VZCZCXRO4781
PP RUEHDE RUEHDIR
DE RUEHAD #0945/01 2331308
ZNR UUUUU ZZH
P 201308Z AUG 08
FM AMEMBASSY ABU DHABI
TO RUEHC/SECSTATE WASHDC PRIORITY 1358
INFO RUEHDE/AMCONSUL DUBAI 7909
RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE

UNCLAS SECTION 01 OF 03 ABU DHABI 000945 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ARP BMASILKO, NEA/PI, NEA/PPD 
ALSO FOR OES, EEB 
 
E.O. 12958: N/A 
TAGS: ECON EINV ETRD EIND SENV PGOV AE US
SUBJECT: ABU DHABI MEGA PROJECTS: MASDAR ZERO-CARBON RENEWABLE 
ENERGY CITY 
 
REF: REF: A) Abu Dhabi 920, B) Abu Dhabi 943 
C) Dubai 271, D) Dubai 272, 
 
ABU DHABI 00000945  001.2 OF 003 
 
 
¶1. (SBU) Summary. The Abu Dhabi Government, guided by Crown Prince 
Mohammed bin Zayed (MbZ), is pursuing the renewable energy and 
sustainable development initiative "Masdar" to maintain Abu Dhabi's 
role as a global energy player in the long term. The Masdar 
initiative includes the Masdar Institute of Science and Technology 
(MIST), an Innovation and Investment branch, and the "clean tech 
cluster" in the Special Free Zone of the anticipated US $22 billion 
"zero-carbon" Masdar City. End summary. 
 
ENERGY SHORTAGE IN THE GULF? 
---------------------------- 
 
¶2. (SBU) Despite the UAE having the world's fifth largest gas and 
oil reserves, electricity shortages are a serious and growing 
problem, reminding the UAE that it cannot build a future on oil 
alone. According to press reports, every GCC country other than 
Qatar is facing shortages of natural gas (in fact, most of the UAE's 
electricity is generated from Qatar's gas reserves).  While Abu 
Dhabi's electricity supply currently exceeds demand, official 
forecasts project that the equation will reverse by 2011. Due to 
limited feedstock and distribution infrastructure, the smaller 
emirates, such as Ras Al Khaimah, already face acute water and 
energy shortages(refs A and B). Gas shortages recently forced one 
company to cancel a USD $5 billion aluminum smelter in Abu Dhabi. 
Masdar officials confided to POLOFF and ECONOFF that even now Abu 
Dhabi sells 600-800 MW of electricity to Dubai to meet demand there. 
Abu Dhabi is looking for energy stability over the long term, 
pursuing peaceful nuclear power (ref C) and to a lesser extent 
alternative energy research. 
 
MASDAR: (PART OF) THE SOLUTION 
------------------------------ 
 
¶3. (SBU) Mubadala, Abu Dhabi's creative development arm, is 
executing the Masdar project -- a long term strategic development 
program aiming to: (1) maintain and expand the emirate's role in 
global energy, (2) turn Abu Dhabi from a technology consumer to a 
technology producer, (3) develop local human capital in scientists 
and businessmen, and (4) diversify the local economy. In a meeting 
with POLOFF and ECONOFF, Masdar officials explained that the name 
Masdar, meaning "source," was personally chosen by MbZ and that the 
ambitious initiative benefits from his personal interest. 
 
"A DISNEYLAND FOR ENGINEERS" 
---------------------------- 
 
¶4. (SBU) Masdar's hub will be Masdar City (MC), a USD $22 billion, 6 
square kilometer, walled area exemplifying the sustainable city of 
the future. Construction has already started near the Abu Dhabi 
International Airport, with the last phase not expected to finish 
before 2015. In a meeting with POLOFF and ECONOFF, MC officials 
described the city's planned energy sources: 50% photovoltaics 
(solar panels), 26% concentrating solar thermal power (many mirrors 
focusing light on a single point to generate heat), 7% waste 
composting & biodigestion, 1% wind, and the remainder potentially 
ground-sourced heat pumps (geothermal cooling to reduce air 
conditioner use) and other sources. No cars will be permitted in MC; 
rather, electric pods will follow magnetic strips to take passengers 
around the compound (and parking lots are envisioned on the 
outskirts). A light rail system will connect MC to downtown Abu 
Dhabi and the international airport. Outside the city's walls Masdar 
will build solar fields, a solar-powered desalination plant, a 
wastewater treatment plant, and recreational areas. (Comment: While 
Masdar's website also notes plans for biofuel plantations, a wind 
farm, and a recycling center, the overall plan is very much a work 
in progress. End comment.) The much-publicized aim is for MC to 
produce no net carbon emissions, no waste, and to reduce desalinated 
water consumption by 80%. More broadly, MC aims to be an 
eco-friendly example for the world. 
 
¶5. (SBU) In addition to eliminating waste and carbon emissions, MC's 
second role is to serve as a "clean tech cluster."  MC will house 
50,000-100,000 residents, the MIST Institute (see paragraph six), 
commercial areas, and the Special Free Zone (SFZ). MC is hoping to 
attract up to 1500 companies to the SFZ with a variety of 
incentives: no taxes, full foreign ownership permitted, and 
intellectual property protection. Officials describe it as Abu 
Dhabi's first free zone, similar to Jebel Ali in Dubai. Within the 
SFZ, the Emirate promises transparent laws and "accelerated 
regulatory approval," as environmental technologies are difficult to 
register in many countries. Abu Dhabi authorities also advertise the 
mix of research and industry inside Masdar City, a cheap 
manufacturing base, and quick access to the high demand MENA region 
as well as South Asia and Africa. Employees of MC "clean tech" 
 
ABU DHABI 00000945  002.2 OF 003 
 
 
companies will be given first choice of MC residences. Other 
potential residents will need to apply and will be screened. MC will 
also contain several hotels, primarily geared toward business 
travelers. 
 
