Saudi Arabia Review 2017

Saudi is pushing forward with renewables including solar energy

Saudi is pushing forward with renewables including solar energy

Saudi Arabia gears up for first renewables tender

The Saudi renewable energy portfolio is being managed by the energy ministry, and a team within it is in charge of the tendering process, while the Electricity and Co-Generation Regulatory Authority will serve as regulator

Saudi Arabia plans to launch its first bid round for 700 megawatts of renewable energy capacity by the second quarter of this year, opening up the sector to both local and international investors, an official at the kingdom’s energy ministry says.

According to the official, the government will offer 300 MW of solar energy and 400 MW of wind power projects during the first bid round. These will be offered on an independent power producer basis, with a second tender to follow in 2018 and a third in 2019, although an exact schedule has not yet been finalised.

The three tenders will make up the first phase of the Saudi renewables programme, which targets power generation capacity of 3.45 gigawatts by 2020 and 9.5 GW by 2023, the official says. The first phase will require $30 billion-$50 billion of investment, with more to come after 2023, Energy Minister Khalid Al Falih told the World Future Energy Summit in Abu Dhabi.

The launch of the renewable energy programme will allow Saudi Arabia, already the world’s top oil exporter, to free up more oil for overseas shipments, especially during the peak summer period when domestic crude burn soars to 1.5 million-2 million barrels per day.

Saudi Arabia is one of the few countries in the world that still burns crude oil to generate power. For many decades, it heavily subsidised fuel and electricity prices but has had to scale back such unsustainable spending following two years of low oil prices and a resulting slump in government income.

Its planned renewables spend of $30 billion-$50 billion compares to the 600 billion dirhams ($163.4 billion) the neighbouring UAE recently earmarked for investment in clean power generation sources, including nuclear, by 2030. Al-Falih says Saudi Arabia would also be investing in nuclear energy, with project plans currently in the early design and feasibility stage.The Saudi renewable energy portfolio is being managed by the energy ministry, and a team within it is in charge of the tendering process, while the Electricity and Co-Generation Regulatory Authority will serve as regulator.

The first tender will include more wind than solar projects, as recent studies indicated higher potential for wind power.

"We underestimated back in 2009 and 2010 based on historical records the potential for wind generation specifically," Ahmad Al Khowaiter, Saudi Aramco’s chief technology officer, says on the sidelines of an industry event in Abu Dhabi recently.




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