Why Is Saudi Arabia Moving To Renewable Energy?

The population of the Kingdom of Saudi Arabia is approximately 34.91 million people[1]. In 2018, the national utility, Saudi Electricity Company used natural gas (52%) and oil (48%) to generate electricity in the country[2].

In 2019, Saudi Arabia’s economy was the 18th largest in world, as measured by nominal Gross Domestic Product (GDP)[3]. The country’s economy is heavily dependent on the export of oil and natural gas, which accounts for 70% of export earnings.

In 2016, Saudi Arabia signed the Paris Climate Agreement, committing to an “ambitious” program of renewable energy investment and “economic diversification” along with energy efficiency, carbon capture, and energy storage[4]. The Saudi Arabian government anticipates its commitments will eliminate up to 130 million tons of CO2 by 2030, relative to business as usual.

In September 2020, Saudi Arabian Energy Minister, Prince Abdul Aziz bin Salman announced that the government’s goal is to produce 50% of the country’s electricity by 2020[5]. This is a very ambitious goal, considering the country’s first utility renewable energy project was completed in 2019. Recent renewable energy projects in Saudi Arabia include:

  • 300 MW Solar Park In November 2019, Saudi Arabian company, ACWA completed the construction of the Sakaka Solar Photovoltaic Plant, located approximately 615 miles northwest of country’s capital, Riyadh. The solar park is the first renewable energy project that has been connected into the country’s power grid.

 

  • 400 MW Wind Farm – French utility, EDF Renewable Energy has commenced work on the Dumat al Jandal wind farm, located 560 miles north of country’s capital, Riyadh. The wind farm is scheduled to be completed by year-end 2022.

Why is Saudi Arabia actively developing renewable energy? Economics pure and simple. The kingdom’s economy is based primarily on exports of oil and natural gas. Fossil fuels are not a renewable resource and the country’s oil production has been in a steady decline over the past decade.

The government intends to use renewable energy to meet the kingdom’s ever-increasing power requirements. Saudi Arabia’s goal is to only use oil and natural gas for foreign export.

Jack Kerfoot

Website – “Our Energy Conundrum”

www.jackkerfoot.com

 

[1] Saudi Arabia Population (2020) –  September 8, 2020 www.worldmeters.info

[2] US Energy Information Administration, “Saudi Arabia Used Less Crude Oil for Power Generation In 2018”, June 2, 2019

[3] International Economic Fund World Economic Outlook, February 20, 2020

[4] Carbon Brief “Paris 2015: Tracking Country Climate Pledges”

[5] Arab News, “The benefits of Saudi Arabia’s renewable energy push” September 8, 2020

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