Photo credit: david_shakbone/Flickr
Say “Saudi Arabia” and “energy” in the same sentence, and chances are you’re talking about oil. But that could change, thanks to a new plan announced by the desert kingdom to build 41,000 megawatts of solar capacity by 2032.
Ka-care, a year-old Saudi government agency created to address renewable energy, is seeking investors for the $109 million plan to build the country’s solar capacity up from next to nothing. Currently, it has only 3 megawatts of solar installations, less than other major Middle Eastern powers.
With its vast oil wealth, Saudi Arabia has never had to sweat its energy needs, but the country also has expanses of sun-drenched open space that would make other nations drool. Taking advantage of its solar resources will allow it to cut back on the domestic use of oil—particularly for desalinization plants—and export more of it.
Ka-care’s plan involves harvesting 25,000 megawatts with solar thermal plants, which direct sun rays to heat fluids and turn turbines. The other 16,000 megawatts would come from photovoltaic panels. The government also plans to push for 21,000 megawatts of new nuclear, wind and geothermal installations. Saudi Arabia has signed nuclear cooperation agreements with China, France, South Korea and Argentina.
The country plans to use a competitive bidding process for the solar installations, starting early next year. Winning bidders could be required to set up manufacturing plants in Saudi Arabia. The nation plans to use $27 billion out of the total $109 billion project cost to train Saudis to run the solar operations and to operate and maintain them.
The project could be a boon to solar panel manufacturers, which have been suffering from cuts to solar incentives in Europe, particularly in Germany, which currently has 25,000 megawatts of solar capacity. That’s nearly half of the total installed capacity across the globe.
According to one analysis, displacing oil that would otherwise be used domestically could net Saudi Arabia a 12 percent rate of return, assuming it spent $2.17 per watt of capacity.
[Via Bloomberg]