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When oil-rich countries talk about renewables, what are they talking about? Caixin Global speaks with Bader Saeed Al Lamki, executive director of clean energy, Masdar

When it comes to renewable energy, the conventional thinking goes: this is a good option for countries that do not produce oil.

On the surface, the Middle East and North Africa should be the last places in the world to consider renewables, as they are blessed with 53% of world’s crude oil and 45% of its gas reserves.

In fact, this is not the case. For example, Saudi Arabia, the world’s largest crude oil exporter, plans to build 30 solar and wind projects by 2023, with the goal of generating 10 percent of its electricity from renewable sources. Further north, Morocco has a target to produce 50% of its energy from renewables by 2030. In the neighboring United Arab Emirates (UAE), the target is 44% by 2050.

What has motivated oil-rich countries such as the UAE to develop renewable energy? What are the opportunities ahead? What is China doing in this field? What is China’s role? What is GE’s role in between?

Caixin Global sat down with the executive director of clean energy from Masdar to discuss these questions on the sidelines of the GE-Caixin 2017 “China for the World” Belt & Road Forum held in Beijing on Nov. 2.

Masdar means source in Arabic. The word became a symbol of renewable energy in 2006 when Abu Dhabi Future Energy Company launched; Masdar City broke ground in 2008 aspiring to become the world’s most sustainable urban community.

The exemplary project is located in Abu Dhabi. It is an award-winning clean technology cluster that includes a free zone with more than 500 registered companies. Hosting one of the world’s largest clusters of high-performance buildings, the city employs passive and intelligent building design to reduce energy and water consumption by an average of 40%.

Other than Masdar City, Masdar considers itself a major regional and international player in renewable energy. Wholly owned by the Abu Dhabi government’s Mubadala Investment Company, Masdar invests in the entire value chain of renewable energy. It is a developer of clean energy power projects. It provides consultation to sustainable urban planners and developers. And it accelerates the adoption of clean-tech solutions by facilitating world-class industry and knowledge platforms such as the Abu Dhabi Sustainability Week and Zayed Future Energy Prize.

Since 2006, Masdar has invested in renewable energy projects with a combined value of US$8.5 billion; Masdar’s share of this investment is US$2.7 billion. Masdar’s renewable energy projects span the UAE, Jordan, Mauritania, Egypt, Morocco, the UK, Serbia and Spain. The electricity generating capacity of these projects, which are either fully operational or under development, is 2.8 gigawatts (GW) gross.

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Caixin: For developers, how does renewable energy compare with coal-fired power plants?

Bader Saeed Al Lamki: Both the renewable energy sector and renewable energy projects have become extremely competitive compared with other alternatives, such as gas- or coal-fired power plants, or even nuclear.

Considering the innovation and technological advances over the past several years, as well as the ability of renewable energy projects to attract additional financing, the LEC (Levelized Energy Cost) of solar and wind have become very competitive compared to the LEC of other sources, such as coal and gas-fired power plants.

What’s to be looked forward to is having the energy storage solution addressed in a cost-competitive way. Having renewables and energy storage will make the integrated solution even more attractive, and ready to be considered a base law. Renewables will have an even brighter future with this combination.

Caixin: Why are so many oil-rich countries sparing no effort in developing renewables? Is it true that for countries that are exporting oil, they are no longer using oil?

Al Lamki: No, on the contrary. This is an indication that renewable energy is becoming part of the energy mix.

The world will not see an overnight switch from fossil fuel-based power to pure renewables. There is always a belief that there will be an energy mix with different choices, in order to ensure sustainability and address energy security so we do not depend on one form of energy.

It is also economically viable, freeing up the domestic consumption of fossil fuels for export.

It is an integrated value proposition and it is an integrated strategy to balance and diversify the energy source,

Caixin: Solar prices went down recently. Has it affected your business?

Al Lamki: Prices have to be sustainable. The whole renewable energy sector is evolving and emerging, there is fast development in terms of a technology revolution which itself leads to better efficiency and lower prices.

Secondly, from a renewable energy developer’s perspective, having solar as a choice that is competitive with gas, coal and nuclear means there will be more demand, a bigger market and more business for us.

Caixin: Is it possible to skip fossil fuel and go directly to renewables?

Al Lamki: We can’t generalize. There is country-by-country consideration. Each country has its own localized renewable resources and individual advantages. Country by country, we develop the local resources. In the Middle East, it is primarily solar. If we look at North Africa, they have a good balance of solar radiation and wind speed. In countries like Egypt and Morocco, we can do both. Other Southeast Asian countries — they do not have sufficient land, so solar might not be a solution — so maybe wind or hydropower.

