ENOWA to develop world’s first high-voltage smart grid

 To achieve 100 percent renewable electricity in NEOM, ENOWA CEO Peter Terium emphasized the crucial role of an efficient grid.
To achieve 100 percent renewable electricity in NEOM, ENOWA CEO Peter Terium emphasized the crucial role of an efficient grid.
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Updated 02 February 2024
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ENOWA to develop world’s first high-voltage smart grid

ENOWA to develop world’s first high-voltage smart grid

DUBAI: NEOM’s water and electricity subsidiary ENOWA has developed a blueprint for the world’s first renewable, high-voltage smart grid, Peter Terium, the company’s CEO, told Arab News.

In an interview on the sidelines of the 2023 UN Climate Change Conference, Terium said that the “grid of microgrids” will allow ENOWA to supply the NEOM region with sizable, 100 percent renewable electricity that simultaneously provides a 50 percent reduction of the corridor footprint.

According to the CEO, the principle of smart grids is simple, as they are traditionally used on a small scale in buildings. However, the sheer size of the development and the scope of coverage needed for the nine to 10 million individuals who will be residing in NEOM adds to the difficulty of the undertaking.

“That’s a huge achievement given it’s the size that makes it complex. You know, one windmill, a refrigerator, and a television are all 100 percent renewable. But a NEOM within the Kingdom that eventually is going to have nine to 10 million inhabitants. That’s very sizable,” Terium said.

In order to ensure minimum disturbance to the natural terrain and minimize visual disruption, the CEO noted that this would require limiting the number of corridors and implementing part of the grid to operate underground.

To achieve 100 percent renewable electricity in NEOM, Terium emphasized the crucial role of an efficient grid, highlighting that individuals often underestimate that all solar and wind farms require connectivity to “bring the electrons to the customer.”

Another key element, the CEO underscored, is storage. In order to ensure the stabilization, backup, and security of its renewable supply, the giga-project is implementing a portfolio of storage solutions.

The development is investing “billions and billions of Saudi riyals” to ensure that its first customers have access to green electricity, sustainable water, and reliable quality electricity through its grid and storage.

“One example is already for sure and we are expanding into the market with that, which is the world’s largest closed-loop pump, hydro storage, and it combines the traditional form of water-based hydro storage, so a small upper lake and a lower lake,” Terium said.

“That has two effects. First of all, it reduces the evaporation of the water. So that’s an economic effect. But the second effect is that it is a great attractor for birds. Birds and wildlife. So we have a major positive solution for storage that is pretty sizable, the largest in the world,” he added.

Considering the challenges ahead, the CEO highlighted that the development isn’t exclusively centered on creating new technologies. Instead, their key focus is to ensure that the electricity supplied to the NEOM region is renewable, dependable, and affordable.

While not entirely cheap, mature large-scale solar and wind technologies remain affordable, underscored Terium, and will thus be primarily implemented into the framework of connectivity used by the futuristic city.

“The NEOM region has a combination of very intensive solar irradiation and very abundant wind profiling — the solar during the day and the wind mainly in the evening. That makes it a perfect combination to take these two cheapest renewable technologies and get as much as possible out of them,” he outlined.

While the existing infrastructure for electricity amounted to half a gigawatt to 1 GW, the company has “ramped that up” to 3 GW with the aim of 5-6 GW in the near future.

According to Terium, the first tenders of solar and wind power plants have already been established, and the large green hydrogen plant being built will amount to 5-6 GW of installed capacity for power generation by the year 2026.

Due to the size of the NEOM development, the executive underscored that ENOWA is currently at about 5 percent completion of its infrastructure, with the goal of accelerating to 10 percent in the coming 12 to 18 months.

He said: “NEOM is going to be a large undertaking. And what we do is build the infrastructure in line with the growth of NEOM. So that’s why the percentage of 5 or 10 percent sounds low, but it is connected to the size, eventually, of NEOM. And then again, five or 10 eventually of a massive undertaking is already a huge project.”

The company is working with the Kingdom’s Ministry of Energy and collaborating with entities like the King Abdullah University of Science and Technology in its energy-centric ventures. Alongside KAUST, ENOWA will be installing the first carbon capture capacity into a gas-fired plant in the Kingdom. The executive said: “That is one example, but there are many other ones and all the institutions that are there in the Kingdom we work with, but also outside of the Kingdom.”

Through collaboration, it hopes to bring some of its ideas on how to scale renewable energy to the region through its renewable energy approaches and Saudi Arabia’s green hydrogen strategy, a part of which is the NEOM green hydrogen plant.

