Texas power failures show limitations of renewables in extreme weather, says US energy leader

Texas power failures show limitations of renewables in extreme weather, says US energy leader
Vicki Hollub, CEO of Occidental Petroleum.
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Updated 17 February 2021

Texas power failures show limitations of renewables in extreme weather, says US energy leader

Texas power failures show limitations of renewables in extreme weather, says US energy leader
  • The energy industry needed to accelerate technology for direct carbon capture

DUBAI: Power blackouts in Texas and other parts of the US in the face of a record winter freeze showed the limitations of some renewable energy systems in extreme climate conditions, according to the head of one of the country’s leading energy companies.

Vicki Hollub, CEO of Occidental Petroleum, told policymakers at the virtual International Energy Forum in Riyadh that the outages were the result of winter conditions “unprecedented” for a century.

“Parts of the grid were just not prepared for it, they had not been weathered in properly. Texas has tried to be progressive regarding renewables, but this has shown that it is not just about putting renewable energy sources in place but being able to operate them when we do,” she said.

Earlier in the forum, Prince Abdul Aziz bin Salman, the Saudi energy minister, offered sympathy and support to states, including Texas, that have suffered several days of subzero temperatures.

“Our hearts and minds are with you, and as always Saudi Arabia does stand ready to extend any support we can send or render to our friends and family members,” he said.

The extreme weather has knocked out 40 percent of the Texas grid capacity, Hollub said.

Frozen oil and gas pipelines also have cut 2 million barrels of crude from US production, adding to the problems faced by US shale producers badly hit by the collapse in demand and oil prices during the pandemic.

“The pandemic had a major impact and showed the vulnerability of shale development when capital is not reinvested,” she said, adding that US oil output could not recover to its pre-pandemic level of 13 million barrels per day.

The US shale industry needs greater scale to match growth with the cost of infrastructure and new drilling operations, she said.

Occidental, the dominant operator in the US Permian shale fields, was focused on paying down the debt from its big acquisition of Anardarko Petroleum in 2019. “No matter how high the oil price goes we have got to keep sustainable capital. The way we’ll create wealth for shareholders is to cut costs,” she said.

Hollub said that the new breakeven “floor” in shale production was around the $40 a barrel level, and that any new developments above that price were “not feasible.”

West Texas Intermediate, the US crude benchmark, is trading at just over $60 per barrel.

She said that the new administration of President Joe Biden was being “very thoughtful” about how it regulated the energy industry and had endorsed the use of carbon capture technologies that were “very much needed.”

The energy industry needed to accelerate technology for direct carbon capture. “This is something that has to happen in the US and around the world. We will not meet the Paris Agreement goals without it,” she added.


PIF’s Noon signs partnerships with Abu Dhabi’s Man City FC

PIF’s Noon signs partnerships with Abu Dhabi’s Man City FC
Updated 17 min 40 sec ago

PIF’s Noon signs partnerships with Abu Dhabi’s Man City FC

PIF’s Noon signs partnerships with Abu Dhabi’s Man City FC
  • It will see Noon become the official online sales partner for Manchester City in the Middle East

DUBAI: Noon, an online platform backed by Saudi Arabia’s Public Investment Fund (PIF) and Dubai businessman Mohamed Alabbar, said it had signed a partnership with Manchester City, the English football club owned by Abu Dhabi.
It will see Noon become the official online sales partner for Manchester City in the Middle East.
Stephan Cieplik, a senior vice president at the club said: “The team has impressed us with their ambition, innovation, and passion for the local communities and businesses they serve in the Middle East.”
Noon was launched in the UAE and Saudi Arabia in December 2017 and in Egypt in February 2019. With an initial investment of $1 billion and working from headquarters in Riyadh, Noon said in 2016 that it aims to expand online sales in the region from 2 percent of the total retail market ($3 billion), to 15 percent ($70 billion) within a decade.
Manchester City is an English Premier League club initially founded in 1880. The club was bought by Abu Dhabi United Group (ABUG) in 2008 for a reported £210 million ($287 million) and is now owned by the City Football Group, which is majority owned by ABUG.


