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Future of Infrastructure special report 2018

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RACONTEUR.NET 19 "We are optimistic for the future. Renewable energy fundamentals have been established quite strongly – it's a viable economic choice on the table, driven by technological evolu - tion and R&D, reduced price and reg- ulatory frameworks for investors that have matured." Masdar's approach goes far beyond energy and the linking of utilities needs with generation options. The company has not only shown a strong focus on providing energy security, while offsetting carbon emissions and diesel use, but has also worked to develop Masdar City, which offers a visionary "greenprint" for sustain - able urban development. Indeed, according to Yousef Baselaibthe, executive director of Masdar Sustain- able Real Estate, the cost of operating within Masdar City is now equal to anywhere else in the region. Christian Hellmund, partner in the energy and renewables team at law firm DWF, says: "Investor confidence is key to driving the development of low-carbon infrastructure in the Mid- dle East and North Africa (MENA). This stems in part from security over assets and the promise of long-term income streams. As the cost of deploy- ing low-carbon technologies goes down and international pressure to commit to climate change agreements jumps up, the stage is set for low-car- bon infrastructure to take flight." What matters is how these devel- opments are connected and can pro- vide knowledge, experience and the potential for industrial learning. Improvements in district cooling effi- ciency, an increasingly important requirement for a warming world, are being trialled. Renewables-powered desalination is contributing to the region's overall water security with the Ghantoot project and Abu Dhabi has built a huge storage system under the Liwa Desert to ensure that water is preserved. In case of emergencies, the reserve can provide about 100 million litres of water a day to the country's residents. Dubai's new solar park is even intended to print its own 3D lab. What makes the UAE special is quite specific to the region. As Mr Hellmund points out: "Its vast, uninhabited land strips create the perfect place to build large-scale low-carbon energy gen - erating plants. Large solar plants are able to harvest more energy from the sun due to the more favourable angle of the sun rays than similar plants located further away from the Equator. "Finally, many countries in MENA are blessed with the ability to con- struct new, innovative energy trans- mission and distribution networks, rather than having to upgrade older existing ones." This doesn't mean that other regions may not be well placed to take advantage of the opportunity to bypass infrastructure develop- ment, from telecoms to power, rail, water, roads and more. One of the key questions surrounding the continu- ing development of renewables is the speed at which energy transition will take place as this will drive investor interest in new opportunities. There are strong disagreements between experts regarding dates for peak oil consumption, which range from the International Energy Agency's pro- jection of 2040 to some as soon as 2021. The speed of energy transition will be key to changes in infrastruc- ture as a whole. There are analysts who see what is now happening with energy as a structural shift in the way the econ- omy works. As Carbon Tracker's Kingsmill Bond says: "The 'busi- ness as usual models' favoured by incumbents are simply wrong." He points out that the last time we saw such a shift in energy was from biomass to hydrocarbons after 1800 and that once the "founda- tion technology" changes, so does everything else. Markets are driven by tipping points, which means they are driven by incrementa l changes; they look to where new grow th lies. With the dramatic fa ll in the cost of wind and solar over recent years, it's possible investors may soon lose interest in high-carbon infrastr ucture a ltogether. Masdar

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