As the Australian government struggles with its Solar Flagships program, the world’s largest oil producer, Saudi Arabia, has unveiled an ambitious solar deployment.
At the Saudi Solar forum this week, officials from King Abdullah City for Atomic and Renewable Energy, the agency responsible for alternative energy, announced a program to generate 41GW (41,000MW) of electricity capacity from solar by 2032 – a run rate of 2GW a year over the next two decades. The $110 billion program would ultimately account for one third of its electricity requirements.
Interestingly, Saudi Arabia sees a greater role for solar thermal, and plans 25GW of concentrating solar power (solar thermal), as opposed to 16GW of solar PV. Extensive wind, geothermal, waste-to-energy and nuclear options investments will also be announced.
The deployment will kick off within the next year, with the government to hold competitive bidding tenders – just like the ACT government with its more modest 20MW of capacity – for 5GW of utility scale solar.
The first round of 2GW will be made up of 1.1GW o solar PV and 900MW of solar thermal, and will be held in the first quarter of 2012. The second round of 1.2GW of solar thermal and 1.3GW of solar PV will be held later next year.
According to the officials, the Saudi government will evaluate the bids on price per kWh of electricity supplied and other factors such as local content, as well as track record in solar project development. Once the tenders have been concluded, the government will draft feed-in-tariffs, which will be used to guide the economics of future investments.
Deutsche Bank analysts said the Saudi solar program meant that the markets would be well defined, and would avoid a boom/bust scenario, although the bidding process meant that the projects would be a lot less profitable. US companies such as First Solar and SunPower will likely have to set up local manufacturing centres to meet local content requirements.
Meanwhile, the head of the renewable energy unit at the International Energy Agencym Paulo Frankl, has predicted that the Chinese solar market will grow far faster than anyone expects, as Beijing grasps for ways to support domestic PV manufacturers.
According to Recharge, Frankl told a conference in Itlaly that the Chinese market will reach an annual deployment of more than 10GW faster than anyone realizes.
“In my personal opinion this will be faster than we [the IEA] have said, or even what the Chinese government says.” This is despite that the Chinese government has been quick to recalibrate its recently introduced feed-in-tariffs to reflect falling costs. Market experts expect the Chinese market to grow to between 4GW and 6GW in 2012.