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Kingdom issues global tender for 2 solar plants
Jun 13, 2016
Saudi Gazette report
RIYADH — Saudi Electricity Company (SEC) is inviting bids from international developers to build two solar-power plants in the Kingdom’s northern region, SEC announced on its website.
The plants will each generate as much as 50 megawatts using photo-voltaic technology, which produces power directly for solar cells, according to a tender announcement that Saudi Electricity Co. posted on its website.
The utility is asking international companies to submit expressions of interest for the projects by June 20.
The plants will be located at Al-Jouf and Rafha, SEC said.
The tender is the first by Saudi Arabia to seek international partners to cooperate in building and operating renewable-energy facilities, according to the Middle East Solar Industry Association.
Saudi Arabia is developing renewable energy to take advantage of its ample sunlight and to diversify energy supply amid rising demand.
Yet renewable resources will only account for about 10 percent of total power capacity compared with the previous target of about 50 percent, Energy Minister Khalid Al-Falih said last week during a presentation of the Kingdom’s long-term strategy to overhaul the economy.
HSBC Holdings Plc’s Saudi unit is acting as financial consultant for the tender, DLA Piper is legal adviser, and DNV GL is technical consultant, Saudi Electricity said.
http://saudigazette.com.sa/saudi-arabia/kingdom-issues-global-tender-2-solar-plants/
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Disappointing that the aim was reduced by 40%. I hope that this will only be temporary. Moreover no mention about wind energy or other renewable energy in that article. I stopped following news on this front some time ago so I have to update myself. Anyway 10% is better than nothing in a country like KSA where the energy use and demand is one of the highest in the world.
However it is certain that solar energy will become a bigger thing for each year as technology improves and KSA is in a perfect position to gain a lot from this as this thread clearly demonstrates. Similarly with wind energy.
Vision 2030 and solar energy: A timely development
Friday, 29 April 2016
Ahmed S. Nada
Much has already been said about the potential for the Kingdom of Saudi Arabia to harness the power of solar energy. In the years that I’ve been in the solar energy industry, rarely a conference goes by that does not have a segment dedicated to talking about the country and how renewable energy must be factored into its future.
With the launch of Vision 2030, by Prince Mohammad bin Salman bin Abdulaziz Al-Saud, Deputy Crown Prince and Chairman of the Council of Economic and Development Affairs, the solar energy industry can now stop speaking in speculative terms. That potential is now well defined and backed by the country’s visionary leaders. The future is now.
The Vision 2030 document reveals a well-thought-out strategy that takes into consideration Saudi Arabia’s strengths and its capabilities. The focus on specific sectors, including renewables, is deliberate and evidently backed by a solid socio-economic rationale.
I have no doubt that there are far more qualified experts who can comment on the various sectors included in the document and I will focus my analysis on the two paragraphs that succinctly summarize Saudi Arabia’s emphasis on developing its new renewable energy market.
"By reviewing the legal and regulatory framework with a view to facilitate private sector investment in renewable energy, Saudi Arabia effectively signals that it is open for business" Ahmed S. Nada
First and foremost, the upcoming launch of the King Salman Renewable Energy Initiative and an “initial” renewable energy target of 9.5 gigawatts (GW) made headlines for obvious reasons. What differentiates this from previous initiatives announced by the country, is that Vision 2030 is the highest level commitment to renewable energy ever seen from the Kingdom.
The “initial” target suggests that the country will grow its renewable energy capacity in increments, taking advantage of future cost declines and efficiency improvements, while also leaving the door open for emerging technologies.
The second point that stood out was the country’s commitment to “guarantee the competitiveness of renewable energy through the gradual liberalization of the fuel market.” This, in my opinion, is clear evidence that the government fully intends to deliver on its renewable energy goals.
Liberalizing the fuel market
Subsidies for conventional fuels tend to hinder the adoption of renewables in many net energy exporting countries, for the simple reason that renewables simply cannot compete on an uneven playing field where subsidized oil is fueling domestic power generation.
By liberalizing the fuel market, Saudi Arabia will effectively grant renewable energy technologies, such as thin film photovoltaic (PV) solar, a level playing field on which to successfully compete against conventional generation as they currently do in other markets.
The document also spells out Saudi Arabia’s ambitions to becoming a renewable energy power house, citing research and development, and manufacturing as elements of the value chain that the country would look to invest in.
Vision 2030 accurately points out that the country has “all the raw ingredients for success” and this cannot be disputed. In fact, with the Balance of Systems – all the components of a PV power plant excluding the module – accounting for roughly a quarter of the cost of a solar power plant, the Kingdom is already well placed to leverage its existing local manufacturing base for the steel, cables and even other components, such as inverters, that are needed to build a utility-scale solar energy program.
The final aspect that needs to be highlighted is the emphasis on public-private partnerships. By reviewing the legal and regulatory framework with a view to facilitate private sector investment in renewable energy, Saudi Arabia effectively signals that it is open for business.
While more details are forthcoming, with the launch of the King Salman Renewable Energy Initiative, my hope is that Saudi Arabia will take a consultative approach on its renewable energy policy framework by leaning on capable, credible industry partners to share their expertise. This will allow the country to skirt the steep learning curve that other markets have had to endure.
Speaking on First Solar’s behalf, I would welcome the opportunity to share our views and over 13GW of global experience with Saudi Arabia, a country that we’ve maintained a longstanding commitment to.
