Acwa Power Remains Committed to China Amid Rising Trade War Concerns
Acwa Power, a leading renewable energy firm in the Middle East, is progressing with its investments in China despite trade war fears. The company plans to invest $30 billion in China’s renewable sectors by 2030, aiming to triple its asset management. While trade disputes influence the global landscape, Acwa Power focuses on growth in the Gulf and sees the potential for green hydrogen. The Middle East’s renewable energy generation is projected to increase significantly over the next years.
Acwa Power, a leading renewable energy developer in the Middle East, remains committed to its plans in China, despite rising trade war tensions, as stated by its Chief Executive Officer, Marco Arcelli. The company has recently entered China’s market with agreements for one gigawatt of renewable projects and aims to invest as much as $30 billion by 2030, aligning with its strategy to triple its assets under management to approximately $250 billion.
According to Mr. Arcelli, “We take a long-term view, and we see China as a very strong economy.” He highlighted China’s ambitious plan to install 250-300 gigawatts of renewable energy annually, stating that even a hypothetical 10-percent slowdown would not diminish its significant market potential. The ongoing tariffs due to the trade disputes, including a 20-percent tariff on Chinese imports imposed by the U.S., have not deterred Acwa Power’s operations focused on clean energy.
The company operates primarily in regions such as the Gulf, Central Asia, Africa, and Southeast Asia and does not have assets in North America or Europe. Mr. Arcelli remarked, “In terms of tariffs on the supply chain for renewables, I don’t see that there is really an issue,” noting that no tariffs exist between Africa, Central Asia, the Gulf, and China. He expressed a greater concern over how trade wars may impact overall economic growth and, consequently, energy demand.
Despite challenges in the global market, Acwa Power’s focus remains on thriving economies with growth rates between 4 and 8 percent. The overall investment strategy is concentrated on established territories, particularly in the Gulf and Saudi Arabia, which Mr. Arcelli believes is emerging as a critical hub for energy transition due to its natural resource abundance. Saudi Arabia is expected to increase its investments and trade with the U.S. by a substantial $600 billion over the next four years.
New U.S. policies, including cuts to the Inflation Reduction Act, have caused worries regarding the future of renewable energy development in America. Nonetheless, Mr. Arcelli predicts that Saudi Arabia will continue to see investment growth. Furthermore, renewable energy generation in the Middle East is projected to increase by about 14 percent annually until 2027, consequently raising its share of the energy mix from 5 to 7 percent.
Moreover, the region is positioning itself as a green hydrogen leader, with Acwa Power undertaking significant projects like the $5 billion Neom Green Hydrogen initiative. An initial agreement with Germany’s Sefe was signed for supplying 200,000 tonnes of green hydrogen per year by 2030. Despite declining hype regarding green hydrogen due to cost concerns, Mr. Arcelli remains optimistic, stating, “There is still interest in off-takes, and we are in contact in Europe with multiple parties.” He acknowledged the necessity for green hydrogen development in the coming decade regardless of fluctuating interest levels.
In conclusion, Acwa Power is steadfast in its commitment to expanding its footprint in China and pursuing renewable energy projects, effectively navigating potential obstacles posed by international trade tensions. The company remains focused on regions with positive growth trends, particularly in the Gulf and Middle East, which are expected to become pivotal in the global energy transition. As investments in green hydrogen and renewable energy sectors increase, Acwa Power is poised to capitalize on emerging opportunities, despite evolving market dynamics.
Original Source: www.thenationalnews.com
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