Accelerating the energy transition

Frédéric Claux, managing director for flexible generation and retail, AMEA, and country manager GCC and Pakistan at ENGIE, talks to The Energy Year about how the UAE is supporting the energy transition within the country and across the GCC region and how the company is contributing to these efforts. ENGIE is a global low-carbon energy company.

How is the UAE supporting the energy transition in the country and across the region?
The UAE is making countless efforts to foster the energy transition, and this is seen through renewable energy projects that have been developed in the areas of solar and green hydrogen. The fact that COP28 will be held in Dubai is also a boost to this cause. The UAE is diligently preparing for a sustainable and prosperous future.
The energy transition is seen across the whole GCC region, especially in Saudi Arabia, which is fiercely preparing for a future powered by fewer fossil fuels. Countries in the region have come to terms with the fact that they need to diversify their economies, which so far have been highly dependent on oil.
Going forward, we will see an increasing penetration of renewable energies, particularly solar, in the UAE. However, as it will take time for an energy transition, we see our thermal fleet playing an important role in bringing reliable stability to the grid until the country is ready. Green hydrogen, due to its storage capabilities, has the potential to play a similar pivotal role.
Similarly, while battery storage is poised to become increasingly crucial in the coming years, there needs to be a more robust strategy for this to fully flourish.
Furthermore, battery storage could bring the same flexibility and stability as a gas power plant, in the interim period but also in the long term. Standalone battery storage and battery storage coupled with renewables are both viable options. In some cases, these schemes can be off-grid, depending on the regulations and permits in place.

What contribution is ENGIE making to the energy transition in the GCC region and the UAE?
ENGIE is keen to accelerate the transition towards a carbon-neutral economy, and a clear testament to this is our ambition to achieve our global net-zero target by 2045. We are actively pursuing diversification of our energy mix portfolio by making significant strides in the areas of desalination, battery storage, district cooling, renewables and green hydrogen. As early adopters in these sectors, we consider them crucial pillars of our commitment to the energy transition.
Today, we stand as a leading independent water and power investor, developer and producer in the GCC region. Our portfolio includes 30 GW of power and 5.8 million cubic metres per day of clean, drinkable water through advanced desalination processes.
In the UAE, we have six independent power and water projects that produce over 10 GW of power and 2.3 million cubic metres per day of desalinated water. Additionally, we have 87 district cooling plants across the region through our partnership with Tabreed that produce 1.42 million refrigeration tonnes.
Globally, we aim to generate a total capacity of 80 GW of renewables by 2030. Currently, we are already generating 37-38 GW from wind, solar and green hydrogen.
Despite the temporary slowdown in renewables tenders caused by the pandemic, both governments and companies have recognised the urgency of accelerating the transition. As a result, we are witnessing a multitude of diverse projects in the pipeline, with numerous upcoming tenders anticipated. However, the competition for IPP and IWPP tenders is intensifying, but we are preparing to secure bids that align with our strategic interests. Given the abundance of incentives for investing in large-scale renewables projects in the region, we consider them pivotal in achieving our global goal of 80 GW.

In what ways are you betting on large-scale PV projects compared to distributed generation in the region?
In the GCC region, we are taking on large-scale utilities projects. While in other parts of the world it would take almost a decade to materialise a large-scale renewable energy project due to permit issues, land availability and community problems, in the UAE the development of a project until its commercial operations date (COD) is only around 18-24 months.
Therefore, the Emirates offers an ideal environment for us to fulfil our 2030 commitments, with minimal risks thanks to factors such as abundant land availability and streamlined permitting processes.
In terms of distributed generation, our focus on exploring this model extends to countries like Saudi Arabia, primarily due to the UAE’s legal landscape posing limitations on the development of this business model. For instance, in Dubai, the rooftop capacity is restricted to 500 kW, which is relatively small and hinders us from further expanding our presence in this domain within the Emirates.
However, Saudi Arabia has many remote industrial facilities that are not connected to the grid and rely on diesel engines as their primary source of power. This not only results in inefficiencies but also contributes to carbon emissions, which will need to be eradicated for the kingdom to achieve its decarbonisation mission. To address this, we are proposing replacing the diesel engines with solar panels, which offers a cleaner and more sustainable energy alternative and also presents an opportunity to PV systems with battery storage in the future.
In 2018 we launched in Saudi Arabia the first captive solar 30-MW PV project, NADEC. This inspired us to extend similar projects to numerous other clients, given the prevalence of off-grid industrial facilities in the region. These projects serve as opportunities for us to expand our operations while simultaneously making a significant positive impact on the environment and supporting the kingdom’s sustainable development goals.

