Welcome to Economic Impact, conversations from Emirates Development Bank (EDB), the key financial engine for economic development and industrial advancement of the UAE. In each instalment CEO Ahmed Al Naqbi leads insightful discussions with change-makers and thought-leaders in the UAE to learn how they’re contributing to the nation’s economy and realising the UAE’s economic ambitions.
Welcome to episode eight in season two of Economic Impact: Conversations from EDB’.
This time we welcome Jeremy Crane, Group CEO of Yellow Door Energy, a UAE-based company offering sustainable energy solutions for businesses in the Middle East and Africa.
He talks us through how he's trying to help businesses reach Net Zero targets and accelerate the Just Energy Transition.
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Speaker 1: HOST
Speaker 2: GUEST
00:00:00 INTRO V/O
“This is Economic Impact...Conversations from Emirates Development Bank”.
00:00:05 Speaker 1
As-Salaam Alaikum, welcome to Economic Impact. Today we have a fantastic guest with us, Mr. Jeremy Crane, the CEO of Yellow Door Energy. Welcome.
00:00:14 Guest
Thank you. Great to be here.
00:00:16 Host
Jeremy, if we, if you don't mind if we can start maybe a bit with your background and before we even talk about Yellow Door, your journey to Yellow Door, how did that begin and how did your background lead you towards that?
00:00:29 Guest
Sure, by all means. So, look, I grew up in Canada, studied engineering and I had a strong passion for, for wind sports…sailing, windsurfing. And so, when I was when I was doing my grad studies
00:00:48 Guest
As an engineer, I focused on wind power and that led me to looking for places where I can start applying that shortly afterwards, not being overly tied down, I found myself shortly after school in Costa Rica, a very, very exciting windsurfing location…
00:01:14 Host
Right - and very eco-friendly if I'm not mistaken as well?
00:01:16 Guest
It's extremely eco-friendly. I think it's one of the few countries that runs most of the year on clean energy.
00:01:22 Host
OK, OK.
00:01:24 Guest
They also coincidentally had wind farms and those wind farms needed some engineers. So, I got myself my first job and parlayed that into a good career of building renewables.
00:01:37 Host
Fantastic. So, you're in Costa Rica, you're working on the wind farms. I'm sure you're having a great life on the beach, you know, doing the different sports and water sports and all that great stuff. What brought you to the United Arab Emirates? And what brought you from there towards founding a company that was focused on renewables and, and the kind of energy that you're producing now?
00:01:59 Guest
Well, there's a few small, a few small steps, but basically I moved to Costa, from Costa Rica to the US to build some larger stuff. Some larger wind farms and then that the company is working for had a really interesting project in Honduras and ended up building power company utility in in Honduras…
00:02:27 Guest
And through some ‘this or that’ problems, sort of got stuck running this utility for a few years.
00:02:35 Host
Interesting.
00:02:36 Guest
And it was really fun. It was. It was a very rewarding experience, but that was the first flavor I had in, you know, kind of leadership roles.
00:02:48 Guest
Fast forward a few years, 2009, I was back in Canada and they introduced some regulations, which were very supportive of solar. There were no solar companies, of course…it was, it was new. So, I decided to start my own and so company number two that grew and scaled and went through a few iterations, but eventually we started developing projects in Jordan.
00:03:17 Host
Mmmm Hmmm.
00:03:19 Guest
That led us to seeking financing, which happened to come through a Dubai-based group and by 2012 they'd acquired my company and, and I was, I was based in Dubai.
00:03:33 Host
Amazing.
00:03:35 Guest
Yeah. They were doing some really exciting things we were building at that point. We're building utility scale solar projects in Italy and Japan and playing in what was the, you know, I guess the, the second generation of utilities, which is the independent power production, these different location.
00:03:57 Guest
And, er, what I saw after a couple of years of that was that those large power plants were important…
00:04:05 Host
Right.
00:04:05 Guest
…but the economics of solar was actually moving such that you could produce solar power where you needed the power, you could distribute that generation and that was very appealing. I really have always enjoyed working with businesses…
00:04:26 Guest
…so, in 2015 I launched Yellow Door with a view that you could produce power where it was needed on a more economic basis than you could on a centralized basis, on centralized plants.
00:04:39 Host
Right.
00:04:40 Guest
And that's really been our model since it's grown and evolved spread over many more countries. But Dubai has been our home since 2015.
00:04:49 Host
That's great. Could you explain…so that's very interesting when you say that it’s you, you came to the conclusion that you could produce power on a local level in a specific site. Can you just explain a bit about that setup? How does that work? So, so when you go in and you want to produce power for a location X, what would you have to do other than the solar?
00:05:11 Host
What, what is the mechanics of it that you have to install and put into place?
