The Saudi Power Procurement Company inks two PPAs for two solar farms

Good morning, wonderful people. We have a compact issue for you this morning with a mixed bag of climate updates from around the region.

THE BIG CLIMATE STORY- The Saudi Power Procurement Company signed power purchase agreements to offtake energy from the 1.1 GW Al Henakiyah Solar PV project and the 400 MW Tabarjal solar park.

^^ We have the details on this story and more in the news well, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- There’s no single story dominating the headlines, but a new report from energy research firm Wood Mackenzie has found that China’s dominance over the global solar energy supply chain will continue for much of the next decade. China has poured over USD 130 bn into its solar industry this year and intends to bring over a TW of solar wafer, cell and panel capacity online by 2024. The report findings come as the US and India subsidize local solar production in a bid to reduce the reliance on Chinese-made goods. The story got ink in Reuters.

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OVER IN COPLAND- Denmark plans to launch green shipping corridors initiative at COP: Copenhagen-based independent research and development center Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping is planning to make “substantial” contributions to COP28 activities, with a focus on moving forward with plans to build green shipping corridors across Europe, CEO and CSO of the center Tanja Dalgaard said in an interview with UAE’s Iris Media. The center will collaborate with DP World and other partners to bring the green corridor initiatives to life, Dalgaard said. Lenders including the International Monetary Fund recently identified a strong need for multilateral cooperation on trade policies to safeguard the global goals of averting climate change, which can be achieved through green corridors.

More details: In efforts to decarbonize the global maritime industry, the Mærsk Mc-Kinney Møller Center is currently working on the pre-feasibility studies for a number of green corridor projects including one in Northern Europe and the Baltic Sea and another in Chile.

We have a rough timeline for the projects: Dalgaard unveiled that the first methanol ship is expected to be operational by 2026 and the first ammonia ship by 2028. However, smaller green corridors focused on specific regions and fuels will be launched sooner.

Egypt will eventually be linked to Europe’s corridors: Last month, Egypt signed a framework agreement with C2X — which is owned by AP Moller Holding and AP Moller-Maersk — worth some USD 3 bn for the production of green methanol and its derivatives. This is part of a larger plan to reach an annual production output of over 3 mn tons by 2030 by pursuing large-scale green methanol projects near the Suez Canal in Egypt and the port of Huelva in Spain, among several other planned locations.

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WATCH THIS SPACE #1- Oman's Hyport expected to award PMC contract by year end: Oman's Hyport consortium is likely to award the project management consultancy (PMC) contract for its Hyport Duqm green hydrogen and ammonia project by 4Q 2023, Zawya reports, citing a source it says has knowledge of the matter. The winning company will provide technical support to develop the project and handle the design review and management through the FEED phase. Hyport signed an agreement with Oman’s Public Authority for Special Economic Zones (Opaz) last month allocating 150 sq km of land for a wind and solar energy generation project to power the production of green ammonia and other hydrogen derivatives.

Oman + Hyport 💚 green ammonia: Posco-Engie consortium also signed a land allocation agreement with Opaz last month for a green ammonia and green hydrogen derivatives plant with a production capacity of 1.2 mn tons annually. Hyport also signed an MoU in July with Hydrom to establish a green ammonia facility to be powered by 4 GW of renewables and a production capacity of 1 mn tons.

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WATCH THIS SPACE #2- ADIB’s first green sukuk could happen any day now: Abu Dhabi Islamic Bank (ADIB) is planning to issue its first green sukuk soon “subject to market conditions”, the bank said in a disclosure (pdf) to the Abu Dhabi Securities Exchange (ADX). ADIB intends to issue a five-year benchmark-sized USD denominated green sukuk under its USD 5 bn Trust Certificate Issuance Programme, according to the document, adding that the issuing should follow investor meetings taking place said to have taken place yesterday.

Advisors: The Islamic lender has tapped Standard Chartered Bank as sole global coordinator, along with Emirates NBD Capital, First Abu Dhabi Bank, and Sharjah Islamic Bank as joint bookrunners and joint lead managers, according to the document. ADIB itself will also jump in as a joint bookrunner and manager.

