Saudi Arabia launches renewable energy tenders, eyes H2-powered train

Good morning, wonderful people. We hope you had a restful weekend.

THE BIG CLIMATE STORY in our corner of the world- Saudi Arabia wants to build five renewable energy projects with a total capacity of 3.3 GW — three wind and two solar. We have more on this in the news well below.

ALSO- German Chancellor Olaf Scholz was in the neighborhood this past weekend in a bid to secure new energy supplies for his gas-starved nation. Not much was signed on the green energy front, but his message to the GCC was clear: Germany is done with sourcing energy from one region. We break down the visit and what was said in this morning’s climate diplomacy, below.

SMART POLICY #1- Is Saudi looking to source a hydrogen-powered train? The Saudi Railway Company (SAR) and French rolling stock manufacturer Alstom signed an MoU to develop hydrogen-powered train solutions for the kingdom, Alstom said. In August, Saudi Arabia’s Ministry of Investment signed an MoU with Alstom to discuss potential investments in the country’s transport sector. Alstom also agreed to look into making the kingdom its regional headquarters.

Alstom actually builds hydrogen-powered trains: While the current agreement only sees Alstom consulting on a strategy, the company does build and sell hydrogen-fuel-cell powered trains, including the Coradia iLint, which it unveiled back in 2016, which it says produces zero-emissions.

Ditto the UAE? Alstom also signed an MoU with the UAE’s Etihad Rail during InnoTrans 2022 in Berlin to develop sustainable technologies in the railway sector, according to a statement posted Thursday. The agreement partly focuses on developing “zero-emission” technologies. Etihad Rail also signed MoUs with France’s SNCF, Caterpillar’s Progress Rail, and electric systems manufacturer Thales Group.

SMART POLICY #2- QatarEnergy and GE to work together on carbon capture: State-owned oil and gas company QatarEnergy and GE signed an MoU to develop a carbon capture roadmap for Qatar’s energy sector, QatarEnergy announced in a statement on Wednesday. The two will study the feasibility of setting up a “world-scale” carbon capture hub at Ras Laffan Industrial City, which is administered by QatarEnergy and where GE has over 80 gas turbines, the statement said. The roadmap will address the development of carbon capture and storage (CCS), the use of hydrogen, and potentially the use of ammonia in GE gas turbines in a bid to curb emissions.

---

THE BIG CLIMATE STORY OUTSIDE THE REGION- World Bank boss in hot water over what he did (and didn’t) say about climate change: World Bank President David Malpass is continuing to come under fire after declining to say directly at a New York Times event on the sidelines of the United Nations General Assembly last week that he accepts the scientific consensus on climate change as being a human-driven phenomenon, multiple outlets report. The White House directly condemned Malpass’ words, while world leaders and environmental groups have strongly criticized the World Bank president (nominated to that office by Donald Trump) for not taking a clear and unequivocal stance on the science of climate change.

Malpass has since publicly said he accepts that human activity is driving climate change and sent an internal memo to World Bank staff reiterating this message.

Malpass says he won’t step down: Malpass is “facing mounting pressure to resign,” the Financial Times reports, but the World Bank boss maintains that no shareholder has asked him to do so, Reuters notes. His five-year term is due to end in spring 2024 and the US Treasury is said to have declined to comment when asked if it supported a second term for him. The US President usually nominates World Bank presidents, whose appointment is then subject to approval by the bank’s board.

The story is everywhere: New York Times | Reuters | Financial Times | Wall Street Journal | Washington Post.

ALSO- In a refrain that should ring true to MENA business leaders: CEOs want governments to drive climate action: Over 700 CEOs and senior business leaders in seven major economies want to see government policies driving climate action, a survey by Cambridge University’s Institute for Sustainability Leadership (CISL) revealed. Some 80% of the business leaders who took part in the survey said that government policies are essential for national and global action to mitigate and adapt to the effects of climate change, according to a statement published on the university’s website on Wednesday. Some 70% of them see regulation as key to achieving their own companies’ climate and net zero goals. Of the 70% that said they have some sort of net zero plan in place, about 80% say they have the bulk of investment needed to make these goals happen. The survey included folks in the UK, Germany, the US, Brazil, Japan, India and South Africa.

---

Two pension funds call it quits on Mark Carney’s green alliance: Pension funds Cbus Super and Bundespensionskasse have pulled out of the former Bank of England governor’s Glasgow Financial Alliance for Net Zero (GFANZ), the FT wrote. The USD 70 bn Australian Cbus fund left the alliance to focus on internal climate change activities, while the EUR 1.3 bn Austrian Bundespensionskasse refused to disclose its reasons for leaving. GFANZ seeks to tackle climate change from within the financial system by getting members to decarbonize their combined USD 130 tn in assets.

