Qatar inaugurates its 800 MWp Al Kharsaah solar plant

Good morning, wonderful people. We take back what we said yesterday about the news drought — we have a big issue this morning packed with regional green news, so let’s jump right into it.

THE BIG CLIMATE STORY in our corner of the world has to be hydrogen as backers of the emerging technology position it as part of the solution to our energy transition:

• Blue hydrogen appears to have taken a lead in the GCC (however temporary?) over green hydrogen agreements;
• Egypt looks set to unveil new framework agreements for green hydrogen projects during COP27, building in momentum it established with MoUs in the past months./

AND- There’s news this morning of yet another GCC investment in a green asset in the west as Wafra takes a majority stake in US solar producer Mission Clean Energy.

PLUS- Qatar has inaugurated the 800 MW Al Kharsaah solar plant. Built at a cost of QAR 1.7 bn (USD 470 mn), the plant is expected to meet 10% of the country’s peak electricity demand.

^^ We’ve got chapter and verse on those stories and more in the news well, below.

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COUNTDOWN TO COP (18 days to go)-

We’re seeing an increase in environmental awareness stunts pre-COP27. UN “Patron of the Oceans” (we’re not kidding — that the name of the gig) Lewis Pugh is swimming across the Red Sea to highlight its endangered coral reefs before COP27. Pugh started his 160 km swim from Saudi Arabia to Egypt’s Hurghada on 11 October and is expected to arrive in a week. In a tweet, Pugh called upon world leaders to take bold action at COP27 as coral reefs are being destroyed by warming oceans.

And then there’s the cyclists: In a bit to draw attention to the problem of litter, Yusef Ahmed, Galal Zekri, retired ambassador Mohamed Elewa, and Wolfgang Hohmann will be pedaling 655 km from Cairo to Sharm El Sheikh. German Ambassador to Cairo Frank Hartmann met some of the cyclists before they set out on 14 October, an embassy statement notes.

^^ Publicity bids or not, both are a hell of a lot more constructive than the bozos gluing themselves to works of art across Europe to draw attention to climate.

WORTH READING- Egypt may be gearing up for COP27, but the conference doesn’t register with the informal garbage collectors known as the zabbaleen, who recycle over 85% the waste produced in Cairo, the National reported yesterday. Very few inhabitants of “Garbage City” — where collecting and recycling rubbish is a thriving economy — are aware COP27 is even taking place, it found.

We’ve already seen the Zabbaleen reluctant to integrate into Egypt’s government-led green initiatives. After the ratification of Egypt’s new Waste Management Act in October 2020, the government started securing contracts with the private sector to collect, treat, recycle and dispose of waste — with plans to integrate the zabbaleen into the system as employees of private sector contractors. But some in the zabbaleen community are resisting thepush to “formalize an informal sector,” we reported last July.

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THE BIG CLIMATE STORY OUTSIDE THE REGION- BlackRock is setting up a unit to invest in the green transition, Reuters reported on Monday, citing a company memo. The USD 8 tn asset manager’s Transition Capital will apparently work with portfolio managers and BlackRock’s capital markets team to target green transition projects. Headed by McKinsey’s former head of sustainability, the team will develop funds and new investment strategies and expand BlackRock’s research in clean energy transition tech.

REMEMBER- BlackRock boss Larry Fink has better things to do than atten COP27, as we noted last week.

ALSO- Is Stellantis walking back on its green record? Stellantis CEO wants to renegotiate the EU’s proposed 2035 ban on fossil fuels cars, the company’s chief executive Carlos Tavares said at a news conference on the sidelines of the Paris Motor Show on Monday, Reuters writes. Earlier this year, the EU effectively banned the sale of new fossil fuel vehicles — including hybrids — from 2035.

Why? Switching to EVs is expensive for consumers… Tavares cited unmanageable “social consequences” to the decision to ban combustion vehicles, claiming that a forced transition to EVs will make car ownership unaffordable for many people, proposing that hybrids be given a role in the transition to zero-emissions vehicles.

