3. Pairing Coal with Solar: The UAE’s Fragmented Electricity Policy

When it comes to clean energy, the United Arab Emirates is a paradox. On the one hand, the UAE is a champion of renewable and nuclear power, an oft-cited example of an OPEC member that has made significant progress in zero-carbon electricity generation. On the other hand, the UAE is completing one of the largest coal-fired power plants in the Middle East. If current government goals are realized, the country will generate far more power from coal, the most carbon- and pollution-intensive fuel, than it will with renewables. Three main pressures lie behind the UAE’s decision to turn away from its 50-year legacy of natural gas-dominated power generation. First is the fragmentation of electricity policy among the seven emirates. Second are the diplomatic breaches with major holders of regional natural gas supply. And third are various economic drivers, ranging from volatile gas import prices to plummeting costs of solar panels. This paper finds that while uncertainties surround the eventual scale of renewables’ contribution, the increase in coal combustion appears destined to undermine the UAE’s already minimal carbon competitiveness. In the future, high per capita emissions could attract carbon-based trade penalties and sanctions.