Saudi Arabia’s Vision for 2030 - Up to $50 Billion in Renewable-Energy Expansion

Saudi Arabia’s Vision for 2030

Our country is rich in its natural resources. We are not dependent solely on oil for our energy needs. Gold, phosphate, uranium, and many other valuable minerals are found beneath our lands. But our real wealth lies in the ambition of our people and the potential of our younger generation.  They are our nation’s pride and the architects of our future. We will never forget how, under tougher circumstances than today, our nation was forged by collective determination when the late King Abdulaziz Al-Saud – may Allah bless his soul – united the Kingdom. Our people will amaze the world again.

​We are confident about the Kingdom’s future. With all the blessings Allah has bestowed on our nation, we cannot help but be optimistic about the decades ahead. We ponder what lies over the horizon rather than worrying about what could be lost. 


The future of the Kingdom, my dear brothers and sisters, is one of huge promise and great potential, God willing. Our precious country deserves the best. Therefore, we will expand and further develop our talents and capacity. We will do our utmost to ensure that Muslims from around the world can visit the Holy Sites. 


We are determined to reinforce and diversify the capabilities of our economy, turning our key strengths into enabling tools for a fully diversified future. As such, we will transform Aramco from an oil producing company into a global industrial conglomerate. We will transform the Public Investment Fund into the world’s largest sovereign wealth fund. We will encourage our major corporations to expand across borders and take their rightful place in global markets. As we continue to give our army the best possible machinery and equipment, we plan to manufacture half of our military needs within the Kingdom to create more job opportunities for citizens and keep more resources in our country. 


We will expand the variety of digital services to reduce delays and cut tedious bureaucracy. We will immediately adopt wide-ranging transparency and accountability reforms and, through the body set up to measure the performance of government agencies, hold them accountable for any shortcomings. We will be transparent and open about our failures as well as our successes, and will welcome ideas on how to improve. 


All this comes from the directive of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al-Saud, may Allah protect him, who ordered us to plan for a future that fulfills your ambitions and your aspirations.


In line with his instructions, we will work tirelessly from today to build a better tomorrow for you, your children, and your children’s children. 


Our ambition is for the long term. It goes beyond replenishing sources of income that have weakened or preserving what we have already achieved. We are determined to build a thriving country in which all citizens can fulfill their dreams, hopes and ambitions.
Therefore, we will not rest until our nation is a leader in providing opportunities for all through education and training, and high quality services such as employment initiatives, health, housing, and entertainment.


We commit ourselves to providing world-class government services which effectively and efficiently meet the needs of our citizens. Together we will continue building a better country, fulfilling our dream of prosperity and unlocking the talent, potential, and dedication of our young men and women. We will not allow our country ever to be at the mercy of a commodity price volatility or external markets. 


We have all the means to achieve our dreams and ambitions. There are no excuses for us to stand still or move backwards. 


Our Vision is a strong, thriving, and stable Saudi Arabia that provides opportunity for all. Our Vision is a tolerant country with Islam as its constitution and moderation as its method. We will welcome qualified individuals from all over the world and will respect those who have come to join our journey and our success.


We intend to provide better opportunities for partnerships with the private sector through the three pillars: our position as the heart of the Arab and Islamic worlds, our leading investment capabilities, and our strategic geographical position. We will improve the business environment, so that our economy grows and flourishes, driving healthier employment opportunities for citizens and long-term prosperity for all. This promise is built on cooperation and on mutual responsibility.   


This is our “Saudi Arabia’s Vision for 2030.” We will begin immediately delivering the overarching plans and programs we have set out. Together, with the help of Allah, we can strengthen the Kingdom of Saudi Arabia’s position as a great nation in which we should all feel an immense pride. 

Mohammad bin Salman bin Abdulaziz Al-Saud
Chairman of the Council of Economic and Development Affairs


Source:  Vision 2030 
​

Saudis Seek Up to $50 Billion in Renewable-Energy Expansion
​

Saudi Arabia will start soliciting bids in the next few weeks for the first phase of a “massive” renewable-energy program costing $30 billion to $50 billion, Energy Minister Khalid Al-Falih said.

OPEC’s biggest producer plans to generate close to 10 gigawatts from renewables, primarily solar and wind power, by 2023, he said at an energy conference in Abu Dhabi. The first tender will be for 400 megawatts of wind capacity and 300 megawatts of solar. It will cost about $700 million, according to Roberto de Diego Arozamena, chief executive officer of Saudi power developer Abdul Latif Jameel Energy, which plans to bid for the contract.
​
Saudi Arabia plans by 2030 to produce 70 percent of its power from natural gas and 30 percent from renewables and other sources, Al-Falih said Monday.

The kingdom is among crude exporters struggling with budget deficits after oil prices languished for two years at about $50 a barrel. Building more solar plants and developing a nuclear-power industry is part of a broader plan that Deputy Crown Prince Mohammed bin Salman announced in April to diversify the economy away from crude sales as the main source of government income.

