UAE energy minister Suhail al-Mazrouei today warned of a widening gap between electricity supply and surging demand, fuelled by data centres and digital infrastructure, and lagging investment in upstream energy projects.
Speaking at the World Utilities Congress in Abu Dhabi today, al-Mazrouei said that demand for electricity is "growing, and growing very strongly, with more power required for data centres. It's overwhelming. I can tell you, even for a country like us."
The energy minister is calling for urgent upgrades to aging power systems and governments showing greater openness to efficiency innovations to avoid a future supply crunch. He said that working on efficiency is not one factor, it's a multi-facet. "You need to look from the generation to the transmission to the distribution, and if you are not investing in transmission, you are losing 20-30pc [supply] in the grid."
"What worries me is the fact that we need to change the existing old system to improve efficiency. There are not enough plans or investments to replace the older grid and to integrate everything together," he said.
Al-Mazrouei added that it is important for regulators, for example governments, to adapt to the changing world in the utility sector primarily through more flexible legislation.
Al-Mazrouei said the UAE is transforming itself from an "energy hub into a smart energy solutions cluster serving both its neighbours and the world," thanks in large part to newly unveiled plans for a 5GW UAE-US artificial intelligence (AI) campus in Abu Dhabi, announced during US president Donald Trump's visit to the region this month. The campus will rely on nuclear, solar and gas power and is aimed at providing a regional platform from which US firms will be able to offer services to nearly half the global population living within 3,200km of the UAE, according to the US Department of Commerce.
Al-Mazrouei said that this AI hub will enable better energy efficiency and energy management, allowing the UAE to serve other countries. "We can manage cities from Abu Dhabi and reduce the energy consumption."
Al-Mazrouei said that such a project is raising hopes "that converting renewable energy to a baseload is doable and... at a price that is much more attractive, I would say, than LNG." "I'm hopeful about converting solar to base load and for more renewable energy," he added.
Historically, baseload power comes from reliable energy sources like coal and fossil fuels and transforming renewable energy to baseload with the help of exponentially advancing battery technology will have an enormous impact on the energy transition.
But al-Mazrouei said while the UAE's focus is on future energy demand, there remains an urgent need for a balanced approach.
"But at the same time, we need a baseload otherwise we cannot afford to have incidents like the one in Europe, where two countries were cut from electricity," he said.
Citing the recent power disruption in Spain and Portugal as a warning, he stressed the risk of energy shocks if base load capacity is not maintained during the transition. "Without adequate investment in both drilling and clean energy," he warned, "electricity prices could soar and consumers will bear the cost."
A sudden loss of power in southern Spain caused a blackout across Spain, Portugal and part of France on 28 April, and authorities in the three countries are working to find the cause of the incident.
