Saudi Electricity seeks bids for two solar plants in kingdom’s northern region
Saudi Electricity Company has asked for bids for two new solar power plants in the north of the country, as part of the much scaled-back solar power programme announced recently under its 2020 national economic plan, the state-owned utility said yesterday.
The plants, each with capacity of up to 50 megawatts, will be built to support larger existing power plants at the sites of Al Jouf and Rafha, which run on conventional fossil fuels, diesel and natural gas.
The tenders come after last week’s announcement by Khalid Al Falih, the minister of energy, industry and mineral resources, that the kingdom would scale back dramatically its target for solar power because of the collapse in oil and gas prices since the original targets were set four years ago.
Under the King Abdullah City for Atomic and Renewable Energy (Ka-Care) plan, Saudi Arabia had set out to build 41 gigawatts of solar generating capacity by 2032, with more than half to be up and running by 2020.
The Saudi economic road map, Vision 2030, now envisions a total of 9.5GW for all renewables by 2023, with solar to provide 3.45GW. Even that lower target is ambitious given that there is negligible capacity now, requiring more than 860MW each year of new capacity.
“It is clear that they have got to get away from burning oil for power and solar with gas is a step in the right direction,” said Steve Griffiths, the vice president of research and a professor at Masdar Institute in Abu Dhabi, which works with Ka-Care on developing regional renewables and was part of a consortium including Saudi’s Abdul Latif Jameel that bid this year for a Dubai solar contract with a record low per kilowatt-hour price..
Mr Griffiths said: “The precedent here is to not get sucked into policy structures like those in Europe – [that is, complicated feed-in tariff-style pricing] and the [independent power producer] model works as a lower-cost option as long as you have a reliable off-taker,” as has been the case in Dubai.
But while the more modest solar plans may be achievable, Saudi’s priorities clearly have shifted as it moves to rapidly diversify its industry amid lower energy prices.
“Our energy mix has shifted more toward gas, so the need for high targets from renewable sources isn’t there any more,” Mr Al Falih said last week, adding that the aim now was to achieve about 10 per cent of the country’s power generation from renewable sources over the next decade or so, versus the 50 per cent originally targeted when oil prices were well above US$100 per barrel.
The plan also calls for the reduction in electricity and water subsidies by 200 billion Saudi riyals (Dh195.88bn) by 2020, while also aiming to increase the amount of water and electricity that is produced under strategic partnerships, by bringing in the private sector, from 27 per cent to 100 per cent.
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Updated: June 12, 2016 04:00 AM