United Arab Emirates is the first country in the Middle East to adopt the Net Zero by 2050 Strategic Initiative. UAE government is encouraging the creation of the green industries, skills, and careers. So, you can start renewable energy company in Dubai to tap into the potential in 2024.
The UAE is the fastest-growing renewable market in the MENA region. Accordingly, traditional business sectors like construction, transportation, and industries are embracing the renewable energy solutions. UAE’s Energy Strategy 2050 outlines a combination of renewable, nuclear, and clean energy sources.
This initiative includes 44% clean energy, 38% gas, 12% clean goal, and 6% nuclear energy mix. UAE’s government plans to generate most of its electricity from renewable energy sources by 2050. Thus, it is set to open significant new corporate business prospects in the solar, waste-to-energy, wind, and water treatment sectors.
If you’re someone seeking to open your renewable energy company in Dubai, this article is the best guide for you. From the registration procedure to solutions of establishment challenges, we cover everything for you. So, sit back, and read this informative and actionable article on renewable energy business formation.
Regulatory bodies overseeing UAE renewable energy sector
Energy sector companies in the UAE require specific license(s), permits, and approvals. Applicable requirements for renewable energy businesses differ according to the chosen Emirate, business activity, and jurisdiction (mainland or free zone). These energy regulatory bodies oversee the renewable sector in the UAE.
- Ministry of Energy and Infrastructure (MOEI) formulates and implements the overall energy policies in the UAE.
- Dubai Electricity and Water Authority (DEWA) generates and distributes electricity and water in Dubai.
- Abu Dhabi’s Department of Energy (DoE) the energy sector in the Emirate of Abu Dhabi.
- Regulatory and Supervisory Bureau (RSB) for Electricity and Water regulates the
- electricity and water sector in Dubai. RSB supervises the licensing, tariffs, and regulatory compliance in Dubai to ensure fair competition and consumer protection.
- International Renewable Energy Agency (IRENA) with headquarters in Abu Dhabi, is global platform for cooperation and collaboration on renewable power. Member countries like UAE get technical assistance, capacity building, and policy advice from IRENA.
Process to start renewable energy business in UAE
This is the step-by-step procedure to become a renewable energy service provider in Dubai.
- Identify your business activity like solar energy generation, wind energy consulting, or equipment manufacturing.
- Choose a suitable legal structure like an LLC, sole proprietorship, or partnership.
- Acquire approval for your trade name, which must comply with UAE’s company naming conventions and regulations.
- Get initial approval from Ministry of Energy and Infrastructure (MOEI).
- Seek regulatory approval from Dubai Electricity and Water Authority (DEWA) or the Abu Dhabi Department of Energy (DoE).
- Get the NOC from the Regulatory and Supervisory Bureau (RSB) in Dubai.
- Prepare and submit necessary legal documents to the relevant authorities.
- Once all requirements are met, obtain a business license from the governmental authority.
This is essential to know that any missing documentation can delay the process. Also, it can potentially jeopardize the funding sources and licensing procedure. Trusting a representative can ensure the approval of right license and certificates, facilitating a smooth transition for your company.
Benefits of establishing renewable energy firm in Dubai
Incorporation of renewable energy company in Dubai provide these advantages together with significant contribution to the UAE’s environment.
- UAE’s strategic location makes it an attractive destination for the foreign renewable energy businesses.
- The abundant solar resources of Dubai as a global business hub offer significant opportunities for solar power projects.
- UAE government’s commitment to renewable energy development is evident through initiatives like the UAE Energy Strategy 2050.
- Dubai is diversifying its energy mix and is gradually reducing its reliance on the fossil fuels.
- UAE is investing heavily on infrastructure development to produce and distribute renewable energy.
- Dubai is actively playing its part by implementing the Dubai Clean Energy Strategy 2050.
Investment opportunities in UAE renewable power landscape
UAE is promoting renewable energy innovation through partnerships with international power generation firms of the USA, Spain, and South Korea. Leading entrepreneurial hub in the Gulf region Dubai is attracting clean energy startups with its US$27 billion Green Energy Fund. The city is establishing the Dubai Green Zone, a special zone for R&D centers and Clean-tech start-ups.
Dubai Green Economy Partnership program is boosting strategic PPPs, create commercial opportunities, and facilitate knowledge transfer. The city is developing a hydroelectric power plant, the first of its kind in the region, using stored hydroelectric power. Dubai’s Digital DEWA is the world’s first digital utility to use autonomous systems.
Mohammed Bin Rashid Al Maktoum Solar Park focuses on smart grid integration, and water desalination. Also, its R&D Centre is testing photovoltaic and concentrated solar power technologies. Moreover, this park houses the first solar-powered green hydrogen production facility of the region, demonstrating hydrogen-powered applications.
Challenges of opening renewable energy company in UAE
United Arab Emirates is facing these challenges in executing the renewable energy projects.
- Intermittent and variable solar/wind energy generation, water scarcity, complex policy and regulatory framework are among the challenging factors for UAE.
- Fulfilling high upfront costs of the renewable power generation and sustaining long payback periods from the clients are demanding also.
- UAE’s renewable energy market is very competitive, with both local and international companies vying for a foothold.
- Compliance with global renewable energy policy and UAE regulatory framework can cause potential uncertainties/delays, impacting project development and investment decisions.
- Some unforeseen issues can impact grid integration, energy storage, reliability, operation, and maintenance of renewable energy projects.
Major types of renewable energy in the UAE
United Arab Emirates has these main kinds of renewable energy.
Now, we briefly look upon these sources of the renewable energy in the UAE.
Hydropower Energy
Water is one of the leading renewable energy sources. Hydropower plants generate electricity through the rapid flow of water, such as with dams.
Wind Energy
Wind is also a great source of renewable energy and clean power. Turbine blades rotate around a rotor through wind, which spins a generator, and generating energy.
Solar Energy
Sun is a huge source of the renewable energy. Solar plants produce electricity through photovoltaic and concentrated means of power generation. Furthermore, you can even produce solar energy in winters and the cloudy weather.
Geothermal Energy
Geothermal energy is extracted from the core of the Earth. This power was naturally generated during the planet earth formation. It was stored in the rocks in the interior of the earth.
UAE’s commitment to global renewable energy standards
United Arab Emirates requires renewable energy companies to follow international environmental standards. So, they ensure sustainable development and minimize negative impacts. UAE is enacting environmental laws like Federal Law No. 24 of 1999 on the Protection and Development of the Environment.
Renewable energy projects may need an Environmental Impact Assessment to assess potential environmental impacts and mitigation measures. UAE has a commitment to achieving the United Nations Sustainable Development Goals (UNSDGs), including Goals 7 and 13. Regulatory authorities of the UAE oversee compliance with environmental standards in the renewable energy sector.
Conclusion
UAE is prioritizing sustainable energy for economic, environmental, and social growth, with a promising outlook for the renewable energy sector. Its commitment is evident, with rapid advancements in renewable energy technologies like solar photovoltaics, wind power, and energy storage. These advancements will enhance the competitiveness and viability of renewable energy solutions in Dubai and across the UAE. Continued research and development efforts will lead to cost reductions and performance improvements, making renewable energy more accessible and cost-effective.
Do you want to start renewable energy company in Dubai? Consult with business setup consultancy KWS Middle East who has got years of experience. You get complete help in choosing a business structure and obtaining a trade license, by a team of professionals.
