Frédéric Claux

Working on renewables, thermal and supply, energy solutions, and networks, Engie has its eye on the energy transition and future demands.

What does energy transition mean for Engie?

It means many things. We embarked on a new strategy five or six years ago that reflects goals aligned with our purpose and is aligned with the objective of net zero carbon by 2045. That is the driving factor behind what we do. We reorganized the company in 2021 according to four global business units. In the past, we were organized geographically. Each entity was doing everything on a standalone basis, but now we are organized transversally along four global business units: renewables, thermal and supply, energy solutions, and networks. Globally we have a strong focus on renewables—this is part of the energy transition and is the future. We have set ambitious objectives for 2025 and 2030, for wind, solar, green hydrogen and also hydro. We are strong in energy solutions, which focuses on energy efficiency and providing energy efficient solutions. We work for industrial customers to improve processes and ensure they generate lower emissions and are more energy efficient. We have smart cities and electrical chargers in this area, as well as mobility solutions. We also work on district cooling and distribution of conventional power. This is an area that must be reduced to meet the CO2 objectives by 2045. It will take time to organize this transition because we cannot just close down power plants, we are looking to green the fleet and seek other ways to decarbonize our operations. Green hydrogen is one of our main focuses locally; we have signed a USD5-billion strategic alliance with Masdar to explore the co-development of a UAE-based green hydrogen hub. The target being 2GW by 2030. For us, it is part of the future.

What is the outlook for renewable energy in GCC countries?

There is keen interest from all countries in this region. They see hydrogen as a potential substitute for oil and gas because of its versatility. However, it will take about 20 years to fully displace oil and gas; that is the challenge. The goal for Saudi Arabia and the UAE is to find an alternative in 20 years. Perhaps at some point, there will no longer be any oil and gas reserves, and they will need to find something else. Hydrogen is perceived as a potential substitute, though it is still early days, and there are many things that need to be done to make it feasible for everyone. There is no clear infrastructure, clear regulations, or large-scale project anywhere in the world. The tariff for green hydrogen is to our knowledge perhaps two or three times higher than the blue or gray hydrogen. This means people are reluctant to use it, especially for base industries like fertilizer and steel. However, with time, the cost of producing green hydrogen will decrease. Renewables in the region are already fairly inexpensive. That is a strong advantage in this region compared to Europe, for example. Manufacturers are still learning and improving the technology and scaling up. It is also important to not only work for exports, and it would be beneficial for the UAE and Saudi to develop the local industry, such as local uses of hydrogen for mobility solutions or even using hydrogen for fertilizers and the steel industry. That would help anchor the ecosystem in the country.

How do companies and governments balance reaching carbon net zero and diversifying the economy while making the most on a barrel?

This is the dilemma in the region. For now, they want to do both at the same time and have 25-30 years to reach the goal. For this region, it is important to develop another industry other than oil and gas. We need to create something that employs people and provides jobs. There has to be a gradual phasing out and phasing in of two different worlds. Those countries are no different from any other country. It is a fine balance, and countries need to keep their eyes on the ultimate goal.