10 POWERING THE MIDDLE EAST AND NORTH AFRICA …
275
underlined in 2007 when the UAE, which was almost entirely dependent on gas to fuel its power stations, became a net gas importer for
the first time. This was a result of decisions by the leadership to subsidize electricity and water produced in gas power plants (hence resulting
in wasteful over-consumption) as part of the ‘ruling bargain’ in exchange
for political acquiescence, to inject gas into mature oil fields to enhance
oil recovery and increase oil revenues, and to provide cheap gas to energyintensive industries as fuel and feedstock to encourage diversification away
from oil. 53 Consequently, a shortage of gas imperiled these three major
objectives along with the regime legitimacy that came with economic
progress.
This quest for energy security was not unique to the UAE. It is replicated in energy-poor and energy-rich MENA countries, as the country
studies in this volume show. High rates of growth in electricity demand
are largely a consequence of subsidized electricity and desalinated water.
Accounting for 5% of GDP in MENA (the highest among all regions), 54
energy subsidies are perceived to contribute to regime stability by buying
political acquiescence and distributing patronage. Even though subsidies account for as much as one-third of electricity demand (because
low prices encourage wasteful consumption), 55 reducing or removing
them is politically tricky, as social unrest in Iran and Jordan has demonstrated. Similarly, although energy efficiency is the ‘invisible fuel’ that
could reduce consumption by over 20%, implementation is challenging in
the short run due to high upfront financing costs of retrofitting buildings, lax enforcement of efficiency standards, and disincentives arising
from energy subsidies. 56 Supply-side management of energy security, of
which nuclear energy is only one possible approach, therefore appears to
be a relatively easier fix for the regime.
To address the issue of energy supply, an interagency energy task
force was created in 2007, led by the newly established Executive Affairs
Authority (EAA) of Abu Dhabi. The latter was set up by Mohamed Bin
Zayed to provide him with strategic advice. The aim of the energy task
force was to develop an all-options evaluation of increasing energy supply
and security. The recruitment of Ambassador Hamad Al Kaabi, the UAE’s
first nuclear engineer who had just completed his studies at that time, as
Associate Director at EAA and his role in the team was another milestone
for nuclear energy. The committee was technology-agnostic about how
to meet the shortfall in demand for electricity, but Al Kaabi’s presence on
the committee ensured that there was an advocate for nuclear energy.
275
underlined in 2007 when the UAE, which was almost entirely dependent on gas to fuel its power stations, became a net gas importer for
the first time. This was a result of decisions by the leadership to subsidize electricity and water produced in gas power plants (hence resulting
in wasteful over-consumption) as part of the ‘ruling bargain’ in exchange
for political acquiescence, to inject gas into mature oil fields to enhance
oil recovery and increase oil revenues, and to provide cheap gas to energyintensive industries as fuel and feedstock to encourage diversification away
from oil. 53 Consequently, a shortage of gas imperiled these three major
objectives along with the regime legitimacy that came with economic
progress.
This quest for energy security was not unique to the UAE. It is replicated in energy-poor and energy-rich MENA countries, as the country
studies in this volume show. High rates of growth in electricity demand
are largely a consequence of subsidized electricity and desalinated water.
Accounting for 5% of GDP in MENA (the highest among all regions), 54
energy subsidies are perceived to contribute to regime stability by buying
political acquiescence and distributing patronage. Even though subsidies account for as much as one-third of electricity demand (because
low prices encourage wasteful consumption), 55 reducing or removing
them is politically tricky, as social unrest in Iran and Jordan has demonstrated. Similarly, although energy efficiency is the ‘invisible fuel’ that
could reduce consumption by over 20%, implementation is challenging in
the short run due to high upfront financing costs of retrofitting buildings, lax enforcement of efficiency standards, and disincentives arising
from energy subsidies. 56 Supply-side management of energy security, of
which nuclear energy is only one possible approach, therefore appears to
be a relatively easier fix for the regime.
To address the issue of energy supply, an interagency energy task
force was created in 2007, led by the newly established Executive Affairs
Authority (EAA) of Abu Dhabi. The latter was set up by Mohamed Bin
Zayed to provide him with strategic advice. The aim of the energy task
force was to develop an all-options evaluation of increasing energy supply
and security. The recruitment of Ambassador Hamad Al Kaabi, the UAE’s
first nuclear engineer who had just completed his studies at that time, as
Associate Director at EAA and his role in the team was another milestone
for nuclear energy. The committee was technology-agnostic about how
to meet the shortfall in demand for electricity, but Al Kaabi’s presence on
the committee ensured that there was an advocate for nuclear energy.