By Dr. Klas Eric Soderquist and Dr. Mohammad Baydoun

Klas Eric Soderquist is an Associate Professor at AUEB, Head of Academic Affairs of the MBA International Program and Director of the Management Science Laboratory (

Dr Mohammad Baydoun is a Project Manager at Millennium Development International, Lebanon and a Visiting Research Fellow at the Management Science Laboratory of AUEB.

From the carbon-saturated smog of Sherlock Holmes’ London, through waves of pollution as industrialization has unfolded, to disasters such as Three Mile Island (1979), Chernobyl (1986), and the oil spill catastrophe in the Mexican Gulf (2010), the evolution of energy production catering to humanity’s hitherto ever-increasing needs is full of dramatically problematic side-effects. As utterly serious these and many other energy-related catastrophes have been, the phenomenon of global climate change is even more serious as it concerns the entire population of the planet. Its effects, in terms of storms and floods in some areas, excessive heat or cold in other, erosion of soils and spreading of deserts in still other, cannot be ignored, let alone escaped from. Fortunately, the last decade has seen an increasingly serious and scientifically documented debate on global climate change emerging, although the notion of sustainable development has been around much longer than so. Starting from policy debate, interdisciplinary research and more or less successful global summits and declarations such as the Rio Summit (1992), Kyoto (1997) and Copenhagen (2009), we now finally witness concrete realizations of sustainable energy solutions in urban and infrastructure planning, scientific and corporate R&D, innovation, and product and process development. For pioneering countries like Germany, that already relies on renewable sources for some 20% (2011) of its energy needs, effective and practical green energy solutions have made it possible to proceed to what was very recently still an unrealistic utopia in industrialized countries, namely to concretely plan for phasing out nuclear energy.

Such successful realizations are promising for the future, but there is a huge need for focused development, and real-world experimentation pushing the applicability and performance envelope continuously further. One of the most concrete examples of action-taking in this sense is the Masdar project in Abu Dhabi, UAE, launched in 2006. Masdar, which means ‘the source’ in Arabic, is a commercially driven enterprise that operates through five integrated units. A wholly owned subsidiary of the Abu Dhabi Government-owned Mubadala Development Company, Masdar is bound to act as a catalyst for the economic diversification of the Emirate through introducing businesses related to alternative energy and reducing dependency on fossil oil.

Masdar City, one of the five integrated units of the Masdar project, is a real-world experiment aiming at tackling the technological, financial and social challenges involved with the ecological meta-challenge of an energy-neutral and zero emission urban entity. The Government set the vision for the Masdar City as “a carbon-neutral, zero waste urban community” (Nader, 2009. p. 3952). The master plan is for a city of 6km2 housing, when fully built out by 2025, some 40.000 residents and hundreds of business. The first buildings of the Masdar Institute of Science and Technology, operated in collaboration with MIT, are already fully operational. Other early residents will include Siemens, Schneider, GE, BASF and the International Renewable Energy Agency IRENA.


The Masdar Vision

The vision is to build a city that should become a real-life example of the feasibility of creating an energy-neutral and zero-emission city, adopting a vision-driven experimental approach to the development of a range of interconnected concepts and technologies. The vision strongly emphasizes workable economic responses to tackle the energy-environmental sustainability problems under way. The core activities in Masdar City are research, development, testing, manufacturing, implementation, marketing and showcasing of renewable energy, clean technologies and sustainable living principles. To be able to materialize all this, the Masdar project relies on five interconnected pillars:

  • Masdar Institute, which is an independent, research-driven graduate institute developed in cooperation with Massachusetts Institute of Technology (MIT).
  • Masdar Capital, which helps its portfolio of promising renewable energy and clean technology companies to grow and scale-up by providing capital and management expertise.
  • Masdar Power, which is a developer and operator of renewable power generation projects, making direct investments in individual projects in all areas of renewable energy.
  • Masdar Carbon, which manages projects in carbon emissions reduction including the pioneering Carbon Capture and Storage Project (further commented below).
  • Masdar City, which aspires to be
    one of the most sustainable cities in the world and the concrete realization of the application and implementation of all principles and technologies developed within Masdar.

What is important related to the five pillars is the concretization of an integrated and holistic innovation eco system, where synergies between education, technology, entrepreneurship and needs-driven demand have all possible conditions available to develop.

What is further particularly interesting in Masdar is the combination of emission and waste reduction on the one hand, and clean energy production on the other. Concerning emission reduction the Carbon Capture and Storage Project is an innovative application for oil producing countries consisting of injecting CO2 into oil reservoirs in order to both replace precious natural gas traditionally used for the purpose of enhancing oil recovery and neutralize the CO2 through its dissolving in oil. In terms of waste reduction, intelligent construction materials, intelligent design and architecture including natural shading and underground communication networks, zero-emission transportation and water optimization (desalination, recycling) are some of the approaches implemented and developed. Moreover, there is a maximum use of cradle-to-cradle products and materials, i.e., fully recyclable goods in all aspects of the city’s material and equipment needs. In terms of clean energy production, finally, 100% of the energy need will come from renewable sources including photo voltaic (around 50%), concentrated solar power (around 25%), evacuated tube collectors, waste-to-energy, and wind power.

Current Challenges

The 2008 crises has been reported to have slowed down some of the original plans and there has been a particular concern about to what extent the personal rapid transit system must be limited to parts of the city (Mandel, 2010). In addition, governance issues like relying on the municipality to run the infrastructure has in some cases limited the options for technologies to be adopted. However, development is now again pacing and momentum starts building up in terms of the positive synergies between the five pillars of Masdar. Major challenges include the social side of sustainability, as the project also relies a lot on changing behaviors and habits of individuals and collectives. Population in the city is still small, and how the social side of sustainability will evolve remains to be seen (Baydoun, 2012). Moreover, Masdar focuses on promoting sustainability in a fully new green-field setting, while it is unclear how and to what extent the approaches developed can be transferred to existing urban settings, where the majority of problems exist (Baydoun, 2012).

Undoubtedly, Masdar and Masdar City are initiatives of utmost importance to the extent they arrive at proving the technical and economic viability of sustainable urban development. If the mandate of the city evolves to find solutions that respond to challenges of both existing and new urban settlements, its contribution to the future of energy production and use promises to be seminal.



Baydoun, M. (2012), “Using innovation research to achieve sustainability in urban developments: the case of Masdar”, Conference on Innovation Systems and the New role of Universities (COSINUS) 5 – 6 September 2011, Bristol: United Kingdom.

C2HMHILL, Masdar – Powerpoint Presentation (accessed 26/03/12)

Mandel, J. (2010), Financial Woes Crimp Celebrated Middle East ‘Green City’, New York Times, 2010/03/17.

Masdar (2010) “Building the World’s Most Sustainable City”, Powerpoint Presentation.

Masdar – A Mubadala Company (accessed 26/03/12)

Nader, S. (2009), “Paths to a low-carbon economy – the Masdar example”, Energy Procedia 1: 3951–3958.

Interviews and local observations (M. Baydoun).