Sending mixed messages: Tavares also reiterated the company’s commitment to carbon neutrality by 2038, according to a Stellantis statement. Earlier this month, Stellantis and Siemens announced a partnership to upscale EV last mile delivery infrastructure in MENA and last year, it began producing EVs at its Kenitra plant in Morocco.

CLIMATE DIPLOMACY- Saudi is looking at renewable energy investments in South Africa. Crown Prince Mohamed Bin Salman and South African President Cyril Ramaphosa inked agreements and MoUs worth more than USD 15 bn during the latter’s visit to Jeddah earlier this week, the countries said in a joint statement this week. While the statement does not mention the areas involved in the agreements, the pair did discuss cooperation in solar, wind and atomic energy. Saudi renewable energy powerhouse ACWA Power had announced it was eyeing investments worth at least USD 10 bn in South Africa’s renewables sector in the coming five years.

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CIRCLE YOUR CALENDAR-

The International Exhibition of Renewable Energies Clean Energies and Sustainable Development will run from 24-26 October in Oran, Algeria. The event will focus on the role of startups in the green transition and the bankability of renewable energy projects.

ADIPEC will run from 31 October to 1 November in Abu Dhabi, UAE. Some 40 ministers from around the world, including eight from MENA, will attend the event. Those include energy and oil ministers from the UAE, Kuwait, Bahrain and Egypt. Discussions will partly focus on the transition toward carbon neutrality, a statement picked up by Zawya details. You can register as an exhibitor here, and as an attendee here.

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

Could Egypt’s green hydrogen MoUs turn to concrete agreements at COP27? Egypt could unveil new framework agreements for green hydrogen projects during COP27 for “at least a couple of the dozen” MoUs already signed with international companies — marking the next stage in getting them off the ground — DW said yesterday, citing experts.

Keep an eye out for Scatec / Fertiglobe / OC + ReNew:

• Norway’s Scatec — which together with Fertiglobe and Orascom Construction is planning a 100 MW green hydrogen plant in Ain Sokhna — is also “rumored to be ready” to sign framework agreements in November, DW says.
• India’s ReNew Power, due to build a USD 8 bn green hydrogen plant in the Suez Canal Economic Zone (SCZone), hopes to execute a framework agreement during COP27, DW quotes CEO Sumant Sinha saying. ReNew expects to complete detailed project studies within 3-6 months, “leading to decisions regarding the investment by mid-2023,” Sinha is quoted by DW as saying.

And expect more in the months following COP: Egypt is also currently negotiating a hydrogen agreement with the EU, with the European Commission expecting “some developments over the autumn,” DW says.

The gov’t is targeting a wider range of countries: We might expect firms from the UAE, KSA, India and Australia to enter the market, DW notes. Egypt might also target investment from EU countries, Japan, China and Russia.

As for export markets, Egypt will likely look first to the EU: “The green ammonia from Egypt is more likely to go to…Europe and the Far East,” DW quotes Rajat Seksaria, CEO of India's ACME Group — which we noted has signed an MoU for a 2.2 mn ton capacity plant — as saying. Green hydrogen serves as feedstock for green ammonia. The EU’s push for more “green steel” to be made using hydrogen could also open up more production prospects for Egypt, DW notes.

But challenges remain: “The main hurdle for hydrogen is not production, but storage and transportation,” the story quotes energy consultant Ali Habib saying. This is challenging because Egypt’s strategy is export-focused. Demand for local green hydrogen application is currently low, DW notes Habib saying. Still-pending regulation would also be essential for local use to take off, we noted recently.

WATCH THIS SPACE- Local industry may be more incentivized to use green hydrogen when the EU implements its plan to tax imports with a high carbon footprint, DW quotes Habib as saying. Egypt could also call for an easing of EU green content certification during COP27 to open up export to Europe, Lekela Power general manager Faisal Eissa previously predicted.

