Global Energy Hotspots

Written by James Brown on . Posted in FDI

These are exciting times for the global energy sector. Until very recently, coal, oil and natural gas looked like they might be slowly heading into the history books, but with the resurgence of the political right, combined with OPEC’s recent restriction on production, investment in the old guard is likely to significantly pick up.

While renewable energy’s seemingly inexorable march to world domination may have temporarily faltered, it remains synonymous with innovation and entrepreneurialism, and with fossil fuels being, by definition, finite, combined with their mostly undoubted associations with global warming, it likely won’t stay down for long.

Renewable energy projects have in recent years been given a sufficiently helping hand through benevolent regulation, tax breaks and subsidies, that their place in the energy mix is now firmly established and assured. Moreover, the likes of hydro, wind, solar, biomass, wave and tidal energy have won the hearts and minds of a critical mass of voters across the globe, to the extent that any government attempting to turn back the clock too far, risks pressing the self-destruct button.

So, for now at least, the global energy sector is in a state of dichotomy, as business, government and academia wrestle with how best to address the sometimes conflicting needs of people, planet and profits. In the meantime, investors are spoilt for choice, as energy opportunities, both traditional and pioneering, once again present themselves in number. Here, we cast the spotlight on to three of the most noteworthy narratives right now from across the energy spectrum.

Firstly, Scotland is successfully treading a delicate balancing act between oil and gas and renewables, leveraging its past, whilst at the same time embracing innovation to be the complete energy destination. Athabasca in Canada, meanwhile, is firmly old school, but it is indisputable that the oil sands industry there has brought prosperity in spades to the Alberta region, and acted as a driver of growth across the board. Finally, Masdar in Abu Dhabi is all about clean energy, and aims to lead the way in innovation, such that it is unsurprising it plays host to Abu Dhabi Sustainability Week, the world’s leading annual event on renewable energy and sustainable development. In short, there’s much for investors to get excited about, despite continued challenging market conditions.

Scotland
Scotland, with its North Sea oil and gas reserves, has for some decades now enjoyed a position at the forefront of Europe’s oil and gas sector. Yet because the North Sea is a mature province, albeit one still offering plenty of opportunity despite challenging market conditions, it has had the good sense to plan for a post-fossil fuels future in good time through a strategy of diversification. This has ensured it has fast become Europe’s undisputed hub for all things renewable too, whereby it has leveraged its existing energy pedigree to attract clean energy investment. Moreover, the Scottish approach is an exemplar of how to do it right, since it speaks to an accountably rewarding collaboration between the public and private sectors and academia to commercialise new technologies and create new employment opportunities.

One initiative evidencing this is Energetica, a dedicated coastal corridor in Aberdeenshire, focussed on energy technology development and energy efficiency. It aims to consolidate the region’s status as the energy capital of Europe, by attracting high value oil and gas and renewable energy organisations. In addition, Scotland’s International Technology and Renewable Energy Zone, centred in Glasgow, is uniting to great effect business and academia to accelerate co-location, innovation, and investment in Scotland’s offshore renewable energy sector, while Energy Park Fife on Scotland’s east coast is another world-leading engineering and research zone. On top of this, the Renewable Energy Investment Fund (REIF) provides financial assistance for projects in the marine energy, community-owned renewables, and renewable district heating arenas.

All told then, Scotland’s rich pedigree in conventional energy, heavy industry and manufacturing is assisting in the development of an enhanced diverse supply chain to support investors across oil and gas and renewables, such as wind, hydro, marine and bioenergy. Moreover, there is much evidence to support Scotland’s energy sector constituting a world leader in innovation and R&D with accountable commercial applications. Its status in this regard is thanks in part to the public and private sectors working in harmony in pursuit of these stated goals. Scottish Enterprise-led energy initiatives, for example, have tangibly benefitted inward investors, as well as Scottish-based exporters looking to improve access to new global markets. A prime example of this is Scottish Enterprise’s partnership with Statoil, one of the world’s key oil and gas players, to develop a pioneering floating wind farm project. This will both act to boost R&D investment in Scotland, and at the same time assist Scottish firms to develop the technology their customers demand.