The alliance could lose more of its members soon, with major banks including JPMorgan, Morgan Stanley and Bank of America threatening to pull out over legal risks associated with meeting strict decarbonization rules.

Subscribe to Enterprise

***
YOU’RE READING ENTERPRISE CLIMATE, the essential regional publication for senior execs who care about the world’s most important industry. Enterprise Climate covers everything from finance and tech to regulation, products and policy across the Middle East and North Africa. In a nod to the growing geographical ambitions of companies in our corner of the world, we also include an overview of the big trends and data points in nearby countries, including Africa and southern Europe.

Enterprise Climate is published at 4am CLT / 5am Riyadh / 6am UAE Monday through Thursday by Enterprise, the folks who bring you Enterprise Egypt, your essential 6am and 3pm read on business, finance, policy and economy in Egypt and emerging markets.

Subscribe to Enterprise Climate here or reach out to us on climate@enterprisemea.com with comments, suggestions and story tips.

***

THE COUNTDOWN TO COP-

Michael Bloomberg launched his 45-day (now 40) Bloomberg Countdown to COP27: Michael Bloomberg, the UN secretary general’s special envoy on climate has launched a month-and-a-half-long series of initiatives and commitments, aims to deliver on UN chief António Guterres’ calls for climate action, according to a UN statement last Wednesday. Last year at Glasgow, Bloomberg committed to help cancel or close a quarter of the world’s coal plants by 2025.

Egypt and Morocco are also on Bloomberg’s green philanthropy agenda this year: Bloomberg pledged to expand the work of his foundation Bloomberg Philanthropies to accelerate the energy transition in 15 additional countries that have potential for renewable energy and high energy requirements, including Egypt, Morocco and Ethiopia. The foundation previously pledged to support the transition in 10 countries, including Pakistan, Turkey, Nigeria and South Africa. Bloomberg met with Morocco’s Prime Minister Aziz Akhannouch and Minister of Investment Mohcine Jazouli in New York on Thursday to discuss Morocco’s energy transition.

(xxYN) Wind power industry leaders signed a manifesto to streamline the industry ahead of COP27. The Global Wind Energy Manifesto for COP27 calls on governments to implement measures to streamline planning and permits, grid upgrades and renewable-friendly reforms to power markets. Signatory industry groups, which include Siemens Gamesa, Orsted and Iberdrola, called on governments to align energy security with climate action and speed up the deployment of wind energy ahead of COP27.

---

HAPPENING THIS WEEK-

Conference season is ratcheting up, with a number of regional climate events taking place this week:

• Our friends at HSBC are hosting an energy transition webinar series this Tuesday through Thursday (27-29 September). The series will look at the “latest climate analysis in relation to the global energy market and transition to net zero” in six different sessions covering energy security, what is required to ensure the success of COP27, financing and investment needs for the energy transition, and the scaling up of renewables in the region, among other topics. (Register).
• The World Cement Association’s (WCA)’s global conference will take place from 25-28 September at Emirates Towers in Dubai, UAE. (Register).
• The Wetex and Dubai solar show will run 27-29 September at the Dubai World Trade Center.
• Dubai will host the World Green Economy Summit on 28-29 September. (Register).
• Fitch Solutions is hosting a webinar on Saudi Arabia’s energy transformation next Thursday, 29 September. (Register).

Saudi Arabia has announced five new renewable energy projects with a combined capacity of 3.3 GW, the Saudi Press Agency reported yesterday. The projects consist of wind and solar farms, and were launched by the country’s power procurement agency, which is the principal buyer.

The breakdown: The country announced three wind facilities that will have the capacity to produce 1.8 GW of power and two solar farms with a combined capacity of 1.5 GW.

How much will all of this cost? The government has not disclosed the financial details of the projects, but the price tag will likely stretch into nine figures USD. Egypt’s 1.8 GW Benban solar park — the largest in Africa — cost at least USD 4 bn to build.

Scholz’s quest for Gulf gas didn’t quite pan out: German Chancellor Olaf Scholz’s whistle-stop tour around the Gulf over the weekend was supposed to secure the country new, long-term supplies of gas as it tries to enter its post-Gazprom future with minimum blackouts and as shallow a recession as possible. After spending two days talking to officials in Abu Dhabi, Doha and Jeddah, the chancellor walked away with a single, 137k cubic-meter shipment of LNG courtesy of the UAE and a non-binding agreement with Adnoc to deliver more next year, Emirati state media and German utility company RWE said yesterday. Scholz’s visits to Qatar and Saudi Arabia did not appear to have yielded immediate agreements.

Debuting Germany’s new LNG terminals: The shipment will be the first sent to Germany’s floating LNG terminal at Brunsbüttel, which RWE called an “important milestone” in the country’s development of LNG infrastructure.

