From Oil to Solar: Saudi Arabia Plots a Shift to Renewables
Life in Saudi Arabia has long been defined by the oil that flows from the kingdom. Over decades, the vast wealth it pumped out paid not just for gleaming towers and shopping malls but also for a government sector that employs a majority of working Saudis. Now, Saudi Arabia is trying to tie its future to another natural resource it has in abundance: sunlight.
Read the entire article at The New York Times.
The world’s largest oil exporter is embarking on an ambitious effort to diversify its economy and reinvigorate growth, in part by plowing money into renewable energy. The Saudi government wants not just to reshape its energy mix at home but also to emerge as a global force in clean power.
By the end of this year, Saudi Arabia aims to invest up to $7 billion to develop seven new solar plants and a big wind farm. It has talked a big game in the past. It adopted ambitious targets for green power several years ago, but no major projects were carried out, and little changed.
Saudi Arabia, with its vast oil resources, would seem an unlikely champion for renewables. But the country’s location and climate mean it has plenty of promising sites for solar and wind farms. The costs of installing and operating those two technologies have fallen drastically around the world in recent years. That means that even in a country where oil is plentiful, renewables beckon as a cheap, and clean, alternative to traditional fossil fuels.
For the project announced this month, Riyadh received bids for the solar farm that rivaled the lowest ever submitted at auctions anywhere. At 2 to 3 cents per kilowatt-hour, a wholesale measure of electricity, solar power here would be below the cost of fossil fuel-generated electricity.
The Saudi market’s sheer size, however, means it merits the attention of the world’s renewable energy companies. Paddy Padmanathan, the chief executive of ACWA Power, which also has other energy projects in the region, predicted in an interview last month that once the country’s energy authorities became comfortable with renewables, they would ramp up their goals for wind and solar power production. “Most of what they will procure going forward, I am convinced, will be renewables,” he said.