Each country has its own choices to make, but there will be definitely one form or another in terms of renewables.

Caixin: What about China? What is China’s role in the renewable energy sector?

Al Lamki: China is leading the industry, to be honest. The installed capacity on wind and solar for year on year is 25-35 gigawatts.

For us, it is interesting to work in China because of three reasons. First, Chinese companies are technology developers, big world-class solar panel manufacturers are based in China. We collaborate with them for projects around the world, China is where we come and procure panels.

Secondly, we come to China to work with world-class EPC companies, together we build wind and solar projects.

We also come to China for financing, discussing projects with major financing institutions such ICBC, the Silk Road Fund, China Development Bank and so on.

With Chinese partners, there is good collaboration in technology, construction and financing. I think, in the sector of renewable energy, if you want to be successful, you should have collaboration with Chinese enterprises in one form or another. We are excited; we take a long-term view regarding the Chinese market and Chinese partners.

Caixin: Are there any hesitations or concerns regarding renewables?

Al Lamki: The renewable energy sector is probably the one form of energy that’s fast-growing compared with other energy forms. The awareness of renewables and the role they can play is clear, the value proposition from the commercial point of view now also makes sense. However, it is important to ensure the stability of the regulatory framework for investment in this sector.

Caixin: Europe, Canada and Australia are the top three countries using renewable energy, and they are all highly developed, how do you see the potential of renewable energy in less developed countries?

Al Lamki: These developed countries are active, however there are now even developing countries are looking at renewable energy as a serious choice. Africa is hungry for energy, renewable energy is available to provide electricity in rural villages and off-grid places where normally the solution is to use trucks to transport diesel from cities, which is very expensive.

Southeast Asia is also an emerging market, such as Indonesia, Malaysia and Vietnam. Recently people are considering off-shore wind in Southeast Asia, because of land scarcity.

The renewable energy revolution is not centralized in developed countries.

The record low electricity tariff is coming from the Middle East, in the UAE. Therefore, renewable energy development is really a global phenomenon.

Caixin: What are the key elements China needs to develop renewable energy?

Al Lamki: China is a very active global leader in the adoption of renewable energy, the annual installed capacity is in gigawatts.

Renewable energy development requires regulation, financing, technology and then developers such as Masdar.

China is already working with technology player like GE, who is advancing wind turbine technology, we at Masdar are very proud to work with GE; we are working with them on at least three projects in which we are installing state-of-art wind turbines in Europe and the Middle East.

GE has a strong presence in China, they are also working with their counterparts in China to support the faster penetration of renewables. We are proud of our partnership with China and with GE. We will constantly look for investment opportunities in China and outside China.

Although this is the first time I joined the Belt and Road summit, it was an eye opener. We understand the driver from a Chinese perspective — what are business opportunities — and the conference also provides an opportunity to network. It is attending was worthwhile and we are looking forward to coming back next year.

Bader Saeed Al Lamki, Executive Director, Masdar Clean Energy

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Bader Saeed Al Lamki is responsible for steering and guiding the teams within Masdar Clean Energy to achieve performance excellence in all areas of investment, green field development and operations for large-scale renewable energy utility projects, carbon capture utilization and storage, and industrial energy efficiency solutions.

He also oversees Masdar’s Special Projects team and its growing portfolio of off-grid renewable energy projects in the Middle East and North Africa region and international markets.

A UAE national, Mr. Al Lamki brings 17 years of outstanding industry experience to Masdar Clean Energy, having joined Masdar in February 2008.

Earlier, Mr. Al Lamki worked as senior project manager with the Carbon Unit as well as in Masdar Power. Prior to Masdar, Mr. Al Lamki led a multi-disciplinary team on a strategic initiative at ADMA-OPCO that worked towards increasing oil production to nearly one million barrels per day.

He has also worked for the French oil major Total, based in Paris, as development planning engineer, conducting prospect evaluation for the ultra-deep water oil reservoir (Block 32) in Angola. He was also involved in the NKOSSA field gas handling facilities for a de-bottlenecking project in the Republic of Congo.

Mr. Al Lamki is currently the chairman of Shams 1 Company, a joint venture between Masdar and Total. He also sits on the board of Torresol Company (Spain), Dudgeon (UK), as well as Tafila Company (Jordan).


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