The nation targets 3.45 gigawatts of renewable energy by 2020, state-owned Saudi Arabian Oil Co., known as Saudi Aramco, said Tuesday in a statement. The goal of 10 gigawatts by 2023 is “only the beginning,” Al-Falih said. “I’m not able to give you the number of where we will be in 2050,” he said.

Nuclear Plans
​
The goals for boosting renewables capacity over the next seven years are achievable, and the start of the tender process is a sign Saudi Arabia is serious about reaching them, de Diego Arozamena said Tuesday in an interview in Abu Dhabi.

Saudi Arabia is also “really moving” to develop nuclear power and intends to build two reactors with a combined capacity of 2.8 gigawatts, Al-Falih said. The country is currently in the front-end engineering and design stage of its nuclear plants, he said.

The country’s only solar plant in operation, aside from a smaller pilot project, is a 10-megawatt facility on top of a parking lot at Saudi Aramco’s headquarters. The national utility, Saudi Electricity Co., is seeking bids for two plants to generate a combined 100 megawatts.

Saudi Arabia previously had longer-term targets for renewable power when crude prices were about double their current level. Its earlier solar program forecast more than $100 billion of investment in projects to produce 41 gigawatts of power by 2040. In January 2015, the government delayed the deadline for meeting that capacity goal by nearly a decade, saying it needed more time to assess the relevant technologies.

​The current Saudi solar program is viable, said Francesco Starace, chief executive officer of Italian utility Enel SpA, which wants to participate in renewables projects there. Saudi Arabia “has no problem in attracting financing provided that basic rules are well-defined,” he said Saturday in an interview in Abu Dhabi.
 
Source:  Bloomberg

Saudi Arabia will launch in coming weeks a renewable energy program that is expected to involve investment of between $30 billion and $50 billion by 2023, Saudi Energy Minister Khalid al-Falih said on Monday.

Falih, speaking at an energy industry event in Abu Dhabi, said Riyadh would in the next few weeks start the first round of bidding for projects under the program, which would produce 10 gigawatts of power.
In addition to that program, Riyadh is in the early stages of feasibility and design studies for its first two commercial nuclear reactors, which will total 2.8 gigawatts, he said.

"There will be significant investment in nuclear energy," Falih said.
Under an economic reform program launched last year, Saudi Arabia is seeking to use non-oil means to generate much of its additional future energy needs, to avoid running down oil resources which are required to generate foreign exchange through exports.

Falih said Saudi Arabia was working on ways to connect its renewable energy projects with Yemen, Jordan and Egypt. "We will connect to Africa to exchange non-fossil sources of energy," he said, without elaborating.

Its finances strained by low oil prices, Riyadh wants to conduct many of its future infrastructure projects through partnerships in which private companies from within the kingdom and abroad would bear much of the cost and risk.
 
Source:  Reuters

Saudi Arabia To Launch $30-50 Billion Clean Energy Plan

Saudi Arabia is looking to invest up to US$50 billion in renewable energy by 2023, announced the Energy, Industry and Mineral Recourses Minister, Khalid Al-Falih, on Monday.

Speaking at the annual World Future Energy Summit in Abu Dhabi, Al-Falih asserted Saudi Arabia’s commitment to sourcing 30 per cent of its energy demand from non-fossil fuels by 2030.
This goal will require diversifying sources of income and creating new industries with the help of the private sector.

The first round of bidding for projects under the program, which would create 10 GW of power, will begin within the next few weeks.

Saudi Arabia is the world’s seventh largest oil consumer, according to the 2016 International Renewable Energy Agency (IRENA) report on renewable energy market analysis in the Gulf Council Countries (GCC) region.

In the 2000s, domestic consumption of oil increased considerably from 17 per cent in 2000 to 28 per cent in 2014.

The report projects that achieving the GCC renewable energy targets could create an average of 140,000 jobs per year.

The Saudi government has previously hinted towards major solar investments, but progress has been slow despite the country’s considerable solar potential.

In 2013, the government announced its plans to invest $109 billion to build more than 50 GW of renewables by 2030; currently its largest solar farm is a 10 MW installation in Dhahran.

Under the 2015 Paris Agreement, Saudi Arabia offered little in the form of emission cuts; however, since its economic reform launched last year the country is seeking non-oil means to generate much of its additional future energy needs, to avoid depleting oil resources.

Under the new plans, Al-Falih said Saudi Arabia will work on ways to connect its renewable energy projects with Yemen, Jordan and Egypt.

He stated:  "We will connect to Africa to exchange non-fossil sources of energy".
 
Sources:  Sustainable Investment Forum

​Saudi Arabia To Spend $50 Billion On Massive Solar Push

Saudi Arabia’s energy minister, Khalid Al-Falih, said that his country will begin soliciting bids for a “massive” renewable energy push, with spending to be ramped up to as high as $50 billion. The move is intended to source at least 10 GW of electricity from solar and wind by 2023, a rapid escalation of renewable energy installations in order to conserve oil for exports.