Athabasca, Alberta, Canada
The Athabasca oil sand deposits in northeastern Alberta, Canada, lying under a landscape of boreal forest and peat bogs, are an unashamedly old school energy resource, and constitute the largest known reservoir of crude bitumen in the world. While some 20 percent of the accessible reserves can be extracted using open pit mining methods, the remainder is located deeper beneath the surface, and involves in situ extraction. There is no doubt that it is a divisive industry, with environmentalists arguing on the one side that it devastates huge swathes of the landscape and leaves a lasting toxic legacy, while on the other, industry predictably argues that damage to the environment can be minimised to an acceptable degree, with the economic benefits significantly outweighing the merits of any objections. Moreover, it argues that the introduction of Carbon Capture and Storage technologies are successfully working to reduce CO2 emissions, through such projects as the

Alberta Carbon Trunk Line and the Quest Project
Equally, strict limits on water usage mean that most water is recycled, while where this isn’t possible, every effort is made to use saline water. Meanwhile, on the land management and reclamation front, stringent criteria are in place before operators can be released from their responsibilities and lands considered returned to a state of self-sustaining ecosystem. From an overall perspective, the Oil Sands Sustainable Development Secretariat constantly monitors the situation to ensure that the needs of all stakeholders are met, and that the social, infrastructure, environmental and economic impacts of oil sands development are satisfactorily balanced.

Key customers for the industry include both the US and China, and for Canada, Athabasca acts as a hugely important revenue generator, driving social programmes and capital infrastructure projects, while at the same time creating jobs in the six figures. To put it into perspective, over the last twenty years Alberta’s oil sands industry has attracted some $200 billion of investment, with investors attracted by the third largest proven oil reserves in the world, after Venezuela and Saudi Arabia.

Abu Dhabi Masdar is mandated by the Abu Dhabi Government, which ultimately owns it, to strengthen the role of clean energy in the global energy mix. In this, it is guided by the Abu Dhabi Economic Vision 2030, which looks to drive new sources of income for the emirate, with the result that Masdar’s activities are focused on pioneering and commercially viable systems and technologies that allow for clean energy deployment and truly sustainable real estate. Masdar Institute, meanwhile, is a research-driven independent graduate university supporting these ambitions, which can point to pertinent project areas around biomass-derived fuels, smart-grid applications, saltwater desalination and energy efficiency technologies, designed to catalyse innovation and bring breakthrough technologies to market.

It is hard to overestimate the importance and global impact of Masdar, the Middle East’s largest exporter of renewable energy. In the last decade it has invested some US$2.7 billion in projects worldwide, encompassing not simply the Middle East, but countries in Africa; such as Mauritania, Egypt and Morocco; Europe, such as the UK and Spain; as well as island nations in the Pacific and Indian Oceans. These last, stand to benefit perhaps most from Masdar’s endeavours, since they currently spend a small fortune on importing diesel fuels, and are also highly exposed to oil price volatility.

Masdar City constitutes the physical manifestation of a vision to develop the world’s most sustainable eco-city, and at the same time provide a “greenprint” for other cities around the world in meeting the challenge of reconciling rapid urbanisation with a reduction in energy and water use, as well as waste. As part of its championing of partnership, collaboration and joint ventures, it affords investors, developers and businesses that subscribe to the Masdar vision, access to a world of knowledge, talent and opportunity in the city. The allure is enhanced further when one factors in the City’s free zone status meaning 100% foreign ownership is permitted, while no corporate and personal income taxes or import tariffs are applied.

Moreover, foreign investors benefit from freedom of repatriation of both capital and profits, and an internationally strategic location, boasting excellent transport infrastructure and international links Abu Dhabi Sustainability Week Each year in January, for the last decade, Masdar has hosted the Abu Dhabi Sustainability Week, the globe’s leading event dedicated to advancing the use of renewable energy, energy efficiency and clean technology.

It is split into three principal gatherings, which run in parallel, encompassing the World Future Energy Summit (WFES), the EcoWASTE Exhibition, and the International Water Summit (IWS). Of these, WFES constitutes the flagship, and acts as a global meeting place for the crème de la crème of the world’s energy industry, as well as government officials from across the globe, affording unrivalled networking and new business opportunities.

IWS, meanwhile, amounts to an unparalleled global platform for promoting water sustainability in arid regions. Far more than a talking shop, the summit draws world leaders, field experts, academics and business innovators together to accountably, responsibly and transparently develop new sustainable strategies and technologies.

Last but by no means least, EcoWASTE Exhibition acts to progress the cause of sustainable waste management and recycling across the Middle East, North Africa and farther afield, by focussing on proposed infrastructure projects, government strategies and market-leading innovations. Deal-making is very much the goal here, since the guiding sentiment is that waste constitutes a valuable economic resource. With this in mind, EcoWASTE Exhibition unites leading local and international experts and providers with key buyers and corporate decision-makers.

Informed by this annual concentration of energy knowledge, breakthrough innovations and disruptive technologies in Abu Dhabi, the Zayed Future Energy Prize recognises outstanding sustainable solutions across a range of corporate, NGO and academic sectors, and is awarded each year at the World Future Energy Summit.

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