STRONG EDUCATIONAL ELEMENT ENVISIONED 
------------------------------------- 
 
¶6. (U) The primary foci of Masdar are sustainable energy, carbon 
management, and water conservation. In order to gain technical 
expertise, Masdar has established a research network of leading 
universities and research institutes in North America, Europe, and 
Asia. In addition, Masdar is partnering with the Massachusetts 
Institute of Technology to open the graduate-level Masdar Institute 
of Science and Technology (MIST) in fall 2009. The plan, reportedly, 
is for MIST to have the same admissions standards as MIT. All 
admitted students (including Emirati nationals and non-citizens) 
will be provided free tuition, housing, and a stipend. MIST faculty 
will spend their first year in Massachusetts auditing the classes 
they will teach at MIST and working in a related research group, in 
order to encourage collaboration between the two universities. The 
five MIST degree programs will not be separated into departments, in 
order to promote interdisciplinary collaboration. 
 
¶7. (SBU) Officials explained that the uniqueness of MIST lies in its 
focus: MIST will be the first university in the world to offer 
degrees in multiple traditional disciplines (e.g., mechanical and 
electrical engineering) exclusively focused on sustainability. In 
line with Abu Dhabi's goal of developing local human capital, 
between 20-30% of MIST students will be Emirati.  (Comment: It is 
questionable whether rigorous "MIT standards" would normally be met 
by so many students from one small country's limited population 
base; standards may need to be adjusted to achieve the goal of 
Emirati participation.  End comment). 
 
BEING PART OF THE MASDAR BRAND 
------------------------------ 
 
¶8. (SBU) MC officials say the project is progressing well. MC is 
reportedly "inundated" with companies wanting to be part of the 
Masdar "brand," as ninety-two percent of the Abu Dhabi references in 
the world media right now reportedly mention Masdar.  MC officials 
explain that in the long term Abu Dhabi will gain "knowledge 
capital" to be replicated and deployed around the world. The 
potential for intellectual property rights alone would, by some 
accounts, be a long term profitable investment. 
 
¶9. (U) According to the UAE press, the "master planners" of MC 
already announced in May 2008 plans to build a similar city in 
Jordan -- to house 700,000 to one million people and designed more 
as practical middle-class housing than as a "big statement." While 
the Jordanian city will not be free of carbon emissions, it will use 
many of the same technologies as MC to decrease energy and water 
usage.  Masdar itself will not be involved, although it is the brain 
trust from which the concept was generated.  (When asked about the 
Jordan project, MC officials described any links to Masdar as 
"journalist distortion." Officials explained that UK-based WSP, the 
consultant which designed Masdar's utilities, is or was among the 
consultants in the Jordan project. The connection ends there. 
Officials described this instance as one of many examples of 
companies wanting to claim some part of the Masdar name, evidence of 
the success of the "branding" of Masdar. 
 
MAKING SUSTAINABILITY (ECONOMICALLY) SUSTAINABLE: 
THE CROWN PRINCE'S PROJECT 
--------------------------------------------- --- 
 
¶10. (SBU) Officials stress that MC is not an isolated experiment, 
but the initial concept that will seek solutions applicable to all 
of Abu Dhabi and the world. Atypical in UAE development strategies, 
MC is mandated to decrease demand for utilities. Officials stated 
that MC must prove to be both environmentally and economically 
profitable: if not, no one will repeat the experiment. Another goal 
of Masdar is to "quantify the cost of green" for future projects. 
When asked if any effects of Masdar were yet visible in other Abu 
Dhabi projects, officials focused on the long term effect: "This is 
the Crown Prince's Project. He's not going to let Masdar be a city 
of green in an island of brown." 
 
NOT THE ONLY BELIEVER 
--------------------- 
 
¶11. (U) Masdar is not alone in its belief in financial success for 
renewable energy in the Gulf. The Dubai-based Gulf Research Centre 
recently published a study concluding that: "Rising domestic energy 
needs for power generation and desalination, favorable conditions 
for solar energy production and interest in acquiring technological 
 
ABU DHABI 00000945  003.2 OF 003 
 
 
know-how make a perfect argument for renewable energy in the Gulf." 
The report suggested that renewables could develop into a "major 
pillar" of GCC economies, stretching the lifeline of oil and gas and 
gradually substituting for them as a primary export. The report 
suggested that solar energy in particular (both CSP and thin film 
PV) have great promise. The emirates of Ras Al Khaimah and Dubai 
have also announced feasibility studies and pilot projects for solar 
power. 
 
¶12. (SBU) Comment: With the full financial and political support of 
Abu Dhabi's Crown Prince and the expertise of top international 
consulting & technology firms, Masdar seems well on its way to 
realizing a new level of environmental sustainability. Economic 
sustainability (i.e., profitability) seems less certain. Clearly a 
$22 billion project of this nature is a long term investment, some 
of the benefits of which -- such as development of local capital -- 
are hard to quantify. It is both interesting and noteworthy that in 
the face of rising electricity demand, sparked in large measure by 
an oil-revenue inspired building boom, Abu Dhabi is diversifying in 
the energy sector -- developing both renewable and nuclear energy 
programs. Masdar clearly aims to put Abu Dhabi on the map in the 
field of non-traditional energy.  Given 10 years (at the outside) to 
achieve its goal, the Emirate may well discover how viable that 
sustainability is.  End comment. 
QUINN