00:05:16 Guest
Right. So, I mean, we're dealing with businesses. So, they all have their own power systems already. So, what we're trying to do is say, OK, how much power do you need during the daytime? How much space do we need to install that and how do we integrate with your current factory setup?
00:05:38 Guest
Now, every market typically always has some regulation constraints as well. So, working within what the business needs and the regulation constraints, we try to maximize the amount of energy that that building can house that that meets those, their daytime needs.
00:05:58 Host
OK.
00:05:59 Host
And currently you have multiple projects across the United Arab Emirates. You've been quite successful in expanding the business, I believe, over the last nine years. Could you maybe discuss a few of the highlights? A few of the important ones, the great ones that you've been doing?
00:06:15 Guest
Sure. Well, I mean, I was go back to our first project in the UAE, which was a one megawatt project for Unilever. Paul Polman was the CEO of Unilever at the time. He was really forward-thinking in terms of the businesses impact on the environment…
00:06:23 Host
OK.
00:06:34 Guest
And one megawatt at the time, 2015 was pretty, was pretty exciting. So, we built that project. There was, I would say, there was minimal economic savings at the time on the power generation. But there was a huge benefit for the company in terms of their CSR input, impact.
00:06:57 Guest
Now you fast-forward a few years we've, you know, built a whole bunch of projects for Majid Al Futtaim (MAF). We've grown into many other markets in the region and I think, you know, one of the one of the most exciting things that we're doing, what we've seen happen in the last couple of years, is companies like MAF or Aldar who are saying, look, we've got a portfolio of 10/20/50/a hundred buildings, how can we green them all? And we've had a great success working with those…
00:07:38 Guest
…call them conglomerates or portfolio owners…
00:07:40 Host
Right.
00:07:40 Guest
…and saying, look, let's go through and roll it out, roll a system out across so that we can have and really maximize the value creation for that business.
00:07:51 Host
That's great. And what have you seen has been the biggest driver of business towards energy efficiency and the production of energy from alternative sources over the last nine years, you must have seen the evolution because it today obviously it's a lot further on than where it was nine years ago. But what have you seen are the main drivers of that?
00:08:11 Guest
Well, that's great. I mean, it has evolved so much and so I go back to our three tenets, right. One is economic savings. The second is reliability of energy and the third is the environmental benefits. So, at the beginning it was all about the environmental benefits.
00:08:31 Host
Right.
00:08:31 Guest
There, there wasn't a lot of economic saving in 2015. If you fast-forward to 2020 the cost of executing solar had come down, and now that prime driver being, had shifted from it being solely an environmental benefit to it being an economic benefit. If you look at it today, businesses are saving at 50% often on the cost of power…
00:08:58 Host
Wow!
00:08:59 Guest
…in places like Dubai, a little bit less than in Abu Dhabi…
00:09:03 Host
Energy is cheaper, yeah.
00:09:03
…where the cost of power is less, but they're still saving.
00:09:07 Guest
Now the third pillar of that, the reliability is something which is today, 2024, starting to have a big impact because now we're seeing the cost of batteries coming down…
00:09:20 Host
Right.
00:09:20 Guest
And that means that it's very economical to co-locate batteries with solar, especially for those off grid sites.
00:09:27 Guest
We've got a couple in in northern Emirates where we can store daytime power, use in the evening and really curtail the use of diesel fuel…
00:09:38 Guest
…very dirty, very expensive, with maybe 80% of their daily load are used by, comes from solar.
00:09:46 Host
That's amazing - and I'm sure technology must have also advanced quite a bit over that decade. When you say reliability, I think about also quality. Is that something you've seen? Have you seen the quality of the panels themselves or the different, you know, components of the equipment you use that's improved?
00:10:03 Guest
Oh, absolutely. So, you know, with a solar panel, the primary metric that people use is efficiency. How much of the sunlight that strikes that panel moves into electricity? You know. So, when I first started in solar 15 years ago you were maybe talking about 14 or 15%...
00:10:25 Host
Mm-hmm.
00:10:26 Guest
…today, you're looking about 23% of the solar, of the sun energy that strikes it changes into electricity.
00:10:33 Guest
And just to put that in context of frontier is probably around 40%.
00:10:38 Host
Right.
00:10: Guest
So, we've come a long way from 15 to 23 and, you know, practical limits might be in the high 20s. So, it's really good. I think the other - from a technology thing - what we're seeing today is really exciting, actually, is the energy management systems.
00:11:00 Host
Right.
00:11:00 Guest
And so that come back to reliability when you're thinking about having perhaps you, perhaps you've got grid, perhaps you've got solar, battery, diesel. How do you integrate all of these systems together? In the UAE we're normally, we've got a great grid…
00:11:16 Host
Right.
00:11:17 Guest
…where we, we can rely on that. But if you're not connected to the grid in the UAE or you're in another market where the grid is not as stable, right, we do a lot of work in South Africa, the energy management system becomes really important.