Another five coming? A source told the Financial Times that Adnoc could send another five cargoes next year.

Germany needs the gas: Europe’s largest economy is facing a long, cold winter without Russian gas after Gazprom cut flows through the Nord Stream pipeline earlier this year. The energy crisis is sending shockwaves through the country’s industrial sector, while the government has been forced to nationalize the country’s biggest utilities company which faced collapse due to the skyrocketing gas and electricity prices.

A lot of gas: The country is now looking to find substitutes for the 142 bn cbm of gas it imported from Russia last year, an amount that a few shipments of LNG from the UAE doesn’t begin to replace.

France is doing a better job of tapping the region’s resources: French oil major TotalEnergies said Thursday it will invest USD 1.5 bn in the expansion of Qatar’s North Field, a move that could hand it valuable supplies of natural gas. This comes a few months after the company took a 25% stake in Qatar’s new USD 30 bn gas project, which is slated to be the biggest in the world.

The visit wasn’t all fossil-fuel-related: Emirati state-owned renewable energy company Masdar signed an MoU with German utility company RWE to explore wind projects off the German coast, according to a statement carried by WAM. Areas in the North and Baltic Seas could generate up to 10 GW of power by 2030, though it remains unclear how exactly the two companies will work together and whether Masdar has made any specific commitments to developing the area.

Adnoc and Abu Dhabi’s Taqa reach financial close on USD 3.8 bn subsea energy transmission project: State-owned Abu Dhabi National Oil Company (Adnoc) and government-controlled Abu Dhabi National Energy Company (Taqa) have reached financial close on a USD 3.8 bn project that will see them build what they say is a “first-of-its-kind” subsea transmission network in MENA, designed to reduce emissions at its offshore production facilities, according to a statement from Adnoc published on Friday. The high-voltage direct current (HVDC) transmission system will include two subsea links and converter stations and will have a total installed capacity of 3.2 GW. Construction began in early 2022 and is expected to begin operations in 2025.

But Enterprise, how exactly does using a subsea transmission network slash emissions at offshore production infrastructure? Offshore platforms usually generate their own electricity through gas turbines or diesel generators — but replacing these onboard generating systems with power from the mainland transmitted through subsea cables can significantly reduce CO2 emissions. Because of their design, HVDC subsea cables are particularly effective in transmitting energy over long distances in an energy-efficient way.

Adnoc says its network will be powered with more sustainable energy sources: The statement says that the project will replace Adnoc’s existing offshore gas turbine generators with “more sustainable power sources” but doesn’t disclose where it will get its energy from.

Who’s involved: Adnoc and Taqa will be joined by a consortium consisting of Korea Electric Power (KEPCO), Kyushu Electric Power Company (Kyuden) and France’s EDF. Adnoc and Taqa each own a 30% stake in the project, while the consortium collectively owns the remaining 40% stake.

Higher interest rates are driving up the costs: The total cost of the project is now USD 3.8 bn, up from the USD 3.6 bn figure first announced in December 2021 because of higher interest rates, the statement says.

Barakah nuclear plant’s third 1.4 GW unit comes online: Emirati nuclear energy operator Nawah Energy Company started operating the third unit of the 5.6 GW Barakah nuclear plant on Thursday, the Emirates Nuclear Energy Corporation (ENEC) announced Thursday. The 1.4 GW unit — for which Nawah received a 60-year operating license back in June — will be connected to the UAE’s national electricity grid in the “coming weeks.”

The Barakah plant has been providing power to the UAE since May 2021 when the first 1.4 GW unit began commercial operation. The plant will supply up to 25% of the country’s power once it’s fully operational.

The fourth unit is about to be complete: The fourth unit of the nuclear power plant is nearing completion, being in the “final stages of commissioning prior to completion of construction,” ENEC said. The corporation is responsible for the deployment and ownership of nuclear energy plants in the UAE.

Lafarge Algeria launched its low-carbon cement Chamil EcoPlanet, the company said on Wednesday. Lafarge’s latest product allegedly produces 40% less carbon emissions than regular cement.

Egypt received a shipment of 42 wind turbine blades from Italy for the 262.5 MW Ras Ghareb wind farm in the country’s Red Sea governorate, according to a cabinet statement on Thursday.

Energizing news for EV enthusiasts: A Moroccan scientist says he invented a battery that can recharge electric vehicles (EVs) in 5-15 minutes. The engineer behind the new lithium batteries, Rachid Yazami, said that his batteries are three times faster than Tesla’s batteries, which take up to an hour to charge, according to Morocco World News. Yazmami’s batteries — which utilize a series of nonlinear electric currents that enable the batteries to avoid overheating — will fully recharge cars in “15 or even 5 minutes,” he claimed at an event last week.