France’s Engie is looking to boost its operations in the GCC's renewables sector and make the most of opportunities, a senior executive has said.
“Renewables is top of the agenda,” Frederic Claux, Engie’s country manager for the GCC and Pakistan, told The National at the Abu Dhabi Sustainability Week event.
“We want to grow this business in the region and are following up on a few transactions that have been announced recently.”
The UAE and Saudi Arabia, the Arab world’s two largest economies, are boosting their investments in renewables as they aim to achieve net-zero emission targets in the coming decades.
The UAE, Opec's third largest oil producer, has planned Dh600 billion ($163.37 billion) worth of clean and renewable energy investments over the next three decades.
Saudi Arabia aims to grow the share of gas and renewable energy in its power mix to 50 per cent by 2030. Last year, it launched five new renewable energy projects to produce electricity sustainably, as the kingdom, the world's largest exporter of oil, pursues a goal of net-zero emissions by 2060.
Engie is reviewing its options with regards to new wind project bids in Saudi Arabia as well as the 1.5 gigawatts Al Ajban solar plant in Abu Dhabi, Mr Claux said.
The company is also involved in a smaller-scale 30 megawatts solar project in Saudi Arabia in partnership with the kingdom’s National Agricultural Development Company.
It aims to finance projects through a mix of debt and equity, he said.
Global renewable power capacity growth is on track to nearly double in the next five years, overtaking coal as the largest source of electricity generation, the International Energy Agency said last month.
Renewable power capacity is expected to grow by 2,400 gigawatts by 2027, equivalent to the current power capacity of China, the world’s second largest economy, the IEA said.
Paris-listed Engie is bullish on GCC growth as its economies recover from the coronavirus pandemic on the back of higher oil prices and new government initiatives.
“The region is booming because of a lot of liquidity and there is a willingness to invest in new solutions to decarbonise businesses, not only the energy business, but also energy-intensive industries like cement factories and steel factories,” said Mr Claux, who is also Engie's managing director for thermal and supply for Asia, Middle East and Africa.
Last year, the UAE Ministry of Energy and Infrastructure signed a preliminary agreement with Engie Solutions, a subsidiary of Engie, to develop clean energy projects and support the country's decarbonisation goals.
The GCC region currently accounts for 15 per cent of the company’s total annual revenue. That share is anticipated to grow in the coming years as Engie bids for new projects and expands its operations.
“We want to win a few projects and increase our business in the region,” Mr Claux said, without divulging expected revenue growth from the region.
“The key countries are the UAE and Saudi Arabia and, to an extent, Qatar.”
Engie reported an 85 per cent surge in its revenue for the first nine months of 2022 to €69.3 billion ($75 billion). It added 2.5 gigawatts in renewables capacity during the period, according to its financial statement.
It is accelerating renewables development internationally with plans to add 4 gigawatts on average per year of capacity until 2025.
The company wants to increase its renewable energy capacity to 80 gigawatts by 2030, from 35 gigawatts at present.
The company was not affected by the Russia-Ukraine conflict, but faced supply chain disruptions as a result of coronavirus lockdowns in China, Mr Claux said.
Looking ahead, Engie plans to invest in Saudi Arabia’s $500 billion Neom project across renewables, desalination, district cooling, engineering services and data centres, as part of its expansion plans.
“There is a whole spectrum of possibilities and we are engaging with them on different fronts,” he said.
Green hydrogen is also an area of focus for Engie as demand for the low-carbon fuel rises globally.
“We formed a partnership with Masdar and won a couple of projects … we are looking into Oman and Saudi Arabia at the moment,” Mr Claux said.