$50B Project Could Make Saudis Major Renewable Energy Exporters

Saudi Arabian Energy Minister Khalid Al-Falih says the Kingdom has designs of becoming a “major exporter” of renewable energy, targeting the European market for starters.

“If the region gets connected to Europe for example, then solar [power] that is produced in Saudi Arabia can be exported all the way to Europe through a network,” Al-Kalif told the World Economic Forum meeting in Davos.

“When it’s sunny in the region, it’s dark and cloudy sometimes in Europe… So we can be a major exporter. “

Riyadh plans to launch bidding soon for projects under the program.

“The projects are aimed to reach a capacity of 10 gigawatts by 2023 and will cost between US$30 and US$50 billion” Al-Falih said, adding that they will include solar and wind power projects. “Ten gigawatts is only the beginning,” he said.

Saudi Arabia is attempting to diversify its economy after it was hit hard by the oil-price crash.

To this end, Al-Falih also noted that there will be “significant investment” in nuclear energy, and that Saudi Arabia planned to export the power as well as the components and services.

Opposed to Al-Falih, energy expert Mohamed Ramady thinks that achieving a viable large-scale renewable energy application will be challenging and will take a significant amount of time, technical knowledge and coordination among various stakeholders.

Related: Saudi Arabia To Spend $50 Billion On Massive Solar Push

“The fact that there are many stakeholders in Saudi Arabia involved in the renewable energy program, such as KACST, KACARE, KAPSARC and KAUST among others ensures some duplication of effort and above all lack of specific focus for renewables,” said Ramady.

Al-Falih also indicated that Saudi Arabia and others are abiding by an OPEC deal that saw an oil production cut come into force at the beginning of this year. “Everybody I talk to is only committing, some of them have actually told me that they have exceeded their commitments,” he was quoted as saying.

According to US JP Morgan Bank, we won’t know exactly how much OPEC and non-OPEC countries have cut in terms of oil production until February, which is when this data is expected to be available.

Al-Falih refrained from speculating on oil prices now that production cuts have been made, but did note that there was an “element of uncertainty”.

By Damir Kaletovic for Oilprice.com

More Top Reads From Oilprice.com:

• Can Saudi Arabia Survive With Oil Below $60?
• Oil Tanks After EIA Reports Surprise Crude, Gasoline Build
• What Stopped The Oil Rally Dead In Its Tracks?