Acwa Power, a leading developer, investor, and operator of a portfolio of power generation and desalinated water production plants, is set to launch a new company that will group its existing renewable energy portfolio and act as a platform to capitalise on the rapidly growing market potential for renewable energy in emerging markets.
In 2015, $266 billion was invested globally in renewable power capacity, more than double the estimated $130 billion invested in new coal and gas generation capacity, according to UN Environment Programme (Unep). However, given the legacy investment in conventional generation capacity, clean technologies only accounted for just over 10 percent of world electricity generation as at last year, indicating a clear opportunity for investment in renewables.
The new company that has been established – Acwa Power RenewCo - will be headed by Chris Ehlers, currently chief operating officer, renewables at Acwa Power, who has been appointed the chief executive officer.
“We currently produce over 1 GW of renewable power in markets which have an energy gap,” said Ehlers. “All the power we generate was procured through transparent competitive bidding and is supplied on long-term offtake contracts to entities supported by stable, sovereign backed Power Purchase Agreements (PPAs), which offers significant risk mitigation and in turn has enabled us to deliver competitive tariffs providing stable, long-term revenues to Acwa Power RenewCo.
“The reputation we have established in renewable energy has enabled us to also secure a high quality and near term pipeline of opportunities using a diverse technology mix spanning solar PV and CSP to wind. Given our commitment to RE and the ambition of the region in which we are focused, I see enormous potential to increase our renewables portfolio,” he added.
"There are compelling reasons today for the growth potential in renewables in Acwa Power’s target markets,” said Acwa Power president and chief executive officer Paddy Padmanathan. “With rapid advances in technology and efficiency in manufacturing and construction driving down capital cost, with the quality of RE resources available and the low interest rate environment, RE is the most competitive solution for the segment of energy we consume when the sun is shining or the wind is blowing even when compared to the alternative where fossil fuel is subsidised."
“Furthermore we are proud to be showcasing the extra value offered by large-scale RE deployment through developing local content in both goods and services leading to much needed employment creation and investment in local communities at the location of RE plants which are often the least developed due to the remoteness of location.”
Acwa Power currently has a presence in 11 countries across the Middle East and North Africa, Turkey, Southern Africa and South East Asia regions. Its portfolio with an investment value in excess of $33 billion generates 23+ GW of power and produces 2.5 million cu m/day of desalinated water to be delivered on a bulk basis to state utilities and industrial majors on long-term off-take contracts under Public-Private-Partnership, concession and utility services outsourcing models.
Acwa Power’s renewable energy portfolio includes nine projects across four countries with a total production capacity in excess of 1GW of renewable power and total investment cost of $4.8 billion.