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Masdar meets renewable’s moonshot challenge

31 January 2025

 

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Abu Dhabi Future Energy Company (Masdar) is off to a great start this year by taking on a project that addresses what UAE Minister of Industry and Advanced Technology Sultan Al-Jaber describes as the “moonshot challenge of our time”, the intermittency of renewables.

Masdar, along with state utility Emirates Water & Electricity Company (Ewec), announced the project on 14 January. The $6bn project comprises 5,200MW solar and 19 gigawatt-hour (GWh) battery energy storage system (bess) plants.  

It is designed to deliver up to 1,000MW of uninterrupted “baseload” power from a renewable source, a first in the world in terms of its scale.

“The country leadership’s will to deploy cutting-edge technology despite perceived risks, the growing experience of Masdar in developing battery energy storage projects globally, along with the decline in battery prices helped expedite the project,” Abdulaziz Alobaidli, chief operating officer of Masdar, tells MEED. “It’s a major achievement, over 15 years since the first single-site 10MW project was procured in Abu Dhabi.”

It has a lot to do with our culture to never say no to the impossible 

Alobaidli was referring to Masdar’s first 10MW solar photovoltaic (PV) plant located on the north side of Masdar City, which was connected to the Abu Dhabi electricity grid in April 2009.

The executive says the 5.2GW/19GWh project was fast-tracked thanks to the broader collaboration of the key relevant stakeholders who facilitated the overall permitting proceedings.

He also stressed that they have obtained the necessary experience by developing renewable energy projects in developed and developing countries over the past decade and a half, with their current portfolio sitting at around 32GW.

“It has a lot to do with our culture to never say no to the impossible,” explains Alobaidli.

“We solved a two-decade problem by jointly evaluating the technical and commercial feasibility of the project, doubling down on our global development experience, and the strategic relationship we have built with key solar and bess suppliers … it helped that the battery technology has reached a desired level of cost competitiveness along with improved efficiency.

“The collaborative spirit of our client, Ewec, has facilitated the development of the project and gave us confidence that we can bring it to the finish line.”

Fast-track project

Masdar announced the selection of contractors and sub-contractors for the project a few days after its launch.

It selected India’s Larsen & Toubro and Beijing-headquartered PowerChina to undertake the project’s engineering, procurement and construction (EPC) contract.

Masdar also picked Shanghai-based Jinko Solar and Beijing-headquartered JA Solar to supply solar PV modules. They will supply solar PV modules amounting to 2.6GW each, with maximum efficiency and production for 30 years.

Another Chinese firm, Fujian-based Contemporary Amperex Technology Company Limited (CATL), will supply its Tener product line for the bess plant.

The project will be structured as a classic public-private partnership (PPP), funded by equity and syndicated debt.

It is being deployed on a fast-track basis, with financial close expected by the second quarter of 2025 and commercial operations set for 2027.

Alobaidli says they are in the process of deployment and starting the mobilisation of contractors, following months of technology assessments and technical workshops.

He also says Masdar is open to considering co-investors or codevelopers in the project “if they will complement” its capability to deliver the project.  

Masdar has also engaged several banks and lenders, which have been conducting due diligence on the project, particularly on the selected battery technology.

The executive, who previously served as general manager of Masdar subsidiary, Shams Power Company, says declining battery prices provide significant opportunities for their adoption at larger scale and long-hours applications.

“This is significant for the industry, and we see demand and supply growing, including the number of suppliers in the market. Security of supply and more competitive battery price is key.”

AI connection

MEED first reported on the planned round-the-clock renewable project in October last year. At the time, sources indicated that the project was envisaged to support the state’s artificial intelligence (AI) strategy.

This was confirmed by a social media post on 14 January, when UAE President Sheikh Mohamed Bin Zayed Al-Nahyan said the project would help power advancements in AI and emerging technologies in addition to being a significant step on the UAE’s journey towards net zero.

Alobaidli says the project, which will be the first of many, “will definitely unlock opportunities for AI and other industries, which require base and round-the-clock load”.

Global expansion

While the 5GW/19GWh project is the largest single project by far to be deployed by Masdar, the experiences it gained by growing organically and through mergers and acquisitions, especially over the past decade, should help ensure it delivers the project within time and budget.

The project’s execution is also unlikely to hamper Masdar’s ongoing global expansion, given its goal to expand its renewable energy portfolio to 100GW by 2030.

Masdar has been expanding its global footprint as well as the type of assets it deploys or acquires, which range from onshore and offshore solar, onshore and offshore wind and, now, battery energy storage plants.

It has been bidding for new projects close to home, such as in Saudi Arabia and Oman, as well as in developing countries or acquiring stakes in projects across nearly every region of the world, from the Philippines, Malaysia and Indonesia in Southeast Asia, to Africa, more mature markets in Europe such as Greece and Spain, and the Americas.

“We are not just running after capacity. We look at profitability and the impact of these acquisitions on our earnings and P&L,” explains Alobaidli. “More importantly, we focus on the impact of these projects on the local communities.”

Alobaidli stresses that Masdar is focusing on prudent risk-reward factors as it expands its operations to avoid overexposure and ensure every deal is robust and backed by objective risk analysis.

“We are backed by three very strong institutions,” he points out, referring to Abu Dhabi National Oil Company, Abu Dhabi National Energy Company (Taqa) and sovereign wealth fund Mubadala. “So every investment opportunity is thoroughly assessed to ensure it meets our growth objectives and stakeholders’ expectations.”

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