Saudi Arabia has plans to launch a new renewable energy programme, expected to involve investment of between $30bn and $50bn by 2023, within the next few weeks, the Kingdom’s Energy Minister Khalid al-Falih has announced.
Speaking at an energy industry event in Abu Dhabi, Falih said Riyadh would start the first round of bidding for projects under the programme, which would produce 10 gigawatts of power, “within weeks”.
Saudi Arabia has, for years, been searching for viable methods to diversify its energy mix, allowing it to export more of its oil, rather than burning it at power and water desalination plants, but progress has been painfully slow.
Power demand in the desert kingdom is growing by eight percent annually, forcing state-run Saudi Electricity Co, the Gulf’s largest utility company, to spend billions of dollars on projects to add capacity to the national grid.
The kingdom produces very little renewable energy – representing less than 1 per cent of the total produced – but under an economic reform programme approved by King Salman last year, it has set renewable energy targets aimed at contributing an additional 3,450 megawatts to the national energy mix by 2020, representing four per cent of energy currently consumed in the kingdom.
Falih (below), confirmed that Saudi Arabia was working on ways to connect its renewable energy projects with Yemen, Jordan and Egypt: “We will connect to Africa to exchange non-fossil sources of energy,” he said, without elaborating.
With its finances strained by low oil prices, in a bid to spread the investment and the risk, Riyadh is keen to conduct many future infrastructural projects in partnership with private companies both from within the kingdom and abroad.
In addition to the renewable programme, Riyadh is in the early stages of feasibility and design studies for its first two commercial nuclear reactors, which will total 2.8 gigawatts, Falih observed.“There will be significant investment in nuclear energy,” the Minister noted. However, he did not give a value, nor a timeline, for those investments which represent the first concrete plans in terms of nuclear energy development in Saudi Arabia.
In 2012, the King Abdullah City for Atomic and Renewable Energy (KACARE), a body set up by the government to spearhead development of renewable and nuclear energy, recommended that Saudi Arabia install 17 gigawatts of nuclear power but no plans were introduced.
Riyadh has since signed nuclear energy cooperation agreements with several countries able to build reactors but recent deals with France, Russia and South Korea go beyond these by including feasibility studies for atomic power plants and fuel cycle work.
Last year, Falih met with China’s leading state nuclear project developer China National Nuclear Corp (CNNC) to discuss cooperation in the nuclear power sector.
This edited article was originally published by Gulf Business