Saudi Arabia continues to source almost all of its energy needs from fossil fuels (99.9%), and the implementation of ambitious renewable energy targets has been slow, as less than 0.1% of energy comes from renewables. In 2020, oil accounted for 62% of energy consumption and natural gas 38%. Saudi Arabia’s increasing electricity demand was predominantly met by fossil gas.

In 2022, Saudi Arabia generated 67% of its electricity from natural gas (up from 60% in 2021) and 33% from oil (down from 40%). Despite the government’s goal to generate 50% of its electricity with renewable energy by 2030, the Kingdom had only installed about 0.4 GW of renewable energy capacity by 2022, generating less than 2% from renewables, which is the same as in 2021.

Despite its vast solar energy resources, solar provided only 0.2% of Saudi Arabia’s electricity generation, with zero percentage of electricity generated from nuclear or renewable sources such as hydro and wind, compared to its neighbor, the United Arab Emirates, which obtained 17% of its electricity from clean energy sources. Nevertheless, the renewables share in the total energy supply has increased by around 483.6% from 2015 to 2020 and is projected to grow over the next ten years thanks to 13 major renewable energy projects that are at different phases of development and implementation by the National Saudi Renewable Energy Program (NREP);  and also a series of new agreements for wind projects and solar projects through 2022 and 2023 signed by the Saudi Power Procurement Company (SPPC). However, Saudi Arabia must rapidly increase the pace of renewable energy deployment to meet its ambitious 2030 targets.

Several key policies and activities are crucial to increase the share of renewables in Saudi Arabia’s energy market. First, the government should implement comprehensive regulatory reforms to incentivize investment in renewable energy. This could include feed-in tariffs, tax incentives, and streamlined permitting processes to attract domestic and international investors. Second, investing in developing a robust energy storage infrastructure is essential. This would address the intermittency issues associated with renewable sources like solar and wind, ensuring a stable and reliable energy supply. Finally, enhancing research and development in renewable technologies, particularly in areas like photovoltaic efficiency and grid integration, can drive innovation and reduce costs. These steps, combined with public awareness campaigns and educational initiatives, can create a favorable environment for renewable energy growth, aligning with Saudi Arabia’s Vision 2030 goals of diversifying its economy and reducing its dependence on fossil fuels.

This Post was submitted by Climate Scorecard Saudi Arabia Country Managers Abeer Abdulkareem & Amgad Ellaboudy.