Saudi Arabia’s solar energy stumbling block

May 31, 2014 by  
Filed under Green Energy News

The clock is ticking, and Saudi Arabia’s ambitious plans for solar energy don’t appear to be progressing as fast as the authorities might have hoped. According to the King Abdullah City for Atomic and Renewable Energy (KA-Care), concentrated solar power and solar photovoltaics (PV) are all set to make up 23 percent of Saudi Arabia’s energy mix by 2030 and 39 percent by 2050. Back in 2012, when that plan was announced, it was estimated to cost over $100bn. The agency also said that it planned to tender a couple of plants — one concentrated solar power (CSP) plant and one PV plant — by the first half of 2013.

There has been little progress from KA-Care in the past two years, with only very small-scale projects getting off the drawing board. In that time, other entities appear to be taking much more of an interest in the sector. In January, Saudi Electricity Company (SEC) called for expressions of interest in the country’s first CSP plant — Duba 1, near Tabuk — which aims to provide 550 megawatts (MW) of electricity to the national grid. Meanwhile, US firm SunEdison said it was mulling a plant to build a solar panel manufacturing facility in the country in February, in conjunction with the Public Investment Fund and Saudi sovereign wealth fund Sanabil. The latter also recently took a 19.4 percent stake in ACWA Power International, a home-grown firm that is expanding heavily into renewable energy.

Last week, the man had been handed the tricky task of meeting Saudi Arabia’s solar energy targets left his post. Bloomberg reported that Khalid Al Sulaiman, a vice president at KA-Care had either retired or not had his contract renewed.

No replacement has so far been named.

It’s possible that KA-Care may now concentrate on the kingdom’s plans for nuclear energy, where it is aiming to build 16 nuclear reactors for an estimated cost of well over $100bn. Some progress took place on that front last month, when KA-Care announced that it was working to set up a nuclear regulatory agency (similar to the UAE’s FANR) with help from Finland’s Radiation and Nuclear Safety Authority. Other than signing a series of nuclear cooperation agreements with various countries, this is Saudi Arabia’s first solid step on the road to nuclear power.

But where does Al Sulaiman’s departure leave Saudi Arabia’s solar power aspirations? It’s hard to say, but one would imagine that there’s more room for the private sector to take up the slack. Earlier this year, one of the kingdom’s biggest family firms, Abdul Latif Jameel, signed a joint venture deal with a Netherlands-based solar developer to invest in and develop PV plants for the KA-Care programme.

The biggest player in the solar energy market, however, may well turn out to be Saudi Aramco. Chief executive Khalid Al Falih said recently that the firm was planning to set up a 300MW plant in a remote part of the country, claiming that solar investment was of “great interest”. Aramco does have a history of taking on large infrastructure programmes that have gone astray. Last year, after the government cancelled a contract awarded to two companies to develop the $30bn Jazan Economic City, Aramco stepped in to fill the gap. Given its resources, its experience, its skills and its cash, the giant will be well placed to take the lead on solar.

But even with Aramco onboard, the way ahead is anything but clear. It’s all very well dreaming about long-term goals, but what the country needs right now is some realistic short-term targets to kick its renewable energy policy into gear.

Ed Attwood is the Group Editor of Arabian Business.

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