Sustaining growth —
TAQA's progress mirrors Abu Dhabi’s vision to build a diversified, knowledge economy that enhances quality of life and career opportunities for residents of the UAE
TAQA’s rapid growth in its first seven years could be seen to reflect the scale of the commercial opportunity in the energy market at a time of rising living standards around the world.
But the enterprise cannot be understood solely in terms of dollars and cents. Since the government of Abu Dhabi created TAQA through the privatisation of its power production and water desalination plants in 2005, it has always had an eye on a bigger prize.
That prize, outlined in the Abu Dhabi Economic Vision 2030, is a long-term strategy for the emirate that offers direction to businesses and government departments alike. It maps out a path for Abu Dhabi to use its natural resource wealth and build a “knowledge economy”, prioritising advanced technology, a world-class industrial base and a dynamic private sector.
TAQA’s evolution speaks to this vision in many ways, says His Excellency Abdulla Saif Al Nuaimi, vice chairman of TAQA’s board of directors. “We are part of Abu Dhabi’s growth,” says Mr Al Nuaimi, who is also director general of the Abu Dhabi Water and Electricity Authority (ADWEA).
Abu Dhabi targets a 7% rate of annual economic growth to 2015 and 6% thereafter, but demand for electricity is rising even faster than that. Power consumption is expected to grow at an average rate of 11.3% every year, according to ADWEA.
The electricity and water provided by TAQA’s plants in the UAE, which supply 96% of ADWEA’s needs, are prerequisites for the high quality of life enjoyed by residents. “You don’t have a choice to invest in energy or not. Wherever the economy grows, power has to grow to serve the economy,” Mr Al Nuaimi says.
At an international level, the foundation of TAQA opened a world of investment opportunities for Abu Dhabi. It has leveraged its relationships with world-class joint venture partners in Abu Dhabi to expand across four continents, acquiring state-of-the-art knowledge and technical expertise.
“TAQA plays an important role in further integrating Abu Dhabi into the global economy by attracting international partners and foreign investment to Abu Dhabi and through the export of capital through its international strategic investments,” said Fahad Saeed Al Raqbani, director general of the Abu Dhabi Council for Economic Development.
TAQA is now the largest independent power producer in the Middle East and North Africa (MENA) region and has substantial oil and gas operations in Canada, the Netherlands and the United Kingdom.
The company has developed a global network of centres of excellence in Abu Dhabi, The Hague, Calgary and Aberdeen to build skills and expertise that will be crucial to Abu Dhabi’s future.
“TAQA has developed a complex portfolio of assets across its various lines of business. The organisation has done tremendously well to turn most of this portfolio into well-performing assets, largely through the capability of its leadership team to reshape direction and embed industry-leading practice in the field,” says Paul Navratil, PwC’s Middle East energy leader.
TAQA has turned around the fortunes of oil and gas fields in the North Sea, reversing declines in production through the use of technology and focused investments. In Morocco and Ghana, the company is expanding power generation plants, installing state-of-the-art technology to maximise energy efficiency.
The skills that TAQA builds in these competitive environments add value to Abu Dhabi as it seeks to deploy more advanced technology in its own energy operations.
Abu Dhabi has committed to sourcing 7% of its electricity-generating capacity from renewable sources by 2020, an ambitious target. TAQA responded to this challenge in 2012, creating a new Energy Solutions unit, with the aim of investing in research and development, incubating new technologies and exploring alternative energy projects ranging from wind to solar and carbon capture.
“TAQA has started an alternative energy division, not only locally, but to gain know-how through bidding with well-known partners who have experience,” says Mr Al Nuaimi.
“Through our renewable energy partnerships in places such as Morocco and Europe for solar and wind, or Abu Dhabi for waste-to-energy, we are building knowledge and contribute to broader renewable energy targets in Abu Dhabi included in the Economic Vision 2030.”
Diversifying sources of energy supply is central to Abu Dhabi’s vision, but there are many other less obvious ways that TAQA serves as a delivery platform for Abu Dhabi’s ambition.
One of the most striking elements of the Economic Vision 2030 is its emphasis on open, free and competitive markets to lift productivity and nurture new national champions. By virtue of its public listing and global reach, TAQA has to compete against the best in the world, in the different markets where it operates. This is what makes it such a vibrant and dynamic place to work. Cumbersome bureaucracy or below-par performance is punished harshly in the fast-moving global energy industry.
To survive, TAQA needs to live up to the high standards it sets for itself. TAQA has always embraced an entrepreneurial spirit, offering its employees a world-class workplace. Its people are drawn from dozens of nationalities, and for UAE national staff, TAQA offers an unparalleled opportunity. Its investment brings jobs and prosperity to its communities from Morocco to Canada, and these markets offer opportunities for UAE nationals to test their skills against the best in the world.
“All our investments add value to the economy, not only internationally but also in Abu Dhabi. As we build a stronger base and headquarters in Abu Dhabi, we hire UAE nationals and train them. This is one of the goals for TAQA,” says Mr Al Nuaimi.
The career opportunities for UAE citizens within TAQA build on a partnership with the public that was established at the company’s foundation in 2005. Almost one quarter of the company’s shares were floated on the Abu Dhabi Securities Exchange and sold to UAE nationals.
Today, TAQA is one of the largest and most liquid stocks on the Abu Dhabi Securities Market, favoured for its reliable dividends that also support the pension fund of farmers in Abu Dhabi.
"From day one, the public has been a partner in growing Abu Dhabi’s utility sector," says Mr Al Nuaimi. “So both the government and the public, UAE nationals, are partners in TAQA’s success."