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KSA seeks 9 GW of renewable power

AMS-140217

Abdulmohsen Al Shoaibi

Hazem El Sharkawy, Riyadh

In an interview with Aleqtisadiah newspaper, Abdulmohsen Al Shoaibi, Chairman of the Saudi Arabia Solar Industry Association (SASIA), declared the Kingdom’s intent to generate 9 GW in the first phase of the renewable energy project – with an emphasis on solar energy – at an estimated cost of 9 billion euros (more than 45 billion SR). Al Shoaibi added that the Kingdom is working to generate 54 GW of power from renewable energy in the coming 20 years, as per the plan of King Abdullah City for Atomic and Renewable Energy (KACARE).

In a recent statement given on the sidelines of the Solar Energy Forum held in Riyadh, Al Shoaibi explained that solar energy contributes to the provision of over 15 per cent of the Kingdom’s electric power. Solar energy reduces  the  strain laid on conventional energy, which consumes a massive  quantity of  fuel sold at high prices worldwide.

Al Shoaibi noted that the cost of solar energy is higher than the cost of electric power distributed by the Saudi Electricity Company, highlighting that the electricity tariff in the Kingdom is the lowest in the world. Solar energy is now lower as a result of high supply against demand. To evidence this claim, he referred to the price of solar panel per watt, which was about $ 4 five years ago. Now it is a mere  40 cents per watt.

Al Shoaibi explained that the workshops are very important for the exchange of expertise between foreign and Saudi companies. International companies, he affirmed, are convinced to invest in the Kingdom due to its promising market and that the straightforward investment process. These companies would like to access the Saudi market and establish manufacturing panels.

Al Shoaibi addressed the problems of solar energy, assuring that although the development of regulations is delayed, after the completion of the solar energy project these regulations would be easily implemented. He explained that there is correlation between the ministries – such as Electricity, Co-Generation Regulatory Authority (ECRA) and  the Ministry of Municipal and Rural Affairs (MOMRA) – and the King Abdullah City for Atomic and Renewable Energy (KACARE), with regard to securing property and linking and producing electricity with the highest voltage and distribution networks.

The Saudi Arabia Solar Industry Association (SASIA) was established two years ago, to support solar energy industry in the Kingdom and attract international expertise and experience. This international expertise is transferred to the Kingdom, particularly to companies in the solar energy industry. Al Shoaibi detailed how the Kingdom facilitates this process: “We provide logistics services and coordinate with the competent authorities, especially for those companies without  experience in the Saudi market.”

Al Shoaibi used the example of Germany to illustrate how the Kingdom’s solar energy market offers lucrative opportunities no longer as available in established markets. Germany has adequate solar energy due to a government-supported program. After a large number of stations were established throughout the country, this program was terminated. As a result, there are no new projects in Germany at the present time. However, the Kingdom is replete with new solar energy projects. The International Energy Forum in Riyadh revealed several of these energy projects, such as the 54 GW proposed by KACARE in Saudi Arabia, a project to streamline energy generated by wind turbines in Ma’an, Jordan; and  the Masdar project in Abu Dhabi, which provides ample opportunities for both local and international developers, investors, and financiers. Al Shoaibi noted that any interested party typically needs to have a local presence in order to win competitive bids.

Al Shoaibi emphasized that these business relations are crucial for the establishment of promising economic ventures in the Middle East.  Associations or joint ventures with local partners may give companies a competitive advantage, particularly in countries such as Saudi Arabia and Jordan, where these networks are encouraged as part of the procurement process. Some may argue that the strength of an association and finding the right partner, advisers, and financiers, are key factors for the success of any company seeking to share in these projects.

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