Saudi Arabia eyes $109bn plan for solar industry
By Bloomberg
Saturday, 12 May 2012 10:28 AM
Saudi Arabia is seeking investors in a $109bn plan to create a solar industry that generates a third of the nations electricity within two decades, according to officials at the government agency developing the plan.
The worlds largest crude oil exporter aims to have 41,000 megawatts of solar capacity by 2032, said Maher al-Odan, a consultant at the King Abdullah City for Atomic and Renewable Energy.
Khalid al-Suliman, vice president for the organisation known as Ka-care, said that nuclear, wind and geothermal would contribute 21,000 megawatts.
We are not only looking for building solar plants, al-Odan said in an interview in Riyadh. We want to run a sustainable solar energy sector that will become a driver for the domestic energy for years to come.
The comments highlight the scale of Saudi Arabias ambitions to boost renewable energy use as a way to pare back on oil consumption used for domestic desalinisation and power plants, potentially saving 523,000 barrels of oil equivalent a day over the next 20 years.
For the solar panel manufacturers such as First Solar and SunPower Corp, the Saudi Arabian market would open a huge new market as European countries reduce subsidies to keep a lid on installations.
Panel sales may dip this year for the first time in more than a decade from 27,700 megawatts installed last year, according to a survey of analysts by Bloomberg on March 9.
These markets are likely to be a lot less profitable than existing markets, Vishal Shah, an analyst at Deutsche Bank in New York, wrote in a note to clients on Thursday, noting the Saudis may require bid winners to supply from factories built in the nation.
It looks like both First Solar and SunPower would need to set up local manufacturing.
Ka-care is the government agency set up in April 2010 to oversee the nations renewable energy strategy. Its plans are likely to be approved later this year, al-Suliman said, according to a copy of the presentation he gave on May 8.
The government is targeting 25,000 megawatts from solar thermal plants, which use mirrors to focus the suns rays on heating fluids that turns a power turbine. Another 16,000 megawatts would come from photovoltaic panels, according to the Deutsche Bank note.
Citing government officials, Deutsche Bank said the capacity would be added in competitive bidding starting with 1,100 megawatts of PV and 900 megawatts of solar thermal in the first quarter of 2013. A second round of bidding is due in the second half of 2014.
That tendering process would differ from the European system, where developers are granted above market rates for solar power they produce. Germany, Spain, Italy and the UK have slashed rates under those feed-in tariffs to control a surge in installations.
Saudi Arabia currently has about 3 megawatts of solar installations, trailing Egypt, Morocco, Tunisia, Algeria and the UAE, according to Bloomberg New Energy Finance.
The Saudi Arabian government has a powerful incentive to diversify its energy mix to reduce dependence on oil, said Logan Goldie-Scot, an analyst at New Energy Finance in London.
The state could generate an internal rate of return of approximately 12 percent if it built a PV plant and sold the displaced oil on the international markets.
The analyst is assuming initial capital costs for the solar projects of about $2.17 per watt of capacity installed.
Gulf oil producers are seeking to reduce their reliance on fossil fuels for power generation to maximize exports of valuable crude and allocate natural gas to petrochemicals production.
Ka-care estimates Saudi Arabias peak electricity demand will reach 121,000 megawatt in the next 20 years, with half of that power generated using hydrocarbon fuel.
Other forms of renewable energy such as nuclear, wind, geothermal, will only generate 21,000 megawatts of the peak-load required by 2032, al-Suliman said in his presentation.
The capital cost of installing the 41,000 megawatts should be around $82bn, al-Odan said.
The rest of the $109bn investment will go to train the Saudis to run the solar plants as well as for maintenance and operation, he said.
Once the strategy, which includes new regulations and financial incentives for private investors, is approved we will start implementation directly, al-Odan said.
Saudi Arabia may burn 850 million barrels of oil a year, or 30 percent of its crude output, to generate electricity by 2030 if doesnt become efficient in energy consumption, Electricity & Co-Generation Regulatory Authority governor Abdullah Al-Shehri said in a presentation in Riyadh May 8.
KSA says should aim for 41 GW solar by 2032
By Reuters
Tuesday, 8 May 2012 2:42 PM
Saudi Arabia should install much more solar power over the next 20 years than any country has managed so far while building around 21 gigawatts (GW) of nuclear reactors, the body responsible for planning the Saudi energy mix said on Tuesday.
The King Abdullah City for Atomic and Renewable Energy (KACARE) - set up to advise on the energy mix - has concluded the kingdom should try to build nearly 41 GW of solar capacity, enough to meet a third of expected peak power demand in 2032, while a sixth of installed capacity should come from nuclear and about half from oil and gas.
"I'm confident Saudi Arabia will approve a diversified energy mix this year," Khalid al-Sulaiman, vice president for renewable energy at KACARE, told Reuters after a presentation outlining KACARE's recommendation to the Saudi government.
KACARE said the Kingdom should aim to build 16 GW of solar photovoltaic capacity and about 25 GW of concentrated solar power capacity by 2032.