Masdar-led consortium starts construction of solar project in Jeddah

Masdar-led consortium starts construction of solar project in Jeddah
Updated 55 min 53 sec ago

Masdar-led consortium starts construction of solar project in Jeddah

Masdar-led consortium starts construction of solar project in Jeddah
  • The plant is locared in Third Jeddah Industrial City, 50 kilometers southeast of Jeddah

DUBAI: A consortium led by Abu Dhabi’s Masdar has started construction of a solar power plant in Jeddah, after reaching financial close on the project.

The consortium, which includes France’s EDF Renewables and Saudi Arabia-based Nesma Company, announced it will start construction of the 300-megawatt utility-scale plant that will begin operation next year.

The plant is locared in Third Jeddah Industrial City, 50 kilometers southeast of Jeddah.

“Saudi Arabia is fast developing into a global renewable energy player, and Masdar will continue to work closely with the Saudi government and our partners here to help the Kingdom achieve its clean energy transition,” Masdar chief Mohamed Jameel Al-Ramahi said in a statement.

The Kingdom’s Renewable Energy Project Development Office awarded the consortium the project after it had submitted the most competitive bid of SR60.9 ($16.2) per megawatt hour, the companies said.

The new plant forms part of Saudi Arabia’s clean energy strategy, where it wants to diversify its power mix and aims to generate 50 per cent of its electricity from renewable sources by 2030.

Crown Prince Mohammed bin Salman earlier signed seven power purchase agreements for new solar plants in Saudi Arabia following the inauguration of the Sakaka plant.


WEEKLY ENERGY RECAP: April 9, 2021

The WTI crude oil price dropped to $59.32 per barrel but has still been trading in the narrow range between $58 and $61 for three weeks. (Shutterstock/File Photo)
The WTI crude oil price dropped to $59.32 per barrel but has still been trading in the narrow range between $58 and $61 for three weeks. (Shutterstock/File Photo)
Updated 10 April 2021

WEEKLY ENERGY RECAP: April 9, 2021

The WTI crude oil price dropped to $59.32 per barrel but has still been trading in the narrow range between $58 and $61 for three weeks. (Shutterstock/File Photo)
  • Oil prices are still moving in a narrow range, despite the OPEC+ plan to increase output

RIYADH: On the week’s closing, oil prices deteriorated and made the first weekly drop in three weeks. The Brent crude oil price dropped to $62.95 per barrel, while still trading in the narrow range between $61 and $65 for more than three weeks.

The WTI crude oil price dropped to $59.32 per barrel but has still been trading in the narrow range between $58 and $61 for three weeks, as most of Europe and the US were partially on holidays and some investors may have positioned themselves ahead of the holidays and therefore affected the market one way or the other.

Now that it looks like the US is adding 916,000 jobs for March, it may give traders the idea that more demand is coming into the picture, despite the fact the EU is still in lockdown. That might keep the upward momentum dampened a bit but, on the other hand, it still looks bullish as global oil inventories continue to fall and Brent’s futures price curve remains backwardated.

Oil prices are still moving in a narrow range, despite the OPEC+ plan to increase output, returning 2 million barrels per day (bpd) over the coming three months, despite the increasing lockdown measures.

Though the US Energy Information Administration (EIA) has acknowledged the heightened uncertainty of oil demand recovery, EIA April’s Short-Term Energy Outlook (STEO) report again forecast rising prices for both Brent and WTI. EIA forecasts Brent crude price to average $62.28 per barrel in 2021 and $60.49 per barrel in 2022. EIA forecasts WTI to average $58.89 per barrel in 2021 and $56.74 per barrel in 2022.

EIA forecasted global oil demand to average 97.7 million bpd in 2021, which is higher by 5.5 million barrels per day from the 2020 global oil demand average.

EIA has lowered its forecast for the US oil production to average 11.04 million bpd this year, while last month EIA’s STEO forecast was 11.15 million bpd. EIA reported US crude inventories fell by 3.5 million barrels to 501.8 million barrels and expects that gasoline prices could hit their highest in three years this summer.