How are you advancing the UAE’s hydrogen development through your alliance with Masdar?
ENGIE is a first mover in green hydrogen. In Q4 2021, we signed a strategic alliance with Masdar to explore the co-development of a UAE-based green hydrogen hub. Along with Masdar, we are looking to develop projects with a capacity of at least 2 GW by 2030, with a total investment in the region of USD 5 billion.
Alongside Masdar, we also signed an agreement with Fertiglobe to participate in developing a 100-MW-plus green hydrogen production plant in Al Ruwais, which is expected to be commercially operational in 2025. We are targeting a final investment decision sometime in H2 2023.
This strategic partnership seeks to harness the synergies between Masdar, renowned for its expertise as an investor and developer of renewable energy projects, and ENGIE, a frontrunner in green hydrogen deployment. The primary objective is to establish an advantageous early-mover position within the burgeoning hydrogen market in the UAE.
By leveraging existing infrastructure, the companies will initially focus on meeting the local demand for green hydrogen. As the partnership progresses, the ultimate aim is to expand the capacity, envisioning the creation of a formidable giga-scale green hydrogen hub for the GCC region.

How critical is water desalination in the UAE, and how is ENGIE contributing with its plants?
The UAE has been using desalination methods as a reliable way of producing freshwater. Underground water aquifers are being depleted, which makes desalination a crucial solution to this problem. In recent years, there has been a decoupling of the power business from the water business, which historically operated in tandem. This shift can be attributed to the significant advancements in reverse osmosis (RO), which has emerged as a far more efficient alternative to outdated thermal technologies.
The GCC region faces severe water stress, and this has necessitated substantial investments in desalination projects. Recognising the urgency of addressing water scarcity, significant resources have been allocated towards the development and implementation of robust desalination initiatives throughout the region.
The business model in the UAE operates under a well-established public-private partnership (PPP) structure, with the Emirates Water and Electricity Company (EWEC) playing a crucial role in tender oversight and acting as the offtaker. Upon successfully securing a project, TAQA, our esteemed partner, receives 60% of the asset shares. Currently, we own and operate four desalination plants under a 60/40 share scheme with TAQA, collectively producing an impressive 2.3 million cubic metres of desalinated water per day.
Moreover, in February 2023, ENGIE and TAQA signed an agreement with EWEC for the development of the Mirfa 2 Reverse Osmosis Independent Water Project, a desalination facility in Abu Dhabi and will produce 120 million gallons [454.2 million litres] of water per day, meeting the requirements of up to 210,000 households in Abu Dhabi.

What verticals does ENGIE Solutions offer to realise decarbonisation?
ENGIE Solutions is a fully owned subsidiary of the ENGIE Group, and our clients consider us as their long-term partners on their journey to decarbonisation. Within ENGIE Solutions we have three distinct verticals, each catering to different aspects of our operations. The first vertical focuses on on-site generation, encompassing a wide range of projects such as captive solar ventures like NADEC and cogeneration solutions tailored for industrial clients.
The second vertical, known as low-carbon networks, includes various initiatives aimed at promoting sustainability. One prominent example is our district cooling business, where ENGIE holds a 40% share in Tabreed. Additionally, this vertical encompasses projects related to district lighting and sustainable mobility. We recently secured a large-scale project with the Abu Dhabi municipality for district lighting. Furthermore, we have an agreement with Mubadala which aims to establish an extensive network of EV chargers across the country, aligning with the growing popularity of electric vehicles and the need for robust charging infrastructure.
The last vertical revolves around energy performance, efficiency and management. We have an iconic project with the Lafarge cement factory, where we have proposed a dedicated investment fund to help them optimise energy use and reduce costs.

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