The use of solar energy has progressively grown over the past few years to meet increasing energy demands worldwide and, in turn, increased global demand for solar panels. In Saudi Arabia, solar power is a significant piece of its 2030 vision and economic plan (Vision 2030). In addition to the environmental benefits associated with solar power, Saudi Arabia has a special geographical and climatic location that makes utilising renewable energy sources economically attractive. In this article, we take a closer look at the renewable energy sector in Saudi Arabia, new developments and government initiatives, and what businesses in the region should consider.

How is the renewable energy sector changing in Saudi Arabia?

Saudi Arabia has considerably developed its renewable energy sector by establishing the National Renewable Energy Program (NREP) - a strategic initiative supervised by the Ministry of Energy (MOE) and launched as part of Vision 2030. NERP aims to increase Saudi Arabia's share of renewable energy production, achieve a balance in the mix of local energy sources and fulfil the country's obligations towards reducing carbon dioxide emissions.

Saudi Arabia has launched a number of projects in solar energy over the past few years, including:

  • Sakaka IPP located 30 km from the city of Sakaka in the Al-Jouf region, north of the Kingdom. The project consists of 1.2 million solar panels arranged over 6 km² of land, with a production capacity of 300MW. Also, it sets a new world record for low costs in the solar photovoltaic sector, which amounted to SAR0.08775 per kWh.
  • Shuaibah IPP located 80 km south of Jeddah, with a production capacity of 600 MW.
  • Rabigh IPP located 25 km from Rabigh, with a production capacity of 300 MW.
  • Rafha IPP located 16 km from Rafha in the Northern Borders region, with a production capacity of 20 MW. It is one of the projects that aims to incentivise Saudi companies to contribute to the renewable energy sector and gain experience in developing renewables projects.
  • Sudair IPP located in the Riyadh region, with a production capacity of 1,500MW. It is one of the projects developed by the Saudi Public Investment Fund (PIF).

Saudi Arabia has developed know-how in renewable energy as a result of its many projects and is encouraging efforts to drive foreign investment to invest in renewable energy. The MOE, in particular, is working to encourage the private sector to increase investment in the Saudi renewable energy sector through its launch of the Renewable Energy Projects Development Office (REPDO). REPDO works to achieve the objectives of NREP and is also responsible for issuing proposals related to renewable energy projects. In addition, MOE established the Saudi Energy Efficiency Center (SEEC), which is responsible for issuing energy project licenses - for example, data review and energy building audit, design and engineering of energy efficiency measures.

What future developments can we expect to see?

As a result of Saudi's push into renewable energy, the UK and Saudi governments recently discussed aspiring plans for collaboration between both countries in space-based solar power (SBSP). This new area of interest centres on the process of collecting solar power in outer space and then wirelessly beaming the generated energy to Earth. SBSP can provide large quantities of energy with very little negative environmental impact. It has been viewed, historically, as a theoretically viable means of harnessing power but has been seen as prohibitively expensive. This is due to the costs of launching satellites, telerobotic maintenance of the space-based solar panels and energy transmitter, and the large size and corresponding cost of the receiving station on the ground. However, recent developments in rocket technology have reduced these launch costs, making SBSP an economically feasible possibility. SBSP is also viewed as a viable power source for establishment of any future lunar colonies.

Earlier this year, UK Secretary of State Grant Shapps met with His Excellency (HE) Abdullah Al-Swaha, the Saudi Arabian Chairman of the Saudi Space Commission and Minister of Communications and Information Technology, to discuss a potential agreement that could support British businesses. The new Saudi smart city being built in Tabuk Province (NEOM) is also exploring the possibility of using solar power from space to supply carbon-free energy for its projects. A collaboration between UK-based Space Solar Ltd and NEOM could see each country committing significant investments into developing SBSP in the coming years. The Business Secretary of Saudi Arabia, Grant Shapps, has commented in a UK government press release that:

"The Kingdom of Saudi Arabia is on an ambitious journey to modernise its economy and society, which opens up a host of opportunities for growing British businesses, exporting UK expertise that could transform global access to renewable energy, including space based solar power".[1]

This recent UK Government interest in cooperating with Saudi Arabia on the further development of SBSP follows news (that it jointly announced with UK Space Agency), last summer[2] of a UK grant funding competition to support the development of technologies associated with space-based power systems, which could contribute to the UK's Net Zero ambition. The competition itself followed the publication of an independent report[3], which has found SBSP to be technically feasible, economically competitive and aligned to UK Government priorities.

While SBSP is an innovative and ambitious concept, aside from the cost implications, a number of legal considerations arise. These cover areas such as property rights in relation to the solar panels, applicable international laws, coordination and registration of space objects and environmental protection.

SBSP represents renewable energy technology that is at the cutting-edge of human endeavour. This is precisely where Saudi is seeking to position itself, as it continues its steps towards achieving Vision 2030.

If you'd like to speak further about this article, please contact Imran Mufti or Andrew Newbery from our global projects group.

Footnotes

[1] Business Secretary in talks with Saudi Arabia to advance commercial collaboration in UK space based solar - GOV.UK
[2] Space Based Solar Power Innovation
[3] Space Based Solar Power - De-risking the pathway to Net Zero