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Saudi Arabia has made a first tangible step to generate electricity from sources other than oil and gas, awarding a contract on Thursday for the Kingdom’s first utility-scale wind farm.
A consortium led by France’s EDF and Abu Dhabi’s Masdar has won the tender to build a 400-megawatt (MW) US$500-million wind farm in northern Saudi Arabia, AFP quoted the energy ministry of the Kingdom as saying.
The first utility-scale wind project in the country is another significant step “towards creating a diversified power sector mix,” according to the Saudi ministry.
Saudi Arabia has also started to work with a fund owned by SoftBank to have one day a total of 200 gigawatts (GW) of solar power in the country, Saudi Energy Minister Khalid al-Falih said last month.
Saudi Arabia has its National Renewable Energy Program, under which the Kingdom aims to boost the share of renewables in its energy mix in coming years. The Saudis are targeting 3.45 GW worth of generation from renewable energy by 2020, which would represent around 4 percent of generation capacity. By 2023, the Saudi target is 9.5 GW, which would account for 10 percent of generation capacity.
The Saudi renewable energy program is directly supporting the Vision 2030 strategy to overhaul the economy and diversify it away from oil.
Ironically, the Saudis expect to fund part of the Vision 2030 plan with the proceeds they expect to reap from the initial public offering (IPO) of 5 percent in state oil giant Aramco. Saudi Arabia’s rulers, including Crown Prince Mohammed bin Salman, have insisted that Aramco is worth a total of US$2 trillion.
The Aramco share sale, initially planned for 2018, was one of the biggest flops in Saudi energy policy last year, and the latest indicative date for the IPO has been now pushed to 2021, “depending on market conditions at the time.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.