#NetZeroNuclear Summit 2023 | Leadership Vision: HE Musabeh Al Kaabi, Executive Director, ADNOC

Thank you. It's truly an honor. Good morning everyone, truly an honor to be part of this conversation, and thanks for inviting me. I run the Low Carbon Solutions and International Growth for ADNOC. ADNOC has set a clear strategy in view of the energy transition going forward. We have identified that there is a requirement, of course, to decarbonize the energy of today while investing in the energies of tomorrow. What do we mean by decarbonizing the energy of today? Ensuring that every molecule produced in our operation has the lowest carbon intensity. And that's very important because we think as long as the world needs oil in the future, it should come from a low-intensity production. And by the way, when you look at the IEA projection by 2050, of course, renewables will play a big role, nuclear definitely will play a big role, but also there is a sizable share of hydrocarbons in the system. So our task is to ensure that that hydrocarbon demand in the future should come with the lowest carbon intensity. Also, we're investing in the energies of tomorrow. We are a shareholder of one of the leading renewable platforms globally called Masdar, the Future Energy Company of Abu Dhabi, and the company is going through a very aggressive growth. Today, capacity of around 20 gigawatts and we're building the capacity to 100 gigawatts by 2030. We're expanding also in carbon capture, we're expanding in hydrogen, and we will come to this I think later. But in a nutshell, decarbonizing the energy system of today and building and investing in the energies of tomorrow.

When you look at our international growth, our strategy is going to focus on natural gas, because we believe that natural gas will play a big role in the energy transition and to achieve these targets, even including climate targets by 2050, definitely we need to expand more on natural gas and potentially offset coal power generation. International expansion also in a very critical sector, which is chemicals. And why chemicals is important because it's a material that we use on a daily basis, but also as an integrated energy player we have a responsibility to accelerate the decarbonization of other sectors. If you look at any economy, be it the US economy, UAE, Japan, Germany, you have five or six key sectors that will require decarbonization: cement, steel, aluminum, chemicals, power, and oil and gas operations. So we are working with other sectors as well to ensure that we provide them with the proper solutions to decarbonize their operations.

Definitely. And if you look again at the IEA projection by 2050, I don't see honestly how we can achieve net zero without embracing nuclear and without embracing carbon capture. Because if the ultimate target is to remove carbon, we need to embrace carbon capture.

I think our approach is all of the above. We need definitely molecules and electrons. As I highlighted, I think on the renewable side we're expanding on the electron side, but on the low carbon solutions we're making good progress with the molecules, especially hydrogen. We believe that hydrogen will have a sizable share of decarbonizing and achieving net zero targets by 2050 or earlier. And there are few enablers for hydrogen to be pushed in the system. One of them is government policies, and we've seen in the US with the introduction of the Inflation Reduction Act, we have seen ETS systems, we have seen the agents trying to push the CFDs, contract for difference system. There are a lot of government policies that would definitely help pushing hydrogen and low carbon solutions. The technology is going to play a big role, and I remain very optimistic when it comes to technology because I remember the first solar project in Abu Dhabi was in 2008. The cost at that time was around 45, 46 cents per kilowatt hour. The last project awarded in Abu Dhabi came at a cost, which was a few months back, at 1.4 cents per kilowatt hour. So significant drop in the cost of solar. In the hydrogen space, although it is still a challenge, I believe that additional drop in the cost of electrolyzers will enable hydrogen to play a bigger role in securing the energies of tomorrow.

Let me share one thing. I think ADNOC participated in the first climate tech we hosted in Abu Dhabi in May of this year, and it was unbelievable when you see the startup companies and the level of innovation coming into the system. In the venture space, for example, you see that especially in the energy transition, startup companies had like a modest number, but just in the last few years you see them going almost astronomical. So there is a lot of innovation happening in the energy transition. We in ADNOC are embracing a lot of it. We're testing, piloting a lot of technologies. Let me highlight some of the decarbonization or carbon capture. We're running a DAC unit, direct air capture, and CO2 mineralization project in Fujairah. We are running a pilot in Abu Dhabi where we capture CO2 and put it in a saline aquifer. We have realized we have definitely a storage capacity to accommodate millions and millions of tons of CO2, so we're testing that concept. We're testing a new emerging technology in the carbon capture to minimize and reduce the cost. We have also tested something very interesting and we announced it a few days back: utilizing geothermal instead of power generation, because of the geology here in this region, we decided to utilize it for district cooling. And believe me, sometimes when you bring these ideas into the system, it is extremely difficult for traditional organizations to accept new ways of doing things. So we had to almost bulldoze our way to get it approved. And today it's up and running. It is in Masdar City. I don't know how many of you have been to Masdar City, but today 10% of their district cooling is supplied by geothermal. So in technology, I think we're at the verge of almost major disruption. And why I'm saying this is because if you combine human innovation and turbocharge it with AI, I think there is a huge potential to improve the efficiencies and push some of these technologies and accelerate them.

I think for nuclear, I would like first of all to thank ENEC and the team here, because the fact that I am achieving the lowest carbon intensity among my peers goes to the nuclear program of the UAE. So great achievement, thank you, you're making my life easier. When you look at my decarbonization, two big levers of how to achieve my targets. One of them is electrification, and that's where we completely connected our onshore operation now with the grid and tap into nuclear and solar, and we are in the process of connecting our offshore operation to the national grid. So going forward, of course, I need further decarbonization, I need further carbon intensity reduction. I already announced 25% by 2030. 2030 is almost tomorrow. So when you look at nuclear power generation, the challenge is if I can get a reliable and cost-effective energy, definitely that's the way, and it will help me decarbonize. And I know that in this industry there is a lot of discussion around SMRs. In fact, sometimes people use their imagination and try to explore nuclear fusion. By the way, at climate tech we had a few startup companies on nuclear fusion. I know that's maybe distant future. But for the traditional nuclear and SMRs, my only request is if we can get it at an acceptable cost, it will make my journey going forward, decarbonizing my operation, much easier. So I rely hopefully to see a more practical approach to push these technologies into the system.

Yeah, I think look, when we talk a lot about hydrogen, and you highlighted earlier that there is a challenge with hydrogen. I think for hydrogen, beside the government policies to maybe introduce incentives, the technology, and if we can tap into the heat or the nuclear, I think that's definitely going to help reducing the cost of hydrogen.

Yeah, we allocated 15 billion dollars for initial allocation, and I can see only one side, I think we're going to increase that number going forward. But 15 billion dollars allocated for the next five years in order to push more the decarbonization agenda and maintain ADNOC's position as a leader among our peers when it comes to carbon intensity. So because of what you highlighted, disruption is happening. I think disruption is happening in all sectors, it's not necessarily oil and gas only, the energy sector, but life sciences for example is being disrupted, technology side. There's a lot of disruption happening around us. So as a responsible integrated energy company, we need to embrace, because we have two options: to stay in the state of denial, or embrace these disruptions and include them as part of our business. So in ADNOC, we're very clear, we're going to embrace new technologies, we're going to be an effective and key player on the energy transition, and we still believe that one of the best ways to generate power or energy is still nuclear, oil and gas. I think the issue with oil and gas are the emissions, and if we find ways to eradicate or remove that emission, I think oil and gas will remain, I would say, a reliable energy source going forward. So I have absolutely no doubt that disruption, although maybe a challenge to the traditional business, could present itself as an opportunity. So we're investing in the energies of tomorrow, and I hope disruption will be part of that journey.