Saudi Arabia launched Vision 2030 in 2016, which aims to diversify the economy and reduce dependence on oil revenues. One key component of Vision 2030 is to source at least 50 percent of its power from renewable energy by 2030, expand its capacity to 130 gigawatts (GW), 58.7 GW of which is expected to come from solar and 40 GW from wind and develop renewable energy technology to implement extensive solar projects.

In June 2021, the Sakaka and the Sudair solar projects commenced their operations, boasting a substantial capacity of 1.5 GW. Furthermore, Saudi Arabia is currently engaged in wind power initiatives as part of its efforts to broaden its renewable energy portfolio. The Dumat Al Jandal wind project, considered the country’s first utility-scale wind farm, is anticipated to possess a planned capacity of 400 MW. To advance these projects, the Kingdom has adopted an emerging energy storage technology, exploring large-scale battery storage solutions to stabilize the grid and ensure a consistent energy supply and larger penetration of renewables into the national grid.

In May 2024, the state-run power procuring company signed deals with Japan’s Marubeni Corporation, which is developing the wind farms with a local Saudi partner. The deals will ensure a levelized cost of energy (LCOE) of as little as 1.57 cents per kilowatt-hour from the 600-megawatt AlGhat project. When completed in 2026, the plant will be the country’s biggest. Marubeni is also building the 500-megawatt Wa’ad Alshamal project, producing wind power for 1.70 cents per kilowatt-hour.

In 2021, Saudi Electric Services Polytechnic (SESP) partnered with the energy training and consulting organization Maersk Training to train over 3,000 trainees who will undergo a capability-building program over the next six years to enter the wind renewable industry and, therefore, to support the country’s ambition of increasing its renewable energy production as a part of Vision 2030. In 2021, Saudi Arabia set a target of reducing 278 Mt of GHG emissions by 2030 in its updated NDC target submitted to UNFCCC. Decarbonizing electricity generation can roughly contribute up to 55% of the NDC emissions reduction target by 2030. When implemented, these renewable energy technology efforts will increase the Kingdom’s share of renewable energy production, achieve a balance in the mix of local energy sources, and fulfill the country’s obligations towards reducing carbon dioxide emissions. However, it’s too early to determine its effectiveness since most of these projects are under construction and development.

Saudi Arabia’s transition to renewable energy has led to some unintended consequences. The construction of large-scale renewable energy projects, such as the Neom megacity, has raised environmental and social concerns. Reports indicate that these projects have disrupted local ecosystems and led to the displacement of communities, with allegations of human rights abuses and poor working conditions for laborers. Additionally, the rapid development of renewable infrastructure has posed challenges related to grid integration and energy storage, necessitating significant upgrades to the existing power grid to accommodate variable renewable energy sources.

Renewable energy technologies are widely adopted globally. Countries like Germany, China, and the United States have extensive renewable energy installations. Each faces unique challenges like grid management, land use conflicts, and ecological impacts. These experiences offer valuable lessons for Saudi Arabia as it navigates its renewable energy transition.

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