Abu Dhabi's Green Dreams

Abu Dhabi's Green Dreams

Ever wonder what happens to the $3 or more per gallon we pay at the pump these days? Or the checks we write for high-priced home heating oil to stay warm this winter? Some of it winds up in Abu Dhabi, the capital of the United Arab Emirates, which is so awash in oil money that is spending $15 billion on solar, wind and hydrogen power, carbon emissions reduction and R&D into clean energy.

Yes, it's a little like selling ice to Eskimos-Abu Dhabi's got plenty of oil but clean energy companies are selling solar, wind and hydrogen power to the Arabs. Indeed, this city (population less than 2 million) is investing more than any other government in the world in clean energy.

That was the word this week out of the World Future Energy Summit, a three-day gathering that brought about 4,000 people to Abu Dhabi. U.S. energy secretary Sam Bodman, Lord Browne of the UK, green designer Bill McDonough, and Prince Charles were among those who showed up, although HRH gave his speech via hologram, no doubt to reduce his carbon footprint.

Anyway, Abu Dhabi is clearly serious about developing sources of clean energy when you think about it, it makes perfect sense. With oil selling for close to $100 a barrel, why burn it yourself when you call sell it onto the world market? These people aren't dumb-they want to be energy suppliers to the world even after the oil runs out.

The Abu Dhabi initiative goes by the name of Masdar, and you can read all about it here. (One blogger wondered whether Masdar is Arabic for chutzpah.) I'd hoped to get to the energy summit this week to see the place for myself because I've got lots of questions about it but, alas, FORTUNE's travel budget goes only so far.

Launched a year ago, Masdar has already made real progress. It has formed a research and education institute with MIT. It has created a clean energy investment fund worth $250 million-rivaling any venture fund in Silicon Valley. It is testing various kinds of solar photovoltaic cells to see which ones work best in the hot, dusty climate of the UAE and it is developing a 100 megawatt solar thermal plant. This week, Masdar also announced that it would join Rio Tinto and British Petroleum to build the world's first hydrogen power plant, a 500-megawatt operation that would cost at least $2 billion. Also announced - a $2.2 million annual prize to honor individuals and groups that develop sustainable energy solutions.