Abu Dhabi National Energy Company, known as Taqa, has sold off its 100 per cent stake in an Indian coal power plant as part of plans to have a cleaner energy portfolio.
Taqa divested its holding in Taqa Neyveli Power Company, which operates a 250-megawatt lignite-fired power plant in the southern Indian state of Tamil Nadu, to Hyderabad-based Meil Energy for 9.26 billion rupees ($104.4 million), Taqa said in a statement on Thursday.
Lignite is a type of coal formed over millions of years by the partial decomposition of plant material. The material is abundant, accessible and generates electricity at a low cost, the US-based Lignite Energy Council said.
All types of coal generate a significant amount of emissions, but lignite, the lowest grade among the four main types of coal, requires more heating to generate energy, causing it to produce more harmful emissions.
India, which imports most of its energy requirement, is still overwhelmingly reliant on coal to meet the rising demand for electricity. About 60 countries have so far scaled back plans to build new coal-fired power plants after the 2015 Paris Agreement, which seeks to limit global warming to 1.5°C above pre-industrial levels and achieve net-zero emissions by 2050.
Taqa's coal divestment in India is a "considered adjustment" to its generation portfolio, said Farid Al Awlaqi, chief executive of Taqa's generation unit. The company planned to "continue progressing towards a more sustainable energy mix", he said.
"It aligns with Taqa’s broader efforts to transition towards cleaner energy solutions, reduce long-term emissions and respond to the changing dynamics of global energy demands," he added.
The UAE aims to reach net-zero emissions by 2050 and intends to increase its target for power generation from clean energy to 30 per cent by 2030. The clean energy goals have accelerated efforts by UAE-based companies to divest from polluting fuels and focus on cleaner forms of energy.
Despite its India divestment, Taqa still has coal in its portfolio. Through its Moroccan subsidiary, it runs and operates the 2-gigawatt Jorf Lasfar plant, the largest coal-fired power plant in the Middle East and North Africa.
Taqa has a plan to reduce scope 1 and 2 greenhouse gas emissions across the group by 25 per cent and in the UAE by 33 per cent by 2030, achieving net zero by 2050, it said on its website.
Established in 2005, Abu Dhabi-listed Taqa is a diversified utilities and energy group with assets in countries including the UAE, Canada, Ghana, Morocco, Oman, the Netherlands, Saudi Arabia, the UK and the US. It holds a 43 per cent stake in Masdar, Abu Dhabi's renewable energy company.
