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Saudi Arabia Unveils $100 Billion Plan To Make Solar ‘A Driver For Domestic Energy For Years To Come’

By Stephen Lacey

"Saudi Arabia Unveils $100 Billion Plan To Make Solar ‘A Driver For Domestic Energy For Years To Come’"

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Photo: Arnaud Desbordes via Flickr

Even the world’s largest producer of oil understands the value of developing renewable energy.

A few months after Saudi Arabia’s oil minister called global warming “among humanity’s most pressing concerns,” the country is rolling out an ambitious plan to source 41,000 megawatts of solar projects over the next two decades — scaling up a domestic solar industry to support one third of electricity production by 2032.

Solar electricity and petroleum serve completely different markets. However, in this case, solar will be directly replacing the oil that Saudi Arabia uses for desalination plants. Officials are currently rolling out a competitive bidding process for 1,100 megawatts of solar photovoltaics and 900 megawatts of concentrating solar power in the first quarter of 2013.

The plan is part of a larger strategy to scale up various sources of renewable energy, build a new domestic industry, and reduce oil consumption. Officials estimate that the solar plan will reduce domestic consumption of oil by 520,000 barrels per day. PV Magazine reported on the news from a solar conference in Saudi Arabia:

The oil-rich country is planning to place more focus on renewable energy generation. In addition to more solar power, it intends to add wind, geothermal, waste-to-energy and nuclear plants to its energy mix in the future. The program, said to be worth tens of millions of dollars, aims to “catapult Saudi Arabia into the group of global leaders in renewable-energy development.”

Of the 41 GW of solar, photovoltaics is expected to comprise 16 GW, while concentrated solar power (CSP) will encompass 25 GW. “The CSP plants, with their higher capacity factor than PV, are foreseen as a bridge between base-load technologies (including geothermal, waste-to-energy and nuclear) and PV, which will provide coverage for daytime demand,” explained Apricum, a strategy consulting and transaction advisory firm specialized in renewable energy.

In a recent speech, Saudi Arabia’s Oil Minister Ali Al-Naimi expressed concerns about climate change, saying “societal expectations on climate change are real, and our industry is expected to take a leadership role.”

It would be nice to think that the Saudis were doing this for climate change reasons. But they’re doing it for more selfish objectives: jobs and efficiency.

In that same speech, Al-Naimi explained the need to support new energy industries that can create more jobs than the oil sector: “We know that pumping oil out of the ground does not create many jobs. It does not foster an entrepreneurial spirit, nor does it sharpen critical faculties.”

According to the Saudis, what does foster that entrepreneurial spirit? Renewable energy.

In a report from Bloomberg Businessweek on the recent announcement, a consultant with the Saudi government, Maher al- Odan, explained the country’s strategy: “We are not only looking for building solar plants….We want to run a sustainable solar energy sector that will become a driver for the domestic energy for years to come.”

The plan will also help the country save hundreds of thousands of barrels of crude per day. With diplomats and energy experts privately concerned that Saudi Arabia has overstated its oil reserves by as much as 40%, the country will need new resources to make up for declines in production.

This announcement shows the importance of renewable energy — even for the world’s largest exporters of fossil fuels.

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30 Responses to Saudi Arabia Unveils $100 Billion Plan To Make Solar ‘A Driver For Domestic Energy For Years To Come’

  1. Harshal Patel says:

    “We know that pumping oil out of the ground does not create many jobs. It does not foster an entrepreneurial spirit, nor does it sharpen critical faculties.”

    If the Saudi’s recognize this, why can’t the Republican Party understand it?

    • Rakesh Malik says:

      “If the Saudi’s recognize this, why can’t the Republican Party understand it?”

      Because the republicans are short-sighted religious fools, the Cult of Bux.

    • Sasparilla says:

      Because the Republican party is being paid, guided and pushed (Koch’s and Co.) to double down on fossil fuels with the fear of primary election challenges if they don’t.

    • Bobzaguy says:

      GOPTea© doesn’t subscribe to the Saudi information website as the price is too high – it’s rumored that Dubya Bush gets a free pass to the website in exchange for using his phone lines in Dallas for local calls – a $65,000 value trade-off.
      Dubya is not on speaking terms with the current GOPTea© party membership.

  2. mike kanellos says:

    I’d like to have hope for this but check out Masdar Solar and Masdar Semiconductor. Or Silicon Wadi in Dubai. I’ve been to all of them. Nice offices, no revenue. There is little incentive in some ME countries to get a job and expats don’t like to stay.

  3. M Tucker says:

    I knew that eventually one of the countries that depend on desalination for freshwater would figure out that powering it with wind or solar would be the only economical way to proceed. It is important to take note that even with the motivation of rising crude oil costs and diminishing crude oil reserves it will still take the Saudi’s 20 years to have enough solar in place to replace just one third of their electrical needs. That is a slow transition.

  4. prokaryotes says:

    One could also interpret this decision as an acknowledgement to peak oil.

