Coal can be an alternative energy source to oil for the UAE

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Coal can be an alternative energy source to oil
for the UAE

• Madhu KoneruExecutive Vice Chairman
• MEC Coal

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Coal can be an alternative energy source to oil
for the UAE
The UAE's construction boom is creating massive
demand for energy and coal could help meet this
need, says Madhu Koneru, Managing Director of Ras
Al Khaimah Minerals Metals Investments (RMMI).
RMMI was established in 2005 as a joint venture
between the Ras Al Khaimah Investment Authority
(Rakia) and India's Trimex Group. RMMI's mandate
is to extend Ras Al Khaimah's long-term
investment strategy in the minerals and metals
sector. In this interview with Emirates Business
Koneru assesses the energy and renewables
situation in the UAE. What do you think the
outlook is for the energy sector
worldwide? Global energy needs are projected to
grow by 55 per cent between 2005 and 2030 at an
average annual rate of 1.8 per cent, with almost
half of the growth due to soaring demand in China
and India. Fossil fuels will account for 84 per
cent of the overall
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Coal can be an alternative energy source to oil
for the UAE
increase in demand between 2005 and 2030 and
electricity use will nearly double, with most new
plants burning coal. Coal is being touted as an
alternative energy source to oil. The UAE
imported nearly 500,000 tonnes of coal in 2007,
most of which was destined for energy supply. In
the private sector manufacturers and metal
processing plants are heavily dependent on the
availability of electricity and closing this
energy gap is a key issue for them. Ageing
less-productive oilfields and resistance among
major oil exporters to build spare capacity will
make crude oil and natural gas more expensive.
There is a need for developing countries to turn
increasingly to coal as fuel. What does the
future hold for the sector in the
UAE? Production of oil and natural gas has
increased at a tremendous rate. Although
consumption has not yet reached the same level as
production it continues to increase steadily. If
energy production continues at
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Coal can be an alternative energy source to oil
for the UAE
the same rate oil and natural gas resources will
become depleted and alternative fuels such as
coal will need to be considered to sustain the
UAE. How successful are the renewable energy
initiatives being undertaken by some of the
emirates? The UAE has been taking some
groundbreaking steps in terms of looking for
alternative energy solutions and reducing carbon
emissions in Abu Dhabi and Dubai. It is well
known that Dubai is developing an environmental
master plan that will ensure that growth and
progress are achieved while protecting the
environment. Demand-side management of
electricity will play a role, as will public
transport services such as the Dubai Metro which
will reduce the number of cars on the roads. So
far it would appear that the initiatives in Dubai
have been reasonably successful with increased
awareness of the benefits of reducing carbon
emissions as well as recycling waste. Abu Dhabi is
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Coal can be an alternative energy source to oil
for the UAE
currently pursuing groundbreaking renewable
energy programmes that underscore a commitment to
the global environment while also developing a
new industry to help diversify the UAE's economy.
The Masdar Initiative is focusing on the
development and commercialisation of technologies
related to renewable energy, energy efficiency,
carbon management and monetisation, water usage
and desalination. What is the situation in
RAK? In terms of renewal energy initiatives Ras
Al Khaimah is working on cutting-edge solar
technology to harness the sun's rays. We're also
aware of work on a prototype of a floating solar
island currently being developed at the
headquarters of the Swiss centre of electronic
and micro technology in the emirate. Funded by
the government of RAK, the 5 million (Dh18.35m)
project equipped with thermal solar panels will
be tested in the desert before being launched at
sea.
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Coal can be an alternative energy source to oil
for the UAE
The project consists of a thermal energy
reservoir and will provide an energy supply 24
hours a day, irrespective of time of day or
night. The solar energy will be used for water
taxis, parking meters, street lights and bus
shelters. Also the RAK Government is investing
heavily in coal as a viable alternative energy
source through RMMI, enabling it to bridge
current energy gaps. The strategy is to gain a
foothold directly at the source of the
commodities in resource-rich regions, directly
hedging against future infrastructure
costs. Where does your company operate
overseas? Although a young company, RMMI has
emerged as a highly successful investment arm of
Rakia and is now a fully fledged Middle East
mining company, managing 23 licences in
Indonesia, Congo and Armenia and recently in
Australia. RMMI will invest 1 billion during
2008 towards building an asset base exceeding
4bn. RMMI's strategic focus is on the investment
in, and development and operation
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Coal can be an alternative energy source to oil
for the UAE
of, mining businesses to rapidly generate growth
across minerals and metals investments. With an
emphasis on the long-term, RMMI adheres to an
investment matrix of metals, minerals and energy,
targeting mid-size companies and independent mine
owners who represent one of the fastest-growing
segments in the industry.