01
Saudi Arabia's renewable energy ambitions
Saudi Arabia announced in its "Vision 2030" development strategy that by 2030 the proportion of renewable energy in the country's energy mix will reach 50%. Saudi Arabia plans to achieve the installation of 27.3GW of renewable energy by 2023 and the goal of installing 58.7GW of renewable energy by 2030. To this end, the Saudi government has decided to spend up to 380 billion riyals ($101 billion).
Saudi Arabia's power sector faces numerous challenges when it comes to renewable energy. Of course, this also means opportunity.
Saudi Arabia's photovoltaics are inseparable from the Saudi Arabian sovereign wealth fund Public Investment Fund, abbreviated as "PIF", which plays a leading role in the development of photovoltaic power plants in Saudi Arabia.
PIF has set a goal of developing 70% of Saudi Arabia's renewable energy capacity by 2030. The annual investment task of the fund in Saudi Arabia is 40 billion US dollars.
Currently, the fund holds a 50% stake in local utility ACWA and a 100% stake in hydropower holding company Badeel, respectively.
On November 30, 2022, ACWA Power signed an agreement with Badeel to build the world's largest single-site solar power plant in Al Shuaibah, Mecca province.
The solar power facility is expected to begin operations by the end of 2025, with a generating capacity of 2,060MW. The two companies are also developing a 1.5 GW solar facility in Sudair.
02
The progress is lagging, now or will exert force
Recently, GlobalData released a new research report - "Saudi Arabia Electricity Market Size and Trends, by Installed Capacity, Generation, Transmission, Distribution and Technology, Regulations, Key Players and Forecast, 2022-2035".
According to the report, at the current rate of development of renewable energy in Saudi Arabia, the country is not even close to the 2023 goal, and the 2030 goal now looks out of reach. Saudi Arabia's current renewable energy capacity additions are projected to average 0.1GW per annum in the country over the 2010-2021 period, which would ultimately result in a shortfall of up to 25.8GW from its 2023 target.
According to the report, the Saudi Arabian economy is largely dependent on oil exports. Saudi GDP will increase from US$528.2 billion in 2010 to US$692.3 billion in 2021, at a CAGR of 2.5% (constant rate). The services sector dominates the country's GDP. The government has recently paid more attention to industrial development. However, a lack of transparency in governance, a shortage of skilled workers, political instability in neighboring countries, and slow progress in industrialization have all brought uncertainty to Saudi Arabia's clean energy goals.
However, in the view of Chasing Carbon, the economic and trade cooperation between China and Arab states continues to expand. In 2023, if some difficulties and obstacles can be eliminated, the photovoltaic market in Saudi Arabia can still be expected.
03
Abundant resources, China's actions
Since oil was discovered in the Saudi Arabian desert by a group of American geologists 80 years ago, Saudi Arabia's vast crude oil reserves - estimated to be one-fifth of the world's total - have been the main engine of its economic growth and its international influence main source of .
But Saudi leaders are now looking to tap another abundant resource: solar power. Because of the local sunshine resources, it is so enviable. Take Riyadh as an example, with a population of more than 7.3 million, it is the capital and largest city of Saudi Arabia. The city is mainly dominated by a hot desert climate. Not only is the temperature very high, but it is also very sunny. It has an average of 3,225 hours of sunshine per year, ranking seventh among major cities in the world in terms of sunshine.
In 2018, Crown Prince Mohammed bin Salman signed a $200 billion deal with Japan's SoftBank Group to build solar parks in his kingdom that could generate 200GW of electricity by 2030. That's a staggering number, equivalent to about half of the world's solar capacity at the end of 2017