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WATCH THIS SPACE #3- Tesla is coming through with more affordable models: Tesla plans to build a EUR 25k (USD 26.8k) car at its factory in Germany in a bid to encourage more EV sales, Reuters reports, citing a source with knowledge of the matter. There is no information on when production is scheduled to start. Tesla’s move comes in light of recent consumer surveys in the EU and US revealing the price tag of EVs — in addition to high interest rates — is holding back the larger scale adoption of greener mobility. The average retail price of an EV in Europe in the first half of 2023 was over EUR 65k, Reuters said citing autos research firm JATO Dynamics.

Tesla has a different strategy than its competitors: Unlike some competitors such as Volkswagen who focus their strategy on protecting profit margins in the transition to EVs, Tesla has opted to focus its goal on mass expansion, with a goal to increase vehicle deliveries to 20 mn by 2030, of which it has delivered almost 4.9 mn of since 2016.

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HELP SUPPORT GAZANS-

Want to support relief efforts in Gaza, but don’t know how? We’ve got you. More than a mn people in Gaza have been thrown from their homes and every human being there lacks access to food, water, and fuel amid the most intense bombardment any population has endured this century. The charities we’re listing below are regional organizations working on Gaza relief that we think you can trust if you want to make a donation.

#1- Egyptian Red Crescent Society is one of the nation’s leading providers of humanitarian and emergency medical services. The Egypt Red Crescent accepts donations in EGP online and is on Fawry with the service code 99981. You can also donate to the organization through this Banque du Caire account: 49/403/30 (EGP) or 1065/601/30 (USD — code: BCAIEGCX030).

#2- The Emirates Red Crescent Authority has launched the Tarahum — For Gaza campaign and is accepting donations online via What’s App, SMS, Apple Pay, credit card, or bank transfer to ADIB (AE370500000000020000417).

#3- The King Salman Humanitarian Aid and Relief Center has launched the Sahem campaign accepting donations via their website, mobile apps on Apple Store and Google Play, or bank transfer to Al Rajhi Bank (SA5580000504608018899998).

#4- UNICEF has been on the ground in Gaza since the start of the crisis, providing urgent supplies and aid. You can donate to the agency directly in your local currency using your credit card here.

ALSO- The folks at Talabat are processing donations for a range of Gaza relief appeals by charities including the Egyptian Food Bank, Misr El Kheir and the Emirates Red Crescent Authority’s Tarahum campaign. You can make the donation via the Talabat app using your credit card.

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CIRCLE YOUR CALENDAR-

Turkey will host the GCC-Türkiye Economic Forum from Saturday 11 November to Monday, 13 November in Istanbul. The forum aims to bring together key ministers and state officials from the Gulf countries and Turkey to explore areas of potential investments and commercial ties and to establish a network for joint projects in the energy, defense, banking, retail, and transportation sectors. The event is organized by the Gulf Research Center and Turkey’s International Cooperation Platform.

The UAE will host the MENA Solar Conference from Wednesday, 15 November to Saturday, 18 November in Dubai. The event will focus on all things photovoltaic, with a full programme on PV materials and devices, future technologies, PV reliability, and forecasting for performance assessment. The conference will also touch on how developments in system operations, concentrated solar power, and grid integration are necessary for the green transition. This will be the first scientific and technical conference specializing in solar energy systems in the region.

The UAE will host the Aviation and Alternative Fuels conference from Monday, 20 November to Friday, 24 November in Dubai. The event will bring together senior government officials and international organizations to assess progress in the development and deployment of sustainable aviation fuels (SAFs) and lower-carbon aviation fuel (LCAF) measured according to the targets outlined in the 2050 Vision for SAF, agreed upon at the last Aviation and Alternative Fuels conference in 2017.

