Acwa Power CEO: Decarbonization Faces Challenges

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Global energy system decarbonization faces multiple challenges because many industry players aren't acting decisively, says the chief executive of Saudi Arabian power developer Acwa Power. "The opportunity is there; the technology is there; but I continue to see a lack of courage and conviction on the part of the energy industry," Paddy Padmanathan, Acwa Power's CEO, told Energy Intelligence in an interview. A lack of conviction within the industry to grasp the range of cost competitive options and opportunities offered by technological advances and rapidly changing consumer views, and to embrace decarbonization, rather than continuing to hedge bets and fight against it, is presently the greatest challenge to global decarbonization efforts, Padmanathan said. Acwa Power, in which the kingdom's Public Investment Fund owns 50%, is involved in several renewables projects, both in the Middle East and globally, particularly in wind and solar, but also in green hydrogen. Last year, Acwa teamed up with US Air Products to build a $5 billion plant in Saudi Arabia with the aim of suppling green hydrogen for use as a transportation fuel (IOD Jul.9'20). The company's strategy going forward is to "keep doing what we are already doing," according to Padmanathan. "Our focus is very much about deploying more and more renewable energy generation capacity at scale and keep focusing on reducing cost," he said. Green Hydrogen Potential Padmanathan sees great potential in green hydrogen and its role in decarbonizing other segments of the industry, which will be essential in the global energy transition (NE Jul.9'20). "We absolutely need to decarbonize all other things as well. Green hydrogen is a real solution," he said. However, there is a real risk that ongoing debates and negotiations about policy and "waiting for somebody else to do something" is holding back a comprehensive push into green hydrogen and project implementation even though funds and solutions exist, he added. Renewable energies will play a role in decarbonizing other sectors going forward. Padmanathan believes that in the Mideast region, including in Saudi Arabia, renewables will be used increasingly to fuel sectors such as transportation, petrochemicals and other industries, which constitute over 40% of greenhouse gases. The first reason for this, according to Padmanathan, is the very cheap cost of solar or wind power that makes renewables the most compelling generator of electricity. This makes it more attractive for industry to start using more. The second reason is that Saudi Arabia and all other countries in the region are taking their commitment to decarbonize very seriously. Renewables for Industries "Renewable energy will be used in industry, petrochemicals and transportation in the kingdom and in the region much more as we go forward," Padmanathan said. To achieve this, Padmanathan believes in a bundle of solutions that involve carbon capture and storage, hydrogen and other means of decarbonizing. With oil demand set to remain at some 24 million barrels per day through 2050, according to the International Energy Agency, and low-cost, lower-carbon oil producers such as Saudi Arabia set to keep supplying that market -- and therefore continuing to emit carbon dioxide -- sequestering this carbon with a view to utilizing it will be key, among other solutions. "We all know that we will continue to emit carbon at a particular rate," he said. "It's a bundle of investments and a bundle of solutions that will come together." This combination of various investments and solutions is what's needed to address the global climate challenge. But, "there is no silver bullet for anything," Padmanathan cautioned (IOD Aug.4'21). Yousra Samaha, Dubai

Leadership Interviews, Hydrogen, Renewable Electricity
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