The Kingdom of Saudi Arabia has been building its international reputation as the world’s major producer of crude oil over the past decades. This one-sided picture could soon be enriched: Saudi Arabia could become a solar power producer in the GW-range and the most important production site for PV-technology in the MENA region.
On October 10, the world’s largest oil producing company Saudi Aramco hosted the Saudi Solar Energy Forum at its Headquarter in Dhahran. Apricum supported Saudi Aramco in conceptualizing this event and in preparing the agenda. The conference focused on the exchange of ideas and experiences among the relevant players in the Kingdom to further develop the solar industry in Saudi Arabia. The nearly 300 participants discussed what progress had been achieved, which obstacles would have to be overcome, which strategies should be pursued and also possible future plans. Many of the participants, in particular senior executives from Saudi companies, expressed their keen interest in entering the solar business or in intensifying their activities in this sector.
Like several Saudi corporations, Saudi Aramco has already developed a solar road-map. The company is currently evaluating bids for the installation of solar power pilot plants. Several pilot plants are to be built by 2011, including both PV- and CSP-technologies. This way, Saudi Aramco aims to identify the best-performing technologies. Consequently, the group plans to install large-scale solar power plants in the GW-range from 2014 onwards.
The rationale for Saudi Arabia is obvious: each barrel of oil saved in the highly subsidized domestic power generation can be sold in the world market at a much higher price. The quantity concerned is significant – today, roughly 320 million barrels of crude oil are being burnt in Saudi Arabia for power generation every year, accounting for roughly 10% of the country’s total production. Taking into consideration that domestic power demand rises by 6% annually, there is a vivid interest to develop alternatives for domestic power generation in order to prevent a major share of crude oil production from being soaked up domestically in the future.
Saudi Aramco’s commitment to solar energy and the high interest from other Saudi companies are strong indications that a paradigm shift towards solar energy is underway in Saudi Arabia. This becomes even more evident when considering the recent launch of the King Abdullah City for Atomic and Renewable Energy (KA-CARE). KA-CARE is a governmental body with the aim of actively fostering the development of solar energy, among other renewable energy technologies. It is expected that KA-CARE will present a national renewable energy master plan within the next few months, which will provide the regulatory framework for a domestic solar market.
With its immense and increasing domestic demand for power and with large resources of land and capital at its disposal, Saudi Arabia has the potential to become a leading solar market very soon. Apricum forecasts cumulative solar installments to reach 14 GW by 2020. Moreover, the Kingdom can become the leading solar manufacturing hub in the MENA region. It is an attractive location, especially for CSP and upstream PV manufacturing activities such as the production of polysilicon, ingots and wafers. Three polysilicon manufacturing projects, accounting for a total output of 16,500 tons per year, are currently being developed. The country’s advantages for solar-manufacturing projects are obvious: low electricity prices, access to capital and a large emerging market.
