x Abu Dhabi, UAEFriday 28 July 2017

Saudi Arabia to also welcome small renewable energy firms

The kingdom will tender smaller scale solar and wind projects to replace diesel

A field of solar panels at Saudi Arabias King Abdulaziz City of Sciences and Technology. The kingdom has created an organisation to manage its renewables projects – and the announcement included deadlines. Fahad Shadeed / Reuters
A field of solar panels at Saudi Arabias King Abdulaziz City of Sciences and Technology. The kingdom has created an organisation to manage its renewables projects – and the announcement included deadlines. Fahad Shadeed / Reuters

As big name energy firms are gearing up for entry into Saudi Arabia’s renewable energy sector, the kingdom will also offer smaller projects to build an all-inclusive industrial hub, the country’s head of renewables has said.

Saudi Arabia is currently underway with its first round of the National Renewable Energy Programme, which will tender more than 700 megawatts (MW) of solar and wind projects this year, as part of plans to meet the country’s target of generating 9.5 gigawatts from renewable sources within six years.

Turki Al Shehri, the head of Saudi's Renewable Energy Project Development Office (Repdo), told The National that the first round of tenders will be be for bulk projects for 300MW of solar and 400MW and wind projects, but that future solar and wind projects up for grabs will be in the range of 50MW to 100MW.

Mr Shehri said the smaller schemes would be aimed at reducing the use of diesel in the kingdom. He gave no indication as to when requests for proposals for such schemes would be issued. 

The Saudi Arabia Solar Industry Association says that about 60 per cent of industrial power in the country is not gleaned from the national grid, with companies relying instead on diesel generators. 

Saudi Arabia launched a request for qualifications for a 400MW wind farm in the Al Jouf region on Sunday, with a view to issuing a request for proposals by the end of August. 

“We wanted to ensure that for round one, these will be successful projects,” Mr Al Shehri said, noting that the process had attracted new names and new partnerships

“New companies are forming consortiums and learning from experienced players," he said. "Other [future] projects will be smaller, and [these new firms] can potentially bid on their own future projects."

Saudi Arabia's domestic economy remains heavily reliant on oil. The country consumes a third of its total oil production internally, feeding around 50 per cent of its power plants.

The country's push towards renewables envisages the freeing up of more hydrocarbons to be exported, with the awarding projects of different sizes intended to not only help meet demand but also to create a hub for the renewables sector within the kingdom, with a 30 per cent localisation requirement for projects boosting the country's human capital development.

“We don’t expect the industry to come tomorrow - we know it will take time to develop,” Mr Al Shehri said. “The objective is that whatever market is in the kingdom is competitive and not subsidised.”

For Repdo, an even grander vision for Saudi Arabia is in the process to make it a launchpad for all things renewables to spread throughout the region.

“The idea is that we can supply the Mena region, not just the kingdom,” says Mr Shehri.