UAE’s Masdar explores China entry to boost clean energy capacity

Any serious investor ignoring China is committing a 'very strategic mistake', Masdar's chief operating officer says

Masdar is active in 40 countries. Victor Besa / The National

Abu Dhabi clean energy company Masdar is planning a possible entry into China, the world’s largest renewable energy market, as the company looks to reach a renewable energy capacity of 100 gigawatts by 2030, a senior executive said.

The company is evaluating the market and engaging with potential partners to determine the most suitable approach for entering the Asian country, Abdulaziz Alobaidli, Masdar's chief operating officer, told The National.

“China is a very competitive market with local players, so we are not yet there. However, we are assessing the market [and] we are engaging with potential partners … to decide what would be our ideal market entry strategy,” he said on the sidelines of the World Future Energy Summit in Abu Dhabi.

“I think any serious investor who is ignoring China is committing a very strategic mistake.”

Masdar, jointly owned by the Abu Dhabi National Energy Company, better known as Taqa, Adnoc and Mubadala, is active in 40 countries. It aims to expand its capacity to at least 100 gigawatts of renewable energy by the end of the decade from about 20 gigawatts currently.

Global renewable energy capacity in the power sector grew by 473 gigawatts from 2022 to 3,870 gigawatts last year, according to the International Renewable Energy Agency (Irena).

China, the world’s second-largest economy, was the main driver with 298 gigawatts installed in 2023, the Irena report said.

The Masdar executive's remarks come against the backdrop of escalating trade tensions between Beijing and Washington.

US Treasury Secretary Janet Yellen recently urged China not to flood global markets with cheap clean energy exports and said she would not rule out any measures, including potential tariffs.

“[Geopolitical tensions] continue to evolve in one shape or another. We have seen the Russia-Ukraine [conflict] and we are now seeing the Iranian and Israeli tensions,” Mr Alobaidli said.

“As a company we wish for these to de-escalate, certainly,” he added.

Masdar has a “plan B and C and even Z” to deal with possible supply chain challenges emerging from conflicts and political instability, Mr Alobaidli said.

“As an investor, we assess the impact [on] the interest rate, logistics and the supply chain,” the Masdar executive said.

“We work with the West, the East and the Middle East … we diversify our supply chain to ensure that if those challenges start to materialise, we have the right mitigations,” he added.

Masdar is also trying to expand its footprint in Europe, which has made significantly strides in clean energy adoption in recent years.

Renewable energy adoption on the continent has received a further push since the start of Russia's invasion of Ukraine in 2022. The EU has sought to rapidly reduce its dependence on Moscow’s oil and gas exports.

In February, Masdar completed the acquisition of a 49 per cent stake in the UK’s Dogger Bank South (DBS) project, one of the world’s largest planned offshore wind farms.

The acquisition was part of an £11 billion ($13.70 billion) joint investment in the UK’s renewable energy sector with German company RWE, which retained a 51 per cent stake.

Mr Alobaidli said that Masdar would continue to assess “transformative acquisitions” in Europe and the US.

Potential investments would target solar as well as onshore and offshore wind projects, he said, adding that there was room for new technologies.

Masdar plans to raise between $750 million and $1 billion through the sale of a green bond this year to fund its renewable projects globally, a senior executive told The National in a separate interview.

This would be the second green bond offering from the company after it raised $750 million last year and listed it on the London Stock Exchange and the Abu Dhabi Securities Exchange as part of a $3 billion bonds programme.