Masdar also runs a pair of government-backed private-equity funds devoted to clean-energy projects around the world. To date, one has invested $250 million, including direct cash infusions to businesses in the United States and Europe. A second $290 million fund focuses on companies working in areas such as water conservation, waste management, and power-grid efficiency. Through the funds, the UAE purchased a 20 percent stake in a giant wind farm under construction near London, the largest such project in the world. Masdar has also teamed with a Spanish firm to build an innovative system that stores solar energy in batteries during the day so it can provide uninterrupted power through the night. A framed picture in Jaber’s office shows the Masdar CEO standing next to Spain’s King Juan Carlos at the power plant’s dedication.
The Gulf region’s alternative-energy push isn’t just about an oil-free future; it’s also about a cost-effect present. Nations such as Saudi Arabia generate roughly half of their electricity by burning their own oil. (The average Saudi consumes twice as much energy per day as the average American.) With oil trading at more than $123 a barrel—and poised to spike higher if Israel attacks Iran’s nuclear facilities—the Gulf monarchies could save tens of billions of dollars a year by cutting their own energy use and ramping up their sales to thirsty nations such as the United States and China. “Fuel supply is one of the major challenges facing the power sector and the nation,” Saleh al-Awaji, a senior official in the Saudi water ministry, said at a conference last spring. “The policy is to work intensely on saving energy and making sure every barrel of oil that can be saved is, and is made available for export.”
Arab leaders—the people most dependent on oil money—also talk of fossil fuels in language that is hard to conceive of coming from Republican lawmakers or presidential candidates. “The oil era is definitely dwindling and coming to an end,” Khaled Toukan, Jordan’s minister for Energy and Mineral Resources, told the ClimateWire news service last year. “All countries of the world are now seeking alternative sources of energy.”
Arab officials believe their renewable efforts offer the world a rare bit of good news from a region primarily known for political instability and violence. The UAE was recently chosen to host the International Renewable Energy Agency, an independent body whose mission accords with its name. The agency is building an energy-efficient headquarters to house 350 employees in Abu Dhabi, which also hosts a high-profile annual summit devoted to renewable energy; this year’s speakers included Chinese Premier Wen Jiabao and U.N. Secretary-General Ban Ki-moon. Abu Dhabi’s ruler, Sheik Mohamed bin Zayed al-Nahyan, told the summit that the UAE was committed to developing “clean technologies” and “renewable natural sources.”
The United States offers another story. The Obama administration believes, rightly, that its move to increase vehicle fuel-economy standards will reduce American dependence on foreign oil. In July, the administration cut a deal with automakers to ramp up fuel efficiency from the current goal of 35.5 mpg by 2016 to 54.5 mpg by 2025. That could reduce U.S. oil consumption by some 12 percent and cut greenhouse-gas emissions by about 14 percent per year. But it hardly represents a transformation of the energy economy.
The Masdar private-equity funds, meanwhile, have invested tens of millions of dollars in U.S. firms such as HaloSource, a Seattle-based clean-water firm, and Solargenix, a North Carolina company that builds integrated solar-energy systems capable of cooling, heating, and powering homes and offices. Masdar had even invested in Solyndra. “I still believe their technology was sound and the company could have succeeded,” Jaber said, shaking his head. But it’s getting harder and harder to find firms worthy of Masdar capital, he says. He works with Deutsche Bank in New York City to scour for new American firms to fund. The United States has the world’s biggest economy, ostensibly full of clean-tech investment opportunities. But so far this year, Jaber says, Masdar has found only one.
This story was reported with a grant from the Pulitzer Center on Crisis Reporting.
This article appears in the April 14, 2012, edition of National Journal.