Terium said: “The Kingdom has now embarked upon a hydrogen strategy and a renewable energy strategy, but it may take advantage of some of the lessons learned that we had in the early stage. And we can bring in some of our ideas of how you can do that bigger and at a larger scale.”

What is important, according to the CEO, is that hydrogen needs to reach its customers, and there are more cost-effective solutions than shipping it in the form of ammonia.

Thus the decision to build a pipeline corridor infrastructure to Europe is something “that only a country like Saudi Arabia can do because that’s a job and a size which is even way too big for even NEOM.”


Mobily partners with Telecom Egypt to launch 1st Saudi submarine cable

Mobily partners with Telecom Egypt to launch 1st Saudi submarine cable
Updated 18 sec ago
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Mobily partners with Telecom Egypt to launch 1st Saudi submarine cable

Mobily partners with Telecom Egypt to launch 1st Saudi submarine cable

RIYADH: Saudi Arabia’s telecommunications company, Mobily, has entered into a cooperation agreement with Telecom Egypt to establish the first Saudi-owned subsea cable connecting the two nations across the Red Sea.

The agreement includes the installation of the subsea cable, which will be fully owned by Mobily, with landing stations in Duba, Saudi Arabia, and Sharm El-Sheikh, Egypt, as stated by Mobily on X.

This cable will serve as a link between Asia and Africa, creating a route to Europe by connecting Saudi Arabia with Egypt.

It will enhance connectivity options for Gulf countries and neighboring regions through Mobily’s digital network, integrating with Egyptian landing stations in the Mediterranean.

Additionally, it will provide new routes to improve service reliability and meet customer needs within the Kingdom and beyond.

“The new cable represents a significant milestone in strengthening Saudi Arabia's position as a leading international hub for telecommunications services and data traffic, in alignment with the goals of Saudi Vision 2030,” said Salman bin Abdulaziz Al-Badran, CEO of Mobily.

He added: “The signing of the agreement underscores our commitment to expanding our infrastructure and enhancing our capabilities both regionally and internationally, as Mobily’s new cable will connect Saudi Arabia to Egypt and improve communication flexibility between the Middle East and Europe.”

This agreement aligns with Mobily’s strategy to bolster its infrastructure and network capabilities. Building on its previous investments in subsea cables that connect global regions, the new cable will expand Mobily’s international reach and capacity.

“Complementing the newly established landing station in Sharm El-Sheikh, we are developing new crossing routes to connect Sharm El-Sheikh to the Mediterranean Sea,” stated Mohamed Nasr, managing director and CEO of Telecom Egypt.

He further said: “We are confident that this commercial agreement will be a valuable addition to our ongoing efforts to support this critical sector and cater to the rising demand for capacity and connectivity.”

By increasing capacity and expanding its global reach through new collaborations, Mobily is dedicated to enhancing its subsea network infrastructure both domestically and internationally.

“I am pleased with our cooperation with Telecom Egypt, which will enable us to offer the best services to all our customers around the world,” Al-Badran noted.

“Telecom Egypt is dedicated to advancing the international telecommunications infrastructure by enhancing the geographical diversity of the global subsea cable networks,” Nasr added.

This commitment aims to provide cutting-edge digital solutions to customers and support the sustainable growth of the Kingdom’s ICT sector through advanced infrastructure.


Saudi Arabia, Turkiye sign 10 cooperation agreements at business forum in Istanbul 

Saudi Arabia, Turkiye sign 10 cooperation agreements at business forum in Istanbul 
Updated 19 min 32 sec ago
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Saudi Arabia, Turkiye sign 10 cooperation agreements at business forum in Istanbul 

Saudi Arabia, Turkiye sign 10 cooperation agreements at business forum in Istanbul 

RIYADH: Saudi Arabia and Turkiye deepened commercial ties by signing 10 cooperation agreements at an event in Istanbul, advancing strategic initiatives across diverse sectors. 

The Saudi-Turkish Business Forum spotlighted opportunities for joint ventures in agriculture, food, and tourism, along with potential collaborations in advanced manufacturing, construction, and infrastructure. Other key areas included technology, innovation, and logistics, the Saudi Press Agency reported. 

Organized by the Federation of Saudi Chambers and the Foreign Economic Relations Board of Turkiye, the event attracted over 450 companies and several government agencies from both nations. 

