The DoE''s regulatory framework is the first legally binding clean and renewable energy target in the Middle East for the electricity sector
The Environment Agency – Abu Dhabi (EAD), in partnership with the Abu Dhabi Department of Energy (DoE), will aim to generate a large proportion of Abu Dhabi''s electricity from clean and renewable sources by 2035.
New regulations, drafted by the DoE, will see 60 per cent of the emirate''s electricity being generated from clean and renewable sources by 2035, and up to 75 per cent reduction in carbon emissions per MWh produced by the electricity sector, according to the Abu Dhabi Media Office.
The DoE''s ''Clean Energy Strategic Target 2035 for Electricity Production in Abu Dhabi'' regulatory framework is the first legally binding clean and renewable energy target in the Middle East for the electricity sector.
The new regulations were unveiled at the United Nation''s annual climate summit, COP27, in Egypt, and are part of an ongoing energy transition to accelerate the UAE''s decarbonisation and green growth efforts.
Dr Shaikha Salem Al Dhaheri, Secretary General of EAD, said: "The target to produce 60 per cent of all electricity using clean sources by 2035 is an important step towards meeting UAE''s Net Zero aspirations by 2050. Planned investment of billions of dirhams in clean energy infrastructure will be transformative in helping us transition to a low-carbon economy with positive environmental and social outcomes. We, at EAD, are working closely with 26 Abu Dhabi entities, including the Department of Energy, as members of ''The Abu Dhabi Climate Change Taskforce'', to develop climate change policy and related strategic plans to achieve this transformation."
Al Dhaheri indicated that the new regulations would contribute to enhancing the efforts made by EAD within the framework of its commitment to the UAE government''s sustainability vision. She added that the EAD is leading a set of framework initiatives to reduce the impact of climate change, including the preparation of the climate change policy for Abu Dhabi and a comprehensive strategy for the years 2023-2027.
EAD is also developing a ‘Nexus’ decision support system to help Abu Dhabi utilise its natural resources sustainably, improve water, energy, and food security, and introduce more cost-effective projects.
The body is also developing a scheme in which the emissions and trading ceilings would be determined. The feasibility of implementing the system at the state level is being studied to ensure competitiveness and sustainability. To complement this scheme, there would be existing voluntary programmes, such as the electronic platform for trading carbon credits on the Abu Dhabi Global Market. "We hope the emirate will be the first in the region to implement this initiative, which will further strengthen the UAE''s climate leadership role, and support its hosting COP28 next year," said Al Dhaheri.
DoE chairman Awaidha Murshed Al Marar said the clean energy targets 2035 framework would have a deep impact on the Abu Dhabi energy structure, allowing the broader economy and industrial sector to quickly move in the sustainability direction. "This will open the door to improved added value and increased productivity for local businesses. These decarbonisation policies will help operationalise the UAE net zero 2050 pathways from today. They represent real, live commitments for our people, planet."
The DoE expects the new regulatory framework to drive a 75 per cent reduction in carbon emissions per MWh produced in Abu Dhabi by 2035, compared to 2016 levels. Abu Dhabi, therefore, will be a leading contributor to the UAE''s updated climate targets to achieve a 31 per cent reduction in greenhouse gas emissions, relative to business as usual, in 2030 and net zero by 2050.
The UAE''s new targets were published in its ''Second Nationally Determined Contribution'' in September ahead of COP27 and as part of the COP26 Glasgow Climate Pact commitments.
The emirate is already making huge strides in this area. In 2021, the DoE introduced the complementary Abu Dhabi Clean Energy Certificates Scheme as an innovative measure to support the carbon footprint reduction of power demand and meet the growing interest of corporate clients and households to contribute to the climate change fight.
"We are very encouraged by the uptake of this scheme. Commercial entities are purchasing clean energy certificates in increasing numbers to claim the use of low or zero emissions electricity, thereby reducing their carbon footprint," said Al Marar.
ICLG - Renewable Energy Laws and Regulations - United Arab Emirates Chapter covers common issues in renewable energy laws and regulations – including the renewable energy market, sale of renewable energy and financial incentives, consents and permits, and storage.
The United Arab Emirates (the “UAE”) was established in 1971 as a federation of emirates. There are seven emirates, each with its own Ruler: Abu Dhabi; Ajman; Dubai; Fujairah, Ras Al Khaimah (“RAK”) (which joined the federation in 1972); Sharjah; and Umm Al Quwain.
The UAE has both federal level and emirate level laws and regulations that govern its renewable energy regime. It has developed policies as part of its strategy to diversify its economy away from oil and gas.