00:11:28 Guest
And we've just integrated an AI engine into that energy management system so that we can balance the different energy sources to meet the customer’s needs. We can forecast those needs and we end up saving another 10% above what a normal system would do.
00:11:49
That's amazing. So, that's the advent of artificial intelligence into your, into your business. That's, that's very, very cool. So, the projects that you guys have currently executed against, you know we've had conversations where you've had them in various emirates. To shed light for the audience, could you, you know, talk a bit about, you know, how is it from emirate to emirate with regards to the usage of alternative energies and how that feeds back into the grid?
00:12:19 Guest
Sure, sure. By all means. So, look, I think Dubai was the first emirate that kickstarted a program called Shams Dubai. 2015. And they set up a net metering system so you could produce whatever energy you wanted, feed excess energy into the grid, consume it back and…
00:12:40 Host
So, net, net metering, sorry again but what that means is your ability to produce and then and then return it to the grid?
00:12:48 Guest
Right. If you produce more than you're using at any one moment, you can feed it into the grid and you get credits for that, and then you consume those credits at night-time or the next day.
00:13:00 Guest
So, we have many customers that are…you know, we've got some Nestle factories, we're reducing all of their energy needs because we produce excess during the daytime and then they consume it at night-time from…they take those credits back.
00:13:16 Guest
Um, Dubai has evolved. Now they put limits on how much you can install on run sites and so it's, that's a little bit constraining on how much clean energy people can install in Dubai.
00:13:32 Guest
Over the last few years, we've seen Abu Dhabi come in and really open up and allow people to generate pretty much as much as they can consume…
00:13:39 Host
Amazing
00:13:40 Guest
…there's no credit system, but you can produce…
00:13:44 Host
On site, what’s needed…
00:13:44 Guest
…what's needed on the site for what you needed…
00:13:46 Host
Right.
00:13:46 Guest
…and it's really been, I think great for many businesses who are trying to clean and save money. So that's, that's been fantastic.
00:13:57 Guest
In the northern Emirates, the regulations have been evolving and changing very recently. They are looking at allowing about 20 megawatts to be installed across the Northern Emirates…
00:14:12 Host
OK
00:14:12 Guest
…every year. It's a relatively small number given the scale of the power needs there…
00:14:19 Host
Right
00:14:19 Guest
…so, we'll hopefully we'll see that expand, but it's a start.
00:14:25 Guest
And we're still waiting to see how Sharjah is going to implement their system.
00:14:29 Host
I'm very confident it's only a matter of time before there's standardized policies across the federal level, but also the local Emirates. With the evolution of the economies of the local Emirates, it's definitely something that's becoming much more prevalent and a need. A lot of the financing that we do for factories it contains that component in there you know for the installation of solar, even if it's just a small percentage of the amount used. But it's something that makes a difference for them. So, I think there's a there's a great future there.
00:15:01 Host
And that being said, you know, how are your expansion plans? What is Yellow Door doing on that front? I know that you're not just in the UAE, but you've used the UAE as a base and essentially expand it out. Ant thoughts there and then I have a follow up on that which is have you thought about the potential to be your own producer in the sense of backwards integration into the components into the actual hardware?
00:15:24
Hmm…two great questions. So look, I think we're definitely looking for ways that we can, I'd say we could go deeper in the UAE market, right, as regulations have constrained the size of any single system we can build, it's OK well, how do we build more or where do we find the more, the larger opportunities, but our growth is also coming through other markets. For instance, in Saudi, they introduced some regulations about two years ago that allow self-consumption as well…and something called net billing - don't need to get into, but they've enabled that. Bahrain has also been very successful for us and we've been in Jordan for a long time…
00:16:15 Host
Right
00:16:15
…and it's always been very open to renewables, so that expansion to South Africa, Oman. So, we HAVE been growing geographically. Our preference, of course, is to grow in our backyard…
00:16:26 Host
Of course…
00:16:27 Guest
…We're really looking for opportunities to invest more here and, and build that. And I think what we'll see is more, more off grid…if you may allow me an analogy…
00:16:42 Host
Please…
00:16:44 Guest
We are, we see the market today in the UAE really being, having moved from that early adopter to the mainstream adoption…
00:16:54 Host
Right.
00:16:54 Guest
We're having, as you referenced to the businesses you work with, all the Main Street businesses are adopting solar today and that's exciting…
00:17:02 Host
Right
00:17:02 Guest
…And that, I think, will last for a few more years…
00:17:05 Guest
Your second question, about vertical integration…
00:17:09 Guest
Um, look, I think there's definitely room for manufacturing…
00:17:17 Host
Uh Huh.
00:17:17 Guest
…of the major components here in the UAE.
00:17:24 Guest
I think that the scale, if you think about the major components we consume, it's about 25% of our cost of solar panels…
00:17:32
Right.
