EQ hosted a webinar on ‘PV InvestTech Saudi Arabia’ on June 21, 2021. The webinar, powered by LONGi, discussed the market in Saudi Arabia with utility scale rooftops, financing and investment scenario, opportunities, challenges and various aspects related to the projects, policies, regulations etc.
Dr. Nabih Cherradi, CTO, Desert Technologies, participated in the webinar as moderator.
The speakers of the webinar included Moamen Hassan, Renewable Energy Section Manager, NECE Solar; Mohammad Hassan Abuhilal, CEO, Sun Synergy Group; Sherief Attia, CEO, Orbits EcoTech; Ahmed Mohammed Alshaheer, Senior Sales & Business development Lead, Alfanar Captive Power, Alfanar and Oguz Tosun, EnKing International.
Local vs Global Procurement for the solar market in KSA- Opportunities and Challenges
Introducing his company, Nabih Cherradi, CTO, Desert Technologies, shared a brief on the profile and capability of Desert Technologies. “We are a platform that we have manufacturing to produce solar panels in Saudi Arabia. This is how we are interested in localization.
Here in Saudi Arabia, we have the latest technology that is developed for the fully automated line. Our target is the expansion to 1GW capacity by 2025. 1 GW will be extended up to 3 GW within the coming five years. We produce different kinds of products that can be used for different applications.”
Talking about the market trends and opportunities, he said “The market should reach over 3000 MW by the year 2030. The overall supply capacity is estimated at 180 GW including the obsolete lines.
The industry must double for the coming years. We can see that there is a real opportunity for newcomers.
With continuous technological advancement and cost reduction, the solar PV market is growing rapidly over the next three decades according to trends.
If we look into Saudi Arabia’s markets. Saudi Arabia has identified renewable energy as one of the pillars of economic diversion for the upcoming 10 years. They have set up a program and a vision 2030 to move from black oil to what they call yellow oil which is solar energy.
Saudi Arabia has significantly increased its renewable energy targets and long term visibility. The targets are extremely ambitious, but it is also realistic. This is going to happen. So, it is a real opportunity to develop and set up.”
Nabih Cherradi further discussed PV Technologies Localization Potential of the PV Value Chain. He also discussed the business cluster effect and potential benefits. He said, “A diversification into PV industry provides synergies and new synergies and new opportunities for existing economies.
Talking about challenges, he said, “There are huge challenges that we have to come over. For manufacturing, we have to create the ecosystem, we have to train the people and develop the local talent.
One of the biggest challenges is the feasibilities of the projects. Without feasibility, there is no interest and excitement from the investor.
All these challenges need action invited by the politics, establishing a legal and financial framework to govern actions and activities.” He further explained some necessary parameters for local industry to thrive including- Politics, manufacturing, projects, technology, collaboration and finance.
He concluded by saying, “The opportunity is there. We just have to think that in which way we can develop the local industry which is needed.”
ECRA regulations for small scale solar systems and how that will drive the market?
Informing about his company, Ahmed Mohammed Alshaheer, Senior Sales & Business development Lead, Alfanar Captive Power, said, “alfanar captive power is a subsidy from alfanar construction.
The captive power plant is a generation facility built by a single user for his own energy consumption. Captive power plants are designed for industrial factories, commercial and governmental buildings, agricultural and animal farms and large residential.”
“We have integrated solutions for a single user. We are working on Solar and CSP Plants, Biogas Plants, Wind Plants, Waste to Energy Plants & WHR, Hybrid plants and Conventional plants. Our portfolio has till now exceeded 1.5 GW for wind and solar projects.”
Introducing Solar Plants, he informed about three types of PV systems- on-grid, off-grid and hybrid. Possibility for small scale system could be ground mounted, rooftop and car parking.
Talking about ECRA requirements of connecting the Solar PV systems (Small Scales) with the grid, he informed, “In Saudi Arabia, there are four government entities- Water and Electricity Regulatory Authority or ECRA, Saudi Electricity Company, Ministry of Municipal Rural Affairs in Housing and SASO. He further presented the summary of the framework.
Describing how ECRA regulations drive the market he said, “It limits many client plans which going to install more than 2 MW per facility. It discourages many clients to invest in solar due to capacity limitations and the price of exporting.
The regulations increase the demand for off-grid and hybrid solutions.
Along with these, the regulation also Increases the demand for other solutions like spiral wind turbines. ECRA regulations enhance ESCO business to reduce the electricity consumption of the existing facility without going to install the new solar system.”
About EcoTech
Sherief Attia, CEO, Orbits EcoTech, shared a brief about his company. He said, “Our approach is to enable everyone in Saudi Arabia whether it is a residential or a business customer to install a solar rooftop system without the burden of paying the initial CapEX of the system.
And introduce it as a service with affordable monthly fees, recurring fees less than or equal to the utility bill, along with all the benefits of the managed service model, including the energy management, management support, efficiency and all of that while guarantying the quality. We believe that Sauquality-driven quality driven market.”
“Our ultimate aim is to facilitate also the onboarding process to make it as simple as subscribing to internet or mobile package and offer the subscription-based model.
