Engie's Strategic Shift in the Mideast Gulf: Balancing Legacy Operations with Green Ambitions
Key Ideas
- Engie is refocusing its Mideast Gulf presence towards renewables and grid-stabilising tech while maintaining a balanced approach to legacy thermal and desalination operations, in alignment with a 2045 net zero target.
- The company is cautious about green hydrogen due to slower-than-expected technological and cost developments, emphasizing the importance of a viable market for its scalability.
- Engie's strategic vision includes consolidating its activities in fewer countries where it is strong, like Saudi Arabia and the UAE, which have a significant portfolio of renewables and energy storage projects.
- The company is actively involved in developing renewables and flexible power assets in the GCC, with upcoming projects such as the Al-Khazna solar PV project in Abu Dhabi anticipated to come online by 2028.
As Mideast Gulf countries strive for ambitious net-zero goals, global utility Engie is adapting its strategy in the region by focusing on core markets like the UAE and Saudi Arabia. Engie aims to ramp up renewables, flexible power, and grid-stabilising technology while maintaining a balanced approach to its legacy thermal and desalination operations, aligning with a 2045 net zero target. The company, once bullish on green hydrogen, has become more cautious due to slower technological and economic progress than anticipated. Engie's Gulf Co-operation Council (GCC) flexible power managing director highlighted the importance of government support in achieving CO2 emissions reduction and net zero targets, despite varying timelines.
Engie's strategy involves targeting efficiency improvements in existing assets through technological enhancements rather than rebuilding entirely. While the company is increasingly active in renewables, it also recognizes the significance of grid stability in the energy transition. Engie's shift towards consolidating its presence in countries like Saudi Arabia and the UAE reflects its commitment to supporting governments in achieving their sustainability goals.
Regarding green hydrogen projects, Engie stresses the need for a viable market that can absorb the current premium costs associated with green hydrogen production. The company acknowledges the slower-than-expected progress in this area but remains committed to exploring opportunities in collaboration with regional partners.
In terms of project developments, Engie is involved in key initiatives such as the Al-Khazna solar PV project in Abu Dhabi, aiming for commercial operations by mid-2028. Additionally, the company has expanded the capacity of the Sohar 1 power generation and desalination plant in Oman, showcasing its commitment to growing its presence in the renewable energy sector.
Topics
Utilities
Green Hydrogen
Energy Transition
Efficiency
Project Development
Renewables
Grid Stability
GCC
Strategic Vision
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