Pattabi, Marco, welcome. Pattabi, to you first.
Tell me about the opportunities and challenges when it comes to
renewable project development.
Georgie, the renewable project development challenges are about
the same worldwide.
Generally speaking, it is getting access to land and
sites.
Second one, being interconnection: being able to
actually connect to transmission lines, and then everything
around the supply chain has been upside down these days.
To that, I would probably now add financing as well because
interest rates are up and so project costs have gone up
overall, as a result of it.
So, all of those are the big challenges today
on renewable development.
Marco, what is ACWA Power's vision for the future of the
energy sector and what are you doing to play your part in that
future?
We're very excited about everything that is going on.
I always say that renewables today are not developed out of
ideology.
They're developed because it's the cheapest, fastest, most
secure energy form.
And so everybody wants to build a lot of that, and we are right
there.
We're an enabler.
For every dollar that we invest, we mobilize ten dollars of
equity and financial partners.
So we really believe that we bring together technology
partners and everything, all the ecosystem that is needed to
develop these renewables.
So that's what we're doing for the environment today.
We're doing more on green hydrogen and water desalination
because those can also be integrated with renewable energy
in order to achieve a greater decarbonization of the energy
sector.
What are you doing with those?
Tell me a bit more.
So, in green hydrogen or green ammonia, we are the first mover,
I think,
together with our partners, Air Products and NEOM in Saudi
Arabia, we're developing an $8.5 billion project where we already
invested more than a billion and a half, is going to come to
production by the end of 2026.
It's the largest in the world fully dedicated for export.
To give you an idea, 600 tons per day of capacity.
The largest green hydrogen project in the United States,
three, so it's 200 times bigger.
We just broke ground on the second project in Uzbekistan to
decarbonize the fertilizer sector for export into Europe,
which is very relevant now with CBAM coming up.
You need to decarbonize the system if you want to continue
to import into Europe.
On water desalination, we just launched at Red Sea Global where
we are providing the utilities to the Red Sea Global Company,
basically the big tourist destination.
All the utilities in water desalination, there is 100%
fueled by renewables.
In other projects in Saudi Arabia and the Emirates, 30% of
the capacity of the energy demand is renewable energy.
Pattabi, so much innovation happening in this space.
What is exciting you the most?
Well, what excites me the most is the scale of the projects
that are going on.
You know, I come from Texas, we say everything is big in Texas.
Yeah, everything is bigger in the Middle East it looks like.
So the sheer scale of what we're looking at and then the level of
innovation that's happening from a technology standpoint, all
exciting.
Not to put a damper though on things, but what are some of the
challenges that you're facing at the moment, Marco, and I
suppose, what are some of the challenges you're foreseeing in
the future?
So, it's different country from country.
I would say here in the Gulf, the returns tend to be quite
low.
So you have to be extremely efficient on your supply chain.
That is because the scale we have here in the region is
massive, and there's a lot of competition to reach and achieve
basically a position in this market. For other markets, in
emerging markets,
I'm talking and thinking now about Africa, Southeast Asia,
the problem there is scale.
So it's very difficult to achieve really the scale that we
have in Saudi Arabia, or the Emirates, or Central Asia now
for us.
And so what we're trying to do is to work with the local
governments on-site, trying to see how we can accelerate the
pace of development.
Finally and overall, what are you hoping that will come out of
this COP, with regards to this sector and what it addresses?
Yeah, let me start off.
I'd love to hear Marco's perspectives as well.
Energy Day is coming up on Tuesday, but there's a lot of
obviously discussions and negotiations that have been
happening over the course of the last six to nine months.
The big things remain the big things.
So tripling renewables, doubling energy efficiency, near-zero
methane in the oil and gas value chain, and then Scope 1 and 2
net zero by the oil and gas players across their full value
chain.
And then there's some new and exciting things hopefully that
come out around getting clarity on hydrogen trade and having,
you know, the ability to be able to move hydrogen derivatives
around the world in a consistent way.
So, those are some of the big things that are needed and of
course hard-to-abate sectors and their role in how they
reformulate their energy value chains.
So those are my hopes and expectations.
I'd love to hear your thoughts.
I think I concur on the role of green hydrogen in hard-to-abate
sectors.
As I mentioned, you know there's no debate today on renewable
energy for power generation.
That's happening.
I think where we need to focus is the hard-to-abate where you
need a green hydrogen or green ammonia as a solution on a
global trade that is something that is emerging.
So we need to work together both on the regulation, the
definition, and try to find the scheme that is best to basically
achieve export projects from the most competitive market here in
these areas, from North Africa, Middle East, but also Southeast
Asia into the final demand that is mainly we see Europe, Japan,
Korea.
Marco, Pattabi, thank you so much for your time.
Thank you.