The UAE will host the Abu Dhabi Finance Week (ADFW) from Monday, 27 November to Thursday, 30 November in Abu Dhabi. The event will gather government officials, banks, financial institutions, and VCs to delve into today’s economic, technological, and sustainability conversations.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

Saudi Power Procurement Company inks two PPAs for 1.5 GW solar farms: State-owned Saudi Power Procurement Company (SPPC) signed power purchase agreements (PPA) to offtake energy from the 1.1 GW Al Henakiyah Solar PV project and the 400 MW Tabarjal solar park, according to statements here and here. The government-owned company is tasked with the predevelopment, tendering, and subsequent offtake of energy from projects under the Saudi Energy Ministry’s supervision.

First off, Al Henakiyah: The project is being developed in KSA’s Al Madinah by the UAE’s Masdar, France’s EDF Renewables, and Saudi Arabia’s Nesma Co. under a build-own-operate agreement, and SWPPC has inked a a 25-year PPA with the consortium at USD 1.68 per KWh (c. SAR 6.31), the company notes. The companies reportedly plan to break ground on the PV plant in 2024 and the project is expected to come online in 2026. Once operational, Al Henakiyah is expected to generate enough clean energy to power some 190k households annually.

Next, the Tabarjal solar farm: The project is being implemented by China’s Jinko Power, Sun Glare, and Sunlight Energy Holding, and will be located in Tabarjal in the north of the kingdom. SWPPC has also inked a 25-year PPA with the consortium at USD 1.68 per KWh (c. SAR 6.40). The project — for which Jinko is the managing and technical member — is expected to generate enough clean power annually for some 75k households in the country, SPPC notes. The consortium will likely begin construction on the plant in 2024 and kick off operations in 2026.

We knew this was coming: The agreements follow SPPC’s announcement of shortlisted bidders for the fourth round of solar projects under the country’s National Renewable Energy Program (NREP). Both Al Henakiyah and Tabarjal are expected to lure in over SAR 4 bn (c. USD 1.06 bn) in investments.

SPPC has been busy: The company has awarded over 11 GW of renewable energy capacity to date as part of KSA’s target of sourcing 50% of its power mix from renewables by 2030, before becoming fully carbon neutral by 2060, according to the statements. Late last month, the company granted Acwa Power an Initial Commercial Operation certificate for a phase of the 1.5 GW Sudair solar PV, greenlighting activation of another 25% of the project which is now 75% complete. Back in December, a JV between Acwa Power and Badeel signed a 35-year power purchase agreement with SPPC for the 2 GW Al Shuaibah 2 solar plant. And earlier in 2022, SPPC announced it would offtake power from three planned wind farms that will have a combined 1.8 GW power capacity.

Oman says gas stations must have EV charging stations: Oman’s Commerce, Industry, and Investment Promotion Ministry has issued a resolution mandating the country’s petrol providers to install EV charging points at all their gas stations, Times of Oman reports, referencing a statement.

The details: The new law is in line with the country’s 2050 net-zero target, and would see violators incur OMR 1k (c. USD 2.6k) in fines after a warning on the first offense. Repeat offenders face a fine of OMR 3k (c. USD 7.7k).

Gearing up for the EV transition: Oman’s government announced last week a target to triple the number of EV charging stations from one hundred to 300 by 2025. The government says the number of EVs in the sultanate currently stands at some 400 cars.

Oman is on a mission to decarbonize mobility: The government announced back in May it would waive customs tax and registration fees for EVs and their spare parts until 2026 in a bid to incentivize the transition to low-carbon mobility. Earlier this month, Omani state-owned gas network operator OQ signed an agreement with Oman’s Transport, Communication, and Information Technology Ministry, Asyad Group, Oman Oil Marketing Company, and Air Liquide Group to conduct a joint study on the feasibility of establishing hydrogen fuelling stations in the country’s Duqm economic zone. The joint study aims to leverage Oman’s proximity to foreign markets and its high solar and wind power potential to create a centralized hub for hydrogen-powered vehicle recharging.