On top of that, the Saudis want to build nuclear reactors, a less ambitious program that would see 2.8 GW of new electric capacity.

The end goal is to generate 30 percent of the Kingdom’s electricity from renewable sources by 2030, with the remainder to come from natural gas.

There are two key objectives that a massive build out of renewable energy would achieve: leave more oil for export, thus generating more government revenue, while at the same time diversifying the economy away from crude oil more generally. The powerful Deputy Crown Prince Mohammed bin Salman is aggressively pushing the government to undertake a monumental transformation of the Saudi economy, a move that is turning heads in Riyadh both because of its ambition and scope and because it is ruffling the status quo.

His plan, called “Vision 2030,” is a long-term effort that can be summed up as an attempt to move beyond oil as the country’s sole source of revenue. As part of the Vision 2030 plan, the government plans on spinning off a small slice of Saudi Aramco – an IPO of 5 percent of the company could generate more than $100 billion in revenue, which the prince plans on putting to good use developing other sectors of the economy.

However, the Saudi government has been talking a big game on renewable energy for several years now. To date, the country only has a measly 10 megawatts of capacity, a single project located at the headquarters of Saudi Aramco, Bloomberg reports. In fact, the government has gone back and forth on its solar ambitions in recent years. Back in 2012, the government laid out a proposal to install 41 GW of solar by 2032, using a mix of photovoltaics and concentrated solar power (CSP). The ramp up was to begin immediately.

But then, nothing happened for a while. Deadlines were delayed. The government thought the solar target would perhaps be attainable in 2040 instead of 2032. But still, there was little news regarding the solar push even as the country continued to burn valuable barrels of oil for electricity – at a time when crude often traded above $100 per barrel. The collapse of oil prices in 2014 dashed all urgency for a clean energy transition. The Saudi government was more concerned with husbanding resources as the market meltdown led to widening fiscal deficits. Also, the monarchical succession in early 2015 scrambled priorities for a time.

Last year, the Saudi government sought to revive its solar program, although with much more modest goals. The 2030 goal was vastly scaled back, with a target of only 9.5 GW of renewable energy instead of the original 41 GW.

Here we are again, with a revision to the solar targets. The latest from Riyadh is 10 GW of renewable energy, but on a much faster timeline – 2023 instead of 2030. “I’m fully expecting within the first quarter 500 megawatts to come out in tenders and then it’ll ramp up,” Paddy Padmanathan, CEO of the Riyadh-based Acwa Power International, told Bloomberg back in December. “That will be a game changer for the region.”

Acwa is set to be a key player in the Saudi solar push. In fact, the company announced an unrelated deal just this week to build a 61-megawatt solar project in Jordan, set to be the country’s cheapest solar power plant at just 5.88 cents per kilowatt-hour. As surprising as it might seem, the Middle East has been breaking records with the cheapest solar power purchase agreements lately. In September, Abu Dhabi broke a new record when it received a 2.42-cent-per-kilowatt-hour bid for a solar project, a sign that solar is quickly becoming the cheapest source of power in some parts of the world.

Even as oil prices are lower, there is still an urgency to scale up solar energy. Saudi Arabia burns through around 900,000 thousand barrels of oil per day just to run air conditioning and keep the lights on during peak demand in summer months, according to the IEA.

Meanwhile, Saudi Arabia is taking on the greatest burden in production cuts as part of the OPEC deal. Riyadh agreed back in November to cut its output by almost 500,000 bpd in order to help balance the market. In recent days Saudi officials said that have already met that target, taking output down to 10 million barrels per day. They also suggested that they would be willing to go much further than they promised, cutting deeper in order to accelerate a rebound in oil prices.

That is welcome news for much of the oil-producing world, but it comes at a cost. The IMF just cut its growth outlook for Saudi Arabia because of the lower output levels. The Fund said that the country’s GDP will expand by just 0.4 percent, sharply down from its October estimate of 2 percent growth in 2017.

A push towards clean energy may seem like a luxury, or maybe even just a longer-term priority, but the budget implications of wasting crude oil for electricity is immediate. That suggests that even though the government has dithered on its solar program for several years, they may finally be serious about scaling up solar in the sunny deserts of the Arabian Peninsula.

The timing is perfect from the clean energy sector’s point of view. Solar power has never been cheaper. Also, clean energy investment took a breather in 2016 after years of blistering growth. Total global clean energy investment declined by 18 percent to $287.5 billion last year as China’s solar and wind demand cooled.

An aggressive push for solar power would improve Saudi government finances, and it would also present a new source of growth for clean energy markets.
 
Source:  Oil Price

---

Partnership with HMCG

Investment Opportunity

---

Concierge Services

Global Sales Agent Hiring!