The world's largest oil producer has built a negligible amount of solar power capacity to date, less than 50 megawatts, after saying a few years ago it would become a major solar power but the target of 41,000 MW, if met, would propel it towards the top of the solar power table.
World solar leader Germany installed more than 7,000 MW in both 2010 and 2011, raising its total at the end of last year to 25,000 MW.
Solar power could help meet peak demand for power in a country where electricity surges in summer, in combination with Saudi oil and gas fired power plants.
Under most of the scenarios model led by KA-CARE, nuclear energy emerged as one of the best ways for generating "baseload" electricity, and the 21 GW target implies more reactors being built in the kingdom over the next 20 years than those currently planned by any other country other than China, India, Russia and the US, according to World Nuclear Association data.
Quote 3 :
Saudi Arabia blazes a trail on solar power
Vahid Fotuhi
May 13, 2012
One of the world's biggest oil producers and consumers has launched a renewable energy programme that may make Riyadh the new global hub for clean power, Vahid Fotuhi writes
In 2010, Saudi Arabia made a huge splash on the international stage when Ali Al Naimi, the oil minister, announced that "Saudi Arabia aspires to export as much solar energy in the future as it exports oil now".
Observers were not impressed. They claimed it was simply not realistic. To achieve this, Saudi Arabia would need to produce and export as much as half the world's total annual installed capacity of solar energy. It could never happen. Or could it?
Less than two years later, the kingdom has hit back at its critics by launching the most ambitious solar programme the world has ever seen.
Under the stewardship of the King Abdullah City for Atomic and Renewable Energy (Ka-care), it has unveiled a detailed programme that will see it generate 41 gigawatts of solar energy over the next 20 years.
Assuming that the policy-makers in Riyadh are able to stick to their timetable, by 2032 about a quarter of the country's electricity will be produced using solar energy.
Ka-care has also set bold plans to build wind, geothermal, waste-to-energy and nuclear energy plants. This huge undertaking, worth hundreds of billions of dollars, is set to make Riyadh a global hub for clean energy investments. It would be a huge leap forward for Saudi Arabia, given that today it is among the world's top five biggest polluters on a per capita basis.
The immediate benefit of this new policy is oil savings. Saudi Arabia currently burns almost 1 million barrels of hydrocarbons each day for domestic power generation. This includes some 600,000 barrels per day of its coveted crude oil. Alarmingly, this flow is expected to rise by about 10 per cent annually.
Oil supplied to power plants domestically at the subsidised price of US$4 per barrel is oil that could otherwise have been sold on international markets at a much higher price. The Saudi Electricity and Co-Generation Regulatory Agency estimates the country loses at least Dh50 billion ($13.61bn) annually by selling oil domestically compared to what it would fetch internationally.
With its renewable energy policy now in place, the kingdom will be able to start satisfying its unparalleled thirst for power through solar-generated rather than oil-generated electricity.
Concentrated solar power plants will be installed to meet winter demand while photovoltaic power plants will be erected to crunch peak-time usage during the summer months. Each megawatt of solar power installed will be able to meet the annual electricity needs of some 50 single-family homes.
Another major benefit is job creation. Today, some 60 per cent of Saudi nationals are under 25. These youths will be looking for jobs soon. By building a world-class clean energy sector, the kingdom will ensure a steady supply of new jobs.
According to the European Photovoltaic Technology Platform, every megawatt of solar power installed creates about 50 jobs in research, manufacturing, installation, and distribution activities.
In other words, by rolling out 41 gigawatts, the kingdom will help to create, both directly and indirectly, some 2 million new jobs.
There are also important environmental benefits. Burning crude oil and derivatives thereof such as fuel oil releases harmful gases such as carbon dioxide, which is bad news not only for the citizens of Saudi Arabia but for the planet as a whole.
By adopting this ambitious programme, Saudi Arabia has set in motion steps that will see it offset approximately 44 million tonnes of carbon dioxide, equivalent to taking some 10 million cars off the road.
This will have considerable environmental and health benefits. At the same time, some 5 billion gallons of petrol would be saved, which would carry additional financial benefits.
Along the way, Saudi Arabia's clean energy investment will give life to powerful innovations such as new and more effective ways of capturing the sun's energy, as well as ways of storing that energy so that it can be consumed during periods when it's needed most.
These innovations would gradually transform Saudi Arabia from the kingpin of "dirty" energy to a global leader in sustainable energy.
The oil minister's solar aspirations might not be so unrealistic after all.
Thenational.ae
Link old post KSA and South Korea unite in solar energy:
http://www.defence.pk/forums/world-affairs/173664-ksa-south-korea-unite-solar-energy.html
Link old post Kingdom, China ink nuclear cooperation pact:
http://www.defence.pk/forums/world-...ink-nuclear-cooperation-pact.html#post2731651
http://www.defence.pk/forums/world-...ink-nuclear-cooperation-pact.html#post2731694
http://www.defence.pk/forums/world-...ink-nuclear-cooperation-pact.html#post2731727
http://www.defence.pk/forums/world-...ink-nuclear-cooperation-pact.html#post2786204
