Britain is looking to oil-rich Gulf states to help it realise its ambition of becoming a low-carbon economy based on reliable, diverse energy supplies.
The UK government hasjust signed two key deals – one with Qatar and another with Abu Dhabi-based renewable energy firm Masdar – that will boost development of renewable energy and low carbon technologies, and which it believes will help promote a global move to tackle climate change.
UK prime minister Gordon Brown inked the deals during a tour of the Gulf region aimed at raising money for the International Monetary Fund. He has signed a Memorandum of Understanding with Masdar as well as a £250 million partnership with Qatar designed to help British companies develop groundbreaking green technologies.
The deals provide a boost to the renewable energy sector, which has been hit in recent weeks by the global financial crisis and a drop in both crude oil and CO2 emission allowance prices.
Masdar and the UK have pledged to work together on technologies such as on and offshore wind, carbon capture and storage (CCS) as well as solar and marine energy. The deal could see millions of pounds being invested in the UK, and follows Masdar’s recent move to invest in the London Array offshore wind farm alongside Germany’s E.On.
The agreement with Qatar will establish a new clean technology investment fund, initially seeded with up to £150 million from the Qatar Investment Authority, that will make venture capital investments in clean energy businesses primarily located in the UK. The fund will be managed by the Carbon Trust and will also investigate the feasibility of establishing a Low Carbon Innovation Centre in Qatar.
“These agreements show how Qatar and the UAE are serious about tackling climate change, diversifying their economies and providing secure energy supplies for the UK,” said the UK’s Energy and Climate Change Secretary Ed Miliband. “The Gulf states recognise the UK too has natural assets, like wind, that offer investment opportunities for them.”
Dr. Sultan Al Jaber, CEO of Masdar, said: “Securing a sustainable energy future is a challenge that requires the collaboration of governments, NGOs and corporations from around the world. The United Kingdom is home to a wealth of expertise in renewables and today’s cooperation agreement heralds a new era of cooperation with the UK government in renewable energy and sustainable technology investment and knowledge transfer that will benefit both our economies and drive the future growth of the renewable energy sector globally.”
The Carbon Trust – an organization established by the UK government in 2001 to support development of low carbon technologies – says that it is working to finalise the agreement with Qatar and establish what financial contribution it will make to the fund and how much funding will be raised from the private sector.
“Mitigating climate change will bring a wealth of new business opportunities as low carbon technologies are developed and commercialized,” said Tom Delay, CEO of the Carbon Trust. “This new clean technology fund will put the UK at the heart of low carbon innovation. By investing in home grown companies developing cutting edge low carbon technologies it will enable the UK to benefit commercially from the move to a low carbon economy.”
Brown’s trip to the Gulf comes ahead of a December meeting in London of oil producing and consuming nations. The threat of a global recession pushed oil prices down to around $65/barrel at the end of October from an all-time high of $147 in July. EU CO2 emission allowances are also trading at an 18-month low of EUR19.
Continued low oil and emission allowance prices could present a challenge for renewable energy developers, while the collapse of the global money markets has created a shortage of financing not only for renewable energy projects but also for clean technology R&D.
In June this year Brown called for greater investment by OPEC nations in the development of renewable energy technologies to help bring an end to the global “addiction to oil”.
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