Italy’s Enel vies for re­new­able en­ergy plants in Saudi Ara­bia

The Star Early Edition - - BUSINESS REPORT INTERNATIONAL - Mah­moud Hab­boush

ITAL­IAN multi­na­tional power group, Enel is tar­get­ing re­new­ables projects in Saudi Ara­bia and the United Arab Emi­rates as oil-rich Gulf coun­tries take ad­van­tage of the fall­ing cost of so­lar power to di­ver­sify their en­ergy sup­plies.

“We will wait for the first ten­ders in Saudi Ara­bia,” Francesco Starace, Enel chief ex­ec­u­tive, said in an in­ter­view in Abu Dhabi, the big­gest of the UAE’s seven emi­rates. Dubai, the coun­try’s sec­ond-largest emi­rate, has also started a re­new­able pro­gramme, “so we will try and par­tic­i­pate” in that, he said.

Un­der Starace, Enel is scal­ing back on large power sta­tions to fo­cus on pro­duc­ing and dis­tribut­ing greener sources of en­ergy. The util­ity rein­te­grated its re­new­able-en­ergy spin-off Enel Green Power last year and plans to cut its gen­er­at­ing ca­pac­ity for power from fos­sil fu­els by 39 per­cent by 2019. Saudi Ara­bia, the world’s big­gest oil ex­porter, and the UAE, the fourth-largest pro­ducer in Opec, are both try­ing to re­duce their re­liance on oil and gen­er­ate more power from the sun, among other sources.

Enel signed a co-op­er­a­tion agree­ment on Satur­day with Dubai Elec­tric­ity and Water Author­ity, known as Dewa, to help up­grade the emi­rate’s power grid, af­ter reach­ing a sim­i­lar ac­cord with Saudi Elec­tric­ity Com­pany on Jan­uary 11. Saudi Ara­bia aims to gen­er­ate 10 gi­gawatts from so­lar, wind and other forms of re­new­able en­ergy in the next five years, en­ergy min­is­ter Khalid Al-Falih said last month. Dewa plans to be able to pro­duce 75 per­cent of its power from re­new­ables by 2050.

Saudi Ara­bia and the UAE, as well as Oman, have nat­u­ral po­ten­tial with their plen­ti­ful sun­shine, “and they have sta­bil­ity that is per­ceived as bet­ter than the north African area,” Starace said. “They are less risky, and there­fore, I see no prob­lem with look­ing at these coun­tries as a great in­vest­ment.”

Cheaper pro­duc­tion costs are cre­at­ing new growth op­por­tu­ni­ties for so­lar power in the re­gion. A group led by Mas­dar, Abu Dhabi’s re­new­able en­ergy com­pany, won bid­ding in June to build an 800-megawatt so­lar plant in Dubai to pro­duce what could be the world’s cheap­est elec­tric­ity gen­er­ated from the sun. The av­er­age cost of elec­tric­ity from a pho­to­voltaic sys­tem is seen plung­ing as much as 59 per­cent by 2025.

Cheaper pro­duc­tion costs are cre­at­ing new growth op­por­tu­ni­ties for so­lar power in the re­gion.

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