Smart Energy in Intercultural Contexts: Nordic Innovations in the Gulf

By Dr. Agnese Cimdina[1]

 

The following reflection is a prologue to my post-doctoral research, which focuses on the internationalization of clean tech and smart energy solutions. I study how the global shift towards green energy—away from fossil fuels and towards sustainable energy economies—is taking place locally in the context of specific business development plans of Nordic companies in the Gulf. Oil economies Norway and the UAE are my main case study areas.

Since the discovery of oil in the UAE in the 1960s, it has financed rapid socioeconomic development through hydrocarbon exports. Alongside the export market, the country has built an extremely energy-intensive economy. The country’s impressive oil and natural gas revenues have enabled them to build ultramodern infrastructure, to construct a high level of welfare for UAE nationals, to support an increase in population, as well as to exert international influence.[2] With sustainability challenges increasing rapidly, however, the UAE—along with the rest of the GCC[3] countries—has started to focus on diversification of the economy, investing in cleaner and more sustainable energy sources. In the UAE alone, “more than 300 billion dirhams[4] [have been] . . . invested in establishing a focus for the country’s path ahead, with the aim of preparing for a diverse economy that frees future generations from dependence on the ever-fluctuating oil market.”[5]

Meanwhile, the Nordic region aims to be at the forefront of a sustainable global energy supply and global climate change solutions: climate change is a priority for the region’s politicians and top-level management.[6] Researchers warn that emissions are increasing dramatically and should be cut by 45 per cent by 2030.[7] In its attempts to incentivize the transformation of their oil economy to a sustainable knowledge economy, the notion of a “green shift” has become Norway’s key slogan. Support systems are in place for Norwegian companies to develop and promote smarter and cleaner energy technologies internationally, including in the Gulf. However, although diversification of the UAE energy mix towards renewables seems to present a good opportunity for Nordic clean technologies, more than a hundred Norwegian companies are active in the conventional oil and gas sector here, but only few in the renewable energy and green business sector. 

Sustainable Desert?

During my research visits at Nordic companies in the Gulf in 2018 it did not take long to realize that before turning to business cooperation within smart and sustainable technologies, be it among Emiratis or Norwegians, it is necessary to understand local perceptions of sustainability, energy, oil, and well-being.

In the course of my research, I became aware that the desert embodies the sustainability narrative in the UAE: it was in a tent set in the desert in 1960 that the nation’s founding fathers decided to build a world class, developed country.[8] The optimism to transform the seven emirates—heretofore “governed by a tribal system and plagued by a lack of education into a unified, modern, educated nation”[9]—was based on recently discovered oil and gas.

My fieldwork started with the World Future Energy Summit in Abu Dhabi, which was part of Abu Dhabi Sustainability Week 2018. There was a broad range of topics covering future energy solutions, which attracted more than 30,000 visitors from 170 countries. I was told that the UAE produces one of the highest per capita waste quantities in the world and has among the highest per capita consumption of energy. Thus, in addition to energy transition sessions, I chose to attend one session on issues dealing with waste and energy where most of the audience was youth. The keynote speaker opened the floor with a question: “How many of you know what the green economy is?” No one replied. The keynote carried on: “What can we do when a landfill is full?” A couple of students answered: “Make a new one.” While panel discussions targeting energy transition in the Gulf reflected high awareness of sustainable energy, the specific concept of green economy seemed to be strange for the general public, including the youth.

Soon afterwards I participated to a workshop in Dubai, which was organized for Norwegian companies to explore business opportunities at the upcoming Expo 2020 in Dubai. Sustainability was presented as one of the three main themes. To house those sustainability businesses from all over the world a huge Sustainability Pavilion will be erected in the desert, which would generate its own power, process its own water and waste, and run almost independently from the grid. Sustainability consultants were hired to look for alternative sources of energy to run the pavilion and to show the variety of green plants available in the UAE. Through the windows of the Expo Dubai headquarters, I could see no plants, no roads, no colours other than sand-yellow: just an endless desert landscape and excavators. Exhibits of coral reefs, mangroves, and oases that were supposed to be in place to showcase how the UAE’s natural environment might inspire ideas for sustainability and the green economy seemed like an impossibility. What would be the costs to the environment to make this possible, I wondered.

