DUBAI: Energy company ACWA Power is getting closer to securing its first deal in China, the firm’s CEO Marco Arcelli told Arab News on the sidelines of the UN Climate Change Conference. The Saudi-based firm has seen its ties with the Asian country grow in 2023, including signing seven cooperation agreements with various Chinese firms in October across multiple sectors, including solar energy, green hydrogen, and water desalination. Speaking from the COP28 forum in Dubai, Arcelli set out how the expansion into the Chinese market is part of the company’s plan to increase the value of its asset book to $250 billion, as it is develops across Central and East Asia. “Right now, the single biggest country is Uzbekistan for the new activity, and all of Central Asia we see coming up with a lot of potential. The next target for us is China. And I am confident that within a few months we will be able to announce the first deal in China,” Arcelli said. Elaborating on the recently signed memorandums of agreement with Chinese firms, the CEO highlighted the firm has three main objectives when it comes to expanding into the Asian country. The first is to keep working with the Chinese in regional and global projects, the second is to expand investments in the country itself, while the third is closer working on research and development. Arcelli added: “We’re working a lot, particularly in the Shanghai area and with a lot of suppliers. To give you some idea of the activities we are working on. You know that here in the Gulf, temperatures are very high. The efficiency of the solar panels decreases. “We are working with suppliers on how we can make the panels more suitable for installations to our region. It is going to benefit us, but it is also going to benefit all the industry in the end.” He further outlined that ACWA Power is discussing ways for Chinese companies to “localize in Saudi Arabia” by demonstrating the “solid program” they have integrated in the Kingdom. According to the CEO, the company is also in talks with other nations from Central Asia in hopes that they will develop the needed equipment locally, thus creating a strong ecosystem for growth in Saudi Arabia. Outlining the Kingdom’s potential and role within the Saudi renewable sphere, the CEO highlighted that the company will be responsible for delivering the Public Investment Fund program of 70 percent of the renewable energy that will be installed in the country. ‘‘We have a goal of tripling the size of the company to about $250 billion of assets under management, up from less than $80 billion when I joined at the beginning of the year,’’ said Arcelli. The CEO flagged up the Red Sea Global project in Saudi Arabia as one of the key developments it is involved in, and said: “We just completed the first phase of the Red Sea Global, which is going to be one of the best and biggest tourist attractions in the world. “We are providing the utilities there to these resorts and that one is 100 percent powered by green electricity. That means not only the power generation, but also the desalination and the wastewater that we are using there. “That will go through a process where we are going to create mangrove wetlands so that basically that’s going to be part of the Saudi Green Initiative to plant the 1 billion trees by 2030.’’ Arcelli also underscored the various milestones and achievements registered by the company in 2023, saying: “I just joined in March this year. So, I have been here for eight months and the speed of growth and of activity in the company is just phenomenal. In the past eight months, we signed agreements for almost 10 gigawatts of power between Saudi Arabia, Uzbekistan and other countries. “We have signed water agreements for 1.4 million cubic meters per day in Saudi Arabia and in the Emirates. We just broke ground this week on the second green hydrogen project that we participate in. All together we are growing in renewables and we’re growing in water by 20 percent this year.” He also talked up the firm’s position as a “leading player” in the green ammonia industry, and its moves in transitioning facilities away from fossil fuels. “For instance, recently in the Emirates, we converted a power plant that was built for using coal and we converted it to gas,” he said. ACWA Power also converted a water desalination plant that was running on oil to reverse osmosis power by electricity. This has led to a saving of 22 million barrels of oil per year, informed Arcelli. Together with the Saudi Electricity Co., ACWA Power has also recently bagged the deal for setting up a 3.6 gigawatts combined cycle plant. Like many companies emerging from a legacy of fossil fuels, ACWA Power was “practically producing 100 percent electricity from fossil fuel until six or seven years ago,” said Arcelli. Today, 43 percent of the company’s capacity, 53 GW, is coming from renewables, and the CEO expects that number to rise to between 70-80 percent. As part of its mission to be an enabler of energy transition in countries that primarily only have access to coal or more polluting fuels, the company does not intend to entirely stop working with gas-fired combined cycles, Arcelli said. Operating in the Global South, Africa, South East Asia and Central Asia, as it stands, does not allow for a complete, 100 percent transition of the needed energy in the region to renewables. “We will do as many renewables as we can and complement that together with the goals and the plans of the local government to some combined cycles. We have a deadline for achieving net zero by 2050. Again, one of the reasons is that there is now a period where gas will still be required there – basically to fuel – but as we continue to add more renewables and more capacity over the long term, that is the goal,” he said. ACWA Power is also looking at other emerging dimensions of renewable energy, like the large capacity battery storage. “We believe that as you introduce more renewable energy into a system, the more you need to think about how to stabilize the grid,” Arcelli said. He added: “There are multiple ways. One is the system itself. So, if you have combined cycles, flexible generation, as we call it, then you can use that as a backup solution in other areas where you are blessed by a lot of sun. “One of the greatest technologies is concentrated solar power. We do it here in the Emirates, so we do it in Morocco, we do it in South Africa, and we are exploring other countries. Arcelli said having “the power of the sun 24 hours a day” would be of huge benefit as he talked up ACWA Power’s battery storage program, which he claimed is equivalent to the whole battery storage capacity installed in all of Europe in 2022. For ACWA Power, the biggest such project is the RSG, which has grids that detach themselves from the main grid. Since it is solar, the project needed to have battery storage. Arcelli said that it is a massive 1.2 GWH for 400 megawatts of solar, so that one can have it all the time. Arcelli was full of appreciation for the rapid transitions in energy provision being made by Saudi Arabia and the UAE, claiming the two countries are “leading the pack” in the transition. “Both have, you know, very significant targets, Saudi Arabia to reach 50:50 renewables and combined cycles by 2030. That’s only seven years away. So that’s a massive programme. And the Emirates, they want to triple renewable energy capacity by 2030,’’ he said. He pointed out that ACWA Power was a big player in both countries, adding: “That is how we bring our contribution, by bringing all the technologies and the financing from around the world, choosing the best and applying it so that we can offer the most competitive rates. Europe started really 20 years ago. "The region here, of course, had abundant fossil resources. So there was maybe not as much urgency 20 years ago as there is today.” Arcelli continued: “But I see basically all the countries here in the region taking that direction. And as I mentioned, it is just a matter of when, not if. Some started earlier with the visionary leaders that, you know, we were blessed with, and others are certainly coming along very positively.” Looking at the state of the global energy businesses, Arcelli said that he felt the industry had taken to renewables as a whole for a variety of factors, but most notably due to its economic reasoning. “I think that in power generation I don’t even talk anymore about renewables because that’s what everybody wants to do. The only time where we are not installing renewables is because you need to either grow a lot quickly and so you need also other types of generation or you want to complement your system,” he said. Arcelli added: “For instance, you may have some solar, some wind, some nuclear, some gas fired generation, but let’s not debate that because renewables are not built by ideology today, they are built because they are the most efficient, they are the most secure, and that they are the most affordable type of energy that you can install.’’