INTERVIEW: UAE's Masdar seeks to double renewable capacity in 2-3 years

Dubai — The UAE's clean energy company Masdar, owned by an Abu Dhabi sovereign wealth fund managing $232 billion in assets, plans to double its renewable energy capacity from the current 11 GW in two to three years through global expansion, a company official told S&P Global Platts on April 26.

Masdar, which more than doubled its portfolio in the last two years and currently has around $20 billion in investments, expects to focus this year on projects in Central Asia and South-East Asia, where it has recently signed a number of agreements, said Fawaz al-Muharrami, acting executive director of clean energy at Masdar.

"We are active in CIS, we are active in Southeast Asia, that is really a primary market for growth for this year," he said. "We are also participating in a number of tenders in that region."

The company is focusing on Asia, where economic growth and the regulatory environment are conducive to investments, he added. Masdar made its first entry into South-East Asia through Indonesia's first floating photovoltaic power plant, a 145 MW project that is being developed in partnership with PT PJBI, a subsidiary of Indonesia's state electricity company PT PLN (Persero).

More recently, Masdar inked a memorandum of understanding with Malaysia's Petronas to explore renewable energy opportunities in Asia. The companies will focus on utility-scale renewable energy, including ground-mounted and floating solar projects, and offshore wind projects. They are also keen to work jointly in other Asian countries such as Vietnam and Taiwan.

"There are active steps that have been taken by this region to decarbonize or to ensure that they increase investments in the renewable energy sphere, and that's why it is important for us to be there and hence our project in Indonesia," Muharrami said.

Greenfield projects

Masdar -- which was set up by the Abu Dhabi government in 2006 and is owned by Mubadala Investment Co. -- currently operates in over 30 markets spanning the UK, where it has stakes in three wind farms, to Australia where it has a 40% stake in a waste-to-energy project.

Although Masdar has recently made a string of acquisitions that currently represent around half of its portfolio, the company wants to grow organically through greenfield projects, Muharrami said. The company is also looking to boost investments in offshore wind projects, which are mainly in the UK right now.

Masdar is expanding its global portfolio amid a surge in demand for renewable energy.

Renewables are forecast to provide 30% of electricity generation worldwide in 2021, their biggest share of the power mix since the onset of the Industrial Revolution and up from less than 27% in 2019, according to the International Energy Agency.

Renewable energy use rose 3% in 2020 as demand for all other fuels slowed down, thanks to an almost 7% growth in electricity generation from renewable sources, the IEA said in a report released April 20.

US portfolio

Renewable electricity generation in 2021 is set to expand by more than 8%, the fastest year-on-year growth since the 1970s, with solar PV and wind contributing two-thirds of renewables growth, the Paris-based agency said. China alone should account for almost half of the global increase in renewable electricity in 2021, followed by the US, the European Union and India.

Masdar is keen to expand in the US, where it has 1.8 GW portfolio, incentivized by the country's clean energy targets and a $2 trillion infrastructure plan that includes the modernization of the country's aging electric grid, which President Joe Biden wants to produce 100% carbon-free electricity by 2035.

"The new US administration has put an ambitious plan to decarbonize and to achieve certain targets on climate change," said Muharrami. "This is very interesting and exciting news and we think that sets a really right path for more and more investments and development of renewable energy projects in the US."

Masdar, which is keen to expand further in Eastern Europe and Africa, is also focusing on the Middle East region.

Masdar and EDF Renewables have signed a strategic agreement to explore renewable energy opportunities in Israel, which inked a peace agreement with the UAE in September last year, unleashing a string of deals.

"We are actively looking at a number of assets and greenfield developments there [in Israel]," Muharrami said. "We are assessing right now those to see if we are able to take over some of these assets in the near future."

Elsewhere in the Middle East, Masdar is bidding for solar projects being tendered in Saudi Arabia's third renewables round.

Masdar, along with EDF Renewables, won in 2019 a 400 MW wind project in Saudi Arabia, the country's first such farm, which is expected to start operations in 2022.

Masdar also is exploring developing desalinization plants powered by renewable power, but that plan is still in the early stages, Muharrami said.