Leading by Example and Water Scarcity

“Is it possible to grow vegetables in the desert?” I asked an Emirati farmer while discussing the competitive advantages of Nordic technologies for sustainable desert farming. “We have the example of a leader,” he replied:

 

          Sheikh Zayed got experts from Japan, America, Europe. He asked them for advice on how to grow this area green. They told him it’s not possible due to extreme heat, salty soil, and lack of water. After 20 years, when the UAE had an agricultural exhibition, he told the organizers to invite those experts again. They took them to the farms and to the green belts around the desert. He showed them what he had made. It was an expensive choice, but he had made it.

 

Inspired by this example, the farmer plans to develop thousands of square meters large vegetable farm and fish pond in the desert to contribute to food security. Technology that one Nordic start-up can offer to turn desert sand into fertile farming soil could be helpful in his endeavour. It has developed technology that can green the desert and cut the associated irrigation need by 50 per cent. The start-up has established its presence in the UAE and has received regional innovation prizes for its technology and believes this recognition could open the doors for business with farmers and golf club owners in the Gulf.

While limiting emissions through innovations in renewable energy and clean technology is a main driver for mitigating climate change, adaptation work focuses on water scarcity.[10] Interestingly, technology developed by this Nordic start-up addresses both these key issues. Their technology also has direct impact on 8 of the 17 UN sustainability goals. However, after being active and present in the Gulf for more than a year their product is not in the market yet. As for several other ambitious Nordic start-ups, matching supply with the local demand has turned out to be a time- and investment consuming process.

Research shows that water scarcity is a fundamental problem in the UAE – groundwater reserves are depleting at alarming rates not only by the impacts of climate change but also as result of overconsumption. These challenges are born of a mix of environmental, socio-cultural economic, and political conditions, such as high levels of per capita water and energy consumption and an increasing population.[11] By relying on desalination, locals tend to envision an idea of “water’s infinity,” regardless of its actual scarcity.[12] It has been estimated that the energy-intensive desalination processes cost the UAE about $18 million a day, but despite the challenges of fresh water production, the UAE has the highest per capita use of water.[13] Moreover, some estimates say that local water use might contribute 9 million tons of CO2 equivalent per year.[14]

Technology That Does Not Count

The events surrounding the World Future Energy Summit in Abu Dhabi were significant not only for my own understanding of local sustainability perceptions and prospects for Nordic clean tech start-ups in the Gulf, but also for a major player in the international energy business—Norwegian Statoil[15]. During the summit in 2017, Statoil signed a cooperation agreement with Masdar, the Abu Dhabi Future Energy Company, over renewable energy development in Scotland. Hywind Scotland was to be the world’s first commercial-scale floating wind farm off the coast of Aberdeen. At the summit in 2018, they announced extension of their cooperation at Hywind.

Masdar and Statoil’s strategic partnership to pursue joint offshore wind projects was a success story for both companies and a significant step for these two oil economies in terms of diversifying energy resources. However, business in the renewable energy sector was not what Statoil primarily had hoped for when entering the UAE in 2010. At that time, Norwegian offshore technology was estimated to be 60 per cent less carbon intensive than the world average, and Statoil strongly believed their technological competence was a significant factor that gave them a competitive advantage. However, in 2018 when ADNOC[16] offered six oil and gas concessions for bidding, the first time ever offering major onshore and offshore blocks in a competitive round, Statoil was not among the companies to enter into agreements that would grant business development in the Abu Dhabi oil and gas sector for the next 40 years. Of note here is that Abu Dhabi has about 6 per cent of the world’s proven oil reserves, containing multiple billions of barrels of oil and multiple trillions of cubic feet of natural gas.

