Economic & Environmental Benefits of Improving UAE Building Stock Energy Efficiency

About the Project

Increasing energy productivity holds some of the greatest possibilities for enhancing the welfare countries get out of their energy systems. It also recasts energy efficiency in terms of boosting competitiveness and wealth, more powerfully conveying its profound benefits to society. KAPSARC and UNESCWA have initiated this project to explore the energy productivity potential of the Arab region, starting with the six GCC countries and later extending to other countries. Aimed at policymakers, this project highlights the social gains from energy productivity investments, where countries are currently at, and pathways to achieving improved performance in this area.

Key Points

In the United Arab Emirates (UAE), buildings consume almost 90 percent of the total electricity used in the country, mostly in Dubai and Abu Dhabi. We undertook a study to explore available opportunities to improve the energy efficiency of the UAE building sector. This paper assesses the best combinations of energy efficiency measures that can be adopted at a minimal cost. In our simulation, we evaluated a series of energy efficiency options for both existing and new buildings. Our optimization analysis is based on the sequential search technique, applied to a wide range of applications, including combinations of energy efficient measures (EEMs) and retrofitting existing buildings. Our findings are:

Any level of energy efficiency retrofit to existing UAE building stock would achieve significant savings. It is estimated that deep retrofits have the potential to reduce the energy consumption of existing buildings by up to 50 percent.

It is estimated that a basic energy retrofit program applied to existing UAE building stock could achieve savings of 7,550 GWh/year in electricity consumption, 1,400 MW in peak electricity demand and reduce carbon emissions by 4.5 million tons/year. The scheme would have an average payback period of less than six months for the UAE government.

Our optimization analyses reveal that deployment of a large-scale energy retrofit program for the UAE building stock would be cost-effective for the government. A deep retrofit of the entire building stock would have a payback period of just 2.3 years, yielding significant benefits: saving about 47,200 GWh/ year in electricity consumption together with 8,802 MW in peak power demand and reducing 28.5 million tons/year of carbon emissions.

Realizing this value, Dubai has already created a super ESCO (Etihad Energy Services) to finance and jump-start retrofit projects of existing buildings using the performance contracting concept, a means of financing energy efficiency investments that is based on future savings. In March 2017, the Abu Dhabi Water and Electricity Authority and the UAE Ministry of Economy launched an ESCO in Abu Dhabi. This scheme could be extended to the other emirates.