Another rocky quarter for Fertiglobe: UAE-headquartered urea and ammonia exporter and MENA’s largest producer of nitrogen fertilizers Fertiglobe reported USD 41 mn in net profits — a 86% y-o-y decline by our calculations — compared to USD 292 mn in the same quarter last year, according to a disclosure (pdf) to the ADX. The company’s revenues dropped by 60% y-o-y to 525 mn in 3Q 2023.

Fertiglobe is looking forward to a better 4Q: The fertilizer company noted an increase in ammonia and urea prices by 150% and 35%, respectively, after the prices reached their lowest point in late 2Q/early 3Q of this year. The higher prices of nitrogen are driven by tightened market balances due to record low inventory levels, healthy demand from key importing regions, restrictions on Chinese urea exports, and supply disruptions, Fertiglobe CEO Ahmed El Hoshy explained in the statement, adding that he expect the benefits from these increases to materialize in the fourth quarter.

Looking ahead: “Fertiglobe's short-term outlook is further underpinned by a strong order book for ammonia and urea sales at higher prices for the remainder of the year,” El Hoshy said, adding that in the medium to longer term, the nitrogen outlook also “remains favorable, with limited incremental supply additions over the next several years.” The company is continuing to expand its low-carbon ammonia capacity to meet the increasing demand for low-carbon hydrogen and ammonia, pointing to Fertiglobe’s recent partnership with UAE oil giant Adnoc to pilot the world’s first cost-effective modular carbon capture unit, he added.

AGRICULTURE-

Morocco has launched the first phase of the Oudiyat Tious hydro-agricultural development project in Boujdour, Morocco World News reports. The MAD 121 mn (USD 11.8 mn) project will irrigate 2.5 sq km of land, optimize water use, and create an added agricultural value of MAD 22 mn. It also aims to enhance the forage self-sufficiency of the agricultural cooperative to 70%. Morocco announced last year that it was investing USD 7.1 bn in upgrading its infrastructure and agriculture.

DECARBONIZATION-

OQ signs charter to advance net zero ambitions: OQ has signed the Sohar Net Zero Alliance charter in collaboration with companies operating in the port to accelerate the sultanate's transition to carbon neutrality, the company said. The charter aims to advance efforts in using renewables and green hydrogen, and establishing an offshore carbon capture and sequestration (CCUS) facility and services at the port according to a statement.

Toward greener Oman ports: Oman's Public Authority for Special Economic Zones and FreeZones (Opaz) has signed seven MoUs last month to support various green energy projects in Oman's port city Duqm.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Emirates rolls out SAF-powered flights: Emirates' first flight powered by a sustainable aviation fuel (SAF) blend took off from the Dubai International Airport for Sydney on 24 October. The SAF was provided by Shell Aviation as part of a supply agreement signed last month. (The National)
• Sonelgaz and TotalEnergies talk renewables: Sonelgaz and TotalEnergies discussed cooperation in renewable energy and energy storage. (Statement)
• The UAE backs sustainable mobility: The UAE’s Energy and Infrastructure Ministry has signed an MoU Emirati real estate company Aldar Properties to install EV charging stations. (Statement)

US-based Air Products is going big on blue hydrogen: US-based gas supplier Air Products is planning to build a CO2 storage and treatment plant at its existing hydrogen facility in Rotterdam as part of efforts to develop the EU’s largest blue hydrogen production unit, according to a statement. The planned carbon capture plant — which is expected to come online in 2026 — would also serve Exxon Mobil’s Rotterdam refinery and other clients in Air Products’ hydrogen pipeline network system, the statement notes. Air Products — which owns a 33.3% stake in Neom’s USD 8.4 bn green hydrogen plant — also plans to export the green fuels it produces from its KSA plant to the EU through an exclusive long-term offtake agreement with Acwa Power and Neom.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Sembcorp to halve emissions by 2028: Singaporian energy company Sembcorp will invest USD 7.7 bn — about 75% of its total investments from 2024-2028 — to halve its carbon emissions by 2028. (Reuters)