If Statoil’s technology can extract more oil in a more “environmentally friendly” way, if they can deploy carbon capture and storage to prevent carbon dioxide from entering the atmosphere, and use electric instead of gas turbines, why did their proven environmental technologies not open the door to a country that has one of the highest levels per capita of CO2 emissions in the world? Speculation in the Nordic business milieu was intense. Some agreed with Statoil’s explanation about UAE’s focus on commercial aspects rather than technological areas; some believed that Statoil’s technology was too advanced for the region; and others felt that ADNOC wanted to keep the business for themselves. The majority, however, speculated that important relationships were not properly considered: the UAE is known not only as an oil economy but also as a relational economy, where relationships come before business.

First Conclusions

After 25 visits to Nordic companies in the UAE and Bahrain during 2016 and 2018 as part of my research to understand how they succeed in entering the emerging smart tech and energy market in the Gulf, I have come to realize that managing relations and negotiating understandings of sustainability and models of development towards a greener economy is a core issue.

As Gunnel[17] observes, the imagined infinity of wealth in the region risks engendering the illusion that it is possible to revive the desert and construct water infrastructure as necessary through a seemingly ever-expanding oil economy. However, oil extraction is itself a water-intensive process, and as oil resources are decreasing more water is used in oil production processes, which in turn produces waste water that needs to be cleaned. Local narratives about a transformed, sustainable desert seem to be detached from the fossil fuel optimism that made these transformations possible.

Insights into the cases of Start-up and Statoil show that technological solutions alone cannot deal with resource scarcity, be it of water or oil, as long as there are divergent perceptions of sustainability and a refusal to believe in the limitations of ecosystems.

If we are to move further on smart energy business development, it is vital that we develop a better understanding of how sociocultural and political factors influence the use of energy resources, of how perceptions of sustainability are negotiated and reinterpreted, and of how such factors shape the ways in which oil economies articulate and act upon sustainability problems. Research aimed at adapting current energy technologies into more sustainable ones requires to bridge the gap between social sciences and technology, and to show the links between contemporary cultures, technologies, and economic actions.

 

 

[1] Social anthropologist and postdoctoral researcher at the Faculty of Business, Management and Economics at the University of Latvia. Applied research project “Smart Energy in Intercultural Contexts: Nordic and Middle East Business Interactions in the Name of Sustainability” carried out in cooperation with the University of Bergen (Norway) and Nordic Innovation Hub (UAE), Project.nr. 1.1.1.2/VIAA/1/16/168 funded by the ERDF. Special thanks for critical comments to Dr.Mari Luomi.

[2] Abdel Raouf M., Luomi M.2016. Introduction. The Green Economy in the Gulf. Routledge. London, New York.

[3] Gulf Cooperation Council

[4] Ca 72 billion EUR

[5] Al Maktum, M.B.R 2017:149. Reflections on Happiness & Positivity. Explorer Publishing. Dubai.

[6] NORDIC BUSINESSES ON CLIMATE TRANSITION, COMPETITIVENESS AND GROWTH, Nordic Council of Ministers 2018.

[7] https://www.aftenposten.no/verden/i/rLRBE8/Klimapanelet-Verdens-utslipp-ma-halveres-de-neste-12-arene.

[8] Al Maktum, M.B.R 2017. Reflections on Happiness & Positivity. Explorer Publishing. Dubai.

[9] Ibid.

[10] Gunel G. 2016. The Infinity of Water: Climate Change Adaptation in the Arabian Peninsula. Public Culture 28:2. Duke University Press.

[11] Gunel 2016 (ibid.); Ahmed M., Al-Jabri A., Choudri B.S. 2016. Green challenges and some technological solutions in the water sector of the Gulf Cooperation Council countries. In Abdel Raouf M., Luomi M.2016. Introduction. The Green Economy in the Gulf. Routledge. London, New York.

[12] Gunel 2016 (ibid.).

[13] Ibid.

[14] The Abu Dhabi Water Resources Master Plan (2009), Gunel 2016.

[15] As from May 2018 Equinor.

[16] Abu Dhabi National Oil Company

[17] Gunel G. 2016. The Infinity of Water: Climate Change Adaptation in the Arabian Peninsula. Public Culture 28:2. Duke University Press.


You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.