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Saudi Arabia to focus on solar, wind in $US50bn clean energy plan

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PV Magazine

Speaking yesterday at an Abu Dhabi’s Sustainability Week (ADSW) event, Saudi Arabia’s energy, industry and mineral resources minister Khalid Al-Falih announced a new grand energy plan for the country.

SaudiCamelSolar

The new program is set to commence in a few weeks’ time, when Saudi Arabia’s government will launch the first round of bidding for a new renewable energy tender, energy minister Al-Falih announced at the World Future Energy Summit 2017 (WFES) in Abu Dhabi.

The energy minister did not, however, provide any details regarding the capacity that will be auctioned in the tender.

He did inform the attendants that Saudi Arabia’s new master program for the energy sector will require between USD 30 to 50 billion investment, which will need to come via the private sector.

Solar and wind power will be the preferred technologies in the auctions, but geothermal and waste projects will also be considered, just with a smaller role to play.

Saudi Arabia, OPEC’s biggest oil producer, is aiming for renewable energy installations, primarily of solar and wind, of 9.5 GW by 2023, but this is just the starting point, the country’s energy minister told the ADSW.

By 2030, the country will generate 70 percent of its electricity from natural gas and 30 percent from renewables and other sources, promised Al-Falih.

“Other resources” include nuclear power plants, of which plans for two nuclear reactors totaling 2.8 GW are currently in the early stages of consideration and planning.

Nevertheless, the new program that Al-Falih referred to yesterday, stems from last year’s Vision 2030 strategy, which is aimed at preparing the country for a post-oil economy.

The IMF recently cut its growth forecast for Saudi Arabia, with new estimates expecting that its GDP will only rise by 0.4% this year, down from 4% GDP growth that was predicted in October.

New regulatory framework: when?

Speaking today in front of a panel at the WFES, being held this week in Abu Dhabi as part of the city’s sustainability week, Osama Khawandanah, senior vice president of energy trading and ventures at the Saudi Electricity Company (SEC) said that the future renewable and conventional power plants will be based on independent power purchase (IPP) contracts and that this is a huge opportunity for the private sector to get involved.

Khawandanah was not able to answer whether the new program will include a feed-in tariff for renewable energy plants, after a member of the audience aimed the question at him. However, he said that SEC will commit to buying all generated electricity from the new renewable energy plants.

So, is there any means for optimism over the potential renewable energy sector on the horizon?

Thamer Al-Sharhan, managing director of ACWA, the country’s leading renewable energy developer, told the WFES that he has heard a number of promising plans over the last six years that didn’t materialize, but this time he has genuine optimism.

He told the panel that for the new plan to succeed, the country needs a clear, fair and transparent regulatory framework that promotes competition among private stakeholders. The private sector always allocates and measures the market risks and eventually comes up with practical solutions. But if the policy framework is not fair, it is very hard for an investor to find a solution. Al-Sharman urged the government to regulate a framework that allows the energy market to evolve from its current monopolistic character.

Other panelists chose to stress the renewable energy development opportunities in Saudi Arabia, and elsewhere in the Middle East, by highlighting projects located in water desalination plants. This idea has been mentioned a number of times at the summit in Abu Dhabi.

PV power for peak times

“Saudi Arabia has made its highest level commitment to renewables with its Vision 2030 strategy,” First Solar’s vice president of business development for the Middle East, Raed Bkayrat, told pv magazine. “We already see developments in the market, with the ongoing tender to procure 100 MW of solar.”

Speaking more specifically, Bkayrat added that there is definitely “potential for Saudi Arabia to tap into solar energy more extensively in order to address its Peak Load requirements.”

Source: PV Magazine. Reproduced with permission.  

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  • Simon

    Q: Why nuclear?
    A: Because…Iran…Israel. Nothing to do with clean energy.

    • solarguy

      I’d say you hit the nail right on the head. My thoughts exactly.

    • john

      I must agree no other reason.

  • RubberDucky

    Saudi will always be a major player in the oil market – The surprising strength of the oil market is the main reason why OPEC could end output cuts by the middle of the year, And that will surely get things to ease again. Saudi has been investing in so many other non-oil fields..
    I honestly have to question those who jump at the first chance to attack any saudi-related news..It isn’t about Iran nor israel- they are clear about it being commercial- and for the sake of using cleaner energy- the whole world knows it is swaying away from oil.
    However since some mentioned iran- how are (their) nuclear energy program okay under your respected radars..the program they’ve hid at the beginning then messed with the un visits on and off.. That’s absolutely fine with you–I guess. oh well.
    Interestingly enough, OPEC and Russia may not need to extend the curbs when they expire in June, The market is re-balancing as demand proves unexpectedly robust and OPEC’s Gulf members and Russia cut supply by more than they promised, Saudi will no longer be the soul player in the price game and production cuts.

    • Simon

      No. You are wrong. Iran and Israels’ programme’s are not fine with me.

      The point is – as you say – they claim these reactors are for commercial purposes. However, it is almost unanimously agreed that Israel is a member of the club and obviously the world is terrified of Iran joining the club as well. I don’t think there is much doubt that Iran has intentions of building weapons if they get the chance…but the world is trying it’s best to stop that from happening.

      And Saudi has said they will get the bomb if Iran does. So, they are also clearly preparing themselves for that eventuality with these reactors.After all, you can’t build a bomb without the plutonium and you can’t get the plutonium without a reactor. And they are not going to wait for their enemy to show off their first bomb before getting their nuclear programme underway.

      Yay – a middle east nuclear arms race.

      • brucelee

        *sad face

  • Noel Wauchope

    Couldn’t agree more, with Simon’s comment “Why nuclear?”.

    The answer springs to mind. As Saudi Arabia is blessed with magnificent resources in solar energy, there is no energy reason for that country to have nuclear power. The obvious conclusion is that Saudi Arabia, like every other country that ever introduced the nuclear industry – looks to having nuclear weapons.

  • Ian

    In 2011, 1/4 of Saudi oil production was consumed locally. The best way for them to export their extensive solar resource is to use it for domestic energy requirements , freeing up the ‘wasted’ oil and export that. Without pumping an extra drop of oil they could export an extra 3 or 4 million barrels a day, simply by installing a few cheap solar panels.Excuse the hyperbole.

    Australia has a similar issue, loads of solar resource, how do we export this bounty? For us the answer may not be as direct as the Saudi’s , but for one solution, we can reduce our need to export goods and minerals by reducing our oil imports. Ie, use domestic solar and wind, which is in abundance, to power our transport fleet in all its forms, to reduce our reliance on imported oil. A dollar saved is a dollar earned – right.

    This way we can use our skills at buying stuff from overseas, like EV’s, to ‘export ‘ solar and wind , without lifting a finger!