00:17:32 Guest
25% would be electrical components, inverters and transformers and other pieces like that and the last 50 will be cables and manpower and racking. Pretty basic stuff.
00:17:47 Guest
Those first two categories are very dominated in, so the solar panels are very dominant from the Chinese companies.
00:17:57 Host
Mmm Hmm…
00:17:58 Guest
…Some of them are looking to set up fab shops in the region and so you know where we see approaches to them. It's not something we're likely to invest in…
00:18:09 Host
Right.
00:18:10 Guest
…but we see others doing that…
00:18:12 Guest
The electrical components, the, the switchgears and the transformers and the inverters, those are absolutely - I mean some of we buy from some manufacturers right here in UAE…
00:18:21 Host
OK, OK.
00:18:21 Guest
…especially the switchgear and the last 50%, a lot of it's manufactured here, right. We're talking about cables. We're talking about aluminum extrusion. We're talking about other bits and bobs and then you know the great engineering talent we have here. So, a lot of our supply chain is already…
00:18:45 Host
Localized…
00:18:46 Guest
…fairly local and is it worth bringing panels here given the volume that's consumed by the country?
00:18:53 Host
Right
00:18:53 Guest
…hard to say, but not an investment, I don't think, that that the Yellow Door is going to be pursuing in the near future.
00:19:00 Host
Gotcha. Gotcha. Very interesting. So approximately 70, maybe 75% is already locally produced and manufactured and there's about 2025. You're absolutely right with the economies of scale of manufacturing that are probably produced in manufacturing hubs like China…and I'm assuming that's where you get probably those components from like you mentioned?
00:19:20 Guest
Absolutely yes.
00:19:21 Host
Very interesting. Cop 28 was a big thing this year. Actually, the end of last year but, you know, the Presidency has remained with the UAE for the year, subsequent year. If you, if I can ask you, how was that for you? I mean, you're in that space and very successful here in the United Arab Emirates. So, how was that for you? And then more importantly, has it levelled off? So whatever interest you might have had, and I hope you had, you had good interest being generated at the time. Has that levelled off, has that reduced or has that maintained since then?
00:19:54 Guest
Look, I think that the COP forum for us in our backyard, in our home, was fantastic.
00:20:03 Host
Yeah.
00:20:03 Guest
The energy it drove…the world leaders, not just political but also economic business that brought here was fantastic, right? And I can say that I I've been in the renewables for over 20 years and I learned a lot from that. I fostered good connections, reconnected with people.
00:20:26 Guest
On the business front, as far as helping us grow, we definitely saw local businesses - excuse expression - but jumping on the bandwagon, right, getting excited about it in a positive way, right and saying, “Hey you know what, look, there's, there's some momentum here. We can use this to help our business”. So, I was very excited for that. That was a tiring couple of weeks for us with everything that was happening. We had several press releases about businesses that we were working with who wanted to, you know, put out the good news during COP and some of those projects we're still building today, right? We've commissioned over 20 projects this year and you know it's momentum that continues.
00:21:16 Guest
Would I have liked to see more? Sure, we always would love to have more, but it was I thought it was very valuable for our business.
00:21:24 Host
That's great. That's great. One last question that I'd like to ask, if you reflect back on your experience in Honduras when you first took on that leadership role running the utility company. And I'm sure the other experiences that you had when you went back to Kentucky, or went to Kentucky, and possibly afterwards in Canada and then Jordan…
00:21:44
What aspects of those experiences, if you were to advise younger entrepreneurs, business owners, what aspects of what you learned and what you experienced really assisted you and drove you to be able to accomplish what you've accomplished today.
00:22:00 Guest
Hmmm…
00:22:01 Host
If you reflect back to those days?
00:22:04 Guest
You know, that's, that's really interesting…
00:22:07 Guest
I think there's one word that comes to mind, and it's a word that every entrepreneur, every leader needs to, needs to embody, and that's resiliency…
00:22:20 Guest
You know, we…certainly if you're, if you're a student growing up and you look towards the business leaders of today, the CEOs and think that looks like an exciting job that looks like a, ‘I, I'd like to do that someday’. Well, it's, I'm sure you can testify, it's not that easy. There's a lot of work, there's ups and downs and to be a leader in the modern world, you need to be able to handle those, those stresses, those ups and downs, and be able to keep moving, keep looking forward. So, I think any market that you've worked in and you've survived and you've moved forward…
00:23:05 Guest
You've done that with resiliency.
00::07 Host
That's great, Jeremy. Thank you so much for your time today. It's much appreciated. Very interesting. The story is very interesting. Wish you all the success going to the future. Thank you.
00:23:15 Guest
Thank you very much.
00:23:16 OUTRO V/O
Economic Impact: Conversations from Emirates Development Bank.