Also, we believe that this will accelerate the market development and will contribute a lot to achieve the vision and objective of Saudi Arabia in this field.”
Today, we are working on most of the leading project development project in the Kingdom imitating from the vision 2030, including the major Smart Cities Development Projects. Also, we have built strong alliance and strategic partnership with most of the leading companies in the Saudi market.
And, we are looking forward to building more strategic alliances that support our vision and strategy. We believe that these alliances will benefit all of us and give more value to the customer.
Obstacles for Solar in Saudi Market
Moamen Hassan, Renewable Energy Section Manager, NECE Solar, presented the obstacles of solar in the Saudi Market in terms of Initial Cost, Return of Investment, Space vs Consumption, Education, Non Experience installation, Net billing vs Net metering.
Talking about Initial Cost, he said, “About On-Grid System, the initial cost of the small solar system is around 3400 SAR up to 4000 SAR per kwp, depending on the design. The initial cost for a large system is around 3000 SAR up to 3200SAR per kwp.
For the downgrade system, when we see the initial cost and we get a request from customers, the ROI for the small system around 6.8 years up to 8 years, based on the number of working hours.
The ROI for the Commercial and Governmental System is around 5.2 years up to 6.5 years. He informed, the ROI for industrial system is around 11 years and this sector is the biggest of all solution.”
Next, talking about education, he said that all of the customers’ requests were random because they lacked knowledge of our system. And, they must know all the benefits of our solar system by education with more ways like social media, online App and seminars.
Another challenge is non-experience and bad recommendation for installation. “Major issues found for installation- protection, design and after sales. So, customer must be supported with these services- preventive maintenance and training the customer for maintenance.” He discussed the other challenge of net billing vs net metering, and space vs consumption.
Carbon Pricing Opportunities for Solar Power Projects in MENA
Oguz Tosun, Carbon Manager- Turkey & MENA, EnKing International, said “When it comes to carbon pricing, especially voluntary carbon pricing, we should be thinking collectively. As collective as possible, especially for the case of solar power projects.”
Sharing a brief on EnKing International, he said, “We are the largest carbon credit developer and supplier in the world, which makes us the largest carbon offsetting company in the world.
We are developing carbon offsetting projects under respectful voluntary carbon standards. Also, we are developing renewable energy certification projects which is a new market which is rising opportunity for solar power projects.”
In last couple of years, we can easily say that the demand for voluntary carbon pricing through different carbon offsetting projects on different technologies such as RE technology, energy efficiency technologies along with some other nature based climate mitigation and carbonization activities, is drastically increasing in the market. He explained carbon offsetting in detail.
Further discussing carbon offsetting schemes, he spoke on Kyoto Mechanisms, voluntary Market and Paris Mechanisms. “Actors in carbon offsetting projects include Project Owners, carbon consultant, carbon standards and auditing companies.”
Explaining the carbon standards available for solar projects in MENA, he informed the carbon standards for off-grid include Gold Standard, Verified Carbon Standard, Global Carbon Council and Global Emission Standard. Whereas, carbon standards for On-grid include Global Carbon Council and Global Emissions Standard
“A challenge for small scale solar projects in carbon offsetting is investment. One small scale project may not be financially feasible but a project bundle is. MENA’s solar industry needs a collective carbon approach.
EKI offers ‘Revenue Sharing Consulting’ method which covers investment costs. All the consulting services will be conducted by EnKing International for issuing carbon credits which includes different projects from different owners. We also guarantee the procurement for the issued volumes of carbon credits.”
Talking about the reasons to issue offsets, he said, “Carbon credit is one of the oldest environmental market. The market itself includes diversified end user profile.
In these projects one can monitor the diversified co-benefits (social, environmental and economic) of the RE project that will be reported in different schemes. Additional revenue is the most common reason to issue carbon offsets.”
Solar Project Financing
Mohammad Hassan Abuhilal, CEO, Sun Synergy Group, discussed the challenges and what can we do to improve the solar energy concept in Saudi Arabia. “People have to understand the benefit they can use from the solar energy and how they can be benefitted.
A global issue is that countries are facing the problem of overproducing energy that is not utilized or underutilized. That’s why many research energy professionals are going towards the energy storage solutions in which the power can be stored and used in the peak time or whenever needed.
Financing opportunities are available in Saudi Arabia. The business model we work on is very simple and straight forward. We don’t count on the bank to provide our financing.
We have already existing independent investors that are ready to support clean energy solutions specifically for solar. They are ready to fund any projects including the right number and right data. We can utilize the availability of these investors directly to the customers.”
“We are trying to develop such projects that they are interested in the end user. The real customer is always the end user. As we are passing through difficult times for COVID issues it becomes more challenging how to help people. So, you need to give the right solutions, financially and technically, to the customer and make it feasible for them.”
“We need to focus on giving the benefit of this power directly to the real needy. We have passion for clean energy. We don’t do it just for the commercial purpose. We do it out of passion to help people and ourselves to build a nice and clean environment, reducing the carbon and bad air that our gran children will be breathing in the future.
We hope to work together as a group to make sure we can do something for the world before we leave it. So, we try to do the maximum utilization of our time before we leave.”
