ACWA Power’s CEO plans to end investment in non-renewable schemes as part of the business’s commitment to reaching net-zero by 2050.
Speaking ahead of the Saudi Green Initiative forum that will be held in Riyadh on October 23, Paddy Padmanathan, chief executive of ACWA Power, told: “We want to reduce carbon emissions because climate change is real. We can see it, we can feel it.”
Riyadh-based ACWA, which is 44% owned by Saudi Arabia’s sovereign wealth fund PIF, is the Kingdom’s most high-profile entity for building renewable energy and hydrogen projects.
The company is expected to deliver at least 70% of Saudi Arabia’s renewable schemes by 2030 and is forecast to take part in around $30 billion worth of green projects over the next 10 years, as the Kingdom’s strategy to diversify its economy away from fossil fuels gathers pace.
ACWA began trading on the Saudi stock market this month after selling an 11% stake. The move values the entire company at $10.9 billion.
Padmanathan said, “We will not invest in coal going forward, we will not do any more coal power plants. We will not obviously do any more oil. In terms of our existing oil-fired power plants in the Kingdom, the government is committed to shutting those down by 2030, so we’ll be working with them on how to shut those down, and then repower them all. The existing fleet of oil assessed will get phased out over the next nine years by repowering.”
He said: “We are working with Saudi counterparts on how best to manage the portfolio in terms of carbon elimination.”
Padmanathan said the increasing reduction in the cost of producing renewable energy means even Middle East petrostates will be able to power their countries more cost-effectively with green energy, particularly through increased investment in solar technology.
He continued: “Conveniently, the cost comes down to such an extent that for a big part of the energy consumed today it is the cheapest option even for a country like Saudi Arabia, which is blessed with such a low cost of production of fossil fuels, to produce its energy.”
He added: “We have also been able to produce low-cost renewable energy through electrolysis to produce hydrogen, so can now contemplate producing green hydrogen [which doesn’t involve the use of fossil fuels].”
ACWA holds a one-third stake in the massive $5 billion Neom project which will be powered entirely by solar and wind and will be one of the world’s largest green hydrogen plants when it opens in 2025.