In the GCC, large-scale green hydrogen production is likely to trail behind blue hydrogen, according to a report published by ratings agency Moody's Investors Service on Thursday and picked up by Zawya yesterday. The GCC’s access to cheap domestic natgas, local carbon capture and storage (CCS) expertise, and available infrastructure will make blue hydrogen production more feasible than the “more costly and challenging” green hydrogen — in the short-to-medium term, Zawya notes the report saying.

Significant investment in tech and infrastructure for storage and transportation is still needed to make GCC green hydrogen projects commercially viable, the report notes. Green hydrogen production growth is also hindered by “substantial delays in auctioning processes” faced by the region’s renewables projects, it adds.

But long-term supply and export potential is there: In the long-term, the UAE, Saudi Arabia and Oman could all be green hydrogen producers and exporters, Moody’s tells us, because of their access to cheap renewable energy and water desalination expertise.

Egypt leads the pack in MENA in terms of the value of green hydrogen projects, with some USD 63.8 bn — just over 35% of the USD 180 bn regional total.

• Morocco has announced some USD 16.85 bn worth of projects.

The GCC has a pipeline with some USD 70 bn. According to data from MEED in early October:

• Oman has announced USD 48.9 bn worth of projects,
• Saudi Arabia: USD 10.5 bn
• The UAE: USD 10.3 bn

The Moody’s report makes the economic case for GCC green hydrogen project development: Both green and blue hydrogen could offset the economic and fiscal impact on the GCC of lower global oil demand and prices when the energy transition gathers steam, the report notes.

But only green hydrogen could reduce GCC countries’ “heavy” hydrocarbon reliance and “underlying credit exposure to longer-term carbon transition risks,” it adds. Both green and blue hydrogen have a role in emissions reduction, it notes.

SOUND SMART- What’s the difference between green and blue hydrogen? Both involve splitting water via electrolysis. But while green hydrogen is produced using renewable energy, blue hydrogen production is powered by fossil fuels, using carbon capture to prevent CO2 from being released into the atmosphere.

GCC-focused alternative asset manager Wafra acquired a majority stake in US utility-scale renewable asset developer Mission Clean Energy, the latter said in a statement on Monday. Neither party has announced the size of the stake Wafra took or now much it paid.

What will Mission do with the investment? The Virginia-based company will use Wafra’s investment to expand its 3 GW project development pipeline focusing on solar and storage in the US. Mission is also expecting investments from Aggregate Power Infrastructure (API) — an affiliate of sustainability sector financial advisor Cohn Reznick Capital.

What exactly is Wafra? They’re the GCC’s go to green asset managers in the US: Founded in 1985 as Wafra Investment Group Advisory, the firm has been managing sovereign GCC institutions’ investments, including Kuwait Investment Authority, according to its website. It currently has about USD 33 bn assets under management (AUM), spanning across real estate, liquid markets, private equity and venture capital.

What’s Mission Clean Energy: Established earlier this year, the company develops solar projects in the US. Its services include land acquisition, permit issuances, construction, long-term operations and maintenance. It also builds energy storage facilities.

From the US to Europe, GCC investing in western green assets has become a trend:

• Kuwait’s Agility Ventures — along with US VC firm Fifth Wall — poured USD 40 mn in US-based EV charging station company Loop Global.
• Abdul Latif Jameel Energy’s subsidiary FRV is investing in German solar-as-a-service provider Ecoligo.
• Qatar Investment Authority (QIA) led a EUR 250 mn series D investment round for Paris-based biotech company Innovafeed.
• QIA also made a landmark EUR 2.4 bn acquisition in major German utilities provider RWE in a debt-to-equity swap that will eventually see QIA own 9.09% of the company.

ADVISORS- Latham and Watkins served as legal advisor to Wafra and API. Farella Braun and Martel LLP served as legal advisor to Mission.

Qatar inaugurated yesterday its 800 MWp Al Kharsaah solar PV power plant, according to state-run Qatar News Agency (here and here). Built at a cost of QAR 1.7 bn (c. USD 470 mn), the 800 MW facility will deliver about 10% of the country’s peak electricity demand, said TotalEnergies, a player in the consortium that owns and operates the facility. The project will feature a semi-automated cleaning system for its 1.8 mn solar panels and over 3k string inverters — devices used to convert solar energy into usable electricity.

