Decarbonising the global energy grid
3 May 2024
As the effort to tackle the climate crisis continues, global demand for renewable energy has been increasing. Unfortunately, the windiest and sunniest parts of the world are not necessarily where the need for energy is highest. This is where transmission plays a big role, linking energy generation to energy use as a product of global interconnection, and diversifying production from renewable sources to create a steadier supply of clean power.
Transporting energy across vast distances is not easy though. From the regulatory complexities of navigating cross-border infrastructure projects to the high costs of financing and the need for long-term planning and advanced technical capabilities, the challenges involved in successfully deploying long-distance transmission projects are varied. Overcoming these challenges is not a single party affair, but requires close collaboration across government, industry and non-governmental organisations.
We conducted a study with nearly 600 industry experts from across the world who highlighted the pressing need for co-ordinated global action to rapidly develop grid infrastructure. Integrating renewable energy into existing grids was cited by participants as one of the most significant barriers to achieving net-zero objectives, alongside supply chain vulnerabilities and ability to access the required capital.
Multiple challenges
From a technical standpoint, there are multiple considerations when implementing cross-border interconnections. Regions can operate using different technical parameters, such as different voltages or frequencies. Even within the same country, interregional variations can create bottlenecks. Adopting regional or international grid codes could mitigate these issues.
Further challenges emerge when we take trading into account. This is where regulation can act as an enabler, facilitating the flow of electricity between countries. The European Union’s efforts to co-ordinate the design of its member state’s energy markets enables an increasingly smooth transmission of energy across the continent. Alongside this, existing infrastructure is outdated, requiring significant upfront investment to upgrade. Clarity on regulatory requirements and more transparency around plans for grid buildout, derisk funding for capital-intensive mega projects.
Coordinated action is vital for the transfer of energy across borders and access to renewable sources of energy
Positive benefits
Despite these challenges, the upside must be stressed. Integrating power systems across borders has many positive societal benefits, decreasing costs and hence energy bills through economies of scale, increasing energy security and lowering the environmental impact of operations. On the latter more specifically, larger power systems are able to integrate higher shares of variable renewables. Globally, the sun is always shining and the wind blowing somewhere.
A common element, therefore, emerges: the need for increased cross-border co‑ordination. Whether it is bilateral, multi-lateral or unified, different models of inter-jurisdictional arrangements are needed for large-scale projects to support global energy interconnections. Our Xlinks project, which is using high-voltage direct current (HVDC) for transmission, is a standout example.
Such projects represent what is needed more in the world, the combination of infrastructure and renewable power across borders, bringing together the public and private sectors for energy security, supply and affordability in an environmentally friendly way. Transporting clean energy using HDVC cables is a crucial step in powering a net-zero and equitable future, and more of this is needed to aid the transition to lower-carbon and prosperous economies.
Political, technical and market hurdles can be overcome through collaboration and partnerships. Leveraging the collective expertise and resources of governments, regulators and the private sector can help ensure interconnections are developed quickly enough to support the energy transition. Grid buildout takes time. We have the resources required to meet ambitions, but stopping now is not viable. We must continue planning, building and maintaining large-scale infrastructure projects to meet the rising demand.
Coordinated action is vital for the transfer of energy across borders and access to renewable sources of energy. This was the message from Cop28 and the UAE Consensus: to help progress and secure a cleaner, brighter future for us all, we must break down barriers and come together.
Exclusive from Meed
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Adnoc Gas and Jera sign $450m LNG deal
28 January 2025
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Lunate to acquire Snam stake in Abu Dhabi pipeline
28 January 2025
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Acwa Power and Snam plan hydrogen cooperation
28 January 2025
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Sace to provide $100m credit to Acwa Power
28 January 2025
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Firm wins Al-Nouf IWP technical advisory role
27 January 2025
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Related Articles
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Adnoc Gas and Jera sign $450m LNG deal
28 January 2025
Adnoc Gas, the natural gas processing and exporting subsidiary of Abu Dhabi National Oil Company (Adnoc Group), and its subsidiaries have announced the signing of a AED1.653bn ($450m) three-year liquefied natural gas (LNG) supply agreement with Jera Global Markets, a trading subsidiary of Japan’s Jera Company Incorporated.