The latest figures from the Commodity Futures Trading Commission on April 6, 2021 showed that long positions on crude oil futures on the New York Mercantile Exchange numbered 655,327 contracts, down by 20,166 contracts from the previous week (1,000 barrels for each contract). It is the fourth consecutive weekly drop in positions.


500 Startups venture capitalist is positive about growth in Saudi market

Amal Dokhan was one of the Kingdom’s first female venture capitalists (VCs) and recently joined Californian venture capital firm 500 Startups as a partner. (Supplied)
Amal Dokhan was one of the Kingdom’s first female venture capitalists (VCs) and recently joined Californian venture capital firm 500 Startups as a partner. (Supplied)
Updated 10 April 2021

500 Startups venture capitalist is positive about growth in Saudi market

Amal Dokhan was one of the Kingdom’s first female venture capitalists (VCs) and recently joined Californian venture capital firm 500 Startups as a partner. (Supplied)
  • About $152 million was invested in Saudi-based companies in 2020

RIYADH: Amal Dokhan, who was one of the Kingdom’s first female venture capitalists (VCs) and recently joined Californian venture capital firm 500 Startups as a partner, is confident that the Saudi market will continue to grow in 2021.

A seasoned professional with experience in startup investments, corporate innovation and consulting in the Middle East and North Africa (MENA) region, Dokhan was in upbeat mood when she spoke to Arab News.

“What we are seeing now in 2021, the numbers will definitely increase when it comes to Saudi Arabia and the region as well. The reason is that last year, when it was not expected for things to increase, they actually turned out to be a positive year for many companies and startups, especially in fintech (financial technology),” she said.

“The year has started with a positive sign for startups and VCs. Lots of international investors are looking into the Saudi market, so lots of prosperity I think is coming on this year and we are going to witness a good number of the deals as well,” she said.

The Saudi VC market has matured and now it a good time for startups as the investment appetite is high. The VC environment in the Kingdom has changed, Dokhan believes. At the moment, there are 47 VCs, and the number is growing. The increased demand is due to the coronavirus, as companies across the Kingdom have been forced to embrace online work and e-commerce has surged, creating more opportunities for startups and VCs.

About $152 million was invested in Saudi-based companies in 2020, she said. 500 Startups itself had also invested in many companies during this time, she said. The Californian firm has run more than 50 accelerator programs in Silicon Valley and around the world, and invested in more than 2,500 companies worldwide, including more than 180 companies in the MENA region.

New startups will be be selected from Saudi Arabia and the wider MENA region, and 500 Startup’s global network of mentors will help the businesses to scale-up and build regional and global connections, she said.

Sanabil Investments, a Riyadh-based investment firm wholly owned by the Public Investment Fund (PIF), has entered into partnership with 500 Startups to launch an early-stage accelerator program for Saudi startups.

The Sanabil 500 MENA Seed Accelerator Program will consist of six programs run by 500 Startups over three years for a group of pre-seed and seed stage startups from across the MENA region.

Dokhan is involved in the program, which will invest up to $100,000 in new startups. There are about 15 mentors who support the program from around the world, who have vast experience in nurturing startups. The program has already begun and is currently in its second week.

“Our program Sanabil 500 MENA Seed Accelerator Program is actually present here with a fund of $15 million . . . and Saudi Arabia will be very well represented in the program. When we launched this program, we were very happy with the number of startups that applied from Saudi Arabia and the region and applications exceeded 500 applications in a very short time,” she said.


Dubai targets families in summer holiday campaign

Dubai targets families in summer holiday campaign
Updated 10 April 2021

Dubai targets families in summer holiday campaign

Dubai targets families in summer holiday campaign
  • The global campaign will showcase Dubai as a “multi-faceted must-visit family destination”

DUBAI: Dubai’s tourism body is launching a summer holiday campaign in May, with a particular focus on attracting family vacationers, it said on Saturday.
The global campaign will showcase Dubai as a “multi-faceted must-visit family destination,” with a variety of offerings for all ages.
It was announced at a virtual Town Hall meeting hosted by Dubai’s Department of Tourism and Commerce Marketing (DTCM), attended by over 600 industry professionals.
There will be promotions and other activities to encourage travelers to choose the emirate for their summer getaway, including discounted rates on hotel stays and airline tickets.