TAQA, which was founded in 2005, is a leading energy and utilities conglomerate headquartered in Abu Dhabi. With a significant presence across 11 countries, TAQA is among the largest integrated utility companies in the Middle East, with investments spanning power and water generation, transmission, and distribution, as well as upstream and midstream oil and gas operations.
Recently, Noel Aoun, the Executive Director of Strategy and Sustainability at TAQA, spoke with Economy Middle East about the company’s sustainability goals, its renewable energy partnership with Masdar, the industry’s decarbonization efforts, and other related topics.
What are TAQA’s sustainability goals and objectives, and how are they aligned with international sustainability frameworks and best practices?
In 2021, we outlined an ambitious growth strategy with a vision to become a leader in low-carbon power and water, with ESG considerations at the forefront of our operations. Since then, we have been working tirelessly to turn our vision into reality.
As part of our 2030 ESG strategy, we have set a target to achieve net-zero emissions and have established 2030 emissions reduction targets, including a mandate to reduce scope 1 and 2 emissions by 25 percent across the Group and a 33 percent reduction of UAE’s portfolio emissions compared to the 2019 baseline.
Our wider ESG strategy is centered around six key areas, including climate change, water and effluents, occupational health and safety, diversity and equal opportunity, local community engagement, and corporate governance.
As part of both our growth and ESG strategies, we have committed to increasing our share of renewables to at least 30 percent of our total generation capacity by 2030. Our recent acquisition of a 43 percent stake in Masdar’s renewables business has accelerated our goal, and we have already surpassed 28 percent of our portfolio coming from renewable sources.
Prior to the Masdar transaction, we added two record-breaking utility-scale solar photovoltaic (PV) projects to our portfolio, including the 1.2 GW Noor Abu Dhabi, one of the world’s largest single-site solar PV plants, and the 2 GW Al Dhafra PV IPP, which is currently under construction but already partially energized. These projects demonstrate how renewables are both economically and environmentally viable.
Water will remain a critical aspect of our sustainability agenda, particularly reverse osmosis (RO) technology, which is more efficient than traditional thermal desalination methods. As part of our growth and ESG strategy, we aim to expand highly efficient RO technologies to make up at least two-thirds of our desalination capacity by 2030, effectively decoupling power and water production. We are currently constructing the Taweelah RO plant, which will have a capacity of 200 million imperial gallons per day (MIGD), making it one of the largest RO plants in the world.
We recently announced plans to develop the Mirfa 2 RO plant with ENGIE, which will have a capacity of 120 MIGD. As part of our infrastructure upgrades, we are committed to reducing losses in water distribution by 25 percent by 2030.
Through our transmission subsidiary, TRANSCO, we have successfully integrated both solar and nuclear power into Abu Dhabi’s existing grid. By decoupling power and water production with RO technology and integrating nuclear energy, we have made significant strides towards decommissioning older, less efficient power and water plants, paving the way for several more efficient projects in our pipeline.
As part of our ESG strategy, we have prioritized developing a culture of diversity and inclusion by reinforcing diversity in gender, age, nationality, and people of determination. Under this particular pillar, we aim to have females represent 30 percent of management positions by 2030. and in keeping with this objective, shareholders recently elected three women to the Board of Directors at TAQA’s Annual General Assembly.
To demonstrate our dedication to sustainability from the top down, we established the Sustainability Committee and Sustainability Management Committee at the Board level.
In recognition of our continued efforts for the implementation of global best practices in sustainability, and the consolidation of ESG considerations as part of our Corporate Governance, two of the world’s leading ESG rating providers have uplifted our current rankings.
TAQA received a two-grade uplift (from “B” to “BBB”) by MSCI in 2022, while as of August 2022, TAQA’s ESG Risk Rating from Morningstar Sustainalytics has been upgraded from “Severe” to “Medium” ESG Risk Rating Category, placing TAQA in the top 33rd percentile of Morningstar Sustainalytics’ “Utilities” industry globally.
Additionally, TAQA is a member of various global associations driving climate action, including the UN Global Compact Initiative, IRENA Alliance for Industrial Decarbonization, International Desalination Association, and Abu Dhabi Global Market’s Sustainable Finance Declaration.
TAQA recently announced its investment in Masdar. What plans are geared toward renewable energy and green Hydrogen?
In 2022, TAQA achieved a significant milestone with the successful conclusion of the Masdar transaction, which resulted in a stake in Masdar’s renewables business alongside Mubadala and ADNOC.
TAQA now holds a leading 43 percent stake in Masdar’s renewable business, including a 24 percent stake in the company’s green hydrogen business. This has greatly accelerated our expansion into renewables, both in the UAE and globally.
Targeting growth opportunities around the world, Masdar is looking to expand its renewable capacity up to 100GW globally by 2030, largely powered by wind and solar resources. The company further aims to solidify its status as a sustainability leader within the energy sector, while also supporting the UAE’s goals of achieving its 2050 net-zero targets.
Additionally, Masdar aims to rapidly ramp up its green hydrogen business, targeting an annual production capacity of up to 1 million tons by 2030.
How is TAQA assisting with the decarbonizing industry?
TAQA is working closely with industry partners to implement solutions aimed at decarbonizing the UAE’s industrial ecosystem.
One of the initiatives involves the acquisition of EGA’s gas-fired assets, connecting EGA to the grid via our operating company TRANSCO, and enabling access to clean solar and nuclear power for the production of green aluminum. And while we facilitate their efforts with access to our grid, they can then tap into a new market for green aluminum customers.
We are also working with ADNOC in the oil and gas space. Currently under construction is a first-of-its-kind high-voltage direct current (HVDC) sub-sea transmission network to decarbonize ADNOC’s offshore production operations.
Once operational, the project will link ADNOC’s offshore facilities to the Abu Dhabi onshore power network, replacing existing offshore gas turbine generators with low-carbon power sources. Ultimately, the project will result in a reduction of over 30 percent in ADNOC’s offshore operations’ carbon footprint.
In addition, TAQA recognizes that sustainability involves more than just renewables and infrastructure. To achieve net-zero emissions, investing in demand-side management capabilities is essential. We are doing this through our subsidiary, Abu Dhabi Energy Services (ADES), which assists commercial and governmental clients in retrofitting and achieving energy and water savings. In 2022, ADES’s Super ESCO successfully achieved 14.2 GWh and 54,932 cubic meters in electricity and water savings, respectively.
Read more: ADNOC distribution, TAQA reveal E2GO to provide EV charging points
How do you ensure that TAQA’s suppliers and contractors meet sustainability standards and best practices?
As a group standard, TAQA’s supply chain function has mandated that the organization only collaborates with suppliers who align with our Business Partner Code of Conduct.
Ensuring that such partnerships demonstrate compliance with laws, regulations, and ethical expectations, this mandate also considers best environmental practices and stipulates that failure to adhere to any of the principles may affect future business decisions with TAQA.
Expanding on our policy, in 2022, we introduced a new third-party due diligence tool at the Group level, which is designed to screen suppliers actively and automatically on key compliance issues, while also enabling us to request specific reports for ESG-related performance.
Social and environmental specifications have also been incorporated into our procurement practices. Recent examples adopted in the UAE include incorporating environmental and social risk analysis as part of our tender processing and sharing a statement of intent as part of procurement procedures that highlights commitment toward protecting the environment, social progress, as well as the health and wellbeing of people.
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