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Ahmed S. Nada is the Vice President and Region Executive for First Solar in the Middle East. With over 13GW of installed capacity, First Solar is a leading global provider of solar energy solutions.
http://english.alarabiya.net/en/vie...30-and-solar-energy-A-timely-development.html
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Saudi Vision 2030 and the Renewables Market
02 May 2016
Mohammed Atif
The Vision 2030 has been published
Towards the end of April 2016, the Kingdom of Saudi Arabia released its much anticipated Vision 2030 with high expectations on reform and transformative change. From a renewable energy perspective, there are only two paragraphs but the commitments are far-reaching:
“Even though we have an impressive natural potential for solar and wind power, and our local energy consumption will increase three fold by 2030, we still lack a competitive renewable energy sector at present. To build up the sector, we have set ourselves an initial target of generating 9.5 gigawatts of renewable energy. We will also seek to localize a significant portion of the renewable energy value chain in the Saudi economy, including research and development, and manufacturing, among other stages.”
Many of the basic details are not new; the King Abdullah City for Atomic and Renewable Energy (KA-CARE) had published a white paper, in 2013 which covered in quite some detail the key steps towards renewables deployment and a market mechanism based on competitive procurement. The Vision 2030 document is silent on the details but does commit to 9.5GW of renewable power generation capacity over the period, specifically mentioning wind and solar. At the moment it is not clear what percentage of these resources are expected to be distributed and connected to the low voltage network versus utility scale plant connected directly to the high voltage network.
The Kingdom is blessed with both wind and solar resources. In August 2015, KA-CARE launched Saudi Arabia’s Renewable Resource Atlas. Information therein indicates annual average wind speeds are estimated at 6.0-8.0 meters per second (m/s). Higher wind speeds of 8.0 m/s and above occur in the northeast and central regions, as well as near mountains in the west. Endowed with some of the highest solar irradiation levels in the world, averaging between 1,800 to 2,200 kWh/m2/yr, Saudi Arabia offers significant solar potential; this is further supported by the significant amount of research and development undertaken on PV plants in sandy and dusty conditions ensuring the technology is vable for desert conditions.
The second paragraph from the renewables section in the Vision 2030 document states:
“From inputs such as silica and petrochemicals, to the extensive expertise of our leading Saudi companies in the production of different forms of energy, we have all the raw ingredients for success. We will put this into practice with the forthcoming launch of the King Salman Renewable Energy Initiative. We will review the legal and regulatory framework that allows the private sector to buy and invest in the renewable energy sector. To localize the industry and produce the necessary skill-sets, we will also encourage public-private partnerships. Finally, we will guarantee the competitiveness of renewable energy through the gradual liberalization of the fuels market.”
This paragraph is quite far reaching and seems to commit the Kingdom to harnessing its natural resources into the manufacture of renewable power materials; developing a domestic manufacturing base. Given the strong focus on private sector participation there is the possibility of a new legal and regulatory framework and models of private sector participation using for example the IPP model and open wholesale trading market models. The well-known feed-in-tariff (FiT) approach has been tried and tested worldwide; most recently in Jordan, Egypt and Dubai.
However, the last statement with respect to guaranteeing the competitiveness of renewable energy implies there will be more emphasis on cost reflective prices for competing fuels. This last point is the linchpin of any successful renewables program and that is fuel pricing reform. This last point however is also sensitive; only recently the minister of water and electricity was dismissed due to fast increases in the water tariffs in the Kingdom which was deemed as socially unacceptable.
Key steps and reforms that maybe taken
It seems that pricing reform in the fuels sector will continue according to the Vision 2030 statements. However, it is likely that the government will be more careful in the implementation of tariff reforms. Tariff reforms in the utility sector have been on-going around the globe for many decades. Furthermore, utilities worldwide it was quite normal in the days when utilities were state owned for electricity, water and other fuels seen to be considered public goods. However, given the sheer cost of subsidies and the relatively lower performance in efficiency, the sector model has changed. Nevertheless, the change was carefully transitioned and multiple tariff structures were developed to ensure for example that exceptions were made for the socially vulnerable. Therefore it is likely that the Kingdom can adopt a new pricing structure for its utilities such that tariffs move towards being cost reflective but that they are also equitable. Based on the latest research in behavioral economics, evidence shows that people have ‘present biases’. This implies that gradual increments in price are far more palatable than extreme price changes.
Legal and regulatory framework needs to ensure that the entire sector is aligned and that there is a very clear concept to development approach to attract private sector investors. Power purchase agreements needs to have a fair balance of risk including currency convertibility issues and connection agreements must be made on the understanding that the grid operator will ensure connection assets are in place in time for energization.
Proposed steps
A vision undoubtedly needs to be supported by a transparent and credible implementation plan. We therefore would recommend the following steps to be taken:
- Ensure the renewables and energy efficiency programs are aligned in the planning cycle;
- Re-calibrate the national load forecasts taking into account the energy-water nexus;
- Based on new load forecasts for both electricity and water and new technologies including renewables and storage begin to establish an optimized investment model based upon economic cost of supply;
- Optimization needs to run in parallel with both generation and grid flow development assumptions;
- The optimized scenario can then be adjusted to cater for social considerations and specific policy targets such as 9.5GW of renewables for example; and
- In order to successfully implement the program a combination of economic optimization and behavioral economics factors must be taken into account.
http://blogs.dnvgl.com/energy/saudi-vision-2030-and-the-renewables-market
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Moreover this link below is worth taking a look at.
Named "Saudi Renewables: Is the Sleeping Giant Finally Awakening? "
http://www.shearman.com/~/media/Fil...eping-Giant-Finally-AwakeningPDF-06102016.pdf
Somalia supports the kingdom on many issues we share a common vision,many somali companies are involved in the bilateral trade of the two countries.
