As part of a wide-ranging economic and social policy vision for the Kingdom of Saudi Arabia, deputy crown prince Mohammed bin Salman, son of King Salman bin Abdulaziz al Saud, announced the first cornerstones on April 25, 2016 for the deployment of renewable energy in the country.
This much more aggressive target would represent a 180 degree shift from the “wait and see” approach to renewables taken by Saudi Arabia so far.
It would make Saudi Arabia a sizable market for the global renewable-energy industry, likely the largest in the MENA region by annual new installations. If the country deploys new power plants at a constant rate until 2023, an average of about 1,600 MW of new renewable energy capacity per year would need to be built.
It is noteworthy that the Vision 2030 paper does not talk about nuclear energy for the Kingdom at all, contrary to earlier plans to build 17 GW of nuclear reactors.
The Saudi renewables program had long been marred by deep-running dissonances and contradictory claims to power over the program among numerous government entities, with the eventual result that nothing was done at all.
The nail in the coffin of the renewables program was that it involved so many departments, including but not limited to the ministries of oil, finance, water and electricity, as well as entities such as Saudi Aramco, Saudi Electricity Company (SEC) and the Electricity & Cogeneration Regulatory Authority (ECRA).
Economic activities related to manufacturing were partly driven by the Saudi Industrial Development Fund (SIDF) and the National Cluster Development Program (NICDP).
Relevant R&D activities were conducted at the King Abdullah University of Science and Technology (KAUST) and King Abdulaziz City for Science and Technology (KACST). The newly founded entity K.A.CARE, while nominally empowered by the King, never developed the authority to unite all actors in realizing a renewables program under its umbrella.
It can be expected that further reorganization will take place among the various entities now under the energy ministry. In particular, it would not be surprising if K.A.CARE would cease to exist as a standalone organization.
Instead, its renewable-energy activities could be absorbed into the new King Salman Renewable Energy Initiative, as the new initiative does not appear dissimilar in spirit and size to the earlier one. It is also expected that Saudi Aramco, which is to be transformed into an “energy holding company” under the new plans, will take an active role in the deployment of renewable energy, likely together with Saudi Electricity Company (SEC).
Excluding such obstructions and in light of the recent all-time low bids for solar energy received by neighboring Dubai just a week after the Saudi Vision 2030 announcement, there should be little reason to further delay a Saudi renewable-energy program.
Dr. Moritz Borgmann is a partner with German-based cleant-tech advisory firm Apricum.