Introduction
The Kingdom of Saudi Arabia (KSA) is the largest exporter of oil in the world and has second largest crude reserves in the world. It is curtailing its renewable power target as it is planning to use more natural sources of power e.g. Natural gas, Solar and wind energy. The higher targets were established for renewable power when the crude prices were three times higher than their current levels, a few years ago. The Minister of energy of Kingdom of Saudi Arabia has agreed that the energy mix has shifted towards gas and therefore, the higher targets from renewable sources are no more required. It will also be in line with the ambitious “Saudi Vision 2030.” The Minister also revealed that OPEC and Non OPEC producers are unlikely to extend the earlier agreements for cut in production beyond June, due to the high level of expectations and compliances involved in the agreements and considering the situation have improved in the last few months and the same is expected to continue in coming years.
The Plans
KSA is picking up the pace on its renewable energy drive. As per a Statement given by minister of energy of KSA on 16th January, 2017, at an energy industry event in Abu Dhabi.
- The Kingdom will be launching a renewable energy program in the next couple of weeks and shall be investing between USD 30 billion to USD 50 billion to achieve its target of producing abundant electricity from renewable to power to serve energy needs equivalent to three million homes, within the next six years.
- It is planning to make substantial investments in nuclear energy and planning to connect with neighboring countries likes Yemen, Jordan and Egypt for the same.
- The KSA shall connect with Africa for the exchange of non – fossil source of energy as hinted by the minister.
- Some geothermal and waste projects will also form part of the nation’s renewable energy program.
- KSA is also planning to reach Europe at later stages of this program to take advantage of Peak demand and arbitrage in the region.
- Riyadh shall start the bidding process for projects under the program which aims to produce ten Giga watts of water. The Minister also invited the global industry to participate in this project.
- The country will also be making a substantial investment in nuclear energy and is looking at constructing two nuclear reactors to generate electricity up to 2.8 Giga Watt. However, this is still at very initial stages. But, a significant investment in nuclear energy for civilian purposes can be seen in the near future.
Conclusion
Reducing the nations’ dependence on oil for the generation of power was an important part of Saudi Vision 2030. The aim was to protect the nations’ economy from the effects of fluctuating oil markets. The initiatives of the ministers in this regard are commendable and shall achieve the desired objectives for the Kingdom. On the other hand, it gives great opportunities for international industry to participate and take benefits from ambitious projects of the Kingdom.