    • mark says:

      This is exactly what I thought. They know full well they are running low on the stuff and that they need to invest in alternatives. but they know full well that if they said such a thing out loud, it would cause oil prices to skyrocket and they remember what happened the last time oil prices skyrocketed. The world scrambled to lower their use of oil and the oil producing countries started suffering big time.

      Brilliant marketing for them and other billionaires. Not so good for the rest of us.

      • MarkD says:

        Well the upside to this is that such an investment would help lower the cost of panels making them more within reach. Currently the panels run around $1K per kilowatt installed – still too steep for most homeowners. With these types of big installs it will benefit everyone

  5. Tom King says:

    Looks like a footrace to see which nations can get to zero carbon first and avoid international trade sanctions. If Saudi Arabia wants to get there too, then I’m willing to start buying their products. (Which until now have obviously been oil based but things do change in this world.)

  6. Artful Dodger says:

    Hmm, saving “520,000 barrels per day” at U$100 per barrel covers the total losses from the Solyndra bankruptcy in seven (yes, 7) days.
    Perhaps we need more solar power?

  7. Mike Roddy says:

    It feels pretty strange that countries like Saudi Arabia are way ahead of the United States on this subject. We have a long way to go, starting with defeating the scoundrels who control Congress.

    • prokaryotes says:

      The real problem of the USA becomes more evident…

      The Saudi Prince, The Mosque And Fox News http://www.npr.org/templates/story/story.php?storyId=129584557

      While the world transistion with full force to the next big thing when it comes to energy security, the GOP (Influenced by lobbyst who bought the GOP) and their main medium FOX news is busy delaying it for the United States.

    • Anne van der Bom says:

      Way ahead? How exactly?

      How much renewable energy are the Saudis using now? What renewable energy technology are they developing?

      One soundbite by a politician does not a climate policy make. In the US on the contrary, there are still tax credits for wind power, large industries producting wind turbines, PV panels and thermal solar equipment, geothermal power and a whole host of startups developing next-generation PV. Do you want to compare that to this idea that is at this point in time only a plan?

      • mark says:

        The USA subsidizes wind and solar to the point of about 5 or 6 billion a year. We subsidize the oil industry about 60 to 100 billion a year. The Saudis have announced they will be subsidizing solar about 100 billion. This sounds to me like they are or will be way ahead of us quite soon. And considering the progress China has made in wind and solar, the US is way way way behind. We tried to help Solyndra, but China is so far ahead of companies like Solyndra that they were able to drive Sloyndra bankrupt.

        The real scandal of Solyndra is that the USA should be logarithmically increasing subsidies to such companies. Not stopping it.

        So while the world prepares for peak oil, we continue to give oil billionaires more of our billions. Great marketing on their part.

        • Bill Woods says:

          US subsidies for oil, broadly defined, run about $5 billion per year — less than $1 per barrel. Subsidies for gas are about the same.
          http://www.oecd.org/dataoecd/40/35/48805150.pdf

          • sailrick says:

            Direct subsidies to fossil fuels are the tip of the (melting) iceberg

            total $594 billion for fossil fuels 1950-2010
            total $74 billion for renewables
            total $73 billion for nuclear
            total $7 billion for geothermal
            total $90 billion for hydro

            “Obviously fossil fuels have gotten the bulk of government help —
            70 percent to renewables’ 10 percent”

            The first and greatest indirect subsidy is the tab that the public picks up for the external costs fossil fuels impose”
            (which includes a big part of the estimated $3 trillion cost of the Iraq and Afghanistan wars

            The second big indirect subsidy is to demand for fossil fuels, which has been locked in by a century’s worth of massive and ongoing infrastructure spending.

            {from Grist}

            Oil has been subsidized since 1918
            Coal has been subsidized since 1932

            ————-

            subsidies for renewables?

            What do you think subsidies are for? They are for helping new technology and new industries get a head start in their early difficult growing stage.

            We have used them for all kinds of industries to help them get started, or to accomplish a public good like rural electrification of the country, the Internet, bitotech, railroads, and many many more. all have gotten subsidies.

            The question is why is the fossil fuel industry getting subsidies they DONT NEEED?

            They are mature industries, not emerging industries.

            The oil industry has the biggest profits of any industry in history.

            And they need subsidies??

            Why?

  8. Merrelyn Emery says:

    Why question their motivation? Surely it is possible to value jobs and efficiency as well as reducing emissions. Any country with high unemployment is in trouble as we have seen from the Arab Spring and Occupy movements and the broke countries in Europe, ME

  9. Leif says:

    Saudi Arabia understands that every gallon of fuel they do not sell to their nation at a low rate they can sell on the open market, (us), at top dollar. Solar pays them twice. They are not dumb like some folks I could mention.

  10. Gord says:

    Good point Prokaryotes in (4), the Saudis understand oil from what I understand. It is the end of ‘easy to get’ oil.

  11. EDpeak says:

    The Saudis are not smarter per se, just a different situation.

    In the U.S. there is at least the superficial shell of democracy, while corporate interests who would lose money from a shift from oil have massive power over the officials elected through the ‘superficial’ democracy.

    Hence you get the policies you see in the U.S.