The LNG will be supplied from Adnoc Gas’ Das Island liquefaction facility, which has a production capacity of approximately 6 million tonnes a year.
In a statement, Adnoc Gas said the agreement reaffirms the company's position as a "reliable global supplier of clean energy" while supporting Japan's energy requirements.
Fatema Al-Nuaimi, CEO of Adnoc Gas, said the agreement builds on the robust UAE-Japan energy relationship and decades of collaboration between Adnoc Gas and Jera.
"We will continue to support Japan’s energy needs and reinforce our position as a reliable partner in the global LNG market," she added.
Kazunori Kasai, chief optimisation officer of Jera Company and chairman of Jera Global Markets, noted that the new supply agreement with Adnoc Gas reflects the "active measures we take to ensure that our global portfolio remains diverse, flexible and competitive".
In October 2023, Adnoc Gas also won an order for LNG supply from Jera Global Markets.
The value of the multi-year LNG supply contract was between $500m and $700m, Adnoc Group said at the time. The company did not specify the duration of the agreement or the volume of LNG that Adnoc Gas will supply each year.
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Lunate to acquire Snam stake in Abu Dhabi pipeline
28 January 2025
Abu Dhabi-based investment firm Lunate is to acquire a minority stake in Adnoc Gas Pipelines that is indirectly held by Italian gas infrastructure operator Snam.
The deal comes less than one year after Lunate acquired a 40% stake in Adnoc Oil Pipelines from US asset management firms BlackRock and KKR.
The transaction with Snam, which is subject to the signing of the sale and purchase agreement, as well as to the potential exercise of the relevant shareholders’ rights, will be made through Lunate’s Long-Term Capital Fund 1, Snam said in a statement on 28 January.
Adnoc Gas Pipelines, a subsidiary of state energy company Abu Dhabi National Oil Company (Adnoc), has lease rights to 38 pipelines covering a total of 982 kilometres across the UAE.
The gas pipeline network serves as a strategic link connecting Adnoc's upstream assets to local UAE offtakers.
"It represents a high-quality and essential asset that generates stable and predictable cash flows in a critical sector and is a major contributor to the UAE’s energy infrastructure strategy," the statement said.
Snam acquired its stake in Adnoc Gas Pipelines in 2020, along with other consortium partners, including GIP, GIC, Brookfield Asset Management, Ontario Teachers’ Pension Plan Board and NH Investment & Securities, through Galaxy Pipeline Assets HoldCo.
Lunate acquired its 40% stake in Adnoc Oil Pipelines from BlackRock and KKR in April 2024.
The acquisition by Lunate’s Long Term Capital Fund was executed through the purchase of a 100% stake in a special purpose vehicle jointly held by BlackRock and KKR managed funds, Lunate said at the time.
The parties did not disclose the financial terms of the deal. BlackRock and KKR spent $4bn on the acquisition of the 40% stake in Adnoc Oil Pipelines in 2019.
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Acwa Power and Snam plan hydrogen cooperation
28 January 2025
Riyadh-based utility developer and investor Acwa Power has signed a memorandum of understanding with Italy's Snam to explore collaboration and joint investments to establish a green hydrogen supply chain to Europe.
A leading European operator in natural gas transportation, storage and regasification, Snam aims to build "a pan-European multi-molecule infrastructure, advancing energy security and the transition to net zero", a joint statement said.
Acwa Power is developing the largest known green hydrogen and ammonia plant in the Neom gigaproject in Saudi Arabia.
The partnership will "explore potential collaboration and joint investments to establish an international supply chain for a dependable and cost-effective supply of green hydrogen from Saudi Arabia to Europe".
The two firms also plan to explore the development of an ammonia import terminal in Italy to facilitate the delivery of green hydrogen through the South H2 Corridor, the 3,300-kilometre-long corridor reaching central Europe through Italy, Austria and Germany.
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Sace to provide $100m credit to Acwa Power
28 January 2025
The Italian insurance and financial group fully owned by Italy's Economy & Finance Ministry, Sace, has agreed to provide a credit facility worth $100m to support Saudi utility developer Acwa Power's green projects in Central Asia.
The deal will facilitate the export of Italian companies and is in line with Sace's mandate, a joint statement said on 26 January.
