Policy Recommendation: Strengthen Saudi Arabia’s Renewable Energy Program
The Kingdom of Saudi Arabia can achieve a noticeable reduction in its greenhouse gas (GHG) emissions if it fully implemented the Saudi Arabia National Renewable Energy Program. Initially, Saudi Vision 2030’s target was to achieve 9.5 GW of renewable energy generation by 2030. This goal has been revised to reach 58.7 GW of renewable energy generation by 2030, with 40 GW of such energy coming from solar. Admirability aside, this goal does not equal a commitment by Saudi Arabia to reduce its GHG emissions by 50% by the year 2030.
The success of this renewable energy project is very important to Saudi Arabia seeing as the vast majority of its current energy needs are met through oil and natural gas, which contribute to the tremendous carbon footprint attributed to the country. Transitioning towards renewable energy will help greatly decrease its carbon footprint and position itself as a renewable energy leader in the region.
The National Renewable Energy Program is being implemented by the Renewable Energy Project Development Office (REPDO), a governmental agency at the Ministry of Energy to support all renewable energy related initiatives in the Kingdom and review all pertinent legal and regulatory frameworks. The plan includes gradually implementing more than 35 renewable energy parks powered by solar, wind, and concentrated solar power (CSP) across the Kingdom to alleviate risks of technological obstacles. Currently, there is no baseline available to measure its success and future studies must be carried out to evaluate the impact of the renewable energy projects completed under round one of the country’s GHG emission rate and carbon footprint. Its impact will be felt over the next 10 years after completing the six solar projects that will collectively generate around 2.5 GW, and accelerate the awarding and implementation processes of 12 pre-developed solar projects, with total energy generation capacity of 3,075 MW of solar PV.
Each round consists of two categories. Category A of round two is projected to produce 70 MW capacity, including Madinah (50 MW) and Rafha (20 MW) projects. Category B of round two is intended to produce 1,400 MW capacity and consist of four solar producing companies of 1,400 MW: Al-Faisaliah PV IPP (600 MW), Jeddah PV IPP (300 MW), Rabigh PV IPP, (300 MW) and Qurrayat PV IPP (200 MW). In April of 2020, the Saudi Ministry of Energy published the names of the shortlisted bidders for the round two projects of the National Renewable Energy Program with two bidders for Category A and four bidders for Category B. Successful bidders will enter into a 25-year power purchase agreement with the Saudi Power Procurement Company (SPPC) as the off-taker.
Round three comprises of two categories of 4 pre-developed projects with total capacity of 1,200 MW of solar PV. In March of 2020, the REPDO announced the list of 12 local and international companies that are pre-qualified to bid in Round three. The biggest challenges for implementing the policy of increased Renewable Energy Capacity Program include insufficient funding for renewable energy projects and technical difficulties in renewable energy projects due to inclement weather conditions. The small market share of renewable energy projects makes it a less attractive investment compared to conventional sources of energy. Additionally, Saudi Arabia’s high temperatures and significant amounts of dust pose technical challenges to photovoltaic (PV) and concentrated solar power (CSP), as high temperatures decrease the efficiency of PV systems and dust diminishes the output level of reflectors of the CSP system and reduces the PV system efficiency levels.
Prince Abd-Al-Aziz Bin Salman, Minister of Energy
This post was submitted by Climate Scorecard Saudi Arabia country managers Abeer Abdulkareem and Amgad Ellaboudy