Tabreed and ENGIE: A global power partnership
In 2009, Tabreed was a growing district cooling developer, fighting for market share in an increasingly competitive landscape. At the time, Mubadala identified the utilities sector as a fertile growth opportunity, foreseeing how it could draw on its institutional strength in terms of capital and access to a regional network. Its investment strategy focused on consolidation of Tabreed’s operations to improve profit margins. As a result, the company expanded and to date has delivered over to more than 1 million refrigeration tons across 72 district cooling plants throughout the Gulf Cooperation Council (GCC) – including to iconic infrastructure projects in the United Arab Emirates, Saudi Arabia, Bahrain and Oman.
With Tabreed’s operations stable and generating consistent returns, Mubadala sought to prepare it for the next phase of growth by assessing attributes and capabilities that would unlock additional value. It set out to find a strategic investment partner who could bring capital, intellectual property and operational expertise to the partnership.
In August 2017, Mubadala announced that ENGIE - the French multinational utilities company had acquired a 40 percent stake in Tabreed. This transaction has allowed Mubadala to leverage a significant portion of capital for reinvestment elsewhere, while remaining Tabreed’s single largest shareholder.
Tabreed now has two major, complementary shareholders: Mubadala, with its institutional backing and access to a strong regional network, and ENGIE, one of the largest utility companies in the world. These two bring considerable expertise and operating experience to our utilities business.
The company has two major projects in the pipeline for 2018 the King Khalid International Airport in Riyadh, and another on Maryah Island in Abu Dhabi.
Mubadala and ENGIE have subsequently entered into a global partnership within the power and renewables sector, and are exploring ways to collaborate on projects worldwide.
Hywind: A new wave of clean energy
Since its formation in 2006, Masdar, Mubadala’s renewable energy company, has developed more than 3-gigawatts (GW) of renewable energy projects globally. Its portfolio covers a wide spectrum of technologies, including solar photovoltaics, concentrated solar power, off-grid and solar home systems, and both onshore and offshore wind power.
Today, Masdar is deploying commercially viable solutions at scale, mainly in solar and wind energy.
Offshore wind harvesting uses complex and capital-intensive technology. By locating wind turbines further out to sea, where the wind is strongest, developers can potentially generate more energy. However, this requires larger and stronger wind turbines able to operate at water depths of up to 120 meters and to withstand ocean waves as high as 20 meters.
At the beginning of 2017, Masdar acquired a 25 percent stake from Statoil in Hywind Scotland, the world’s first commercial-scale floating wind farm. The First Minister of Scotland, Ms. Nicola Sturgeon, inaugurated the project later that year in October. The 30-megawatt (MW) wind power project is now supplying approximately 20,000 UK homes from its location 25 kilometers off the coast of Peterhead in Aberdeenshire.
Hywind Scotland uses engineering pioneered in the offshore oil and gas industry. It is also powered by 6-megawatt (MW) wind turbines developed by Siemens, and mounted on floating structures with a steel weight of 2,300 tons that are tethered to the seabed.
Combined with London Array - the world’s largest operational offshore wind farm - and Dudgeon, a 402 offshore wind farm launched in November, Hywind Scotland brings the total capacity of UK renewable energy projects in which Masdar is a partner to more than 1.
Despite harsh winter weather, including hurricane winds and storm waves, Hywind Scotland has thus far surpassed expectations. In its first three months of operations, it achieved an average capacity of 65 percent compared with the industry average for offshore wind farms in winter of 45-60 percent.
Masdar is looking to build on the success of its partnership with Statoil to pursue other innovative renewable energy projects including the battery storage project “Batwind”, which will connect to Hywind in 2018. This battery storage technology has the potential to mitigate the intermittency of wind power and further reduce energy costs.