A recent study by researchers at Aarhus University and Vermont Law School indicates that if current patterns of usage continue, there is a risk that by 2040 there will not be enough water in the world to meet its drinking needs; and not enough energy to meet power demands. The world’s population is growing by roughly 80 million people each year. Changes in lifestyles and eating habits in recent years are requiring more water consumption per capita. According to the OECD, despite tremendous efforts in the last two decades, the number of city dwellers without access to an improved water source has increased since 1990; as urbanization has outpaced the development of infrastructure. The situation is even more daunting given that access to an improved water source does not always mean access to safe water.
The UN estimates that global energy demand will grow by 60 percent by 2040, while demand for water in the markets where ACWA Power operate is growing at least six percent annually. Governments are faced with making decisions on how to plan for a future where no development model is complete without providing sustainable solutions in both energy and water. A clear example of this policy-making challenge is in ACWA Power’s home market of the Kingdom of Saudi Arabia. Its wide-ranging privatization and economic 2030 reform programme identifies a need for an initial target of 9.5 GW of renewable energy to be installed in the Kingdom by 2023. Outside of the Kingdom of Saudi Arabia, the company’s expansion plans target high-growth economies, based on a comprehensive assessment of several criteria, including the company’s ability to create value and the availability of creditworthy purchasers. Accordingly, ACWA Power focuses its international market strategy on four key regions:
GCC: Following the company’s investments in Oman and the UAE, the company aims to continue its strategy of pursuing both greenfield and acquisition opportunities in the GCC countries, all of which have embraced private sector participation in the ownership, development and operation of power generation and water desalination plants. Over the next decade, as the GCC population soars by 30% to over 50m people, the Gulf region will see an increasing strain on its supplies of electricity, food and water. ACWA Power is distinguished from many of its competitors as, whenever possible, it provides combined power and water solutions that are increasingly integrating renewable technologies.
The MENAT countries, namely Jordan, Morocco, Egypt and Turkey, provides opportunities for the company to expand its portfolio through a mix of acquisitions and greenfield developments while diversifying its fuel mix to address respective governments’ renewable energy plans.
The company intends to consolidate its position in this fast growing region by building on its presence in natural resource based economies such as South Africa, Mozambique, Namibia and Botswana across fossil fuel and renewable energy based plants in both the sovereign and industrial offtake markets.
ACWA Power plans to build on its presence in South-East Asia by targeting greenfield developments and acquisition opportunities through planned capacity addition by sovereign and quasi-sovereign purchasers, and pursuing opportunities in the merchant market of the Philippines. Meeting its energy demand and climate change considerations will dominate the energy agenda in China. The renewable energy growth, pilot ETS and energy-efficiency targets in China may also have some influence over the future energy policy and economy in this part of the world. Growth in energy demand in Vietnam has been high and will continue to be so.