The UAE Energy Strategy 2050 is the first unified energy strategy in the UAE based on supply and demand, which aims to deliver clean, secure, affordable energy and reduce greenhouse gases. Initially launched in 2017 with a focus on the transformation of the energy sector, the strategy was updated in 2023 with a focus on specific enablers such as policies and regulatory, technical, and technological tools to facilitate transition in the power sector and to achieve net zero by 2050, setting out increased targets for energy efficiency and achieving net zero, as well as a comprehensive strategy in relation to hydrogen.
There is no “global” definition of “renewable energy” in the UAE; however, in relation to distributed renewable energy production, it is defined as: “Energy produced from natural resources and renewed at a rate that exceeds its consumption” (article 1, UAE Federal Decree-Law No. 17 of 2022 Regulating the Connection of Distributed Renewable Energy Production Units to the Electricity Grid (the “Federal Distributed Energy Law”)).
The main governmental participants in the renewable energy sector in the UAE are typically the same entities that participate in the conventional electricity generation, transmission and distribution sectors.
The Federal Ministry of Energy and Infrastructure regulates the sector at a federal level. Electricity services are expressly reserved to the Federal Government in accordance with article 120 of the UAE Constitution. However, notwithstanding such exclusive jurisdiction, there are different authorities across the emirates in the UAE in the renewable energy sector that govern the process of generation, transmission and distribution of electricity. As the most significant emirates in terms of economic activities and development of renewables, this chapter focuses primarily on the regimes applicable in Abu Dhabi and Dubai.
At a federal level, the main participants in the renewable energy sector are the Ministry of Energy and Infrastructure and Etihad Water and Electricity Company (“Etihad WEC”).
The Ministry of Energy and Infrastructure is responsible for establishing policies for, among other things, the electricity sector in the UAE and compliance with such policies. However, the Ministry of Energy and Infrastructure has limited influence in directing policy and implementing projects in Abu Dhabi and Dubai and primarily focuses on addressing the growing electricity demand in the Northern Emirates. The Ministry of Energy and Infrastructure works together with Etihad WEC to implement the Federal Government’s electricity policy in the Northern Emirates.
Etihad WEC was established pursuant to Federal Decree Law No. 31 of 2020 concerning Etihad Water and Electricity Company, which converted the Federal Electricity and Water Authority into a public shareholding company under the name “Etihad Water and Electricity Company”, wholly owned by the Emirates Investment Authority (“EIA”) (and such ownership may not be reduced below 51%). The EIA may, subject to the approval of the Council of Ministers, offer part of Etihad EWC’s shares for public subscription or private placement.
Etihad WEC has an autonomous juristic personality and full legal capacity to conduct its activity and achieve its objectives and is managed “on a commercial and investment basis”, replacing the Federal Electricity and Water Authority in all the legislation and related competencies, including the provision of electricity and water services in the areas where it operates, including the free zones. The powers of Etihad WEC include:
By virtue of inheriting the responsibility and assets of the Federal Electricity and Water Authority, Etihad WEC is the entity responsible for the generation, transmission and distribution of water and electricity, including renewable energy, in the Northern Emirates. Unless permitted by Etihad WEC, no person may carry out any action that affects the “General Network” (facilities, stations, equipment, installations, systems, electricity and water lines, optical fibres and assets owned, managed or supervised by Etihad WEC), Etihad WEC’s assets, or the service lines in its areas where it operates.
The main participants in the renewable energy sector in Abu Dhabi are the Abu Dhabi Department of Energy (“Abu Dhabi DOE”), the Emirates Water and Electricity Company (“EWEC”) and the Abu Dhabi Power Corporation (“AD Power”), as well as private sector participants.
Abu Dhabi DOE was established in 2018 pursuant to Law No. 11 of 2018 (the “DOE Law”) to control and supervise participants in the energy sector. In the same year, Law No. 20 of 2018 (the “EWEC Law”) established the EWEC as the provider of water and electricity. Abu Dhabi’s electricity was thus restructured in 2018, such that:
Abu Dhabi DOE is the entity responsible for granting generation and production licences; its role includes the organisation of the energy sector in all aspects through the development of policies, standards, regulations, decisions and executive and operational circulars to control, supervise and license the energy sector. The “energy sector” is defined broadly under the DOE Law to include the generation, storage, transportation, distribution, supply, sale and purchase of electricity of all kinds (including clean, renewable and traditional).
AD Power is a government corporation owned by Abu Dhabi Development Holding Company, a government-owned company mandated to own, oversee and operate development-related state-owned enterprises in a number of sectors, including utilities. AD Power was established, among other things, to invest in projects and establish subsidiaries.
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