ACWA Power CEO says big oil needed in renewables, but reward won't be same

Dubai — Oil companies that turn to renewables in the energy transition will have to get used to lower returns but also less risk and potentially fewer losses, the CEO of renewables power projects developer ACWA Power, Paddy Padmanathan, said Oct. 15.

France's Total had done a "fantastic job" expanding its oil and gas business into solar and wind energy, Padmanathan told the Energy Intelligence forum.

On its website, Saudi Arabia-based ACWA Power says it is often the lowest-cost bidder in solar energy tenders, with projects ranging from Dubai to Morocco and Vietnam. It can generate 37.7 GW of power and produces 5.8 million cu m/day of desalinated water.

"The market that is front of us is so massive we really need as many participants as we can, and I really hope that the oil companies are able to transform themselves and truly step into this market," he said. "I see them as a very value-adding partner, potential collaborators but definitely partners that are much needed in the marketplace."

Solar energy, wind energy and battery integration were "not complex" like projects that oil companies face every day in some of the most hostile environments, he said. Big oil companies had to come to terms "very fast" with the fact that renewables were more straightforward and not high risk, he said. "We are in a much more stable business. We invest a lot of money; we sit there collecting 1.7 cents per kilowatt hour for 25 years. So, it's very stable but thin returns."