"Sace will provide a $100m line of credit to Acwa Power in exchange for a commitment to create business matching opportunities with Italian companies in their respective areas of interest," the statement said.
Sace and Acwa Power have also documented a commitment to explore new opportunities and evaluate up to $500m in support, to facilitate exports from Italy and promote the internationalisation of Italian companies, including small and medium-sized enterprises.
The agreements were signed by the CEO of Acwa Power, Marco Arcelli, and by the CEO of Sace, Alessandra Ricci, on the occasion of Italian Prime Minister Georgia Meloni's visit to Saudi Arabia.
The agreement with Sace is one of several that Acwa Power signed with Italian companies on the sidelines of the Saudi-Italian High-Level Roundtable Meeting in Al-Ula, Saudi Arabia.
It signed agreements with Cassa Depositi e Prestiti (CDP), the Italian financial institution for development cooperation; De Nora, a multinational company specialising in water treatment technologies; and Ansaldo Energia, a power generation equipment manufacturer.
The latter agreement was signed by Nomac Holding, a fully-owned subsidiary of Acwa Power.
Acwa Power's Arcelli said: "The opportunities for cooperation between Saudi and Italian companies are immense in the sphere of supply, localisation, financing and energy.
"We believe that bringing together our competencies and resources will significantly advance energy transition and water security, promoting sustainable infrastructure developments not only in our countries but also in Africa, Central and Southeast Asia and the rest of the Middle East."
Photo credit: Acwa Power
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Firm wins Al-Nouf IWP technical advisory role
27 January 2025
Abu Dhabi-based offtaker Emirates Water & Electricity Company (Ewec) is understood to have awarded the technical advisory contract for its next independent water project (IWP) in Al-Nouf.
According to sources familiar with the project, the planned Al-Nouf seawater reverse osmosis (SWRO) IWP will have a design capacity of up to 170 million imperial gallons a day (MIGD), or approximately 772,835 cubic metres a day (cm/d).
Austria-headquartered ILF Consulting Engineers has won the contract, industry sources tell MEED.
MEED understands that the legal and financial advisory packages for the Al-Nouf IWP will be tendered and awarded separately.
Al-Nouf will be Abu Dhabi's second-largest IWP after the 909,218-cm/d Taweelah SWRO plant, which reached full commercial operations in April 2023. It will be the UAE's third-largest, slightly behind Dubai's 818,280-cm/d Hassyan 1 SWRO project, which is under construction.
A facility in Al-Nouf will require a long pipeline that will connect the plant to Abu Dhabi, and will likely involve the participation of Abu Dhabi Transmission & Despatch Company (Transco), sources told MEED last year.
This latest development follows a revision of the scope and capacity of Abu Dhabi's fourth IWP scheme. The Saadiyat Island IWP will have a capacity of 60MIGD.
When it was tendered in July 2023, the original scheme – called the Abu Dhabi Islands IWP – comprised two SWRO plants, each with a capacity of 50MIGD, to be located on the Saadiyat and Hudayriat islands in Abu Dhabi.
Ewec previously said these projects are important to Abu Dhabi’s water security due to their proximity to the load centre of the Abu Dhabi islands, and because of the scheduled decommissioning in 2028 of the integrated power and water desalination plant at Sas Nakhl.
As in previously tendered IWPs, the successful developer or consortium will own up to 40% of a special-purpose vehicle that will implement these projects, while the remaining equity will be primarily held indirectly by the Abu Dhabi government.
Awarded IWP contracts
Ewec and Spain's Acciona, the lowest bidder for the Saadiyat Island IWP that was tendered last year, have yet to sign a water purchase agreement.
In comparison, Ewec awarded the contracts for two IWPs in 2023. Ewec, Abu Dhabi National Energy Company (Taqa) and France’s Engie signed the water purchase agreement for the Mirfa 2 IWP project in February 2023. They reached financial close for the project, which will have a capacity of 120MIGD, two months later.
Taqa, Ewec and South Korea’s GS Inima reached financial close on the $444m Shuweihat 4 SWRO IWP in December of the same year. Located within the Shuweihat power and water complex, the facility will supply up to 70MIGD of potable water. Commercial operations are expected to commence in the second quarter of 2026.
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