Abu Dhabi National Energy Company, or Taqa, has broken away from its traditional focus on hydrocarbon assets by establishing a division to invest in renewable energy.
The unit, Energy Solutions, will invest in wind, solar, thermal and hydro power as well as technology-intensive oil and gas projects.
Energy Solutions has already identified a number of targets and is close to launching official bids for wind farm tenders in Morocco.
"We are interested in looking into more than just a few projects in 2012, and grow exponentially in that area," said Saif Al Sayari, the head of Energy Solutions.
Taqa has not as yet decided on the scope of investments, but Energy Solutions could become an equal to the company's other two divisions.
"The plan is, since this is the third vertical, it should be as big as the other two verticals," Mr Al Sayari said. "The opportunity is there, the projects are there, the technology is there. It is only a matter of integrating all these components together and make something out of it."
Today, Taqa has a combined asset base of about US$32 billion (Dh117.64bn). Energy Solutions will buy into existing projects as well as building new assets. It is also looking to invest on home soil and has launched a feasibility study for a waste-to-energy project in Abu Dhabi. The project has the potential to generate up to 300 megawatts, Mr Al Sayari said, and could be operational in four years.
The company is also assessing the potential to turn agricultural waste in Abu Dhabi into diesel fuel.
Other potential investments include a carbon capture and storage project in the Netherlands, where Taqa is committed to the $1.1bn Bergermeer gas storage project, to become operational in 2015.
While the move into renewable energy is a departure from its traditional emphasis on fossil fuels, Taqa started changing its portfolio mix last year. It sold off non-core oilfields in the US and Canada, and shed its 50 per cent stake in a $320 million power plant in the Caribbean. Instead, it has entered the race to develop one of the last frontier oil regions, buying a 20 per cent stake in WesternZagros, a Kurdish producer.
The asset reshuffle is part of a focus on core strategic markets, which include the Middle East, Mohammed Mubaideen, the investor relations manager at Taqa, said last month.
The Abu Dhabi power player has also emerged as the front-runner for the 1,600 megawatt Hassyan power plant, which the Dubai Water and Electricity Authority tendered as an independent power project.
Taqa and its Japanese partner, Marubeni, submitted the lowest price for the electricity they would sell under the public-private partnership. The company owns 98 per cent of power generation capacity in Abu Dhabi.
Taqa is majority owned by the state utility Abu Dhabi Electricity & Water Authority, while 24.9 per cent is traded on the Abu Dhabi Securities Exchange.
