The UAE can reduce its energy costs by up to $3 billion (Dh11 billion) a year by 2030 through implementation of energy efficiency technologies, according to a study by Oliver Wyman, a global management consulting firm.
Driven by increased population and escalating commercial and residential demand for electricity, especially in the summer, the Gulf states have become significant consumers of oil, says the study.
Since natural gas supplies no longer meet local energy demand, the region's oil exporting countries have started to tap into money-generating fuel oil reserves, which is impacting both local economic growth and global energy security, the study noted.
It said by 2030, assuming constant electricity production costs, the UAE can save 51 per cent of the energy used in the residential sector, 38 per cent in the commercial sector and 11 per cent in the industrial sector.
"The time is ripe for Mena (Middle East and North Africa) countries to take a closer look at energy efficiency technologies and programmes," said Marc Hormann, Oliver Wyman partner and co-author of the study.
"Even moderate adoption of proven energy efficiency measures could reduce energy demand by one-quarter to one-half in the year 2030, greatly freeing up capital."
Khalid Malallah Al Awadi, a UAE energy expert, told Gulf News a re-evaluation of the use of natural gas for crude oil production enhancement by the UAE can help conserve a lot of energy and enable production of electricity at a lower price.
"As well, the use of insulated doors, windows, roofs and walls, use of district cooling instead of window air conditioners, use of low wattage high luminous lights instead of halogen or sodium light bulbs can significantly increase energy savings," he added.
It is estimated that in the Gulf Cooperation Council (GCC), an investment of $125 billion will be needed to meet growing demand for power over the next decade, which is estimated to rise an average of eight to 10 per cent per year.
Of the UAE's current electricity generation capacity, almost 85 per cent of the power generated is gas-based, and the other plants are oil-fired.
Nearly all of Abu Dhabi and Dubai's electricity comes from gas-based stations.