This comes as the trade volume between the Kingdom and Turkiye reached SR25.4 billion ($6.76 billion) in 2023, marking a 15.5 percent growth. Saudi exports to Turkiye represented SR15.6 billion, while Turkish imports to the Kingdom accounted for SR9.8 billion.  

Turkish Minister of Trade Omer Bolat said: “Turkiye aims to raise the volume of its bilateral trade with the Kingdom to $30 billion in the medium and long term, and diversify its fields, especially tourism, health, infrastructure, information technology, and the defense industry.”  

The minister praised the strong bilateral relationship, the quality of Turkish products, and the success of the his country’s services sector, encouraging mutual benefit from these strengths. He also highlighted the Kingdom’s transformations across sectors such as mining, health, technology, and communications. 

“Today in Istanbul, I met with my brother, His Excellency the Turkish Minister of Trade Omer Bolat, and we discussed strengthening relations and expanding trade partnerships for the good and interest of the two brotherly countries,” Saudi Minister of Commerce Majid bin Abdullah Al-Qasabi said in a post on X. 

  


SABIC sees turnaround as it reports $266.2bn Q3 profit

SABIC sees turnaround as it reports $266.2bn Q3 profit
Updated 15 min 37 sec ago
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SABIC sees turnaround as it reports $266.2bn Q3 profit

SABIC sees turnaround as it reports $266.2bn Q3 profit

RIYADH: Petrochemical firm Saudi Basic Industries Corp. reported a net profit of SR1 billion ($266.27 million) for the third quarter of 2024, a marked improvement from a loss of SR2.87 billion in the same period last year.

SABIC attributed its positive results to various factors, including higher income from operations by SR797 million, bolstered by a heightened gross profit margin offset by raised operating costs.

The company’s revenue rose 3 percent year on year to SR36.88 billion, primarily driven by increased average selling prices despite a slight decrease in sales volume.

The firm also benefited from gains related to divesting its Functional Forms business and favorable currency exchange fluctuations.

According to the London Stock Exchange Group, the third quarter profit missed analyst forecasts of SR1.6 billion, as reported by Reuters.

A notable factor was SABIC’s reduced losses from discontinued operations, amounting to SR3.3 billion, mainly stemming from a fair value reassessment of the Saudi Iron and Steel Co., known as Hadeed.

The reclassification of Hadeed as a discontinued operation will continue until the completion of its sale, which was previously announced by the company.

When compared with the second quarter of 2024, however, net profit fell from SR2.18 billion due to a lower gross profit of SR194 million, attributed to softer selling prices and higher feedstock costs.

The quarter also saw a rise in operating expenses by SR223 million and a decline in profits from associates and joint ventures by SR313 million, following a fair value assessment related to the firm’s agreement to sell its shares in Alba, announced in September.

Despite these challenges, SABIC’s total revenue for the first nine months of 2024 reached SR105.28 billion, with a net profit of SR3.43 billion, a sharp turnaround from the SR1.04 billion loss in the same period last year.

This was aided by reduced discontinued operation losses and lower Zakat expenses by SR1.05 billion, stemming from regulatory-driven provision adjustments in June.

In September, Saudi Arabia’s Mining Co. completed the acquisition of SABIC’s 20.62 percent shareholding in Aluminium Bahrain, also known as Alba, marking a significant milestone in its strategy for regional growth.

According to a press statement, the transaction valued between SR3.62 billion ($960 million) and SR3.97 billion.


Saudi Vision 2030 to catalyze banking sector growth: Moody’s

Saudi Vision 2030 to catalyze banking sector growth: Moody’s
Updated 04 November 2024
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Saudi Vision 2030 to catalyze banking sector growth: Moody’s

Saudi Vision 2030 to catalyze banking sector growth: Moody’s
  • Rating agency said development of planned mega projects in Saudi Arabia will play important role in generating huge business and lending opportunities for banks
  • Kingdom’s housing program has been a driver of credit growth for the banks over the last five years

RIYADH: Saudi Arabia’s Vision 2030 program to diversify the economy could accelerate the country’s banking sector development in the coming years, according to an analysis by Moody’s. 

In its latest report, the US-based credit rating agency said the development of planned mega projects in Saudi Arabia will play an important role in generating huge business and lending opportunities for banks. The infrastructure required to host major events like the Asia Cup in 2027, the Asian Winter Games in 2029, Expo 2030, and the FIFA World Cup in 2034 is expected to support this growth further.

Vision 2030 aims to reduce the Kingdom’s decades-long dependence on crude revenues and steadily bolster its presence in other sectors like tourism, technology, and real estate. 