The independent power producer is Qatar’s first large-scale solar power plant. It is owned and operated by Siraj 1SPV, a consortium owned jointly by TotalEnergies and Marubeni (40%), and Siraj Energy (60%). Siraj Energy is a JV between QatarEnergy and Qatar Electricity and Water Company (QEWC). QatarEnergy’s CEO Saad Al Kaabi (also Qatar’s Energy Minister) said at a presser yesterday that the company has reserved land for future expansion of plant.

Qatar doubled the value of its solar energy projects in 2022. The country invested QAR 2.3 bn (USD 631 mn) in solar this year, bringing the country’s total investments in the segment to about QAR 4 bn (USD 1 bn), Qatar News Agency reported. These investments will go towards the Mesaieed and Ras Laffan solar plants, which are expected to increase the country’s renewable energy capacity to 1.67 GW by the end of 2024.

OVER IN EGYPT’S COP CITY-

China’s Sungrow to complete five solar plants in Sharm El Sheikh before COP27: Chinese solar energy company Sungrow will build solar plants with a combined capacity of 35 MW worth EGP 500 mn in Egypt’s Sharm El Sheikh before COP27, according to Egyptian daily Al Mal. The five plants will be completed in partnership with our friends at Hassan Allam Utilities as well as Gila Electric and Intro Energy, Al Mal quotes Sungrow’s North Africa division’s head of sales Mostafa Mohamed as saying.

Egypt’s new automotive bill gets approved by the House: Egypt’s House of Representatives approved yesterday a bill that sets up a Supreme Council for Vehicle Manufacturing that will set policies for the automotive sector in general, including “green” vehicles. The bill also sets out the framework for a fund that will offer incentives for local assembly of these vehicles.

What does “green vehicles” mean? In addition to EVs, the incentives would also cover hybrid vehicles, natural gas-powered cars, and any vehicle that produces lower emissions than conventional gasoline-powered vehicles. This fits neatly into the country’s two-year-old mandate to encourage car owners to convert their gasoline-powered engines into dual-fuel ones, to also run on natural gas.

NEXT STEPS- The bill awaits ratification by Egypt’s President Abdel Fattah El Sisi, but will only come into effect once its executive regulations are published.

Need a refresher on what the bill entails? We explored the details of the legislation here.

Lebanon’s Jbeil district is getting an electric bus fleet: The United Nations Development Programme and the Global Environment Facility will deploy a fleet of electric buses in Lebanon’s Jbeil district, the country’s national news agency reported on Monday. UNDP, GEF and the municipality of Jbeil will also establish an EV charging station to serve the public transport fleet.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Saudi construction company Alfanar was selected to build a 110 MW floating solar park to help power the Al Jubail water desalination plant, Arab News reports. The project is expected to cost around SAR 1.2 bn (USD 330 mn), according to Saudi newspaper Okaz.
• Dubai-based wholesale data center provider Khazna Data Centers inked an agreement with energy services company Emerge to launch a 7 MW solar plant to power its new data center in Abu Dhabi’s Masdar City, state news agency WAM reported yesterday. Emerge is a JV between Electricité de France (EDF) and Masdar.
• Beeah Group will be collecting and processing waste at Sharjah’s port, according to a company statement. Companies looking to use Beeah’s services can sign on using its recently-launched digital platform Marasi.

The City of Lights no more: Parkour aficionados are turning off commercial establishments’ “wasteful lights” in Paris, the New York Times writes. Videos (watch: runtime: 1:02) show ninja-like young men running, leaping, and putting their “physical abilities to good use” to reach elevated emergency light switches on storefronts. The nocturnal pastime began a couple years back and has gained momentum amid Europe’s energy crisis. Some call it trespassing — but others say the athletes are simply enforcing an often-ignored Paris law requiring stores to turn off their signs between 1am and 6am.