Abu Dhabi, the largest of seven sheikhdoms in the United Arab Emirates, is swimming in oil revenue - and it's investing some of that money in solar power. That's more than can be said for Exxon Mobil Corp., which rebuffed a Rockefeller initiative at yesterday's annual meeting to nudge the company toward renewable energy. A shareholder resolution sponsored by the company's founding family was easily defeated.
Exxon's stance is an assertion that today's primacy of oil will continue for years to come, and that what the oil giant does best is look for oil and gas, not manufacture solar panels. But Abu Dhabi is doing the sort of forward planning that the Rockefellers wish Exxon would consider for tomorrow. Today Masdar, part of the industrial development arm of the Abu Dhabi government, unveiled plans to invest $2 billion in thin-film photovoltaic solar technology. True, this amounts to about a month of Exxon Mobil's projected capital spending this year. But in the solar world, it's substantial and noteworthy and probably just the sort of thing the Rockefellers would like Exxon to do.
Steven Geiger, director special projects at Masdar, talked with me by phone today. He said that Masdar aims to produce 1 gigawatt of panels by 2013 by adding plants, most likely in the southwest United States and Asia.
The first phase of investment will help bring solar power to Abu Dhabi and other Mideast oil producing countries, many of which still use oil to generate electricity, a practice that is wasteful and costly. In addition, Geiger said, there is a “staggering the growth of power demand” in the UAE.
But the solar plants Masdar envisions will have the capacity to produce way more than those Mideast markets will buy. Masdar is looking to become a player in the global solar market. Until now, Geiger said, Abu Dhabi had made three modest investments in solar thin film companies. By contrast, he said, “this is 100 percent built and owned by Abu Dhabi.”
Though the investment is big, it will still leave Masdar well behind the industry leader in thin films, U.S.-based First Solar, which is also the low-cost producer right now. The way thin film works, Geiger explains, is that you spread two layers of amorphous silicon on large glass substrates, or panels. It isn’t as efficient as some solar panel technologies, but it’s cheaper and good to use in places with plenty of space, like the desert. It’s also good to use in hot places where the temperature on the surface of the panels can reach 75 or 80 degrees centrigrade. And the more of it a company can make, the more it drives down costs.
Masdar quotes Deutsche Bank as saying that the current global PV market is worth US$15 billion and growing at 40 percent a year clip.
“It’s a scale game,” Geiger said today. “I think you’ve seen the entry of large tool suppliers into this business, the same people drove down costs in semiconductors and flat panels.” At this point, he said, solar has “moved out of the garage, away from people trying to build better mousetraps to people with tool sets who are cranking out bigger volumes.”
So Abu Dhabi isn’t waiting, he said. While the oil is still flowing and with cash coffers brimming, it is diversifying into renewable technologies. It’s the sort of thing the current generation of Rockefellers would appreciate.