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. 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.
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. He didn’t say how much renewables capacity the nation would be tendering in coming weeks, nor did he say when the nuclear plants would be operational.
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 revenue.
The country’s only solar plant in operation is a 10-megawatt facility on top of a parking lot at the headquarters of state-owned Saudi Arabian Oil Co., known as Saudi Aramco. The national utility, Saudi Electricity Co., is seeking bids for two plants to generate as much as 50 megawatts each.
Saudi Arabia has backed away from more ambitious renewable-power targets it set 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 solar-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.