Saudi Arabia: $109 billion boost for solar power

Bloomberg:

Saudi Arabia is seeking investors for a $109 billion plan to create a solar industry that generates a third of the nation’s electricity by 2032, according to officials at the agency developing the plan. 

The world’s largest crude oil exporter aims to have 41,000 megawatts of solar capacity within two decades, said Maher al- Odan, a consultant at the King Abdullah City for Atomic and Renewable Energy. Khalid al-Suliman, vice president for the organization known as Ka-care, said on May 8 in Riyadh that nuclear, wind and geothermal would contribute 21,000 megawatts. 

“We are not only looking for building solar plants,” al- Odan said in an interview in Riyadh yesterday. “We want to run a sustainable solar energy sector that will become a driver for the domestic energy for years to come.” 

The comments highlight the scale of Saudi Arabia’s ambitions to boost renewable energy use as a way to pare back on oil consumption used for domestic desalinization and power plants, potentially saving 523,000 barrels of oil equivalent a day over the next 20 years. 

For the solar panel manufacturers such as First Solar Inc. (FSLR) and SunPower Corp. (SPWR), the Saudi Arabian market would open a huge new market as European countries reduce subsidies to keep a lid on installations. Panel sales may dip this year for the first time in more than a decade from 27,700 megawatts installed last year, according to a survey of analysts by Bloomberg on March 9. 

Persian Gulf oil producers are seeking to reduce their reliance on fossil fuels for power generation to maximize exports of valuable crude and allocate natural gas to petrochemicals production. Ka-care estimates Saudi Arabia’s peak electricity demand will reach 121,000 megawatts in the next 20 years, with half of that power generated using hydrocarbon fuel. 

Other forms of renewable energy such as nuclear, wind, geothermal, will only generate 21,000 megawatts of the peak-load required by 2032, al-Suliman said in his presentation. 

Saudi Arabia is considering different options to generate electricity from nuclear energy, according to al-Suliman. Under the so-called “Balanced Scenarios”, Saudi Arabia would build 16 nuclear reactors by 2030 with a capacity of 14,000 megawatts of electricity. 

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