 percent in federal buildings, contributing to clean energy by 5 per cent, promoting the sustainability of buildings by an approximate 5-10 percent, and raising awareness of energy and water conservation and the importance of behavioural change. On the long term, the policy is projected to decrease the demand of energy in the building sector by 51 percent by 2050, contributing to the UAE’s sustainable development.”

The Minister added: “The new policy will contribute to the UAE’s GDP and help achieve financial returns that amount to Dhs21.5 billion by 2050, resulting from retrofitting federal buildings as part of the National Water and Energy Demand Management Program 2050, helping establish a local market of energy services and products, creating opportunities for the private sector to invest in energy efficiency systems and renewables projects, improving productivity, and lowering operational costs. As a result, the UAE’s global competitiveness will improve.”

He noted that regulating the energy providers market is a major step towards developing the country’s energy infrastructure and enhancing environmental sustainability. It reflects the wise leadership’s keenness on ramping up investments in the energy sector, encouraging innovation, and developing modern technologies that will provide long-term economic and environmental benefits.

He highlighted the policy’s prominent role in strengthening the UAE’s sustainability solutions to drive climate change mitigation efforts, as well as create better integration and collaboration between stakeholders and encouraging them to provide distinguished energy services and products at competitive prices, which will contribute to the greater good of the society.

The UAE’s non-oil sector is expected to continue its robust growth in 2023, building on the solid growth momentum of 2022, according to OPEC’s Monthly Oil Market Report - June 2023.

The global organisation hailed the progress of the the UAE’s travel and tourism sector, noting that it’s “recovering robustly, with a 55.8% y-o-y increase in passengers at Dubai International Airport in 1Q23, reaching 95.6% of its pre-pandemic levels. ”

It is anticipated, continues the report, that passenger figures will surpass those of 2019 this year.

“This revival in tourism, coupled with a growing population and government support, is contributing to the overall economic growth and the UAE’s capability to withstand global economic challenges.”

The country’s Purchasing Managers’ Index (PMI) has remained at a high level, but retracted slightly in May to a level of 55.5, after 56.6 in April, therefore suggesting that the expansionary trend will be maintained, according to the report.

Opec left its forecast for 2023 global oil demand growth steady for a fourth month on Tuesday, though the producer group warned that the world economy faced rising uncertainty and slower growth in the second half of the year.

Global oil demand this year will rise by 2.35 million barrels per day (bpd), or 2.4%, the Organization of the Petroleum Exporting Countries (Opec) said in its monthly report. This was virtually unchanged from the 2.33 million bpd forecast last month.

“There are rising uncertainties regarding economic growth in the second half of 2023 amid ongoing high inflation, already elevated key interest rates and tight labour markets,” Opec said in its report.

“Moreover, it is still unclear as to how and when the geopolitical conflict in Eastern Europe might be resolved,” it added, referring to Ukraine.

Opec+, which comprises Opec, Russia and other allies, has been taking more steps to support the oil market in 2023. On June 4 the group announced its second package of output cuts since April.

Crude prices, however, have remained under pressure from concern over slowing economic growth and demand.

The Brent crude benchmark was little changed after the report was released, maintaining a 2.1% gain to trade above $73 a barrel.

Chinese oil demand is now expected to rise by 840,000 bpd, Opec said, up from the 800,000 bpd forecast last month, adding to a recovery after strict COVID-19 containment measures were scrapped.

WAM/ Agencies