“Planned mega projects to diversify the economy include the tourism, real estate, and infrastructure sectors, and the government provides the country’s banks the opportunity to help fund them,” said Abdulla Al-Hammadi, assistant vice president and analyst at Moody’s Ratings. “One part of Saudi Vision 2030 is a plan to raise home ownership to 70 percent by 2030 from 47 percent in 2016.”

The report said the Kingdom’s housing program has been a driver of credit growth for the banks over the last five years, with household mortgages reaching SR607 billion ($161.67 billion) at the end of 2023, up from SR110 billion in 2016. They now comprise around 24 percent of total banking sector loans.

“Given these mortgages were secured at a fixed rate during a time of low interest rates and that tenures are often for 25 to 30 years, this could place some pressure on margins in the sector. We believe that larger banks will be hit hardest due to their dominant position in the Saudi mortgage market,” said Al-Hammadi. 

If deposit development continues to lag loan growth, banks could also face growing funding shortages. Given the nature of mortgage fixed-rate loans, it may be challenging for financial institutions to offload them in the still-developing secondary markets.

The agency said Saudi banks could also face challenges in this run, which include insufficient deposit growth to meet the growing credit demand associated with Vision 2030 infrastructure and development projects. 

“A challenge is that availability of deposit growth is lagging behind accelerated credit growth at Saudi banks, while the home-ownership push has packed the banks with long-term, fixed-rate mortgages that tie up funds. 

“The banks will need to tap more confidence-sensitive market funding. This could entail foreign deposits, interbank syndications, and debt issuance, particularly Islamic bonds or sukuk,” said Al-Hammadi.

According to the report, reliance on short-term foreign funding will be riskier than long-term, such as senior unsecured debt and additional tier one, since long-term allocations will better match these banks’ long-term loans.


Oil Updates – crude gains more than $1 after OPEC+ delays output hike

Oil Updates – crude gains more than $1 after OPEC+ delays output hike
Updated 04 November 2024
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Oil Updates – crude gains more than $1 after OPEC+ delays output hike

Oil Updates – crude gains more than $1 after OPEC+ delays output hike
  • Brent up 1.9 percent, WTI up 2 percent
  • OPEC+ delays December output hike by one month

BEIJING/SINGAPORE: Oil prices extended gains on Monday, rising more than $1 on a decision by OPEC+ to delay by a month plans to increase output, while the market braced for a week that spans a US presidential election and a key meeting in China.

Brent futures rose by $1.39 per barrel, or 1.9 percent, to stand at $74.49 a barrel by 10:22 a.m. Saudi time. US West Texas Intermediate crude rose by $1.41 a barrel, or 2.0 percent, to stand at $70.90.

On Sunday, OPEC+, which includes the Organization of the Petroleum Exporting Countries plus Russia and other allies, said it would extend its output cut of 2.2 million barrels per day for another month in December, with an increase already delayed from October because of falling prices and weak demand.

The grouping had been due to increase output by 180,000 bpd from December.

“While the delay until January does not change fundamentals significantly, it does potentially leave the market having to rethink the strategy of OPEC+,” ING analysts said in a note.

The delay bucked the expectations of some in the market for OPEC+ to deliver the planned hike in output, they added.

“This delayed supply increase means that maybe the group are more willing to support prices than many believe,” they said.

The group is set to gradually unwind the 2.2-million-bpd cut over the coming months, while another 3.66 million bpd of production cuts will stay until the end of 2025.

Brent and WTI posted weekly declines last week of about 4 percent and 3 percent, respectively, as record US output weighed on prices. But both contracts edged up on Friday on reports that Iran could launch a retaliatory strike on Israel within days.

On Thursday, US news website Axios said Israeli intelligence suggested that Iran was preparing to attack Israel from Iraq within days, citing two unidentified Israeli sources.

It is questionable whether the price uptrend will be sustained as previous initial positive reaction to the delayed output hike and geopolitical tension have eventually fizzled off, said Yeap Jun Rong, a market strategist at IG.

For now, oil prices may stay in a broad consolidation range, with any upside likely to find some resistance at the level of $78.50, he added.

Markets await Tuesday’s US presidential election, with polls showing Democratic Vice President Kamala Harris and Republican former President Donald Trump neck-and-neck.

And on Thursday, economists expect the US Federal Reserve to cut interest rates by 25 basis points.

In China, the Standing Committee of the National People’s Congress meets from Monday to Friday and is expected to approve additional stimulus to boost the slowing economy, though analysts say the bulk may go to help cut local government debt.