Saudi Arabia: A renewable energy powerhouse in the making

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Saudi Arabia is a major economy with significant energy needs – and those needs are growing

Demographic and economic growth are driving significant increases in energy demand positioning Saudi Arabia as the 11th largest annual electricity producer with the 3rd largest production-per-capita ranking among the top 20 producers in the world. This is projected to grow at 4% annually.

However, while Saudi Arabia is traditionally associated with oil, the government is looking to renewable energy to meet rising demand and reduce domestic emissions.

  • In the coming years, the Saudi government plans to increase the share of renewables in the energy mix from 1% to 50% by 2030
    • Ranked 6th worldwide for solar energy potential and 13th worldwide for wind energy potential
    • Government plans envisage significant private sector role in realising these opportunities through the Independent Power Producer (IPP model)
  • The government wants to go further – announcing plans to develop 58.7 GW of renewable energy capacity by 2030
    • The majority of this (40GW) will be in solar energy, where the Kingdom also aims to develop a major manufacturing base that will enable it to become a leading exporter that also supports the development of solar energy in other countries
    • As part of this process, Saudi Arabia launched Round Three of the Kingdom’s National Renewable Energy Program in January 2020, comprising four projects with a combined capacity of 1,200 megawatts (MW) of solar PV

This potential is already translating into investment – and there is much more to come.

Sakaka

The 300MW Sakaka IPP photovoltaic solar project is the first ever utility-scale renewable energy project under the National Renewable Energy Program of Saudi Arabia. The Renewable Energy Projects Development Office awarded ACWA Power the contract at a world record-breaking tariff of US Cents 2.3417/kWh.

Dumat Al Jandal

A $500 million deal signed between UAE’s Abu Dhabi Future Energy Company and France’s EDF’s Renewables in January 2019 will establish a 400-megawatt wind farm in Dumat Al Jandal, creating almost 1,000 jobs in the construction and operations phases and the project reached completion of construction in October 2021.

NREP Round Two contracts were awarded in April 2021. The round included six solar projects with a total generation capacity of 1.47 GW and an expected investment of 5.25 billion SAR.

Sudair

In August, ACWA Power announced the financial close for the 1500MW Sudair Solar plant, a key project under the Public Investment Fund renewable energy program

With an investment value of more than $900 million and capable of powering 185,000 homes the project is set to become one of the largest single-contracted Solar PV plants in the world and the largest of its kind in Saudi Arabia

For more information on investing in Saudi Arabia, contact the Invest Saudi

(e) InvestorCare@misa.gov.sa / @InvestSaudi