    In Saudi Arabia you have a U.S.-backed dictatorship that nevertheless like all dictatorships needs to ‘pay off’ its citizens and like smart dictators they do let (some) of the oil money go to citizens but otherwise they are free to do what they want.

    But unlike the corporate profit interests in the U.S., the rulers of Saudi Arabia don’t have to worry (so long as they keep their massive military, and massive police, and public beatings and beheadings to keep the public ‘in line’ and so long as they keep sharing some of the profits with the populations by means of subisdized gasoline and the actual checks they sent to citizens when the Arab Spring was fresh, to kind of bribe the public to stay in line) but otherwise they do whatever they want.

    so they don’t have to worry about making less money, they own the country, the house of Saudi more or less does.

    So they keep the oil going to the extent it’s profitable and to the extent allowable by peak oil and oil price and other considerations while at the same time they can ramp up renewables.

    If the Saudi rulers magically had their places exchanged with say a U.S. congressperson, they would in short order most of them, probably all of them eventually, they would start to behave like U.S. congress members who have a corporate “campaign financing” gun to their heads.

    In short, it’s not about information or smarts, but about institutions, something the public needs to open its eyes to (and then to start to change) if we want a liveable planet, let alone a liveable and just one.

  12. Matthew Tiedemann says:

    A puzzling statement from a ususally well-informed blogger:

    “It would be nice to think that the Saudis were doing this for climate change reasons. But they’re doing it for more selfish objectives: jobs and efficiency.”

    The overwhelming majority of people and countries will not change their behavior in substantive ways because of the anticipated long-term impacts climate change. The only way to solve this problem quickly enough to matter will be to align incentives such that pursing near-term interests, such as jobs and efficiency, also contributes to addressing climate change.

    Kudos to the Saudis!

  13. NJP1 says:

    Saudi switching to solar energy is a ”good thing” but it diverts attention from their main problem. In 1900, before the oil age got going, the population of Saudi Arabia was 1 million, which would suggest that was the number that country could feed from its own resources. Less than a century of oil wealth input increased their number to nearly 30 million. Saudi can only feed them by selling oil and buying food. The Saudi government has stated that it intends to give up all production of wheat by 2016 because growing it is financially unsustainable. They have to use oil wealth to lease vast tracts of land, mainly in Africa, to grow food to ship to home markets. When oil gets too expensive to use as a functional commodity on a world-wide basis, those overseas landholdings will become untenable, not least because local Africans will need to eat too, and will react violently to the idea of local food being shipped abroad, no matter what ‘agreements’ are in place. With food access and oil exports stopped the Saudi economy will collapse. They will have a lot of solar power, but not much else. A desert country cannot sustain an infrastructure for 30 million people on solar power alone.

    • BGD says:

      A desert country CAN, however, position herself to be a major exporter of renewable-energy-based ELECTRICITY and industrial production, as well as en exporter of hydroponics foods produced off her long coastlines, and large quantities of desalinated water sent from coastal plants near her borders with Jordan and other countries. Sh can also, like Israel, position herself to be a major exporter of irrigation-farmed foods from certain parts of her geography. Specialization and comparative advantage can lead to maintenance of trade in the long run.

  14. colin springthorpe says:

    To All, hope you are well. I have been working on Climate Change Idea for three years, Seawater in to usable water by the means of the Sun. If any one would like any details, check me out on google, enter climate change idea colin springthorpe. This is not a new idea, I can be found on face book as well. Thank you for your time.
    Regards Colin.
    Mia Indy Green Energy R/D UK

  15. john atcheson says:

    The Marine Stewardship Council certifies fisheries as sustainable, but I don’t believe they look at the carbon footprint, nor do they certify aquaculture.

    But they can tell you if it’s being managed well.

  16. Dr.A.Jagadeesh says:

    solar insolation and wind speeds in high magnitude.

    Dr.A.Jagadeesh Nellore(AP),India
    E-mail: anumakonda.jagadeesh@gmail.com

  17. FancyNancy says:

    I predict in 10 years we invade Saudi Arabia for solar panels.

  18. Min-woo Kim says:

    Japan’s FiT in July is among the highest in the world. It’s clear that Japan’s FiT will shake the solar market. Saudi Arabia has the same options. Now, they’re using it. What about your country? New solar technology will show with these nations. This is it!
    As you know, earthquake in japan is happening frequently. Floating solar panels installation is one of the best solutions for power crisis in Japan. So you have to reduce the vibration to install Floating solar panels. Because, it makes many kinds of problems! The vibrations caused by wind, waves and external forces. New Floating Body Stabilizer for Floating solar panels installation has been created in South Korea. The Floating Body Stabilizers generate drag force immediately when Floating solar panels are being rolled and pitched on the water. Recently, this Floating Body Stabilizers using to reduce the Vibration of Floating Solar Panels in South Korea. You can see New Floating Body Stabilizer videos in YouTube. http://www.youtube.com/watch?v=moO–q5B92k, http://www.youtube.com/watch?v=nA_xFp5ktbU&feature=youtu.be.