Saudi Arabia announced a major development plan for solar energy as it looks to slash emissions and cut how much oil it burns for power.
The oil-rich state has signed seven agreements to produce electricity from solar power in various parts of the country, Energy Minister Prince Abdulaziz bin Salman said at a conference in Sakaka Thursday. These projects will add up to 3,670 megawatts of capacity.
So far, Saudi Arabia has been slow to move away from fossil fuels in favor of clean energy. By way of comparison, the U.K. had over 38 gigawatts of wind and solar installed by the end of last year, compared to less than 1 gigawatt of all renewable power in Saudi Arabia currently. The kingdom also wants to be a leading clean hydrogen producer.
One of the plants, developed by the sovereign wealth Public Investment Fund, will be the country’s largest when it starts operating – producing 1,500 megawatts of clean power.
The switch to solar aims to decrease greenhouse gas emissions by more than seven million tonnes. Some of the projects have set a new world record for the lowest cost of solar-produced electricity – costing 1.04 US cents per kWh, according to a statement.
“We are moving to a better, more efficient, more cost effective energy mix,” Prince Abdulaziz said in an interview. “There is a huge economic case for it, especially when it comes to this 1 million barrels that will be displaced by 2030.”
These energy projects have been signed with five consortia, comprising Acwa Power which is co-owned by the kingdom’s sovereign wealth fund, and 12 Saudi and international companies.
“In some years we will see five and seven gigawatts of solar renewable projects every year,” he said. That would be enough for the kingdom to meet its goal of having half of its power production from renewables by 2030, he said.
© 2021 Bloomberg L.P.