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UAE data centre policy highlights AI-energy nexus

4 February 2025

Commentary
Jennifer Aguinaldo
Energy & technology editor

The UAE National Team for Reviewing the Impact of Data Centres on the Energy Sector held its inaugural meeting on 3 February.

The UAE Ministry of Energy & Infrastructure (MoEI)-attached entity was formed to assess the impact of data centres on the domestic energy sector and to work on developing a federal policy aimed at regulating the operation of local data centres.

Sharif Al-Olama, undersecretary for energy and petroleum affairs at the MoEI, said the formation of the national team is part of the state's strategic efforts towards digital transformation and enhancing sustainability in the energy sector.

This development follows significant initiatives aligned with the UAE's national artificial intelligence (AI) strategy.

For instance, Emirates Water & Electricity Company and Abu Dhabi Future Energy Company (Masdar) announced the $6bn "gigawatt-scale" solar photovoltaic (PV) and battery energy storage system (bess) project in Abu Dhabi in mid-January.

The project, comprising 5,200MW of solar PV and a 19 gigawatt-hour (GWh) bess plant, is expected to provide 1,000MW of round-the-clock, baseload renewable power.

The UAE leadership has said this project will help advance AI and other emerging technologies while contributing to its 2050 net-zero target.

Advanced AI models require the construction of hyperscale – large-capacity and low-latency – data centres, which consume large amounts of electricity, impacting consumption, supply, planning and carbon emissions.

A federal policy could help streamline the entire ecosystem and mobilise plans to ensure no single point of failure once all the planned data centres start operating.

This move comes a few months after the UAE cabinet approved the state's international AI policy in October, which focuses on advancement, cooperation, community, ethics, sustainability and security.

In addition to helping shape future standards and guidelines in AI diffusion, the UAE foreign AI policy advocates "transparency and built-in checkpoints within AI tools, enabling governments to enforce ethical standards and implement accountability measures".

Investors and data centre operators will be watching these evolving policies with great interest to ensure compliance, and to see what impact they might have on capital and operating expenses, if any. 

 

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Jennifer Aguinaldo

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