GSMT Section A

Country study on

United Arab Emirates

(and market opportunity for the solar power industry)

By: Shruti Jangid

1

How distant is UAE? An analysis using the

CAGE framework
CULTURAL DISTANCE
Language: English is the primary lingua franca in both
countries and widely used in the job market (L)
Religion: 77% of UAE population is Muslim and only
7% is Hindu (H)
Social networks: Some Indian colonies do exist in the
UAE, primarily those from Kerala speaking
Malayalam (M)

ADMINISTRATIVE DISTANCE
Weaker legal institutions (H)
Less expensive regulatory process (H)
Difference in currency However, conversion not
very difficult (L)
UAE is an absolute monarchy and India is the biggest
democracy (H)

CAGE for UAE - India

GEOGRAPHIC DISTANCE
Distance: The countries are placed closely and almost
the same temperature zone too (L)
Land border: The countries are separated by the
Arabian Sea (L)
Time zone: The countries are separated by a time
zone of 1 hour 30 min approx. (L)
Climate: Countries share a similar climate; Western
part of India and UAE are almost comparable (M)

ECONOMIC DISTANCE
Per capita incomes: GDP (nominal) $43,876 for UAE
v/s for India its $1,584 (H)
Quality of human resources: HDI 0.827 for UAE v/s
for India its 0.586 (H)
Natural resources: UAE has highly abundant natural
resources (M)
Overall distance

L: Low, M: Medium, H: High

Cultural

Administrative

Geographic

Economic

M-H

M-H

L-M

H-H

Indian School of Business, Hyderabad, India

Shruti Jangid (61510530)

Current energy scenario of UAE and

projections for the future

UAE is in the super-league of energy suppliers: with the worlds sixth

largest proven oil reserves and the fifth largest natural gas reserves
Largest energy operator in the UAE is Abu Dhabi National Oil Company
(ADNOC)Dubai Electricity and Water Authority (DEWA)

With increasing consumption of petroleum oil and natural gas, and

depleting reserves, moving towards alternate sources of energy is the
way ahead!

UAE has highest per capita ecological footprint in the world

In 2010, the UAE National Human Resources Development &
Employment Authority announced that the UAE population doubles
every ~8.7 yrs (world population = every 55 years)
Despite increased energy production and imported Qatari gas through
the Dolphin natural gas pipeline, UAE domestic gas demand
substantially exceeds available supply
UAE has also diversified its economy significantly in recent years so as
not to rely too heavily on its natural resources.

Encouraging diversification into renewable energy will allow UAE to keep

generating cash by exporting its oil and natural gas and also create more
employment opportunities for its nationals!
Indian School of Business, Hyderabad, India

Shruti Jangid (61510530)

UAE and its energy diversification towards

Solar power
Abu Dhabi to host first round-the-world solar flight
attemptThe first solar-powered plane attempting to
circumnavigate the globe will take off next year as part
of a new partnership between aircraft developers Solar
Impulse and UAE renewable energy firm Masdar
gulfnews.com, Sep 14

UAE to hold solar car race. The Abu Dhabi

Solar Challenge (ADSC), the first ever solar car
competition to take place in the United Arab
Emirates (UAE), will be held Jan 16-19 next year
maktoob.news.com, May 14

Before 1990 all the power utilities in GCC were government-owned and vertically integrated. However, now
U.A.E. and other GCC countries have passed the legislation allowing the construction and operation of power
plants by private sectors.
Solar power will help in prolonging the fossil fuel reserves for an extended period of time as well as reducing the
carbon foot print which is highest in UAE (nearly 60 ton per capita)

WAY AHEAD :

Fossil fuel plants are necessary for power generation in the periods of low sun radiation. Optimum solution is
employment of a hybrid system for a green future.
Economy will also grow since the major exports-oil and petroleum products, are sold to the world at more than
20 times the price it is sold to local power producers
UAE would like to conserve its oil for future exports and therefore, not use it in the country for inefficient power
generation
Indian School of Business, Hyderabad, India

Shruti Jangid (61510530)

Sunshine-rich UAE

Dubai has pledged that by 2030 its solar park will expand to 1,000 MW of clean power
Solar power companies can utilize the high affordability of the customer
It is constructing the worlds largest solar energy venture (100 MW)in Madinat Zayed
Dubai hosted the Global Energy Forum11 that showed its energy sustainability concern
Six countries are connected by GCC interconnection grid, which will supply electricity
during emergencies, reduce generation reserves for the countries, improve efficiency and
provide a basis for electrical power exchange
Government has divided the power sector into generation, transmission and distribution
segments so that private investment is easy
The idea of a Gulf carbon trading platform is under talks. If it institutes a credible cap
and trade system, the carbon caps would forge a type of Darwinian environment, forcing
the energy intensive industries to become more efficient.
The total demand for electrical power consumption in the GCC countries is expected to
triple over the next 25 years
UAE is ranked 41 (57,880 GWh) globally for its energy consumption (2013 data)
Governments are encouraging the private sector to invest in the lucrative power industry

Efforts towards renewable energy is fragmented between hydro, solar, nuclear,

clean-coal, etc. with nuclear occupying the maximum share
In Dubai, the Dubai Electricity and Water Authority plans to double the capacity of
its coal-fired power plant, which would reduce the need of alternate energy
Indian School of Business, Hyderabad, India

Shruti Jangid (61510530)

Data sources

http://blogs.wsj.com/middleeast/2014/06/17/gulf-region-an-attractive-prospect-for-global-retailers-a-t-kearney/
http://www.tecom.ae/report-reveals-uaes-retail-sector-growth-challenged-by-skillset-gap/
http://www.gtglobaltrader.com/news/uae-outlines-vision-future-energy-%E2%80%93-plus-uae-energy-focus
http://www.aljazeera.com/indepth/features/2014/01/gulf-bright-solar-powered-future201412363550740672.html
https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CBwQFjAA&url=
http%3A%2F%2Fwww.scirp.org%2Fjournal%2FPaperDownload.aspx%3FpaperID%3D33058&ei=P5YpVI7TNYi8uASi5I
KICQ&usg=AFQjCNFBVQgcHixcI2UbYJqo54vf-OxR6w
http://energy.heroesoftheuae.ae/en/article/overview.html
http://belfercenter.ksg.harvard.edu/publication/20528/addressing_the_uae_natural_gas_crisis.html

Indian School of Business, Hyderabad, India

Shruti Jangid (61510530)