Solar energy not a short-term option for Saudi Arabia
Washington - Saudi Arabia is preparing for the day when its most valuable commodity is no longer in high demand but is still counting on oil to play a significant role in the global energy mix for at least the next 50 years.
As a result, the kingdom has slowed development of solar power, despite public statements to the contrary. Plans for solar power to be a major portion of the kingdom’s energy mix have been pushed back to 2040.
Saudi Oil Minister Ali al-Naimi insists that Saudi Arabia is planning for when oil exports are no longer a source of income but he has been quick to insist that the demise of oil and gas is not fast approaching. At a March conference in Berlin, Naimi repeated a theme he has stressed before: “There is no way in the next 50 years” that the world will stop extracting hydrocarbons out of the ground to meet global energy needs.
On the other hand, Naimi extolled the virtues of the kingdom’s other natural resources at the Berlin gathering, arguing that “I don’t think there is a more ideal country for renewables than Saudi Arabia”, thanks to abundant sunshine, available land and generous amounts of sand that is required to build solar panels.
It’s not surprising, however, that the Saudi minister remains loyal to the energy source that has made the kingdom a dominant global energy power. In a speech delivered February 23rd in Houston, Naimi noted: “Saudi Arabia, the United States, Europe and many other nations are built on energy from fossil fuels… The products derived from oil are essential parts of our daily lives.
“As an industry, we should be celebrating that fact and better explaining the vital importance of these precious natural resources. We should not be apologising,” Naimi said.
Indeed, the Saudi oil minister said: “We must ignore the misguided campaign to ‘keep it in the ground’ and hope it will go away.”
Concerning climate change issues associated with fossil fuels, Naimi said: “The solution is to work on technology that minimises and ultimately eradicates harmful emissions.”
While he championed the development and use of renewable energy, such as wind and solar power, he also warned: “It is inconceivable that renewables alone can supply the growing global population with the critical energy it needs in the decades ahead.”
Formed by royal decree in April 2010, the King Abdullah City for Atomic and Renewable Energy (K.A.CARE) was given the mandate of “building a sustainable future for Saudi Arabia by developing a substantial alternative energy capacity fully supported by world-class local industries”.
In May 2012, K.A.CARE announced its intention to install 41 gigawatts (GW) of solar power by 2032.
Saudi Arabia burns nearly as much crude oil and oil products as it does natural gas to fuel its power plants. Solar power developed to handle peak electricity demand could reclaim valuable oil export revenue. The goal of 41GW is considered extremely ambitious, particularly as solar power currently contributes virtually nothing to Saudi Arabia’s energy mix.
In January 2015, K.A.CARE quietly pushed back its timeframe for installing 41GW of solar power from 2032 to 2040. Much of the delay appears to be attributed to bureaucratic issues, starting with the fact that K.A.CARE falls under the jurisdiction of neither the Oil Ministry nor the Electricity Ministry, making major decision-making daunting. Meanwhile, regulations overseeing the development of the solar power sector have yet to be approved.
The change in Saudi leadership in January 2015 that placed King Salman bin Abdulaziz Al Saud to the throne has thrown a wrinkle into plans for solar power. Deputy Crown Prince Mohammed bin Salman bin Abdulaziz is chairman of the Economic and Development Affairs Council. Under his guidance the council is scrutinising all facets of the kingdom’s economy. Major economic reforms — beyond energy subsidy cuts that introduced in January — reportedly are in the works but no clear timetable has been set for when they are to happen.
Given speculation that key business sectors may be overhauled in any economic restructuring, development of renewable energy sources may take a further back seat until the dust settles.
Even if the Saudi government’s pursuit of solar energy is slowed, it is noteworthy that different options for solar power are being considered. Speaking at a climate conference in Paris in May 2015, Naimi said: “Hopefully, one of these days, instead of exporting fossil fuels, we will be exporting gigawatts of electric power.”
Others see a potential for Saudi Arabia to produce solar panels, which would be a job generator for Saudi youth and a means to not only outfit the kingdom with panels but perhaps to become a regional supplier.
Yet, the Saudi government appears confident that the role of fossil fuels will diminish later rather than sooner. For the immediate future, the kingdom is likely to focus on pumping more oil out of the ground than harnessing the power of its abundant sunshine.