Acwa Power bids to turbocharge Saudi’s green targets

Acwa Power

• Saudi Arabia is targeting 50% renewable electricity by 2030
• Riyadh-based Acwa Power will play a key role in delivering on this goal
• Acwa Power is also a first mover in green hydrogen

When it comes to the green transition, Saudi Arabia has got some catching up to do.

The country is targeting a 50-50 split in electricity generation between renewables and gas by 2030, but in 2021 just 0.2 percent of electricity came from renewable sources.

To achieve this Vision 2030 goal, the country has tasked its private sector with helping make the transition a reality.

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One of the key companies in this green effort is Riyadh-based Acwa Power — and the scale of this task is not lost on CEO Marco Arcelli.

“In Saudi Arabia, I think that we have to recognise how ambitious Vision 2030 is,” Arcelli said.

“This is probably the biggest decarbonisation programme in the world, in any country.”

Saudi Arabia’s Public Investment Fund holds a 44 percent stake in Acwa Power, and has struck a deal with the company, Arcelli says, to deliver 70 percent of the country’s renewable electricity by 2030.

He estimates that Acwa Power will need to deliver between 40 and 80gw of energy, enough to power 30 million to 60 million homes a year.

The company is moving quickly to make this happen.

In the short term, Acwa Power reports, it has 20 active deals in negotiation with 22gw of power on the table.

More than 80 percent of these deals are in renewable energy, mainly in Saudi Arabia, the wider Middle East, central Europe and East Asia.

Regardless of long term renewable goals in Saudi Arabia, the year has been good to Acwa Power.

In the first quarter of 2023 it reported a jump in net profit of 78 percent to SAR 270 million ($72 million), and a 7.1 percent increase in operating income to SAR 559 million, compared with the first quarter of 2022.

Share prices have climbed 25 percent in the last year.

The company is investing billions in renewable energy in Saudi Arabia, but to catch up on lost time and hit the 2030 goal, green hydrogen will undoubtedly play a role, says Arcelli, who calls it “the next big thing.”

Hydrogen is a fuel that only emits water when burned, but it can be carbon-intensive to produce.

Green hydrogen refers to hydrogen produced from fresh water in an energy-intensive method, but using exclusively renewable energy, earning it the “green” label.

Acwa Power is one of the companies best positioned globally to capitalise on green hydrogen, Arcelli said.

Making green hydrogen requires a lot of fresh water and renewable energy. And as the world’s largest desalination company, Arcelli is confident Acwa Power can help meet the targets.

“I would say that we are the only company in the world that is a leader in all three technologies: desalination, renewables like wind and solar, and green hydrogen production,” he said.